What are the pros and cons of a fixed-bid contract?
With a fixed-bid contract the client agrees to pay a fixed amount of money for delivery of fixed software functionality. The good thing about a fixed-bid contract is that you know in advance what it’s going to cost you. And, it puts pressure on the vendor to be efficient. The negative side of a fixed-bid is that the vendor needs to build in additional costs to cover the expense of items that might come up. You also may not be as motivated as you should to cooperate with the vendor when he needs questions answered or help because you’ll think it won’t affect the cost since it’s a fixed bid.
