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How to Help Mitigate Open-End Software Contract Fiscal Costs


It’s 2020, and you start your new project. Your company has used open-ended software contracts in the past, but it left a bitter taste in your mouth because you may have hired the wrong company. Progress of the project wasn’t as fast as you’d like, and you went over budget after the company promised their fixed estimate to get set in limestone. 

Thinking back, one mistake you made was not verifying how the staff augmentation provider would help mitigate the cost of the contract. Here are six proven methods we use with every client to help reduce financial risk with open-ended software contracts.

Minimum Viable Product (MVP)

Dealing with some companies, you may get a vast requirements plan that expands beyond what you need to get your project functional to do the job. With your initial project, you need to keep upsells to absolutely what’s required to build your minimum viable product.

When we have a requirements meeting, we decide on the absolute MVP to get the project done or find the best solution for your problem. Where many companies will upsell you making it seems necessary, we build phases for future solutions you can choose to pursue. 

For example, we recently met with a business having issues with their Access data. We started with the solution to move the trouble data to their in-house servers with SQL. This we called phase one. We created another stage to help further eliminate the need for Access and creating a UI with the remainder of the data migrated to their new databases.

Offloading Communications from Developers to PM

Many staff augmentation and other staff solutions depend on developers communicating with your PM or IT management. When developers are required to make the communications, including attending various meetings for non-technical issues, this causes the project to take much longer.

Our staff aug teams include a PM to perform communications and be the direct liaison between your organization and company. With communications offloaded to the project manager, developers have extra hours a week to ensure timely completion of your project and help mitigate open contract costs.

Continuous Q/A (Quality Assurance)

On the other end of the spectrum, communications may be lacking. You may go weeks without hearing from the developers, PM, or company. You may not know of issues that can cause the project to continue longer. This is purely unacceptable.

We have frequent meetings with clients to ensure the quality and transparency of the project and our work. We have bi-weekly meetings with many of our clients. Our developers and PM participate in your IT daily standups. Our PMs are available for communications, and you get the answers you need. Issues are brought to you immediately.

Identify Our Underperforming Resources

Underperforming resources are a massive issue with the supply of qualified developers lower than the demand. Our model allows us to correct underperforming resources. Many companies outsource further, or contract staff aug work out to freelancers, which makes correct resources much harder to handle.

Our model of employing our developers allows us to correct issues with underperforming resources using a step-based model. We assign backups to each account to ensure if there is a need for reassignment, your project continues according to plan. Retraining is another option we use to provide our developers to get the training and practice to make them highly capable. Termination is an absolute last resort when resources are not compatible with ours and our client’s business models.

Chose Low-Risk Technologies to Build Your Project

Another way to help with open contract costs is to stick with technology that is proven and still relevant to stay competitive. Technology is continuously changing, but staying just below bleeding edge technology will keep you advanced enough to keep at lower risk while remaining competitive.

A balance of new technology with tried and true tech and methodology needs to be found. One example of this is with a client we had when GraphQL was newly opened sourced. We attempted to utilize GraphQL, but the client wasn’t the right fit to make an API like this work efficiently for the amount of data actually used. We determined using traditional SQL was the best fit for the client.

Fully Vetted and Trained Developers Before They Even Look at a Client

Many staff augmentation companies and other outsourcing companies want to get billable hours quickly. The problem is they often scale up their development staff as the work comes in. Other staff aug companies hire contractors to get a job done as needed. The problem with this practice is the lack of proper vetting and training.

We have several ways we help reduce the risk of unqualified developers and engineers. One practice we use is internships. Our CEO is an instructor with the local college and has the advantage of giving those who show exceptional skill an internship. Interns are trained and signed off by our CTO before ever thinking about working with a client.

Developers with experience are tested and vetted to ensure the highest quality engineers work with our clients. We don’t use outsourcing, and all developers are staff located in NY and 100% US-based. This is the best model to work with.


Take the time to ask how the company you interview how they mitigate open-end contract costs. Learning how a staff aug company handles resources, hiring, and communications can show you how productive developers and the company as a whole may be. 

Are you fully staffed for your 2020 IT Projects? If not let’s have a conversation. Covey specializes in 100% U.S. based commercial and government software staff augmentation to get your projects done. We work with AWS, SaaS development, custom software, blockchain, agile methods, and DevOps implementation. Email us or give us a call at 315-738-6016 to learn how we can help your business or agency.