Agile Contracts

Traditional project contracts are not very agile, yet we often find contracts are a part of the not so ideal real world. While the 3rd line of the agile manifesto states “Customer collaboration over contract negotiation” it is sometimes difficult to convince all the external stakeholders and powers-that-be of this wisdom.

The next Calgary ALPN meeting on Monday will feature Gerard Meszaros from ClearStream Consulting talking on “Are Fixed Price and Agile Mutually Exclusive?” This should be a good talk, I have known Gerard for 4-5 years and he always has a compelling message; backed up by a wealth of experience and a deep knowledge of agile methods. If you are in the Calgary region on Monday lunchtime, come along and hear Gerard’s presentation.

The DSDM Consortium developed a sample agile contract a number of years ago. It is based on the idea of switching from a traditional waterfall approach (fixed cost and variable time and functionality) to an agile timeboxed approach that fixes time and cost and then varies functionality.

The contract has wording that seeks business consensus of delivered value rather than conformance to a spec (that is likely wrong). The document is a few years old now and based on UK contract law not US contract law, but is definitely valuable if you are struggling with creation of an agile contract.

Download dsdm_agile_contract.doc

However, I would caution that creating an agile contract is probably the last thing you want to do and should only be considered when collaboration options have been exhausted.