A fixed-bid contract sounds like the safer option for a client: one number, agreed up front, no surprises. In practice, it usually creates a different problem — it puts the vendor and the client on opposite sides of every conversation about scope, because every change either eats into the vendor's margin or gets fought over as "out of scope."
What Time and Materials Actually Changes
Billing time and materials instead means we get paid for the work we actually do, not for guessing correctly about scope months in advance. That sounds like it should favor the vendor, but in practice it removes the incentive to pad estimates defensively or resist reasonable changes because they threaten a fixed number. If a client doesn't need more of our time, they don't pay for more of our time.
The Trade-Off, Honestly
This isn't free of trade-offs. It puts more responsibility on us to be transparent about where the hours are going and to flag scope changes as they happen rather than after the fact, and it asks more trust from a client who's used to a single fixed number. We think that trade is worth it, because the alternative — a contract structure that rewards either side for being adversarial about scope — tends to produce worse software, not just worse feelings.
