Reply to: IT fixed price: when it's taking a long time

[tractor]

..

Raise a business case with them as to why it is taking longer being very careful to identify situations that are out of your control and are not in keeping with the origianal contract/quote. Even though it is fixed price, if you can demonstrate the client has moved the goal posts it would be unreasonable to not expect an extra bill.

The key is to prove it. If you go in with no proof you are on a wish and a prayer, if it is there in black and white and cannot be argued they can't say no.

This, identifying where ANY changes or additions have been made to the original spec. This IMHO is where your best bet in making a successful argument may lie.

You may also want to consider any barriers or obstacles that may have arisen since commencement that you were not made aware of as a risk.

[Freamon]

You need to demonstrate that what you are being asked to deliver is not in the agreed requirements/spec/design/whatever.

What does your contract say about changes to signed-off documentation?

[BolshieBastard]

It would not be unusual to have to renegotiate a fixed price deal part way through.

Once upon a time, there was a large IT consultancy firm who's name was something like Accident-Sure who, due to previous f**king up of projects for a large banking client, who's name was something like BHOS, took on a project to replace the operating platform of every windows based client and server in the organisation, at a fixed cost. Half way through, Accident-Sure decided that they were well off target and simply told BHOS that they weren't going to be able to deliver at the fixed cost. They carried on working until the fixed budget had run out, got some more, spent that and still didn't complete the job and then just disappeared into the ether. The client got someone else to finish the job on a time and materials basis.

Everything is negotiable

Which is why I said if you dont ask you dont get.

Having said that, the might of large scale companies to force changes is well known and one that small contractor operations are infrequently afforded.

[Wanderer]

Top advice from d000hg there.

Fixed price jobs are going to be risky to both parties. I learnt that lesson when I got a builder to do some work for me. Fixed price, pretty loose spec, builder was pretty casual about the whole thing. Don't worry about it he said, everything will be sorted, no problems.

BIG mistake. Turns out that he was after the upsell in a big way. Everything was a big problem, every little thing was an "extra", everything was done to the very basic level and if you want more than that then it's an expensive add on.

It wasn't a nice way to do business to be honest, lots of arguments over what was included and what wasn't. Him moaning at me that I was robbing him and he was making no money on the job etc. Me arguing that I was simply demanding the deliverables that were in the (fairly loose spec).

It's not my style of doing business but It struck me that this bloke had a really thick skin and this was the way he did business. At the end of it he was smiling and happy, a job well done it seemed. Personally, I was exhausted at the constant battles with the guy but I guess that's par for the course with them.

If you are going to do fixed price work then have a bullet proof spec and stick to it ruthlessly. You must have a good upsell prepared for the inevitable schedule slips and scope creep (because they WILL happen) so make sure you end up coming out of the deal quids in.

[d000hg]

It would not be unusual to have to renegotiate a fixed price deal part way through.

Exactly. Your client will do exactly that on £multi-million projects and this is why fixed-price is bad.
It all comes down to how you word it though...

• "Please can I have a bit more money"
• "It's taking longer than I expected"
• "I underestimated"

These make you look shoddy.

• The scope has increased as new features were added
• Problems in the original spec were discovered which were only knowable once work begun
• It would make sense to plan a 2nd phase to this work

These sound like you know what you're on about.

It also comes down to your client and the contacts/relationships you have. Ideally it would not be unexpected but it could get rather tense, however you need to raise it ASAP and be firm about it - if you haven't screwed up then you are not doing anything wrong and they need to re-evaluate their budget. Software (and other) projects often end up with a larger than planned budget.

If you want fixed price you deliver fixed price. Would you complain if having agreed your fixed price the client wanted it delivered cheaper part way through?

Of course. But if it ended up taking 1 month when we budgeted for 3, it would hardly be surprising if it came in under budget and made them happy.

[theredore]

Learn from it

We all make mistakes like it. Depends how close your relationship is with the client. Stick with your fix pricing and you can learn from it.

[TheFaQQer]

And try and avoid signing Fixed Price/Term contracts when some joker supplier has managed to get a T&M contract in to service yours and intends to make every penny out of it he can!!!

One of my first big projects (BIG client, BIG consultancy, BIG software provider), I learned that.

Client -> BIG consultancy was fixed price and no deviation. With huge penalty clause for late delivery.
BIG consultancy -> BIG software provider was T&M with no penalty clause.

Eight months late = £8million in penalty fees

[northernladuk]

And try and avoid signing Fixed Price/Term contracts when some joker supplier has managed to get a T&M contract in to service yours and intends to make every penny out of it he can!!!

[BlasterBates]

Have you got a spec of sorts?

If they're asking for stuff not in the spec you can ask for more.

Next time spend a week writing a spec, and don't accept vague decriptions, by the end of it you should be able to go away and program it without going back to clarify anything. Even better produce a test specification which outlines what the system is going to produce with data!!

It doesn't take long to produce a test spec. and as you're writing it you'll clarify your design. It's bacsically just a scenario.

When you have a signed off test spec. there is nothing they can dispute.

Even if you have to come up with an estimate before the design and test specs are ready once you've reached that point that they're finished you have a deliverable for which you can ask for money and a stronger negotiating position for reevaluating your project timescale.

A lot of time disappears in misunderstandings if a spec isn't clear and you realise you haven't properly understood the requirements, that's the beauty of a test spec; you have a clear objective of the data you need to produce.

[Scrag Meister]

Do what the big boys do - bid cheap and change control EVERYTHING to pad out what was an unachievable bid in the first place.

Which is just short for what NLUK just posted.

I worked on site during a road build back in the day, I was permie-ish (temporary fixed term contract, PAYE tax etc) and the initial "fixed" price between the council and the main contractor was £27M, but every change to the spec was raised as a variation order and was billed. It was amazing how many little tasks ended up on the critical path, delaying future tasks in the project plans. The final cost after negotiations at the highest level once the contract was complete was £43M.

Believe me road building contractors are the hardest project managing bar-stewards you will meet. They think nothing of not paying a small sub contractor and just letting them go bust.

So snapshot the starting project plan and keep a close eye on all the small changes that come through. Obviously though if you quoted and the project plan doesn't change then I think you will have to accept it as a learning experience.

[TheFaQQer]

Surely some things that have been completed which you may have done as a nice-to-have to please the client, have now become an out-of-scope piece of work, which is chargable above and beyond the initial estimate...

It can only be out of scope if they agree the spec properly in the first place.

(Top tip: never refer to what you are offering as a "solution" in your proposal document)

[TheFaQQer]

Was that from the DailyWTF recently?

Apparently so (although they said 80 hours). I read it elsewhere (or possibly the same place) some years back, and it's done me pretty well since then

[ChrisPackit]

because the job was poorly spec'd

Surely some things that have been completed which you may have done as a nice-to-have to please the client, have now become an out-of-scope piece of work, which is chargable above and beyond the initial estimate...

[northernladuk]

Always use the 80/20 rule.

Nothing in IT takes less than 80 days. Think of how long it might take and multiply it by 20.

That made I larf.....

[jmo21]

Always use the 80/20 rule.

Nothing in IT takes less than 80 days. Think of how long it might take and multiply it by 20.

Was that from the DailyWTF recently?