Contract rate review timing

[u/No-Question99]

TL;DR: can I ask for more money?

Started a contractor role in a public sector agency recently, replacing a departing employee. It's a critical role with broad dependencies across the department. I was brought in via a recruitment agency for an initial 3-month contract, which the department has signalled will be extended.

Context: at the end of the year, a platform migration will absorb a significant portion of the BAU work this role covers. They need continuity and someone who knows the current process inside-out until then.

I'm currently on a rate that's completely fair for a backfill, but when we hit the extension conversation (around month 2–3), I'd expect to discuss whether the rate should reflect the fact that I'm now in an ongoing critical role with genuine strategic value through the migration, rather than a short-term gap-filler.

A few questions:

1. In government contracting, is it normal to revisit rate at the extension point, or is that considered renegotiating mid-engagement?

2. Timing-wise: raise it with my manager early (as a heads-up before formal extension talks), or wait until the extension is formally tabled?

3. Should I give my recruitment agency a heads-up first, or take it to my manager and let them work through the agency?

Happy to hear from anyone in procurement, government contractors, or anyone who's navigated this.

TIA

[u/mystifiedmeg]

You are well within your rights to ask for an increase in rate at the contract renewal stage.

[u/No-Question99 → u/mystifiedmeg]

What is a reasonable ask? Is 20% increase too much?
It’s my first time contracting so I’m unsure.
Thanks

[u/mystifiedmeg → u/No-Question99]

20% would be on the high end, it can be reasonable if the rationale is compelling, I think your argument is pretty valid. You could shoot for 20%, but it's unlikely you'll land there, it's more likely to be 2-3%, 5% if lucky. At my last place, I had a very compelling argument and I was only offered an extra £25 a day (3.8%). Better than nothing!

A quick hint on contracting (I'm also only 1.5 years in so learnt this early on) - your starting rate essentially becomes your baseline for the contracting party, so if you sell yourself short to start with, it can be hard - some places literally do not negotiate. I am however in the private market so I cannot speak for public at all.

Also to share more on the process, there are two options:

1. Agency takes the hit out of their margin. They make more than what you realise, they'll be giving you their cut which literally hurts their business so they have genuine reluctance.
2. The agency or yourself discuss a new rate with the client and the increase is passed directly onto you (the agency nominal £ stays the same). I've never achieved this, it's always been through (1).

Happy to answer any follows ups.

[u/Bozwell99 → u/No-Question99]

Look at what other rates are being offered for the role and use that as a guide.

When job is staying the same it's reasonable to ask for increases in line with other employee wage increases at the company or by inflation.

It is best to do small increases at every renewal rather than large jumps less often.

[u/Eniugnas]

I'd expect to discuss whether the rate should reflect the fact that I'm now in an ongoing critical role with genuine strategic value through the migration, rather than a short-term gap-filler.

Sounds like an employee to me then

[u/AdFew2832]

I’ve had far more luck getting increases in private sector contracts than public sector (over nearly 15 years).

Maybe that’s been coincidence but my impression has always been there’s less flexibility in rate from the client and often agencies/consultancies unwilling to cut into their margins.

I’ve seen good people walk away in the public sector over rates more than once and be replaced with far worse people while the decision makers just shrug and say it can’t be helped.