Workshop Report

A Tale of Three Companies: A Story about Inter-Organizational Contract Structures in Agile Development by Angela Martin of Victoria University of Wellington, New Zealand, reported on how three companies worked together.  The infrastructure company was working under their standard arrangement, while software was being developed with a time-and-materials contract. 

An Experience Report by Michael Hirsch of Zühlke Engineering in Zürich, Switzerland, discussed how his company has successfully done agile development under contract since 1999, by dividing the contract into two parts: inception and development.  The inception contract outlines the overall effort and proposes a development contract.   The development contract may be fixed price or time and materials, but either way they are iterative and involve on-going customer feedback.  Customers who try time an materials always prefer it for future contracts.  Michael shared with us The Zühlke Software Development Process.

An Experience Report by Gerard Meszaros of Clear Stream Consulting in Calgary told the story of how difficult it was to get contract language which allowed for downstream changes, and how the ultimate success of the project depended upon embedding the acceptance of change into the contract.

A simple Prioritizable Scope Contract was presented by Klaus Wuestefeld.  We all loved the term.

The Position Paper by Steve Berczuk echoed the general discussion.

In Fixed Price, Fixed Date Contracts at Engage, Ken Schwaber noted that there is no silver bullet.

Christian Sepulveda discussed using a Licensing Clause in Agile Contracts.  This approach helped him to get paid in one contract.

The Fixed Price Contract from Hell was discussed by Mary Poppendieck.  She also discussed the Target Cost Contract used in automotive supply contracts.  More on this can be found in the Contracts Excerpt from Lean Software Development.

One form of target cost contract is the Declining Rate Contract, discussed by Tom Poppendieck.

We discussed a contract type called Maximum Cost Latest Date Contract.  In this contract, the vendor establishes the most that the system could possibly cost and the latest it could possibly be delivered.  Then the features are developed and (hopefully) deployed iteratively.  At any time, if the customer perceives that they have received enough value, they can cancel the remainder of the contract for 15% of the remaining cost.

Mary Poppendieck showed a slide demonstrating that 20% of requirements generate 80% of the value. 
Here it is:  Extra Features.