Fixed-price vs hourly software development, made simple.
Fixed-price means the price and the deadline are agreed in writing before any code is written, so the builder carries the risk of going over. Hourly (time and materials) means you pay for time as it is spent, so you carry that risk. If you do not have a tech team to check the work, fixed-price plus a written delivery guarantee removes the uncertainty you cannot judge on your own.
01 / The two models
There are two common ways to pay for a software build, and they put the risk in different places.
Fixed-price sets one price for one agreed scope, with a delivery date both sides commit to. You know the number before you start. If the work takes longer than expected, that is the builder's problem to absorb, not a bigger invoice for you.
Hourly, also called time and materials, bills for hours worked plus costs as the project runs. The rate is fixed, the total is not. If the estimate was optimistic, or the work hits surprises, the meter keeps running and the final bill grows.
Neither model is dishonest. The difference is who absorbs the unknowns. That matters most when you cannot personally tell whether a build is on track, behind, or quietly going sideways.
02 / Side by side
What changes when the meter is on.
The same project feels different under each model. Here is where it diverges.
| Hourly (time & materials) | Fixed-price (how we work) | |
|---|---|---|
| Budget certainty | An estimate, not a commitment. The final total is known only when the work ends. | One price agreed in writing before any code is written. You can plan the launch budget around it. |
| Scope discipline | Scope can drift quietly. More hours simply means a larger invoice, so there is little pressure to stay tight. | Scope is defined and signed up front. New asks are a clear change order, not a silent overrun. |
| Incentive alignment | The builder earns more the longer it takes. Efficiency and the invoice pull in opposite directions. | The builder earns the same whether it takes four weeks or eight. Speed and quality pull the same way. |
| Who owns the risk | You do. Underestimates, rework, and surprises land on your bill. | We do. If it takes longer than planned, that is ours to absorb, not yours to fund. |
| Change handling | Changes blur into the ongoing hours, so it is hard to see what a decision actually cost. | Changes are priced as explicit change orders. You decide each one with the cost in front of you. |
| What you own | Depends on the contract. Ownership and handover are often left vague. | Code, infrastructure, repo, docs, prompts, evals, and deployment are yours from the first line. |
Want the full method behind the right column? See how we build.
03 / When each one fits
Honestly, hourly has its place.
Pick the model that matches how clear the work is and how well you can supervise it.
-
01
Hourly fits open-ended work you can steer yourself.
- Research or exploration where the scope genuinely cannot be defined yet
- An in-house engineering lead who can read the work and call when to stop
- Small, ongoing tweaks to something you already understand and control
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02
Fixed-price fits a defined outcome you need delivered.
- A clear thing to ship, with a launch you want to plan around
- No tech team to supervise hours or judge whether a build is on track
- A budget that has to hold, with no appetite for an open-ended meter
We work fixed-price because most of our clients are companies without a tech team. If you cannot personally tell good work from slow work, an hourly contract asks you to trust the meter on faith. Fixed-price moves that risk to us, where it belongs.
04 / Why fixed-price de-risks non-technical buyers
A guarantee turns a promise into something you can hold us to.
A fixed price answers "how much." A written delivery guarantee answers "what if it is not what we agreed." You need both.
The price is the price
Agreed up front, in writing. No billable-hour surprises and no scope games. You plan around one number.
Quoted before we startThe date is committed
A Forge runs four to eight weeks against a delivery date we commit to, not a moving range.
Committed, not estimatedA delivery guarantee
Free remediation against the signed acceptance criteria, time-capped at about six weeks. AI behavior is judged against pre-agreed evals. New asks become a change order, and third-party delays are excluded.
In the contractYou own everything
Code, infrastructure, repo, docs, prompts, evals, and deployment are yours from line one. No lock-in and nothing to claw back later.
Yours from line oneWe remove technical and ROI uncertainty, not business responsibility.
The acceptance criteria are signed before the build starts, so "done" is not a matter of opinion at the end. If we miss them, fixing it is on us inside the cap, at no extra cost. That is the difference between an estimate you hope holds and a commitment you can enforce.
Before any fixed-price build, an Audit sets the scope and the acceptance criteria, so the price is grounded in a real plan rather than a guess. The Audit fee is credited in full to the build. See how we build.
05 / Common questions
What is the difference between fixed-price and time and materials?
Fixed-price sets one agreed price for one agreed scope, with a committed delivery date, so the builder carries the risk of going over. Time and materials (hourly) bills for hours and costs as the work runs, so the total is an estimate and you carry the risk of overruns.
Is fixed-price more expensive than hourly?
Not by default. A fixed price includes the builder's risk of overruns, so the headline number can look higher than an optimistic hourly estimate. But the hourly estimate is not the final bill, and overruns land on you. Fixed-price trades a possibly higher certain number for protection against an open-ended one.
What happens if the scope changes after we agree a fixed price?
New work is handled as a clear change order, priced and decided before we proceed. The original scope and acceptance criteria stay fixed, so you always see what a change costs instead of watching it disappear into ongoing hours.
How do I know the work is good if I do not have a tech team?
That is exactly what the guarantee is for. We sign acceptance criteria before the build, and AI behavior is judged against pre-agreed evals. If the delivered system misses those criteria, we remediate it for free inside a time cap of about six weeks. You hold us to a written standard, not to your own technical judgment.
When is hourly actually the better choice?
Hourly fits genuinely open-ended work, such as research where the scope cannot be defined yet, or ongoing tweaks to a system you already control. It also fits teams with an in-house engineering lead who can supervise the hours. For a defined outcome you need shipped, with no tech team to oversee it, fixed-price is the safer fit.
Does fixed-price mean you take on the business risk too?
No. We remove technical and ROI uncertainty, not business responsibility. We commit to the price, the date, and the signed acceptance criteria. Whether the product wins in your market is a business outcome we help with but do not guarantee.
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Last updated June 2026 · Talk with Felipe
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