Re: FW: Guesstimate THIS! (was RE: Contracting Experiences

Subject: Re: FW: Guesstimate THIS! (was RE: Contracting Experiences
From: Eric Ray <ejray -at- RAYCOMM -dot- COM>
Date: Wed, 7 Apr 1999 16:12:29 -0600

>But sometimes, surely, it meant they knew what they wanted and what they
>were willing to pay for it, didn't it? Most of the work we contract out
>(including *all* of our contract writing) is done at a fixed price -- in
>fact, we generally don't ask for bids, we say "this is what we pay for
>this job; do you want to do it?" Because we send out the same type of
>work over and over, we have a pretty good handle on what we expect. I'd
>hate for novice contractors to think *all* fixed price jobs involve
>clients who are ignorant or dishonest or both. ;-)

But the reason I strongly caution EVERYONE to be wary of fixed
price contracts is that the burden of dealing with issues--of any
origin--is placed squarely on the person taking the fixed price
contract. Say, for example, a new contractor took one of your
fixed price bids. Then assume that the project lead is indecisive,
unclear, or ambivalent about where the project should go. On
an hourly rate, there's a cost to the contracting company for
mid-stream direction shifts, gratuitous revision cycles, or "Oh,
we meant 'blah, blah" and just assumed you knew that really
was "blah blah blah" in OurJargon. With a flat rate, the contractor
must either deal with it or walk away--either way, it's a potentially
disastrous situation. Yes, there are contractual ways to work
around many of these issues, like the revision cycles, but for many
contractors in many cases, each contractual workaround represents
one more lesson from the school of hard knocks.

Eric

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Eric J. Ray RayComm, Inc.
http://www.raycomm.com/ ejray -at- raycomm -dot- com

*Award-winning author of several popular computer books
*Syndicated columnist: Rays on Computing
*Technology Department Editor, _Technical Communication_

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