Lessons Learned for Outsourcing Organizations

Outsourcing organizations can follow a number of practices to help their projects run more smoothly:

• When reviewing proposals from bidders, examine assumptions very closely, particularly for Firm Fixed Price contracts. Evaluate the assumptions and determine how they will affect the project and how they probably will come into play. Ask the contractor what could happen if the assumptions are incorrect or fail to occur.

• Question estimates closely. Ask the contractor under what circumstances the estimate may be invalid. Ask the contractor how likely it is that it could favorably beat the estimated amounts.

• On Firm Fixed Price contracts, be flexible and willing to negotiate functionality so that the contractor can meet budget and schedule constraints.

• Stay involved with the project. If possible or practical, monitor trends in requirements, change requests, and so on.

• Be aware that traditional contracting practices may be in conflict with modern iterative development processes such as the RUP. For example, specifying that all requirements, documentation, and so on must be completed before any coding begins is contrary to iterative lifecycles. Similarly, requiring all development to be completed before testing begins suggests that a Waterfall lifecycle be employed. Consider having an RFP reviewed by someone fluent in the RUP before releasing it.

• Encourage the contractor to demonstrate releases made at selected iterations during the project lifecycle. This is an opportunity to observe progress on the actual product instead of through status reports and Earned Value charts.

• Consider applying one of the two progressive procurement models described in this chapter.