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business·7 min read
Fixed Price vs Time & Materials: How to Choose Without Getting Burned
An honest breakdown of software development pricing models, when fixed-scope works, and when agile sprint teams save millions.
AM
Alex MorenoFounder & Principal Engineer
Most software agency disputes stem from misaligned contract structures rather than technical failures. Fixed-price contracts incentivize agencies to cut corners when scope expands, while unmanaged Time & Materials can lead to runaway budgets.
When Fixed-Price Makes Sense Fixed-price milestones are ideal when requirements are tightly scoped and architectural spikes have already been completed during a discovery sprint. You get predictable financial exposure and guaranteed milestone deliverables.
When Dedicated Sprint Teams Win For high-velocity product development with emergent requirements, dedicated senior teams with bi-weekly sprint reviews provide maximum velocity without artificial change-request friction.
Written By
Alex Moreno
Founder & Principal Engineer
Specializes in Architecture + delivery. Part of the senior core team delivering high-leverage software at DosVectis.