We have a vast experience with the fixed bid pricing model. In fact, most of our valuable relationships started out with this model but eventually have grown into a Time & Material pricing model (where we bill by hours spent on your project). A fixed price is rarely a good solution for both sides, because:
- it usually takes extra time to come up with an estimation (a fixed bid), and that extra time can be used to work on a project in T&M pricing model
- it usually turns out to be more expensive to the customer, because we have to account for the risks that we take if our estimation will be slightly wrong
- it is inappropriate for research and code maintenance projects where the outcome is unpredictable
- it has the consequence of pitting the client’s management team against supplier’s management team to argue about scope changes that inevitably occur in any project.
The latter effect is undesirable in a business environment because Micrologic is about avoiding conflicts with our clients, as we believe that a good relationship with our customers is the key to success.
With that in mind, we still provide our clients a fixed bid on small or easily predictable projects. We always provide our clients with detailed estimates on all stages of the project and complete
weekly statistics on used resources, so that you know how your money is spent to move the project forward. It’s very important for us to make the cost of the project completely transparent for clients on every stage, allowing them control of the cost.