If managed not to slumber through Part 1 on estimation, then you find yourself waiting with bated breath for the dramatic climax of our tale of estimation and fixed bid projects.
For the sake of this discussion, a fixed bid project is a project that has a fixed price based on a defined timeline. Of the fixed bid projects that I’ve seen, the timeline often has a 10%-15% leeway on the timeline. The cost almost never does – so you can be late, but you’re going to swallow the cost. Also common, just to twist the knife a little bit more, is the penalty clause. If you miss the date, not only are you going to pay for the additional time and resources, but you’re also going to have to pay the customer for the privilege.