Re: How do I charge My client? -- about fixed-rate contracts

Subject: Re: How do I charge My client? -- about fixed-rate contracts
From: Thomas Neuburger <thomasn -at- twelfthnight -dot- com>
To: "Marc A. Santacroce" <epubs -at- ricochet -dot- net>, Brian South <BSouthernComfort -at- aol -dot- com>, Tech Writers List <techwr-l -at- lists -dot- raycomm -dot- com>, framers -at- mindspring -dot- com, Free Framers <framers -at- omsys -dot- com>, Lone Writer SIG <stclwrsig-l -at- lists -dot- stc -dot- org>
Date: Sun, 20 Feb 2000 09:44:57 -0800

(Note -- I'm cross-posting this, since I think the information is
useful in several fora.)

On Techwr-l, Marc Santacroce wrote:

Unless you (and your client) have a very good estimate of how long
the project will take, I would stay away from a fixed bid. (You'll
end up eating anything that goes over time and budget.) ...

There's a good way to make this work. These days, much freelancing
is done by the hour, but fixed-rate contracts can be quite successful.

The prototype for this kind of contract is a new product that
needs manuals timed to the product's release. You're done when
the product is out the door. (I call these "fixed-end" contracts.)

Here's what I recommend:

1. Figure out the effort -- X books of Y length and difficulty.

2. Figure out the schedule AND number of drafts -- begin on Date 1,
first draft on Date 2, 2nd draft on Date 3, final on Date 4.

3. Figure out the total price if all goes well.

4. In your contract, state the above, and tie engineering/corporate
input and response dates to each your delivery dates.

5. Now tie payment due dates to each of your delivery dates
like this (note the last two paragraphs):

First payment of $xx due on signing.

Engineering input for first draft due by April 1.

First draft due from writer on April 15.
Second payment of $xx due on delivery of first draft.

Engineering review of the first draft due by June 10.
Second draft due from writer on June 24.

Engineering review of the second draft due by August 1.
Final draft due from writer on August 10.

Final payment of $xx due on delivery of final draft, or
no later than August 24 if project is delayed due to
engineering changes.

Writer agrees to work until the project is completed.
However, additional drafts and work performed after the
scheduled completion date will be billed at the rate of
$xx/hour.

I've never been unhappy with this kind of contract. It clearly states
costs (so there's no wrangling over how many hours something "should"
have taken), and it puts the burden of schedule and size compliance
on the company, where it belongs.

In my experience, fixed-end contracts (where a project has a clear
close date) billed hourly sometimes lead to problems if the client
has slowly grown the task but not the agreed estimate in hours. I'm
sure you know how common this is.

Depending on the client, discussing these situations can be quite
awkward, since their goal is to hold costs down and put the burden
of meeting your "estimate" on you. In the above structure, there's
no awkward discussion about effort. It's just X drafts done by Y
dates, with an overrun rate of Z.

My thoughts,

Tom Neuburger


Mastering Framemaker
Foundation: Building Sentence Skills
<http://www.amazon.com/exec/obidos/Author%3DThomas%20Neuburger/>





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