Fixed price or day rate: which one protects you.

Under a day rate, a supplier who finds a faster way to do something earns less for doing it. Nobody sets out to exploit that, but incentives shape behaviour whether or not anyone is being cynical, and over a long engagement it shows.

Under a fixed price the incentive reverses. Finding a faster route is rewarded, and the buyer is indifferent because they agreed the outcome rather than the hours.

It only works if both sides accept a written scope with an explicit list of what is not included. Many buyers find that document uncomfortable, because it looks like the supplier limiting their obligations. It is doing the opposite: it is the only thing that makes the price meaningful.

It also demands that you make decisions on time. A fixed price assumes a certain pace of input from the client, and the fair version of the arrangement says so.

Genuine research, where nobody can know the shape of the answer in advance. Ongoing support and maintenance, where the work is real but unpredictable in any given month. And discovery, which is why discovery should be a separate small paid engagement rather than free work absorbed into a quote.

A supplier who insists everything can be fixed price is overselling. One who insists nothing can be is avoiding the scope conversation.

What if the project turns out to be harder than expected?

On a fixed price that is the supplier problem, which is the point. It is also why a supplier will ask more questions before quoting, and those questions are the most valuable part of the process for you.

How do change requests work under fixed price?

Anything outside the written scope is quoted separately before it is built. That sounds rigid and in practice it prevents the slow drift that causes most disputes, because both sides can see what changed and what it costs.

Should discovery be free?

No, and free discovery is usually worse for the buyer. Paid discovery produces a written scope and a prototype you own and can take to any supplier. Free discovery produces a sales document designed to win the work.