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Contract Personnel

"Fixed Bid" vs Hourly Staffing

A DeVore Software Development Project Manager summed it up for one of our clients:

With hourly staffing, the individual's sole metric is the satisfaction of the person they are reporting to, and following that person's direction exactly. With fixed bid projects, the individual has the metric of "within budget" in addition to customer satisfaction, and the manner of understanding and evaluating "customer satisfaction" is often defined in writing. The individual becomes a part of the "management team", and the work is less likely to go very far "off course" before correction.

If you have 1) Management capacity and 2) Subject Matter Expertise on board, the hourly assistance model is often the best approach. If your management staff is time constrained, or if the project work is in an area that your staff does not have substantial expertise, the "fixed bid" approach is worth a discussion. It adds a risk management dimension to your outcome.