# Fixed price or time-and-materials for your dev: why the reassuring fixed price often ends up costing more

> Source: https://extradev.fr/en/blog/fixed-price-or-time-and-materials-for-your-dev-why-the-reassuring-fixed-price-often-ends-up-costing-more
> Published: 2026-06-16
> Author: Vincent Roye
> Site: Extra Dev (https://extradev.fr)
> Lang: en-US
> Tags: forfait, régie, TJM, externalisation, pilotage projet, forfait agile, budget dev

Fixed price feels safe with a set number, but change orders, rigidity and the risk markup inflate the bill. A data-driven comparison of fixed-price vs. time-and-materials for your development projects.

Fixed price feels reassuring. One number, one scope, one delivery date. On paper, it is the ideal contract for a CTO or a founder who wants to control their development budget. Except that in the real world, **a fixed-price contract bakes the cost of uncertainty risk into its price**, and that risk is expensive. I have seen projects quoted at €30,000 fixed-price end up at €48,000 in change orders, where a well-managed time-and-materials engagement at €180/day would have cost €35,000 all in.

- ⚠️ **Deceptive fixed price**: the set number hides a 20 to 40% risk markup.
- 📊 **Managed T&M**: a short daily ritual and living specs reduce the real cost.
- 🎯 **Agile fixed price**: a price cap with adjustable scope, the best of both worlds.
- ✅ **Clear verdict**: fixed price only for a tightly scoped V1, T&M for everything else.

## What is the real difference between fixed price and time-and-materials?

The two models differ neither by the developer's location, nor by their seniority, nor by the technology used. The distinction comes down to one sentence: **a fixed-price contract is a commitment to a result, a time-and-materials contract is a commitment to means**. Everything else follows from that.

### Why does this distinction change everything for your budget?

With fixed price, the vendor commits to delivering a defined scope for a firm price. If they underestimate the workload, that is their problem. If they overestimate, that is your money wasted. According to the [Atimeus guide](https://www.atimeus.com/blog/projet-forfait-vs-mission-regie), the sales cycle for a fixed-price contract requires a requirements document, a detailed commercial proposal, presentations, then contract negotiation. Several weeks pass between the launch of the tender and the first commit.

With time-and-materials, you are buying time. A daily rate, a developer, a sprint cadence. The vendor bills for days worked. No surprises on the unit cost. The risk lies in management: if no one frames the priorities, days pile up without a tangible deliverable.

**Fixed price shifts the risk to the vendor. Time-and-materials leaves it with the client.** This risk allocation explains the entire price gap between the two models.

## Why fixed price costs more than it appears

A vendor who accepts a fixed-price contract is making a bet. They are betting that the requirements will not change, that client feedback will arrive on time, and that integration with existing systems will hold no surprises. Each uncertainty translates into **a safety margin built into the quote**.

### How does the risk markup inflate the initial invoice?

According to the comparison by [Furious Squad](https://www.furious-squad.com/gestion-projets-forfait-regie/), fixed-price contracts create "margin pressure" for the vendor, which pushes IT services firms to inflate their estimates by 20 to 40% above their actual anticipated cost. That buffer covers the unexpected, but when the project runs smoothly, the client still pays for the pessimistic scenario.

I have staffed engagements on both sides. On a fixed-price contract of 45 days billed at €22,500 (an implicit daily rate of €500), the vendor had built in 12 days of buffer. The project was delivered in 38 days. Those 7 "ghost" days earned the vendor €3,500 without a single commit to justify them.

### Why do change orders turn a fixed price into a variable price?

The real trap of a fixed-price contract is not the initial quote. It is what happens when the scope shifts. And it always shifts. A payment button that needs to handle Apple Pay on top of Stripe. A form that goes from 5 to 12 fields. A third-party API whose documentation turns out to be incomplete.

Every change triggers a change order. According to [Kicklox](https://www.kicklox.com/blog-client/prestation-regie-ou-forfait-comparatif/), a fixed-price project with a "rigid budget" may feel secure, but that rigidity backfires on the client the moment requirements evolve. On the [application development projects](https://extradev.fr/blog/cout-developpement-application-fourchettes-reelles-par-type-projet) I see, change orders represent between 15 and 35% of the initial budget.

**A fixed-price contract at €30,000 that ends at €40,000 in change orders costs more than a time-and-materials engagement at €180/day over 200 days** (€36,000), with zero flexibility on priorities to boot.

| Criterion | Classic fixed price | Time-and-materials (€180/day) | Agile fixed price |
| --- | --- | --- | --- |
| Quoted price (40-day project) | €24,000 | €7,200 (40 days) | €8,400 (cap: 40 days + 5-day buffer) |
| Average observed change orders | +25% (€6,000) | €0 | €0 (scope adjusted) |
| Likely real cost | ~€30,000 | ~€7,200 to €9,000 | ~€8,400 max |
| Time to first commit | 3 to 6 weeks |  "Fixed price charges for uncertainty. Well-managed T&M eliminates it."
>
> Vincent Roye, June 2026

## Frequently Asked Questions

### What is the difference between fixed price and time-and-materials in software development?

Fixed price is a commitment to a result: the vendor commits to delivering a defined scope for a set price. Time-and-materials is a commitment to means: the client buys developer time, billed at a daily rate. Fixed price shifts the risk to the vendor, who compensates with a 20 to 40% markup on the quote.

### How do you avoid budget overruns on a time-and-materials web project?

Three levers: a short daily standup (15 minutes) to align on priorities, a prioritized backlog updated every week, and a senior developer who ships fast with AI assistance. A profile with at least 8 years of experience augmented by Claude Code or Cursor delivers in 3 days what an intermediate profile takes 8 days to produce.

### What is agile fixed price?

Agile fixed price combines a price cap (like classic fixed price) with an adjustable scope (like T&M). The client buys a maximum number of days but can swap features from one sprint to the next without a change order. This model suits projects where the overall scope is stable but the details evolve.

### Fixed price or time-and-materials for a web project: which should you choose?

Time-and-materials is preferable for the majority of web projects: MVP, SaaS, redesign, feature additions. Fixed price is only justified for a tightly scoped V1 with a frozen requirements document validated by a technical profile, on a short timeline (under 6 weeks). For everything else, managed T&M with a daily standup and a prioritized backlog costs less and delivers more value.

### What daily rate should you expect for a senior developer on T&M?

A senior freelance developer's daily rate in France ranges from €450 to €700 depending on the technology and location. Through a structure like Extra Dev, the rate is €180/day for a profile with at least 8 years of experience, augmented by AI. That differential is explained by an optimized software production chain (strict processes, AI tooling, centralized management).

## Sources

- [Projet au Forfait vs Mission en Régie · atimeus.com](https://www.atimeus.com/blog/projet-forfait-vs-mission-regie)
- [Que choisir entre régie ou forfait en prestation de services ? · furious-squad.com](https://www.furious-squad.com/gestion-projets-forfait-regie/)
- [Régie ou forfait : comment choisir le type de prestation idéal · kicklox.com](https://www.kicklox.com/blog-client/prestation-regie-ou-forfait-comparatif/)
- [Forfait ou régie : Quelle facturation privilégier ? · karanext.com](https://www.karanext.com/blog/forfait-ou-regie)
- [Régie vs Forfait : quel type de contrat choisir ? · yieldstudio.fr](https://www.yieldstudio.fr/blog/regie-vs-forfait-quel-type-de-contrat-choisir)
- [Développeur Freelance : Choisir Régie ou Forfait ? · YouTube](https://www.youtube.com/watch?v=Yq6APALFy_U)