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How to estimate amount of work/man hours for an unfamiliar task? This project is fixed bid project from customer. And most of our project is fixed bid project, for the past 3 - 4 project we are running at lost because we never have a so call fixed loyal customer and the technology base will keep changing due to different customer. Therefore, we always run into 2 condition: 1) angry customer which want to uncut our cost but in long run it burns our pocket. 2) Hiring 3rd parties vendor which we don't have technical knowledge to verify their delivery, most of the time all the issue and bug will appear during the closing phase. Endup we need to switch vendor, but in long run....due to different technology needs for different product we were not able to procurement the right vendor to do the task.

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If a task is unfamiliar to you, hire or partner with someone who is familiar with the task or don't bid. If you have a lot of uncertainty in the task, bid it T&M or load a ton of contingency in your fixed price, or don't bid. If requirements change with a change in customer and you don't have a change management process to reprice the changes, then don't bid.

You exposed a lot of internal capability maturity issues in your post. Notwithstanding this current bid, you need to focus internally and mature your processes. If your firm wishes to continue to go after unfamiliar tasks, and you cannot vet your vendors adequately, the solution is simple: do not bid FFP. If FFP is required, walk away.

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    thanks for the input. I have talked to the management to focus on T&M related quote in order for me to better buildup the team competency. – Steven Pang Nov 6 at 7:01
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I've dealt with a similar problem as well and dealt with it as following:

Try to split the project in smaller tasks and give an estimation to each one of the single tasks. Up the price of the tasks which are unfamiliar or risky to you, that way you build yourself a buffer for research or for hiring the third party.

You could also add a legal note to your quotation in which you define that if you underestimated a task by over 20% (any %) of the estimated time, you will contact the customer (and arrange a new contract for that particular task).

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  • Thanks for your input. – Steven Pang Nov 6 at 5:57

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