HW23: Chapter 22
22.6. Fixed-price contracts, where the contractor bids a fixed
price to complete a system development, may be used to move project risk from
client to contractor. If anything goes wrong, the contractor has to pay.
Suggest how the use of such contracts may increase the likelihood that product
risks will arise.
Fixed-price contracts
may increase the likelihood of product risk because the contractor will be
responsible for any additional cost beyond the amount that they won the bid for
and they might forgo some aspects of software engineering in order to deliver a
product in budget on time. For example, the contractor might not put as many
resources into testing their system if they believe that they will go over
budget because, as we’ve read, software projects can easily go over budget, and
testing makes up a large part of the budget. This would result in a product
that is complete but not tested and therefore prone to more bugs than normal.
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