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Fixed Fee, project not complete

Posted on 2011-03-02
Medium Priority
Last Modified: 2012-05-11
Not sure if this is the right place to ask about this, but not sure where else to go.
(if it's not, and someone knows a forum that could help me, please advise)

I worked on a project a few years ago.  It was a fixed fee project.  It was set up with an Advance payment, 6 monthly payments and a final payment.

Basically, the project began to fall behind due to issues on the Client side.  We couldn't work as we were waiting for them to deal with these issues etc.  This went on for a few months.

Meanwhile, we were still getting the monthly instalments on the fixed fee.  We had every intention of throwing an extra body or so in the final month or two to get the project complete and satisfactory.  
Unfortunately the client had bigger problems and the their entire project (we were only a tiny part of the project) was put on hold.  
There was one monthly instalment and the final payment left to go.

Almost two years later and it's back on again, only the Client now has different personnel and they seem to think we were ripping them off.
Basically, they are looking at the deliverables.  They paid out approx 75% of the fee but didn't really get anything for it.  

From my point of view, this has nothing to do with us and isn't really our problem until they complete the payment of the fixed fee.  Am I correct in this thinking?

Now, obviously I am chasing to get the business from them again.  Some things will have changed, but the little work we did have done will probably still stand up and can be continued.  
Should we offer to complete the project for the remaining fee? (this would probably be at cost to us) Should we treat it as a whole new project?  I'm not really sure where we stand on it.  

It would also be advantageous for us to get on their good books as getting the completion of this project will probably mean a few more continuation projects.

So basically, the question is.  In a fixed fee project, if things don't work out due to Client issues, do they have any comeback/right to be annoyed that nothing was done for the money paid?
Question by:obrienj
  • 2
LVL 25

Accepted Solution

SStory earned 1336 total points
ID: 35017068
So, it sounds like, they had issues, you stopped programming and yet they paid you.
If you had a contract it is all spelled out or should be. If not, if you had an agreement you should honor it, whatever that means.  Regardless, if they feel cheated, and you got paid a lot for not doing anything, client issues or not, then if you want to continue a relationship with them you would probably be wise to "eat" this one, i.e. lose money on this one, in order to keep good faith and get more business from them. In the end, only you can really judge from all of the facts.

I once underbid a project and worked way more than what I was paid, but I went ahead and got it to the point I'd promised and then as the person wanted more and more added--beyond the original deal--I said OK, from this point forward X dollars/hour.  I made more at that point than the fixed fee I'd bid on the first half.  And the client was happy and my name left untarnished.

These are all things to consider.

Author Comment

ID: 35019325
Thanks for the advice.... appreciated.

Yes, to a certain degree you're right..... but it's not as simple as I stopped programming etc.  I had personnel involved that I was paying.... they were sitting doing nothing waiting for Client to get back to them.  

But you're right, I'll probably have to swallow a loss to finish the project.  
LVL 25

Assisted Solution

SStory earned 1336 total points
ID: 35026760
Well, I guess if the project has this sort of magnitude, you need a contract that spells out what happens if you fail to live up to your part and what happens if they do what they did.  If it means, tough luck to them, it should be in the contract.  That's a tough one especially if you were paying these personnel just for that project.  In the end I guess will depend on what it will mean to that business relationship, if it is worth it to you and how it might affect your reputation as a business.  It seems to me that they should at least consider some sort of compromise since they caused it.  Maybe so you don't lose as much.
LVL 29

Assisted Solution

leonstryker earned 664 total points
ID: 35057590
Two things to consider:

1. Contract

According to the terms of the contract, they maybe required to finish paying you and/or you may need to finish the job. This may need to be resolved legally.

2. Future business.

If you are planning to get any future business, then forget #1 and start kissing them where the sun does not shine.

This all falls under the Golden Rule: "He who has the gold, makes the rules."

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