A Fixed price for a software development project is in general not the preferred option for the contractor. It comes with risks, as it is hardly possible to produce a fully reliable estimate of the required effort (and thus: costs), especially for larger projects. For the client organization, on the other hand, the limitation of any cost risks via a fixed price agreement is advantageous.

Now, let's apply the principle of "fixed price" not to the entire software application project, but to smaller scopes of development. This will get us to the "fixed price per sprint", and by applying such principle in a contract the cost risk shifts from the contractor (software service provider) to the client. This Fixed Price per Sprint is common in Agile Projects.


The author is a manager in the software industry with international expertise: Authorized officer at one of the large consulting firms - Responsible for setting up an IT development center at the Bangalore offshore location - Director M&A at a software company in Berlin.