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Fixed-bid aligns incentives on outcomes. The risk lives with the developer, which means estimates need a buffer and scope needs to be pinned down.Hourly aligns incentives on activi…

Fixed-bid aligns incentives on outcomes. The risk lives with the developer, which means estimates need a buffer and scope needs to be pinned down.

Hourly aligns incentives on activity. Clients sometimes prefer it for unknown scope; developers occasionally prefer it for unknown clients.

The practical mix: fixed-bid for projects with a clear deliverable; hourly retainers for ongoing maintenance and small change requests after launch.

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