T&M and Fixed Bid - Testing Services

Even before companies raise RFP for a project/outsourced work (as also prior to starting any software project initiation), the estimates for work are worked on at a high level to understand the time it will take to complete various phases of the work. Typically, the effort distribution for various stages of the software development lifecycle is: Design 15%, Construction/Coding 50%, Testing 30%, and Documentation 5%.

In the above generic estimate, unit testing is considered part of the development work. The figures tell us if coding itself consumes 50% of the time, rest of the time is the cumulative effort spent on design, testing and documentation. Therefore, if we estimate for 200 man days of coding effort, this would mean it will take another 200 days for the complete project!

We came across a scenario where the client was trying to develop some generic principles on T&M and Fixed Bid for Testing Services such that he can use them directly say Unit Testing can be done by Fixed Bid, Stress/Volume testing can be done by T&M!

However, the problem here is the client is not confident of the project estimate. So, the sub allocation of tasks within testing services will also change along with the project estimates. The 30% of X would keep changing with the value of X. What the client does not realize is there are certain factors to be considered which are unique to each project. There cannot be a thumb rule as the client expects. Depending on the time, money, resources and the quality of work expected out of the project (we shall have to desist talking about "ALQ, accepted level of quality as there is nothing "acceptable" in real sense") we define what kind of tests are critical for the project depending on the shipping date. Usually, companies go for fixed bid when there is a limitation of the budget and when the schedule is of priority continuous support is needed, they go for T&M. To summarize, investor options are important for making a decision on the kind of bid a company would like to offshore especially for testing service.