But.... you fail to factor in the most important variable of all... RISK

There is more risk associated with a fixed-price job. IMO, the developer bears more risk. Thus, in order to properly equate the two (TM vs Fixed Price) - the Fixed Price number must be discounted by the requisite risk.

On one hand, the developer will charge more because of the risk. At the same time, the additional charge must be discounted by the risk. Only at the end of the project will you know whether you won/lost/pushed. Looking prospectively, one must discount accordingly.

Whether one can quantify the risk or not is another issue....

There is no question that one can "bury" many things in a fixed price K. A savvy client however, will still require substantiation of those "other" items. People that bury items play on and hope to cash-in on the ignorance of others.





>One of the benefits of fixed price contracts, IMO, is that they give you the ability to make more money in a given year than a similar time & material contract would. You could see this in one of two lights:
>
>1. Your rate/hour is higher for the given contract.
>2. Number of hours billed exceeds the number of hours actually worked.