AGILE CONTRACTING MODELS
The topics covered below are also covered as part of our Fundamentals of Agile: PMI-ACP Prep Course.
Fixed-price, fixed-scope (and possibly fixed-time):
Appoint internal employee to act as the customer throughout the duration of the build.
Use previous experience, feel and guesswork for estimation - when possible incorporate agile metrics of existing team and qualification to ground estimates in the closest thing you have to reality.
Write contract scope to be fixed at a feature level rather than a story point level to allow the team to “right-size” feature set.
Fixed-price, fixed-scope, and fixed-time with customer collaboration:
Work closely with the customers at the start of the project to identify prioritized requirements and then work throughout the project with the client to realize highest-marketable feature set and release schedules which maximize ROI opportunity.
Time and Materials:
Makes sense when the requirements are volatile.
Pay for work as it gets done.
Not-to-exceed with fixed-fee (NTE/FF):
NTE: puts a ceiling on the total amount paid to the contracted company, which protects the sponsor in case the work goes slower than expected.
FF: the contracted company is guaranteed a certain profit margin over their materials and subcontractors’ fees.
Fixed price per function point or story point:
The contracting company is paid for each function point or story point delivered to the customer.
Allows customer to change the requirements along the way.
Venture-capital financing model:
Work sponsor gives a round of financing for a certain amount of work.
The contracted company must produce results in order to get more funding.
The result of a work period need not be working software; it could be a paper study, or a requirements document, or anything the sponsor selects.
Incremental delivery with payment on incremental acceptance:
This can be used with either fixed-everything contracts or the NTE/FF contract.
The sponsor expects incremental delivery of integrated, tested systems, constructs and runs acceptance tests at each delivery increment.
The contracted company gets paid after each successful incremental acceptance.
More essential information on Agile Contacting:
From Alistair Cockburn: http://alistair.cockburn.us/agile+contracts
From Jeff Sutherland: http://jeffsutherland.com/Agile2008MoneyforNothing.pdf
PMI’s own Outline of PMI-ACP Course Materialhttp://www.pmi.org/en/Certification/~/media/Files/PDF/Agile/PMI_Agile_Certification_Content_Outline.ashx
11 Books to Readhttp://www.pmi.org/Certification/~/media/Files/PDF/Agile/PMI000-GainInsightsAIGLE418.ashx
Santeon’s PMI-ACP Study Guide:Download