Comments on: When do you give fixed bid?

By: Ned Collyer

Ned Collyer — Wed, 31 Dec 1969 19:00:00 +0000

Fixed bid everything that has a defined scope that the client will sign off, and you can estimate well. (Can even be big projects).

Ensure that there is a clause that rework and/or change of scope is covered by some means (t&m or CR fixed price costings that are additional to your initial quote).

The paperwork has to be up to scratch.

You can go T&M if you want.

Personally, i find fixed price makes me work more productivly, because the quicker i finish, the bigger the profit.

T&M.. the longer a project drags on the longer you get paid. I would rather do lots of projects than one that drags on for years doing the same crap.

By: VoxxitDesigns

VoxxitDesigns — Wed, 31 Dec 1969 19:00:00 +0000

Sometimes this is a good idea. Prepackaged solutions are often taken advantage of by smaller clients. Although, I do agree that when you want to get your foot in the door, you may want to give clients a packaged solution. I would also note, though, that you may not want to give those clients the wrong idea :)

By: mrsmiley

mrsmiley — Wed, 31 Dec 1969 19:00:00 +0000

I’ve found that when dealing with small business and trade contractors, they will only accept fixed price quotes. Depends on the project of course, but this is they work, so often the only way to work with them it to adopt the same business approach to pricing. As far as they are concerned, you are selling them a product (eg. a website, brochures, business cards, etc).

By: Craig Bedard

Craig Bedard — Wed, 31 Dec 1969 19:00:00 +0000

I believe that is always best to fix bid a project. The project price should be calculated on the value you provide to your client for a few reasons:

1. As you get more experienced, a consultant gathers a lot of reusable work (code etc.) that can be used on future projects. If you charge by the hour, this added 'value' cannot be charged for.

2. Clients never want an hourly rate without an estimate of how long it is going to take. This is the same thing as fixed bidding.

3. An hourly rate is not motivating as you get paid more the slower you work.

By: Jonathan Snook

Jonathan Snook — Wed, 31 Dec 1969 19:00:00 +0000

I’ve always tried to provide fixed pricing. Sometimes this means a little more work upfront to nail down the statement of work but it creates a more predictable situation for both yourself and the client.

The key is to be clear to the client what constitutes an “out of scope” change. It’s a tricky balance between just doing the changes because their small or you don’t want to jeopardize the relationship with the client while on the other hand trying to make sure the client doesn’t feel like you’re nickel-and-dime’ing them.

By: davidjmedlock

davidjmedlock — Wed, 31 Dec 1969 19:00:00 +0000

I agree with Craig. Although I do currently have a situation where I'm providing a mix. I recently stepped into the world of freelancing/independent contracting. I have a full time contract with one company and when I left the last company, I signed a contract with them to provide consulting, since I was, at the time of my departure, their only web developer.

So, right now for this company I provide consulting as needed. This includes troubleshooting, handling errors that occur, meeting with people at the company for various things, etc. When they need a big project developed, they come to me with specs and requirements (or I develop the specs for them and charge my hourly consulting rate) and then I give them an hourly estimate with the option to convert it to a fixed quote. Either way, it works out well for both of us since they get what they need and I get paid pretty well whether it's fixed or based on the time I spend.

It goes to show that sometimes, no single solution is the right one, but a mixed approach can fill everyone's needs adequately.

By: shadowbox

shadowbox — Wed, 31 Dec 1969 19:00:00 +0000

I always provide a fixed price for a project for all the reasons listed above. The only time I tend to fall back on time-based rates is when I have to install content into a site for a client - typically the info on the type of content to be provided can be vague, so I find it easier to say ‘hire me for a day to add content, I reckon I can get approx 30-40 products added’ etc.

That said, I have one client who I always charge by time - this is because he is a complete nightmare over change of scope. Content is constantly changed, specs are vague and subject to several revisions after the fact ‘Oh, now I see it, I don’t like it, please change to this….hmmm, actually, could you now change it to this…’. I still try to get some stuff in at a fixed rate (e.g. design work), but because I know what a pain he is, I do tend to over-price to account for the expected faffing.

By: beley

beley — Wed, 31 Dec 1969 19:00:00 +0000

I work on a hybrid model. Most ‘projects’ are fixed-bids based on our hourly rate and estimated time to complete (as well as value provided, and any expenses). However, when I’m called in as a consultant I just bill my hourly rate. If it escalates into a larger project, we will write a proposal and charge by the project. I’m happy just billing hourly for maintenance, consulting, etc. though.

By: MarkB

MarkB — Wed, 31 Dec 1969 19:00:00 +0000

The only time we DON’T provide a fixed bid is when we’re doing simple maintenance or update work - which typically only takes a couple of hours, so we charge our hourly rate. And even then we can give an estimate of the time, and cost, involved.

In my experience, fixed bids give the client a better idea of the project’s worth, and is easier to sell to them.

By: ecaptus

ecaptus — Wed, 31 Dec 1969 19:00:00 +0000

It is much easier to go with fixed-price when you know what the client’s budget is. You have no worries about coming in over budget if/when hiccups occur. My contracts also include maintenance for changes under 1 hour for the first 90 days. Any changes that take over 1 hour require an additional fixed price contract.