RE: Estimating Projects

Subject: RE: Estimating Projects
From: "walden miller" <wmiller -at- vidiom -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Tue, 3 Oct 2000 13:04:58 -0600

I have worked on bill-as-you-work and lump-sum contracts.

As a lump sum example, I negotiated a training development contract for a
lump sum with a payment schedule:
25% up front
25% for a major milestone (at week 12)
50% for the finished project (at week 17)

I included a penalty clause for late source deliverables (on a per week
basis). Consequently, if I don't make my deadlines because my client didn't
provide information, then I charge them the difference between the deadline
and the delivery as a penalty.

As a bill-as-you-work example, I did a job for a company to document a
software program (about a 300 page manual):
I gave them an estimate and proceeded to bill them every two weeks for time
spent on their project. After finishing the beta version of the manual
(still under the estimate), the manual went into the copyedit from hell...
After one round of edits, I asked the company to buy out the contract and
release me from further work. The manual and product were released two
years later. I did other things in the mean time.

I like the lump sum with penalties because when you are working full-time
for a client, it is hard to take on other projects. And when they screw
around with delivering information, you still get paid for their screw-ups.
Basically, they are putting you on retainer. Otherwise, you have to take on
second and third projects just to make sure the money well doesn't dry up.

Regardless of the style of contract, the real bottom line is what you are
comfortable with (based on your current and prospective work load) and how
comfortable you are with your client(s). Also, make sure your contract is

just my thoughts
Walden Miller
Vidiom Systems
Boulder, Colorado

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