A fixed fee per phase, a cap in the contract and every phase priced on day one.
The independent advisor line on an ERP budget should be the predictable one. It is, when the contract is built for it. Five terms do the work, and none of them require a new procurement policy.
Start with the structure
A fixed fee changes who carries risk. When the advisor commits to a price for a defined phase, an optimistic estimate costs the advisor, not you. That one incentive changes how proposals get written. Firms scope honestly up front because they have to.
The setup it replaces is short: hourly work with optional later phases, expanded one amendment at a time, never compared against another bid. Price the whole job and that path closes.
The five terms
1. Fixed fee per phase. Price each phase as a fixed amount tied to deliverables, not rate times estimated hours. Selection is a well understood body of work. A firm should be able to price it.
2. A not to exceed cap on every phase. Where some hourly work is unavoidable, cap it. Put the cap in the contract. A cap in a proposal is a hope. A cap in a contract is a limit.
3. Deliverables with acceptance criteria. “Requirements document” is not a deliverable. “Requirements document covering these modules, reviewed by these department leads, accepted in writing by the project sponsor” is. Clear deliverables show when scope has actually changed.
4. Change orders tied to named scope changes. A legitimate change order says what new work is added and why. “Additional hours to complete the original scope” is a cost overrun, and the contract should say whose problem that is.
5. Every phase priced on day one. If oversight, negotiation support or post go live review might happen, price it in the original solicitation. You get a real comparison across bidders while you still have leverage, and you still decide later whether to exercise it.
Questions for the interview
Proposals are polished. Interviews show structure. Ask:
- “What happens to your fee if this project takes twice as long as planned?”
- “Which parts of your scope are fixed, and which are open ended?”
- “How many amendments did your last three engagements of this size require?”
- “Will you price every phase now, including the ones you call optional?”
- “Who on this team will do the work, by name, for the full engagement?”
The answers do not need to be perfect. They need to be clear.
How fixed fee handles change
Projects change. A good contract handles it. If the agency adds a module, a department or a new decision, that is new scope, priced and approved as new scope. It stays visible instead of buried in hours.
Tie the fee to accepted deliverables and the advisor is paid for finished work, not time spent. That protects quality as well as budget.
The first principle
You would never let an implementer bill open ended hours on your ERP. You demand a fixed scope, a price and a change process. Hold your advisor to the same discipline. It is the standard I hold Avero to. The firm teaching you to buy well should be willing to be bought the same way.
Price the whole job. Cap it. Define what done looks like. Then hold everyone, including your advisor, to it.
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