>>I'm used to work with specifications as most of us are. When there is no specification coming from the client and when this is for a fix cost, I insist to receive specification or I do it and the client is charged for. However, in this case, it's on site and the consultants are paid by the hour and the client doesn't care about specification. So, if it takes 200 hours for something, the consultants are paid for 200 hours. Yes, it's true deadlines are blown away. There is no project management.
>You have to create the specifications, module-by-module, with reasonable timelines and have the client sign off on them. Bill them for the time to create the specs and ensure that the client understands that your need to spec out the project impacts the delivery date and cost.

As in the quoted text, this is exactly what I've done since the beginning. However, for this client, this does not apply. Of course, if this would have been a fix cost, I would have not went for it. As we are all on site, if they want to change something, we change it and are all paid for it. It's not pratical as mention in the original message, but we have to live with it. The good side is the contracts are usually extended several times because of that. In a short scale, something planned for 3 months is usually done in 15 months.