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I understand that fixed-price quotes are nearly always better than T&M. Unfortunately, fixed-price bids rarely have anything to do with how much I would like to make, or some other arbitrary number pulled out of a hat. Similarly, T&M proposals are simply fixed-price with a minor cushion--the differential between estimated hours to complete times the hourly rate, versus the not-to-exceed price. Rather than a panacea, most (competitive) T&M projects are fixed-price with a buffer.
The projects we have completed for the client to this point have been minor--typically 50-60 hours. The current project is more than 10 times that scope. It is a far different scenario in pricing than comparing X and then multiplying X by 10. There are at least a dozen other vendors responding to the RFP for this project, and those are only the locals.
There is no "personal selling" involved. Every vendor is skilled, competent, and highly motivated. The RFP dictates style, format, performace, and there is little or no place for differentiation. Bids are conducted in an honest, straightforward manner, and awarded on a non-discriminatory (as far as I can tell) basis. It is, in essence, the technical documentation development equivalent of what is called a "reverse auction" in the building industry, or the "Wal-Mart model" in manufacturing. When the details of the final product or service are strictly defined, the focus of competitive bidding moves to price.
It is the area of pricing adjustments for projects of different scope that I am most in need of advice--specifically, for "normal rates" for Captivate tutorial projects, where style, format, and performance are all explicitly defined in an RFP. The issue is reduced to its essence--how much per hour for generating Captivate tutorials on a 50 hour project versus how much per hour for the same work on a 500 hour project.
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