A client asks for a fixed price. The vendor writes a spec, quotes a number, and both sides sign it feeling like they’ve eliminated risk. Six weeks in, the client wants a feature that wasn’t in the spec, the vendor calls it a change order, and the relationship that started as a handshake is now a negotiation over what “originally scoped” meant. That’s not a fixed price project gone wrong. That’s what most fixed price projects actually look like once real requirements meet a document written before anyone had built anything.

The fixed-price contract is built on a specific assumption: that the scope of the work can be defined in advance with enough precision to price it accurately. The agile development model is built on a specific observation: that software requirements are not fully knowable in advance, and that attempting to define them completely before development begins produces worse outcomes than defining them incrementally in response to what is learned during development.