The fixed price (also known as project-based) model is perfect for small and medium scope projects, where requirements, specifications, and schedules can be clearly defined before the start of the project development.

How to know that this model is for you?

It is important to understand when and where to use the Fixed price model to invest money into reasonable solutions and decrease the risk of dissatisfaction with the end result. Here there are several possible options when it is the best to use this model:

Do you care more about the result and not the means it would be achieved with?

Can you describe your project requirements in mutually acceptable and understandable terms and details?

Don’t you have time for the project supervision?

If the answers to the questions above are true and if final project features are so clear that during the development process there is a little place for changes or modifications then this model is right for you.

After the client’s request, we analyze project scope and complexity, provide project delivery schedule and fixed budget for the complete product development for the client’s approval.

An agreement that appears in the result of discussion includes detailed specifics of the project, deliverables, milestones, predefined time frame and fixed budget. The fixed price model is low risk for the client, especially with the well-defined requirements and established project management methodologies. But after the agreement is concluded any changes in features or scope would result in a change in both price and schedule. So it is important to discuss every detail and make an estimate of the appropriate cost for the project delivery at the very beginning.

The service provider and client can agree on periodic payments. The agreement may specify what fixed part of the total cost a client pays on the achievement of each time interval/milestone/intermediate delivery during the project development process.

Stages of a fixed price model

Fixed price model The model based on fixed time and price is easy to understand and it involves the following stages:

Client sends an inquiry and project requirements.
Service provider and client negotiate all the details.
Service provider sends the final proposal, billing, and schedule.
Both parties negotiate agreement and project development begins.
Service provider gives a fully implemented solution.
Client approves the project.

A fixed price model demands a lot of professionalism on the part of the service provider. Unpredicted changes and difficulties have to be undertaken without additional expenses and profit loses. Since all the risks of project implementation lie on the outsource company, they must ensure expert project management, efficient monitoring, quality assurance, and cost control.

Benefits

Among the advantages of the fixed time and fixed price solution are:

suited for small and medium-sized projects;
clear requirements and well-defined objectives and milestones;
low risk for clients, since the risk of successful completion is transferred mostly to the service provider;
relatively little client’s supervision is required;
fixed price based on the project estimate before project delivery commencement;
assurances that project will be completed within the agreed budget and timeframe;
service provider is highly motivated to be efficient and productive.

Our services

Quintagroup offers the Fixed price model for the following services:

Quintagroup works using the fixed price model for projects to guarantee that the end product will be delivered on time, within budget and will correspond to the requirements defined in the agreement.

If you don’t feel that a dedicated team model suits your needs, you can learn more about other pricing models like Dedicated Team and Time and Material model.