SA Developer .NET

Hi guys,

In which ways does companies quote for software projects? I've heard of Fix-fee and per hour rate for work done. Which works best?

 Regards,
Adriaan

 Hi Adriaan,

 

There is no set way to quote, but normally a per hour rate will be used against an hourly estimate to quote a fixed amount to a client. For example R250 p.h * 100 Hours worth of work. Or the alternative is to negotiate an hourly rate on a time and material basis with the client - the hours you work get  till completion (or per month) get invoiced to the client.

Does clients prefer one over the other? Or is it mostly the development company that decide what works best for them.

adriaan:

Hi guys,

In which ways does companies quote for software projects? I've heard of Fix-fee and per hour rate for work done. Which works best?

 Regards,
Adriaan

I prefer the per hour rate for work done. Generally how I work is:

1. I create the technical spec charged at a specific rate lower then my normal development rate. So let's say I charge around R300 an hour for developing, I charge R250 an hour to create the technical spec. I also have a maximum charge for the technical spec, so I always tell the client the maximum amount they will be charged for it, so if I think the spec will take me ten days (80 hours) I'll say the maximum charge for the spec will be R20000 (80 hours x R250 per hour). So they will basically get the spec for a maximum price of R20000.

2. Part of my technical spec will give the maximum estimated timelines of how long the project will take, then depending on that I charge different hourly rates. The less hours the higher the charge:

0 to 25 hours - R400 per hour

25 to 50 hours - R375 per hour

50 to 75 hours - R350 per hour

75 to 100 hours - R300 per hour

100 hours up - R275 per hour

 However ANY CHANGES from what is set out in the technical spec is charged at the maximum about (R400 per hour for changes to the spec and development time).

Hope this helps...

---

"I would love to change the world, but they won't give me the source code"
Meeting Place - chat online with anyone, anytime, no downloads or plugins required

It depends from client to client. Most prefer fixed quotations. But we always aim to do time and material projects. This helps us in event of scope changes etc.

Some good guidlines!