benskey — 2013-05-13T10:39:58-04:00 — #1
5 years ago we sold a website project to a client who wanted to prepay for the whole project in order to minimise their company's annual tax liability. We spent about 6 months trying to get the project off the ground and in this time worked only about 20 hours (about 1/5 of the expected project value), before it became evident the client did not have time to give the project the attention it needed. In about month 8 communications dried up completely and we assumed they'd either gone broke, or decided to go elsewhere, or similar. We had many projects on the go at once and so may have been guilty of not chasing them as aggressively as we would have if a) we were less busy and b) they hadn't paid. Whatever the case, on the occasions we did try to progress the project they were unable to participate at their end
Long story short, yesterday I received a call from the guy that had signed the original proposal, keen to get moving as though nothing had happened! In those 5 years we'd gone from:
- a handful of staff in 1 office to 15+ staff in 2.
- no payroll tax to payroll tax
- developing on our proprietary CMS to developing on Open Source, ftp to git, iterative to agile (web used to be so simple!)
- charging a CMS license fee component for our own CMS to not charging for open source
To what degree would you honour the original contract? Very interested to hear what you all deem fair.
For the purpose of this exercise assume that 1/3 of the agreed cost (that was paid in full up front) was the CMS license fee component. It never got to CMS stage due to the client delays, but if it had got that far that would have been the easy money because the work had been done.
Thanks for your input
felgall — 2013-05-13T16:50:05-04:00 — #2
Did the original contract have a time limit or specify that information was to be provided in a timely manner?
If you were pricing the project now would the quote be higher or lower than the original quote?
Is the work that was already done five years ago still usable or have things changed sufficiently that you'd have to start over?
Is what the client is asking for now the same thing they asked for originally or have their requirements changed?
benskey — 2013-05-13T22:03:53-04:00 — #3
1) It simply said:
"The client understands and agrees that the customer‟s active, prompt, and positive participation in the website design and development project lifecycle is a powerful contributing factor to the successful and timely delivery of the project." which unfortunately doesn't state any repercussions that may relate to this particular circumstance.
2) Today the pricing would be similar, but our cost base has grown significantly.
3) We'd largely have to start again. There may be small elements of the design that can be carried over but it'd be unlikely to save more than a couple of hours of work.
4) I'd expect their needs will have changed and this will be considered in any agreement.
I was planning to handle it is as follows:
- Remove the CMS license fee from the equation (1/3 of project value) and liken that to software that he purchased but never used.
- Deduct the hours spent from the original hours total allowed for. (eg 65 - 20 = 45)
- Adjust available hours left to spend based on our standard hourly rate increase. (eg 45 / 1.3)
I'd welcome comments on the above and/or alternative suggestions of what you would deem "fair".
shadowbox — 2013-05-14T04:35:19-04:00 — #4
I reckon your plan of action seems as sound as any. I would probably get on the phone to the guy and just have a chat about it first, see if you can sort something out. I'd be pretty shocked if the guy truly believes he can just carry on where he left off without some adjustments to the original agreement.
webcosmo — 2013-05-15T17:59:30-04:00 — #5
I would say have a chat first, and try to do the job with today's tools, like Opensource, etc, and make the client happy. You did enjoy the money in those 5 years, and he wasn`t a pain about giving it back, so ...