Category: negotiation

How to use agile methods for the fixed price contracts

November 30, 2007 by Artem

Agile software development methodologies discourage the use of the fixed price contracts. When forced to commit to the fixed price, agile approaches advocate unfixing the project scope. However, even if it is impossible, there are still ways to realize the benefits of agile methods.

Poorly predictable complexities

Sydney opera house, a beautiful piece of art, the Sydney's best known landmark and international symbol was started as a fixed-price, fixed-date project. Unfortunately, since it was no standard building time, it was impossible to estimate all the difficulties and complexities in advance. As a result, it took 13 years and 102 million Australian dollars to build instead of 3 year and 7 million estimated - 330% time overrun and 1350% costs overrun!