Fixed price or time and materials: which one protects you

Closetags 5 min read

Fixed price sounds safer and usually is — but only when the scope is genuinely knowable. Here's how to tell which situation you're in.

Clients almost always want fixed price, and vendors almost always want time and materials. Both instincts are rational, and the right answer depends entirely on how well the work can be specified in advance.

When fixed price is right

The requirements are written down, the integrations are documented, and nobody expects to discover major surprises. Most marketing sites, most equipment rollouts and most well-specified applications fall here. A vendor who won't fix-price this kind of work is telling you they don't understand it.

When it's a trap

If the scope is genuinely exploratory, a fixed price just means the vendor has padded it heavily and will fight every clarification as a change request. You'll pay more and enjoy it less.

The middle path we prefer

A small paid discovery phase, priced fixed, that produces a written specification. Then fix-price the build against that specification. You pay for certainty once, and you own the spec either way.

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