4 ms·

My inner nihilist thinks the more "optimistic" competitors might be making more money.

• bumby 5y ago
  It can depend on accountability mechanisms. I would like to see more contracts that give bonuses to companies that come in under budget and under schedule and penalize the overly optimistic ones that never seem to hit their target. This is becoming more common in some domains.
  • nohuck13 5y ago
    What domains is it becoming more common in, in your experience?
    • bumby 5y ago
      The predominant domain to use this type of contract is infrastructure construction. I haven’t personally seen it used in software development outside of control systems but I can’t immediately think of reasons why it couldn’t be extended to other domains as well
    • catherd 5y ago
      My contract manufacturing company does this. Our standard contract has a 5% bonus for being less than 10% late on the delivery date (and penalties start around 25% late). After suppliers see the contract they will often revise their originally quoted schedule.