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Tuesday, July 27, 2010

Hourly rates mean nothing on their own...

I've seen so many end-users (ie non buyers) say they want to see hourly rates for the pricing section of the RFP. Time and again these same people don't want to disclose their budget, so its not as if the lowest hourly rate is going to come 'under budget'.

Generally, even if they are paying time & materials for a project, I ask end-users to come up with a scenario or to ask for an estimated project timeline/hours required so they can properly evaluate the rates. Hourly rates on their own don't give a good picture - I've seen people quote $65/hr and spend 500 hours versus someone at $120/hr spend 100 hours on a project...and again, the less experienced people will be at a lower hourly rate, but will take longer/learn on your dime...

Depending upon how well the project is described/detailed in the RFP, it's always a good idea to ask for a project timeline anyhow - obviously the successful vendor will need to sit down and discuss details at a kickoff and revise, but anyone who's done the project before will have an idea of what steps/stages they need to take, and on average how long it has taken them on past projects...

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