This model works best for – customers with well-defined requirements and project schedules. Under this option, the customer pays a fixed price for the complete project, which in turn is linked to well-defined deliverables. For any change in scope the customer has to pay a fixed hourly rate which was agreed at the initial stage of start of project. For any changes in the scope there is a standard change request procedure that is followed.
This model guarantees on-time, on-budget delivery of projects. Deliverables, costs and timelines are clearly defined in the fixed cost model.