If you do careful up-front estimates and clear statements of work then you're pretty damn close to doing a fixed price contract, why not label it as such ?
In my experience, those that do fixed bids and suck at estimating will build in unrealistic reserves to avoid getting burned.
If you are good enough to get as close as you describe it then you could simply underbid by a bit and feel good anyway, after all it's just a small percentage of the total amount that you're risking.
If you've built up a relationship using this model then I can see how you would win against fixed bids, does that happen as well when both you and the fixed bidder are in the same pricerange and the quality of the presentations are comparable?
We often work with early stage startups, where uncertainty is a fact of life. In these cases, both parties agree that hourly is preferable.
For mid-size companies, there is certainly less distinction. We generally give a bracket (+/- 7%) outside of which further discussion is automatically triggered.
> does that happen as well when both you and the fixed bidder are in the same pricerange and the quality of the presentations are comparable?
A great question, but unfortunately it's unknowable except through backchannel heresy. I like to believe our bids are simply always better. :-)
> We often work with early stage startups, where uncertainty is a fact of life. In these cases, both parties agree that hourly is preferable.
Ah, yes I can see that, that was not clear from your initial statements, I thought you meant under 'ordinary' conditions as in when working with established companies.
> We generally give a bracket (+/- 7%) outside of which further discussion is automatically triggered.
How did you arrive at the 7%? Gut feeling or some kind of formula? (It's a funny number to pick, why not 5 or 10?)
> I like to believe our bids are simply always better.
In my experience, those that do fixed bids and suck at estimating will build in unrealistic reserves to avoid getting burned.
If you are good enough to get as close as you describe it then you could simply underbid by a bit and feel good anyway, after all it's just a small percentage of the total amount that you're risking.
If you've built up a relationship using this model then I can see how you would win against fixed bids, does that happen as well when both you and the fixed bidder are in the same pricerange and the quality of the presentations are comparable?