Fixed Price Bids

Subject: Fixed Price Bids
From: "George F. Hayhoe" <george -at- GHAYHOE -dot- COM>
Date: Fri, 9 Jul 1999 10:38:08 -0400

Donn LeVie asked:

<<Has anybody (contractors specifically) tried quoting flat
fees for projects
worked on and completed off site? I do that with my
"moonlighting projects"
and clients seem to be happy with that alternative. What
kinds of success or
horror stories does anyone have quoting flat fees vs.
quoting hourly rates?>>

I've had a number of clients and potential clients who
wanted fixed price bids. It seems like almost all
governmental entities here in the U.S. adopted that approach
for outsourced work to avoid the cost overruns that were all
too frequent in the past. The biggest problem I've found is
that the projects are often so abysmally spec'ed that it
takes me a week or two to define the scope of work so that I
can bid intelligently. Then I'm almost always the high bid
because apparently the other vendors have relied on vague
descriptions to make their estimates.

For example, I bid two years ago on a project that involved
producing all the publications for an international
engineering conference, from initial posters and call for
papers to the proceedings. The so-called scope of work
description the client provided was a list of the
publications to be produced--no descriptions, no page

I like fixed price contracts, but I always build in wiggle
room so that I don't wind up being . . . well, you get the
picture. For example, the bid will specify that the fixed
price assumes a maximum of X hours for each major task, with
additional hours billed at the rate of $Y/hr.

--George Hayhoe (george -at- ghayhoe -dot- com)

George Hayhoe Associates
Voice: +1 (803) 642-2156
Fax: +1 (803) 642-9325

APEX '99 Grand Award for Publication Excellence

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South Carolina/Carolina Foothills STC Chapters
1998-99 Technical Publications Competition

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