Great summary @Khalid Ali. Having worked on both the Vendor and supplier side - having the right team on large scale projects will make to break the project profitability, regardless of the pricing model employed.
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Adam Hibbs
Director
AICPA
447441604299
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Original Message:
Sent: 04-15-2026 02:47
From: Khalid Ali
Subject: Fixed fee projects
Working for a project organisation - I see first hand how margins are made or broken through the management of risk on a fixed fee project, not necessarily through efficiency of delivery.
On your point around building uncertainty into the final price - it's a real tension in the industry.
How do we price for risk but also ensure we're putting in a price which is competitive and delivers value to the end client? If your organisation and it's vendors are pricing the same risks - how do you properly align and price the risks according to program responsibilities to ensure you're not double-counting and pricing yourself out of the competition? (or are there any profit / pain sharing mechanisms you can jointly apply to incentivise delivery and risk mgt?)
T&M is trickier. As these project types should typically be used where scope is less defined - and so any rates should include an element of risk%.
But where vendors are supporting delivery - it can be difficult to get one set of rates that works if deliver / overhead / risk models for each organisation differs - and 'blending' these often puts the risk back on the lead delivery partner if the delivery model changes.
But T&M margins are often lost in the commercial management of a project and a good PM / programme manager is paramount.
Managing spend, delivery against scope and client expectations (through change events / early warnings) are essential to ensure a project isn't sat with disallowed costs that outstrip the accrued risk pot.
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Khalid Ali
Ramboll UK Ltd
Salisbury
+4477171748970000000000
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Original Message:
Sent: 04-14-2026 04:02
From: Adam Hibbs
Subject: Fixed fee projects
Interesting insight. What are your thoughts on the same side of this for Time and Materials projects? For fixed fee projects, it is also about who shares what risk/uncertainty that is built in to the final price (ie it does not all sit with the Vendor). A vendor may also price high due to the uncertainty/risk.
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Adam Hibbs
Director
AICPA
447441604299