Milestone/deliverable based contracts

[MrMarkyMark]

Although great from an IR35 perspective, I always saw fixed price work as nothing but a headache. Even at the consultancy level, we would always prefer day rated work.

The problem, as I see it, is the only way to win as a consultancy with fixed price is on small, short timescale projects (Great, I can increase my 'day rate' marginally for 6 - 8 weeks or whatever) or by massively loading the cost to account for the inevitable tulipe. Because of that, most customers don't really want fixed price because they (should, at least) know that's exactly what you're doing.

Paperwork is all well and good, but now you're into a mud slinging fest and good luck if it all goes legal.

+1 work a lot in the OPs field funnily enough.

The amount of dependencies you would face can be very high.

[eek]

Every time I look at fixed price work it doubles in price once you’ve added some margin for error (25%), the known unknowns (another 25%) then factored in unknown unknowns (33% on the total).

I’m happy to quote fixed price but any company with a clue should get an internal pm to watch the project and use t&m with a consultancy pm.

[malvolio]

You're right there about it being difficult to achieve unless working with the client directly, malvolio, but then how do I find the clients? How did you go about it, Snarf? (I've taken the delays from other parties idea on board Lance, thanks for that!)

Actually I don't. The times I've had such a deal, they called me. Never underestimate the power of a network of ex-colleagues...

[MrMarkyMark]

Every time I look at fixed price work it doubles in price once you’ve added some margin for error (25%), the known unknowns (another 25%) then factored in unknown unknowns (33% on the total).

I’m happy to quote fixed price but any company with a clue should get an internal pm to watch the project and use t&m with a consultancy pm.

You know that.

[northernladyuk]

Viewing it from the client side, the killer milestone is client acceptance. It can drag on for months and you are at the end of their dithering and change requests to get paid.

[mudskipper]

I've done it with one contract. We agreed 3 prioritised phases - 50%, 30% and 20% payment. There was some flexibility in terms of adding stuff in/taking stuff away by mutual agreement. As others have said, you need to have a timescale for acceptance - in my case we agreed that any problems would be reported within two weeks of delivery, with six weeks 'guarantee' at the final phase (the work I was doing was geared around month end, so that gave them two cycles). From my POV it worked well; one of my more profitable contracts From their POV it worked well too - they have promised to send future work in my direction.

[TheFaQQer]

The problem, as I see it, is the only way to win as a consultancy with fixed price is on small, short timescale projects (Great, I can increase my 'day rate' marginally for 6 - 8 weeks or whatever) or by massively loading the cost to account for the inevitable tulipe. Because of that, most customers don't really want fixed price because they (should, at least) know that's exactly what you're doing.

When I used to write bid documents for the consultancy I worked for, we would price everything as expected and then double it.

Or think of a number and double that instead.

[Snarf]

You're right there about it being difficult to achieve unless working with the client directly, malvolio, but then how do I find the clients? How did you go about it, Snarf? (I've taken the delays from other parties idea on board Lance, thanks for that!)

Im direct with the client. Got the role through knowing people in the business improvement team from previous employment.

So far every role I have had since 2014 has been word of mouth or referrals, Ive not dealt with a single agency! Its looking like the next one will be the same as Ive just had a call saying that another company wants a system similar to the one Im doing for my current client.

Ill make sure that I get a better contract this time though!

[pr1]

When I used to write bid documents for the consultancy I worked for, we would price everything as expected and then double it.

Or think of a number and double that instead.

If you know they need YOU [otherwise they'll need to spend a lot of money and probably more importantly, time, finding someone else] then you can name almost any price

Alternatively if you know who you are bidding against then work out what you think they will charge and knock 10% off (if you think your competitor can do it cheaper than you are prepared to, just don't bid)

It's great for ad-hoc "additional" income but it would be very hard to gross the same amount averaged across a year vs "standard" t&m contracting

[d000hg]

This is much more of a proper B2B relationship instead of the traditional freelancing/contracting agency model. You'd probably need to approach/sell yourself to companies as a 'shop' than a freelancer?

Great scope to sub-contract or even hire employees too down the line.