Agile KS 3 – Contracting Methods – PMI-ACP Exam

Agile projects are with fixed time and resources but variable scope / features

Agile contract types:

  • DSDM Contract – focuses on “fitness for business purpose”, the deliverables will need to pass tests
  • Money for Nothing and Change for Free – basically a time and material contract that includes early termination options (e.g. when >20% of remaining work) and provides flexibility for changes (provided the client works with the team for every iterations)
  • Graduated Fixed Price Contact – both sides share risks and rewards, e.g. finish early will result in high hourly rate
  • Fixed Price Work Packages – break down the SOW into work packages and estimate the recent work packages with fixed prices first
  • Customized Contracts – mix the above types of contracts to strike a balance between risks, costs, flexibility and quality on both sides

Works best when both sides want a successful collaboration and future businesses, a higher level of trust is required

Payment may be released for each incremental delivery / iteration after passing the acceptance tests / demo.


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