Scrum on a Fixed Bid? Yes, You Can!

Scrum on a Fixed Bid?  Yes, You Can!

Can you use Scrum on a fixed bid project?  Sure! Here’s the recipe.

  1. Start with a fixed bid project.  You have the scope, deadlines, and budget defined.
  2. Organize the scope into a Work Breakdown Structure (WBS) of deliverables and work packages, just as you would for a waterfall project.  
  3. Restructure the work packages as user stories.  (Add role & reason to each item.)
  4. Work with the client to rank order the work packages into a backlog, with the highest priority items at the top.
  5. Have the team estimate the effort of each item in the backlog.  Use planning poker, Fibonacci numbers, t-shirt sizes, or your favorite relative-sizing technique.
  6. Start sprints, including sprint planning meetings, daily standups, sprint reviews/demos, and sprint retrospectives.

This way you get all the benefits of using Scrum, including:

  1. Delivering value with each sprint
  2. Finishing the most important things first
  3. Better coordination through daily standups
  4. Identifying problems sooner with sprint reviews/demos
  5. Continuous improvement in productivity thanks to sprint retrospectives

What about Change?

But what if you discover something that needs to be changed?  Using Scrum, you’ll discover this need sooner rather than later, which gives you more options and ability to make the change before it’s too late.

What if the change is going to cost more?  Most fixed bid contracts have some provision for change requests and additional funding.  Use this contract clause as you normally would.

What if the budget really is fixed?  In that case, you can have the client trade lower-priority items in the backlog for the new item so that the overall budget remains the same.  Having sorted the project work into a backlog, and working on the highest priority items first, gives you the flexibility for such tradeoffs during the project.

Using Scrum on a fixed bid project adds benefits that you don’t get from a waterfall approach.  The question isn’t whether you can use Scrum on a fixed bid project. The question is, “Why wouldn’t you use Scrum on a fixed bid project?”

P.S.  Don’t believe me?  For examples of how Scrum has been successfully applied to multi-million dollar fixed bid projects, read Scrum: The Art of Doing Twice the Work in Half the Time, by Jeff Sutherland.  One such example is the FBI’s computer system project that was successfully created using Scrum for less than 5% of the hundreds of millions of dollars that had been wasted on 2 failed attempts using the waterfall approach.

2 Responses

  1. […] How often have you heard that Agile projects are too unpredictable to get locked into a contract – especially a fixed bid contract? Not so. (For more information, see Scrum on a Fixed Bid? Yes, You Can!) […]

  2. […] P.S. Don’t overlook the value that Scrum practices such as daily standups, sprints, and sprint reviews can add to more predictable projects – even fixed bid projects. For more about that, see Scrum on a Fixed Bid? Yes, You Can! […]