Fixed Price Models

Insights

August 20, 2025

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The Fixed Price model is one of the most common outsourcing approaches, where the total project cost is agreed upon before development starts. This price is calculated based on the estimated time, resources, and scope required to deliver the final product.

Table Of Contents

When to Choose the Fixed Price Model

At Newwave Solutions, we recommend the Fixed Price model for projects that are well-defined with clear deliverables. It is most suitable when the scope is stable and unlikely to change during development. Instead of breaking down tasks into smaller phases, our team provides an upfront estimation of the total effort and cost, ensuring full transparency from the beginning.

Pros and Cons of the Fixed Price Model

While the Fixed Price model offers a sense of security by locking down scope, cost, and timeline from the beginning, it also comes with certain trade-offs that businesses should consider before committing.

Pros	Cons
Clear budget and scope defined upfront	Limited flexibility if requirements change during the project
Reduces financial risks for businesses	Requires significant preparation time to detail requirements accurately
Works well for small, short-term, or well-defined projects	Less suitable for long-term or evolving projects
Ensures timeline and deliverables are contractually guaranteed	Any scope changes may lead to additional costs or delays

The Fixed Price model can be highly effective when your project has a well-defined scope and stable requirements. However, for businesses expecting evolving needs or complex, long-term development, it may not provide the adaptability required for success.

Who will need this?

The Fixed Price model is an effective choice for:

Small, short-term projects with a fixed budget.

First-time outsourcing clients seeking a simple and predictable engagement.

One-time consulting services such as architecture design, feasibility study, or code audit.

Proof of Concept (PoC) development.

Isolated tasks with a defined scope, such as building a specific feature, migrating applications to the cloud, or performing one-time security testing.

Knowledge-sharing activities with clear outcomes.

How We Delivers Fixed Price Projects?

With Newwave Solutions, clients choosing the Fixed Price model benefit from:

Transparent estimation: Clear scope, timeline, and budget agreed upfront.

Predictable delivery: Milestone-based execution with no hidden costs.

Quality assurance: Strict QA and testing processes to ensure results meet expectations.

Risk control: Scope stability reduces uncertainties and ensures smooth execution.

The Fixed Price model is a reliable option for businesses seeking clarity, cost certainty, and straightforward project execution. By defining scope and expectations upfront, it eliminates unnecessary risks and ensures smooth collaboration. Ready to explore the Fixed Price model with Newwave Solutions? Contact us to discuss your requirements. Our team will help assess the scope and provide a clear roadmap tailored to your business needs.

To Quang Duy is the CEO of Newwave Solutions, a leading Vietnamese software company. He is recognized as a standout technology consultant. Connect with him on LinkedIn and Twitter.