Workshop

The following papers were discussed at the workshop (click on hyperlink to see paper): Optional Scope Project, by Marina Morgagni – Manager, eXtreme Programming Centre & Piergiuliano Bossi – Coach, eXtreme Programming Centre, Quinary SpA, Italy Pay Per Use Contracts, by Nora Sleumer, Massimo Arnoldi, Massimo Milan Lifeware SA, Switzerland Draft DSDM Contract, Commentary, & License, by Richard Stephens and the DSDM Consortium Excerpt on Contracts from Lean Software Development, by Mary Poppendieck and Tom Poppendieck
The following contract types were discussed:
Optional Scope Contract General release Plan --> rough cut cost/schedule estimate (No Charge). Work in 1-4 week XP iterations, developers estimate each story, developers know velocity. Customer pays on acceptance of output of each iteration. Work can be stopped any time, but customer must pay for current iteration. See www.quinary.com. Alternate: Small fixed-price contracts.	Buyer Motives + Early value received + Velocity --> Visibility --> Trust + Trust Grows + Stop at any iteration if need change or vendor not okay ++ Can change requirements in middle of project + Most Critical Features Competed – Must Prioritize Requirements		Vendor Motives – Customer may exploit + Velocity --> Visibility --> Trust + Trust Grows + Difficult for Government work + Risk only one iteration
Pay Per Use Contract Goals of both parties are aligned. Requires Trust. Intellectual Property ownership is an issue. Must identify revenue by feature Seller of product responsible for marketing Similar to: Profit-sharing Contracts	Customer (Seller of Product) Motives + Shared risk (opportunity cost) + Less front end cost + Market feedback – Loss of share of long term revenue		Vendor (Producer of Product) Motives + Shared Risk + Incremental Payments + Difficult for Government work + Long term, higher revenue potential – More front end cost
*DSDM Draft Contract* MoSCoW Priorities (Must Have, Should Have, Could Have, Won't Have) Fixed Cost for M plus as many S, C as possible in cost/schedule	Buyer Motives + Fixed Cost – Might not get S, C		Vendor Motives + Won't establish bounds
*Fixed Price Contracts* Many buyers require fixed price contracts. Vendors should strive to sell the benefits of agile development to a manager at a high enough level to override purchasing department policy.	Buyer Motives + Cost known up front – Risk: vendor cannot deliver, loose time and cost – Need scope detail up front – Transfer risk to vendor		Vendor Motives + Customer has no incentive to limit scope – Vendor bears cost risk – Scope inflation
*Target Cost Contract* Trust relationship needed Joint target cist defined - includes changes Joint responsibility for cost - scope Cost of exceeding target shared between parties (negotiated) Relationship leads to: Follow-up projects	Buyer Motives + Fixed Cost – Might not get S, C		Vendor Motives + The Won'ts establish bounds
*Satisfaction Guaranteed Contract* Pay for time at cost (low rate) If satisfied with final result, pay higher rate at the end – Large companies usually paid higher rate – Small companies usually did not Use Small contracts Can combine with profit sharing contracts	Buyer Motives + Buyer Defines Satisfaction		Vendor Motives + Eliminate risk of non payment + Build reputation
*Co-Souring Contract* Vendor and buyer staff work together Vendor must have reputation	Buyer Supplies project management and has responsibility for project		Vendor Mentors/coaches buyer staff in agile/technical skills
The following customer and vendor categories were identified:
*Customer Types* Government * National * Military * Local (can have personal relationship) + Financially stable – Need a track record +/– Money source dictates formality Prime Contractors + Get small companies into government – Little process or contract flexibility – Slow to pay – If prime is not financially stable, sub looses Large Companies * Internal Project * Product * Service (eg. web site) Small/Medium Companies + Better access to decision makers		*Vendor Types* Internal * Consultant * Service Organization Large Consultancies Small Companies * Custom Development Individuals VAR's * Sub-contract Professional Services from Product Company