Most on-site IT work is bought one of two ways. You pay a set price for a defined job, or you pay for the hours worked and the parts used. Each moves risk to a different party, and each fails in a predictable way.
This is the buying guide. It helps you choose, tells you what to write into the agreement, and lists what goes wrong. For a side by side table of the two models, see our fixed price vs time and materials comparison. We do not quote rates here, because a rate without a scope is not useful.
Should I buy on-site IT work at a fixed price or time and materials?
Choose fixed price when the work can be counted and the site is known. Choose time and materials, with a ceiling, when you cannot yet estimate the extent or duration of the work.
Many jobs sit between the two. A common pattern is a fixed price for the known tasks, and time and materials for diagnosis or discovery, with a not-to-exceed figure. The question is which party should carry the risk of the unknown, and whether it can price that risk fairly.
What do the two models mean in plain terms?
A fixed price sets the price in advance, whatever the actual effort. Time and materials charges hourly rates for labor plus the cost of materials.
US federal procurement rules describe both clearly. A firm fixed price does not change with the contractor's actual cost, so the contractor carries the cost risk and has a reason to work efficiently. Time and materials pays for direct labor hours at set rates plus materials at cost, with a ceiling price that the contractor exceeds at its own risk. The same rules allow time and materials only when the extent or duration of the work cannot be estimated, and note that it gives the contractor little cost incentive, so the buyer must watch performance closely.
Private buyers are not bound by those rules. The reasoning is still a useful guide.
How do I decide which model fits my job?
Decide by how much of the job you can describe today.
Use these questions as a starting point. Mixed models are normal. A staged approach has three steps: a survey or diagnosis on time and materials with a small ceiling, then the defined work at a fixed price against the written scope the survey produced, then a small allowance for unforeseen items approved case by case. Each party then carries the risk it can see, and the provider does not guess high to protect itself.
- Can you list the tasks and count them per site? Lean fixed price per task or per site.
- Is the fault or condition unknown, as in an intermittent failure? Lean time and materials with a ceiling.
- Are conditions at the site unknown, such as ceiling access or existing cable? Survey first, then price the work.
- Do the same tasks repeat across many sites? A fixed price per task makes budgeting easier.
- Is the scope likely to change as you go? Use time and materials or staged fixed prices, with a clear change process.
- Do you have the time to review timesheets? Time and materials needs that attention.
What should a time and materials agreement include?
A time and materials agreement should include a ceiling, a rate card, a rule for approving overruns, and sign-off on time as it is worked.
Insist on these terms.
- A not-to-exceed amount, and a rule that no work beyond it happens without written approval.
- A rate card that states hourly rates, minimum visit time, billing increments and after-hours rules.
- How travel and waiting time are charged.
- How parts and materials are charged, and whether you approve them first.
- Daily or per-visit timesheets signed by your site contact.
- A named person who authorizes extra work.
What should a fixed price agreement include?
A fixed price agreement should include a written scope, the assumptions behind the price, the exclusions, acceptance criteria and a change process.
The fixed price is only as firm as the scope it points to. Make sure the agreement states what happens when an assumption fails, for example when the site is not ready on the day. Say who pays for a return visit and how a change order is priced and approved. Define acceptance by test and sign-off, not by the engineer leaving.
What goes wrong with each pricing model?
Fixed price fails on vague scope. Time and materials fails on open-ended effort. Both fail when the site is not ready.
With a fixed price, a loose scope turns into a dispute over what was included, followed by change orders. A provider may also cut corners to protect its margin, so define acceptance tests. With time and materials, hours can grow without anyone noticing, and the invoice arrives after the effort is spent. A ceiling and signed timesheets control that.
With either model, the commonest cause of extra cost is a site that is not ready: no access approval, no parts on site, no contact available. A readiness check before dispatch prevents most of it. Our readiness assessment and visit scoping calculator help with that.
To keep a time and materials job on budget, control readiness, approvals and visibility, not rates. Send the engineer only when access, parts and contacts are confirmed, because waiting time is billable under most agreements. Set a check-in point at a fraction of the ceiling so you see the spend before it is gone. Require the work note or timesheet at the end of each visit, not at month end, and match the hours to the report with photos and test results.
What should I ask a provider before I sign?
Ask questions that show how the price behaves when reality differs from the plan.
We quote against a written scope and agree the pricing model, assumptions and change process with you before dispatch. You can use the same questions with any provider.
- What is in the written scope, and what is excluded?
- Which assumptions does the price rely on, and what happens if one fails?
- How are changes requested, priced and approved?
- What happens if the site is not ready on the day?
- Is there a ceiling, and who approves going past it?
- How do you record time, and when do I see it?
- What evidence do I receive at closeout?
Key takeaways
- Fixed price suits work you can count. Time and materials suits work you cannot yet estimate, and needs a ceiling.
- Mixed models are normal: fixed for known tasks, time and materials for discovery.
- A fixed price is only as firm as the written scope and assumptions behind it.
- A ready site, a named approver and signed time records prevent most overruns.