Friday, December 4, 2009

Refunding a Contract? Huh?

I have been in business for 20+ years and can safely say this was a new one to me. Sure we have had accelerators before and pay per goal/deadline but never a full refund.

We provided a proposal to an organization which was deemed to be too expensive. Upon further review it was in actuality equal or less than their other estimates when viewed item by item.

That's not the point.

One of the key individuals asked for a complete refund if within 6 months they don't like the solution or want to drop it or go back to what they had. If we would agree to this they would do the project with us. Individually I would, as a business, we can not and will not commit to such a thing. It is an embarrassment to my business and theirs if such a thing occurred. I know this happens all the time, but we are not the size of EDS or IBM and can just shrug it off.

Never been asked that before. Really.

My reply was we were happy to do so, if they would agree to pay us twice the amount of the project cost if in 6 months they kept what we rolled out. So if it was a 10K project so pay an extra 10K. Seemed reasonable to me as a request, but we would still be on the losing side in many ways as it's their choice not ours.

Needless to say they decided it was too expensive. We await their next server failure and "woe is us" story when their vendor asks for more money than the contract stipulated when they run into problems.

See tomorrow's post to better understand where this is going.


  1. UGH! This is one of the reasons I got out of consulting ... too many one sided deals that, in the end, just aren't worth it. I'm glad to be on the other side where I can help negotiate what is a fair price for us all... at least I try to. The slow pay factor of the public sector really drives me .. and others crazy. But THAT is a whole other story!

  2. This reminds me of the last time I fired a client. They wanted a development project fixed bid but wouldn't agree to detail specs. I told them I would do fixed bid but with a 50% risk factor due to unknown requirements.

  3. Tim - I hear that from many people and nice to see you are trying to keep it sane. Public sector pay schedules are a pain, but so is their limits. We had to drop a bid because the maximum of the contract could only provide a month of work at a time per year. Just weird.

    David - I prefer to do it or not do it, I don't like risk that is too unknown. I have offered some clients free work if we can't fix it or create it, so far only gave up twice in 20+ years. But I have also dropped clients for various reasons.