How to find fixed-price contracts (developer)

[jamesbrown]

@jamebrown you act like a nay sayer.

I am still negotiating the way the project will be paid.
Trying to set milestones right now, and getting as precise of a spec as I can.

I'm just going to leave this here...

[WTFH]

You're being generous there. I don't even think about the scope until the contract for x days analysis at £x an hour has been approved.

That will generate a statement of work from which the client gets a (very high level) overview followed by an estimate for the total price of the work.

And if they want fixed price we toss in an extra 25% leeway to cover overrun risk.

Several of the fixed price contracts I have done have been based on recommendations, with a "could you do the same for us".
At that point I normally take the price I charged the last time (provided I was happy with the effort/reward), add 20% on, and quote that.
There's also a few extras that I can add in to up the charges.

But I agree, doing it properly would mean a few billable days analysis prior to pricing.

[JazzyFry]

You've agreed a price without agreeing what the spec is or how it will be delivered?

Normally when I have done a fixed price contract, it isn't "secured" until the client has signed off the contract, which includes things like:
An agreement on how and when a payment will be made.
What is the scope and approx timescale.
What is out of scope.
What I expect from them (testing, etc).
What documentation/support I will provide.
What my response time will be. (both in terms of support and when receiving requests etc from the client)
Who can contact me (if it's a large organisation you want to limit who you have to deal with)
What my charges are for any project creep.

You are right it isn't "secured", as it has not been signed. "verbally agreed" is a better a fit.

Price isn't 100% agreed yet, although we seem to have come to a ballpark. Still negociating but both very willing to work together. I am currently doing scoping work, squeezing the client like a lemon (nicely) in order to make sure both are visions are aligned, in terms of deliverable and the technical work it entails.
He is the one ready to go and I am the one clarifying to avoid scope creep.

We are likely to work via payment milestones.


Thank you for sharing your points. We have already agreed on all these.

[JazzyFry]

Several of the fixed price contracts I have done have been based on recommendations, with a "could you do the same for us".
At that point I normally take the price I charged the last time (provided I was happy with the effort/reward), add 20% on, and quote that.
There's also a few extras that I can add in to up the charges.

But I agree, doing it properly would mean a few billable days analysis prior to pricing.

Do you consider 20% a contingency margin for scope creep, or a van value/rate increase?

[JazzyFry]

You're being generous there. I don't even think about the scope until the contract for x days analysis at £x an hour has been approved.

That will generate a statement of work from which the client gets a (very high level) overview followed by an estimate for the total price of the work.

And if they want fixed price we toss in an extra 25% leeway to cover overrun risk.

Thanks.

What I have done is
- agreed on a deadline
- shared with client a detailed report of the technical work the deliverable would entail in my opinion
- shared with the client my interpretation of what the app should be, in terms of mock ups and textual explanations, to ensure we are aligned
- shared with the client what I think should be omitted to avoid scope creep
- A ballpark cost, plus a 20% margin for contingency since it is a fixed cost contract
- Told client I will only agree on the specific milestones once client confirms we are aligned on all the above


Anything else you would think about? Much appreciated.

[northernladuk]

I assume you'll be posting exactly what you are delivering so we can do that for you as well?

[eek]

I assume you'll be posting exactly what you are delivering so we can do that for you as well?

I was more waiting to discover he's planning to do the work for £300 a day....

[WTFH]

Do you consider 20% a contingency margin for scope creep, or a van value/rate increase?

I consider it an increase in margin. If my customers think I’m good and recommend me, then I can up my prices.
It’s also not a critical/main source of income, I do it when I want to, but won’t do it to a level that negatively impacts the important things in my life, which aren’t the size of my bank account or number of minutes billed. But the amount of cider produced, time spent with my wife, and other properly important things.

[zonkkk]

Thanks.

What I have done is
- agreed on a deadline
- shared with client a detailed report of the technical work the deliverable would entail in my opinion
- shared with the client my interpretation of what the app should be, in terms of mock ups and textual explanations, to ensure we are aligned
- shared with the client what I think should be omitted to avoid scope creep
- A ballpark cost, plus a 20% margin for contingency since it is a fixed cost contract
- Told client I will only agree on the specific milestones once client confirms we are aligned on all the above


Anything else you would think about? Much appreciated.

Unless you have previously worked on the project or it is a brand new project you won't be able to estimate correctly. I suggest small workpackages to start with and then adjust your quotes accordingly. Keep them to 4-6 weeks initially (agree on deliverables and freeze requirements before quoting).

I add between 20-50% contingency (depending on risk) + 20% for meetings discussions, bug fixes, etc. This does not show up in any formal quotes but I am transparent with my client about it.

[jamesbrown]

The first work package should be analysing and estimating the job and developing a work plan with the client. At that point, you have a break for negotiation of the substantive work.

This is best for both you and the client. Otherwise, for any significant programme of work, it's a crapshoot - I don't care how good you think you are at estimation, you'll make major mistakes every now and then that could've been foreseen with a proper scoping activity (I still make significant blunders, sometimes in my favour, sometimes not, and I've been doing this for some time). The thing about a proper scoping activity is that you need to get paid for it.