Practice: Negotiated Scope Contract

[Kent Beck]

Here is the final practice.

Write contracts for software development that fix time, costs, and quality
but call for an ongoing negotiation of the precise scope of the system.
Reduce risk by signing a sequence of short contracts instead of one long
one.
You can move in the direction of negotiated scope. Big, long contracts can
be split in half or thirds, with the optional part to be exercised only if
both parties agree. Contracts with high costs for "change requests" can be
written with less scope fixed up front and lower costs for changes.
Negotiated scope contracts are a piece of software development advice.
They're are a mechanism for aligning the interests of suppliers and
customers to encourage communication and feedback, and to give everyone the
courage to do what looks right today, not do something ineffective just
because it is in the contract. They might be unwise for you at the moment
for business or legal reasons. Moving in the direction of negotiated scope
gives you a source of information with which to improve.

[J. B. Rainsberger]

Post by Kent Beck
Write contracts for software development that fix time, costs, and quality
but call for an ongoing negotiation of the precise scope of the system.
Reduce risk by signing a sequence of short contracts instead of one long
one.

<snip />

This has become my standard practice, and when I have been able to use
it, it has worked very well. I am interested to know about specific
variations the community uses.

I generally ask for one month's commitment/investment to give us time to
gather a nontrivial amount of information about project pace, customer
involvement levels, that kind of thing. After that, I ask for a series
of two-week agreements, after any of which, "If you don't like how fast
we're going, you must fire us." This line along gets rave reviews.

Often the client counters with a longer contract with a standard
2-weeks' notice termination clause. I can generally negotiate them
towards termination at the end of each 2-week iteration, and they're
happy with that.

I have read (in the Poppendiecks' _Lean Software Development_) about
clauses sharing cost savings for early completion. Who has successfully
negotiated that clause into a project? Who has been in the enviable
position to exercise it? It seems to me to be a somewhat advanced practice.

[Chris Woodruff]

I am a silent reader in the group but this Practice brought up a
question I would like to get ideas about.

Now I really like the negotiated scope idea and think that it would
be a great help with dealing with private sector clients but I deal
with government clients and this Practice will not mesh with the
Federal US practices. Any ideas on a compromise between Negotiated
Scope and Written-in-Rock scope the government prefers?

Thanks

Chris Woodruff

Post by Kent Beck
Here is the final practice.
Write contracts for software development that fix time, costs, and

quality

Post by Kent Beck
but call for an ongoing negotiation of the precise scope of the

system.

Post by Kent Beck
Reduce risk by signing a sequence of short contracts instead of one

long

Post by Kent Beck
one.
You can move in the direction of negotiated scope. Big, long

contracts can

Post by Kent Beck
be split in half or thirds, with the optional part to be exercised

only if

Post by Kent Beck
both parties agree. Contracts with high costs for "change requests"

can be

Post by Kent Beck
written with less scope fixed up front and lower costs for changes.
Negotiated scope contracts are a piece of software development

advice.

Post by Kent Beck
They're are a mechanism for aligning the interests of suppliers and
customers to encourage communication and feedback, and to give

everyone the

Post by Kent Beck
courage to do what looks right today, not do something ineffective

just

Post by Kent Beck
because it is in the contract. They might be unwise for you at the

moment

Post by Kent Beck
for business or legal reasons. Moving in the direction of

negotiated scope

Post by Kent Beck
gives you a source of information with which to improve.

[Kent Beck]

Chris,

I had a long discussion about this topic with an experienced manager from a
large aerospace company. They said that as long as you had the trust of your
contract adminstrator (I think that is the term), you actually had a fair
amount of leeway in the details of executing a contract. If not, they would
kill you with compliance.

At XP 2003 I met two students at a university in Austria who were writing a
pair thesis about XP and public sector contracting in Europe. I don't know
what ever became of their work and I can't find their names.

Sincerely yours,

Kent Beck
Three Rivers Institute

-----Original Message-----
Chris Woodruff
Sent: Friday, June 03, 2005 11:40 AM
Subject: [xpe2e] Re: Practice: Negotiated Scope Contract
I am a silent reader in the group but this Practice brought up a
question I would like to get ideas about.
Now I really like the negotiated scope idea and think that it would
be a great help with dealing with private sector clients but I deal
with government clients and this Practice will not mesh with the
Federal US practices. Any ideas on a compromise between Negotiated
Scope and Written-in-Rock scope the government prefers?
Thanks
Chris Woodruff