Commercial structure
Four engagement models, chosen to fit the risk
We work in four commercial structures: fixed-scope delivery when requirements are settled, capped time and materials when they are not, a dedicated development team when the work outlives any single project, and an offshore development centre when you need an engineering function rather than a supplier. The right one depends on how well-defined the work is and who should carry the estimation risk.
- Estimation risk sits with whoever can actually control it
- Every model has a written change-control mechanism before work starts
- IP assigns to you on creation, in all four models
- Exit assistance is contractual, not a goodwill gesture
Commercial facts
- Fixed-scope entry point
- From USD 12,000 for discovery and prototype
- Capped T&M entry point
- Four-week minimum engagement
- Dedicated team entry point
- Two engineers, three-month minimum
- ODC entry point
- Roughly 10 engineers, three-year horizon
- Invoicing currencies
- USD, GBP, EUR, AED, INR
- Standard payment terms
- 15 days from invoice; 30 days on request
- Overlap commitment
- 4–8 hrs daily, by market
- Enquiries
- nitesh@redcubical.com
Side by side
How the four models actually differ
Read the estimation-risk row first. Almost every other difference in this table follows from it. Whoever carries estimation risk prices it in, and the party who cannot control scope is the wrong party to carry it.
What separates the models
The models differ on one axis that matters and several that follow from it. Fixed-scope gives you price certainty and moves estimation risk to us, at the cost of scope rigidity. Capped time and materials gives you scope flexibility with a hard ceiling. A dedicated team gives you capacity certainty and full control of priorities. An ODC gives you an operating function with recruitment and retention included.
| Dimension | Fixed-scope delivery | Capped time and materials | Dedicated team | Offshore development centre |
|---|---|---|---|---|
| Who carries estimation risk | Redcubical. We absorb overrun against the signed scope | Shared. You carry it up to the cap, we stop billing above it | You. We supply capacity, you decide what it builds | You, with our recruitment and retention risk taken off your books |
| Price certainty | Highest. One number, fixed on signature | Bounded. A known ceiling, usually landing 10 to 20 percent under it | High per month, unbounded in total. Predictable run rate | High per seat. Annual budget set on headcount plan |
| Scope flexibility | Lowest. Change needs a priced written variation | High. Reprioritise every sprint boundary at no commercial cost | Highest. Your backlog, changed whenever you like | Highest, plus the ability to change team shape as well as backlog |
| Minimum commitment | One milestone. From USD 12,000 for discovery and prototype | Four weeks | Two engineers for three months | Around 10 engineers and a three-year horizon |
| Ramp time to first commit | 10 to 15 working days including scoping sign-off | 10 working days | 10 working days after shortlist acceptance | 8 to 14 weeks for the first cohort, then rolling |
| How change is handled | Written change request, impact assessed in 3 business days, priced, approved before build | Backlog reprioritisation at the sprint boundary. No paperwork below the cap | Product owner reorders the backlog. No commercial process at all | Quarterly capacity planning plus in-quarter reprioritisation |
| Reporting cadence | Milestone status weekly, demo at each milestone gate | Weekly burn-down against the cap plus fortnightly demo | Daily stand-up, fortnightly demo, monthly delivery review | Weekly delivery report, monthly review, quarterly steering committee |
| Exit terms | Terminate for convenience. Pay accepted milestones plus work in progress | 30 days notice. Pay to the notice date, unused cap is never billed | 30 days written notice. Two-week handover included | 60 days notice, with a 90 to 180 day structured transition plan |
| Best fit | Well-understood modules, integrations, migrations with a known target, fixed-budget procurement | Discovery, greenfield product work, anything where the second sprint will teach you something | A roadmap longer than any single project, or a product that needs continuity of context | A permanent engineering function of 10-plus, or a cost base you want to restructure |
| Worst fit | Ambiguous requirements, research work, anything depending on a third party you do not control | Procurement that requires a single total number before approval | A one-off, tightly bounded piece of work with a hard end date | Under 10 engineers, or a horizon shorter than about 30 months |
Two things this table cannot show. First, most successful long engagements move through more than one model. Second, the cheapest model on paper is frequently the most expensive in practice, which is covered further down this page.
The four models in detail
What is included, how it is priced, and when it is wrong
Each model below lists what you get, how the money works, and the circumstances in which we would advise you against it. The last part is the useful part.
01. Fixed-scope delivery
A defined set of requirements, a fixed timeline and a fixed price agreed before work begins. We carry the estimation risk: if the build takes 30 percent longer than we thought, that is our problem, not your invoice. This is the model procurement teams like, and it is the right answer more often than agile purists admit.
What is included
- A scoping phase producing a written specification, acceptance criteria per deliverable, and an architecture outline. Signed by both sides before the price is fixed.
- A named delivery lead and a named lead engineer, both identified in the statement of work.
- Milestone demos in your environment, not on our laptops.
- Defect remediation against the agreed acceptance criteria at no charge for 30 days after each milestone acceptance.
- Documentation, architecture decision records and handover material as a named deliverable rather than an afterthought.
- Source code in your repositories from the first commit.
How it is priced
- Effort estimated bottom-up by the engineers who will do the work, then reviewed by an architect who was not involved in the estimate.
- A contingency of 15 to 25 percent depending on how much of the scope depends on systems we cannot inspect before signature. We tell you the contingency figure rather than burying it.
- Payment against milestones, typically 20 percent on mobilisation and the balance across three to five acceptance gates.
- Discovery is priced separately and first. We will not fix a price on a system we have not looked at.
02. Capped time and materials
You pay for the effort actually consumed, at agreed blended or role-based day rates, up to a ceiling that cannot be exceeded without your written approval. Scope stays flexible sprint to sprint. This is our most common model for greenfield product work, because it prices honestly for the fact that the second sprint always teaches you something the first one could not.
What is included
- A written ceiling in the statement of work, plus an indicative sprint-by-sprint plan showing how we expect to consume it.
- Weekly burn reporting: hours consumed by role, percentage of cap used, forecast to completion, and variance against the indicative plan.
- A kill switch at every sprint boundary. You can stop with two weeks notice and pay only for work delivered.
- Fortnightly demo of a deployable increment. If there is nothing to demo, that is the signal to have a difficult conversation early.
- The same documentation, IP and handover terms as fixed-scope work.
How it is priced
- Role-based day rates, published in the statement of work, held for 12 months.
- Hours logged to your tickets and reconciled against your own tracker, not just ours.
- Invoiced monthly in arrears for actual consumption. If we use 70 percent of the cap, you pay 70 percent. Unused ceiling is never billed and never invoiced as a cancellation fee.
- Cap increases require a written amendment. We flag the forecast breach when we cross 70 percent of the ceiling, not at 100 percent.
03. Dedicated development team
A named, ring-fenced squad working only on your roadmap, inside your tooling, attending your ceremonies and reporting to your product owner. You get capacity; you decide what it builds. This is staff augmentation done with delivery accountability attached rather than a CV marketplace.
What is included
- A named roster in the contract, with a 90-day no-swap commitment and 30 days notice for any change after that.
- A delivery lead at no additional charge on teams of five or more, covering ceremony facilitation, reporting and escalation.
- Equipment, connectivity, workspace, licences for standard tooling, and statutory employment costs. There are no pass-through charges for any of these.
- Background verification, individual NDA and IP assignment for every team member before access is granted.
- Committed daily overlap with your working day, written into the contract by market.
- Replacement at our cost within 10 working days if an engineer is not performing, with a two-week overlap paid by us.
How it is priced
- A monthly rate per seat by role and seniority band. See hire developers for the current indicative table.
- Invoiced monthly in advance, in your choice of currency.
- Rates held for 12 months, then reviewed against Indian salary inflation with a contractual cap on the increase.
- No charge for public holidays beyond the contractual allowance, no overtime billing without prior written approval, and no recruitment fee.
04. Offshore development centre
A managed engineering function in India operating under your brand, your standards and your governance, with recruitment, retention, facilities, IT and statutory compliance handled by us. Optionally structured as build-operate-transfer, so the entity and the people can become yours later. Covered in full on the offshore development centre page.
What is included
- Recruitment against your role definitions, with your engineers in the final interview loop.
- Dedicated physical space with badge-controlled access, segregated network, and access control policy agreed with your security team.
- An ODC manager, a talent partner and an IT and security owner, all named.
- Employer-of-record responsibilities: payroll, statutory contributions, benefits, and employment compliance under Indian law.
- A governance stack: weekly delivery reporting, monthly reviews, quarterly steering committee.
- Transfer rights, including a defined mechanism for employee transfer if you exercise a build-operate-transfer option.
How it is priced
- Three options: per-seat pricing, cost-plus with an open book, or fixed management fee on top of pass-through cost.
- A one-off mobilisation fee covering space fit-out, IT provisioning and the first recruitment wave.
- Annual rate review tied to a published index rather than to negotiation.
- A transfer fee schedule agreed at signature, so a future transfer is not a fresh commercial negotiation from a weak position.
Paperwork
Change control, and what a statement of work actually contains
How change is controlled
Change control exists so that scope can move without trust collapsing. Any request outside the signed scope is logged, impact-assessed within three business days, priced as effort, schedule and cost, and built only after written approval. On team-based models the equivalent mechanism is backlog reprioritisation at the sprint boundary, which costs nothing commercially.
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Raise
Anyone on either side raises a change request in your tracker. It states the requested outcome, the reason, and the requested urgency. Verbal requests are written up by us and sent back for confirmation, because "we discussed it on the call" is the origin of most disputes.
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Assess
We assess effort, schedule impact, technical risk, and knock-on effects on already-accepted deliverables. A change that invalidates completed work is flagged explicitly with the rework cost separated out.
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Price and option
You receive a priced variation with at least two options where they exist: full implementation, and a reduced version that preserves the schedule. Where a change can be absorbed by descoping something else, we say what.
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Approve
Written approval from your named authorised signatory. Below an agreed threshold, typically two days of effort, your delivery contact can approve directly so small changes are not bureaucratic.
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Build and re-baseline
The variation is appended to the statement of work, the plan is re-baselined, and the new date is the date. We do not leave two competing versions of the truth in circulation.
What is in a Redcubical statement of work
Our statements of work run to 12 to 20 pages. Anything shorter is hiding something that will surface as a dispute. Every SOW contains:
- Scope, as a numbered list of deliverables with explicit exclusions. The exclusions list is the part worth reading twice.
- Acceptance criteria per deliverable, testable and written before work starts.
- Assumptions and dependencies, including what we need from you and by when. Each dependency carries the schedule consequence of it slipping.
- Named people on both sides: delivery lead, lead engineer, your product owner, your authorised signatory for variations.
- The commercial model, rates or fixed price, cap where applicable, payment schedule, currency and invoicing entity.
- The committed overlap window in both time zones, stated as clock times.
- Reporting artefacts and cadence, listed by name and frequency.
- Change control mechanism and the approval threshold.
- Environments and access: who provisions what, and by when.
- Security and data handling, including residency, classification and permitted access.
- Warranty period and what counts as a defect versus a change.
- Termination and exit assistance, with the handover deliverables named.
Money, IP and paper
Payment terms, currency, invoicing, IP assignment and escrow
Payment and IP terms
We invoice in USD, GBP, EUR, AED or INR, by international wire over SWIFT or domestic transfer for INR. Standard terms are 15 days from invoice date, with 30 days available on request. Intellectual property assigns to you on creation, not on final payment, and source code escrow is available through a third-party agent where you need it.
| Item | How it works |
|---|---|
| Currencies | USD, GBP, EUR, AED, INR. Quoted in one currency and invoiced in the same currency for the life of the contract |
| Payment method | International wire transfer over SWIFT to our Indian bank account. NEFT, RTGS or UPI for INR invoices |
| Bank charges | Sender pays sending charges, we absorb receiving charges. Intermediary bank deductions on USD wires are reconciled at quarter end rather than chased per invoice |
| Standard terms | 15 days from invoice date. 30 days available on request and granted as a matter of course to established clients |
| Fixed-scope schedule | Typically 20 percent on mobilisation, then 20 to 25 percent at each of three to four acceptance gates |
| Team-based schedule | Monthly in advance for dedicated teams and ODC seats. Monthly in arrears for capped time and materials |
| FX handling | Rates are set in the contract currency, so day-to-day rupee movement is our exposure, not yours. Annual review is capped contractually |
| Taxes | Export of services from India is zero-rated GST for overseas clients with the appropriate declarations. Indian clients are invoiced with GST at the applicable rate. Withholding tax treatment depends on your jurisdiction and any double taxation treaty |
| Late payment | A reminder at day 7 past due, a delivery-risk conversation at day 21, and a contractual right to pause work at day 30. We would rather have the conversation at day 7 |
| Purchase orders | We work to a client PO where your finance process requires one, and reference it on every invoice line |
A note on tax: we are an engineering firm, not a tax adviser. The GST and withholding positions above are how our contracts are normally structured, and your own tax and legal advisers should confirm the treatment in your jurisdiction before signature.
Intellectual property assignment
- Assignment on creation. Every line of code, design file, schema, script and document created for you is yours from the moment it exists. It is not held hostage to the final invoice.
- Your repositories, your accounts. Code is committed to your GitHub, GitLab or Azure DevOps organisation, and infrastructure is built in your cloud accounts, from day one. This makes the assignment operationally real rather than merely contractual.
- Individual agreements. Every engineer signs a personal confidentiality and IP assignment agreement before access is granted. A company-level clause with no individual chain behind it is weak.
- Pre-existing and third-party material. Our reusable internal libraries are licensed to you perpetually, irrevocably and royalty-free rather than assigned, and every one is listed in the SOW. Open-source components are inventoried with their licences, and copyleft licences are flagged before use, not after.
- Moral rights and attribution. Waived. We do not require a credit line in your product.
- Residual knowledge. We retain the general skills and know-how our engineers acquire. We do not retain your data, your business logic, or anything specific to your domain.
Source code escrow
Escrow answers one question: if your supplier disappears, can you still operate the system. It is worth paying for in some engagements and pure ceremony in others.
- Worth it where we host or operate a system on your behalf, where the build depends on internal tooling of ours, or where your own regulator or insurer requires it.
- Usually unnecessary on our standard engagements, because the code is already in your repositories, the infrastructure is already in your accounts, and your engineers already have commit access. Escrow of something you already hold is a filing exercise.
- How we do it. A tri-partite agreement with an established escrow agent, quarterly deposits verified by the agent, and named release triggers: insolvency, material unremedied breach, or cessation of support.
- What is deposited. Source, build scripts, infrastructure code, environment configuration templates, dependency manifests and a written build-from-scratch procedure. Source alone is not enough to rebuild a system and we will not pretend otherwise.
- Cost. Borne by you, typically USD 1,500 to 4,000 per year depending on agent and verification level.
Exit
Termination and exit assistance
A supplier who makes leaving difficult is telling you something about their confidence in the work. Our exit terms are written to be executable, and we have run them.
| Model | Notice required | What you pay on exit | Exit assistance included |
|---|---|---|---|
| Fixed-scope delivery | None. Terminate for convenience at any time | Accepted milestones in full, plus verifiable work in progress on the current milestone | Handover of all work in progress, current documentation, and a 15-day question window |
| Capped time and materials | 30 days written notice, or at any sprint boundary with 2 weeks notice | Effort consumed to the notice date. Unused cap is never billed | Backlog state, architecture decision records, environment access transfer, 30-day question window |
| Dedicated team | 30 days written notice | Fees to the end of the notice period. No exit or release fee | Two-week structured handover inside the notice period, recorded walkthroughs, runbook review, named-engineer question window for 30 days |
| Offshore development centre | 60 days written notice | Fees to the end of notice, plus any unamortised mobilisation cost per the agreed schedule | A 90 to 180 day transition plan: documentation, paired operation, employee transfer where elected, asset and licence transfer, entity options |
Termination for cause is separate and immediate in either direction on material unremedied breach, with a 15-day cure period. We have never invoked it. We would rather fix the relationship or end it cleanly than litigate it.
- Documentation is current, not reconstructed. Architecture decision records are written as decisions are made, so exit documentation is an export rather than a writing project
- No proprietary lock-in by design. No Redcubical-only frameworks, no build system only we can run, no cloud resources in our tenancy
- Credential and access inventory maintained throughout, so revocation at exit is a checklist rather than an archaeology exercise
- Recorded walkthroughs of each subsystem, deployment path and operational runbook, handed over as files you keep
- A named engineer available for questions during the post-exit window, not a shared support inbox
- Optional paid extension of exit support at standard rates if your incoming team needs longer. Offered, never required
Decision flow
How to choose, in six questions
Work down this list and stop at the first question where the answer points somewhere. It resolves most cases in under five minutes.
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Can you write testable acceptance criteria today?
If yes, fixed-scope is available to you and probably the best value. If no, stop here: fixed-scope will cost you a risk premium of 20 to 30 percent and generate a change-request queue. Go to capped time and materials, or buy a fixed-price discovery first to get to a place where you can answer yes.
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Does the work end, or does it continue?
A bounded piece of work with a real end date points to fixed-scope or capped time and materials. A roadmap that will still exist in 18 months points to a dedicated team, because you are buying continuity of context and you should not pay a project premium for it repeatedly.
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Do you have a product owner who can keep a backlog ready?
Team-based models need someone on your side making prioritisation calls weekly and answering questions inside the overlap window. If nobody can do that, choose a model where we own the plan: fixed-scope, or capped time and materials with our delivery lead running the backlog to an agreed outcome.
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What does your procurement process require?
Some organisations genuinely cannot approve anything but a single total figure. That is a legitimate constraint, not a failure of agility. Capped time and materials often satisfies it, because the cap is a total figure. Where it does not, we scope tightly and price fixed, and we will tell you what the certainty cost you.
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How many engineers, for how long?
Under 10 engineers, or under about 30 months, a dedicated team beats an ODC on total cost and speed. Above 10 engineers with a multi-year horizon, an ODC starts to win on cost per engineer, recruitment throughput and retention, and gives you a transferable asset.
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Where does the risk you actually fear sit?
Name the failure that would hurt most: budget overrun, missed date, wrong product, or key-person loss. Budget overrun points to fixed price or a cap. A missed date points to fixed-scope with milestone gates. Building the wrong thing points to capped time and materials with fortnightly demos. Key-person loss points to a dedicated team with a named roster and a no-swap commitment.
The uncomfortable part
The model that is cheapest on paper is usually the most expensive in practice
Why the cheapest quote costs the most
A fixed price on unclear scope looks like the safest option and is usually the most expensive. You pay a risk premium of 20 to 30 percent, you get a supplier commercially motivated to interpret the specification narrowly, and every discovery becomes a priced change request. The cheapest total cost of ownership almost always comes from the model that prices honestly for uncertainty.
Here is the arithmetic, because it is not intuitive. Suppose a build genuinely needs 400 engineer-days but the requirements are only 60 percent settled at signature.
- Fixed price on unclear scope. We estimate 400 days, add 25 percent contingency for the ambiguity, and quote 500. The 40 percent of scope that was never really defined arrives as change requests, each priced with its own contingency and each carrying re-planning overhead. Typical landed effort: 560 to 620 days. You also spent internal time negotiating variations instead of making product decisions.
- Capped time and materials at a 500-day ceiling. We bill the 400 days actually used, plus perhaps 40 days of genuine rework as the scope resolves. Typical landed effort: 420 to 460 days, invoiced at consumption. The unused ceiling is never billed. You keep the optionality and you keep the money.
- Lowest bidder on the same fixed scope. A quote of 340 days is not efficiency, it is a different plan: thinner senior involvement, less testing, and a commercial need to recover margin through variations. The rework surfaces in month five as a defect rate you now own.
The costs that never appear in a comparison spreadsheet
- Your own management time. A rigid contract on fluid scope consumes your senior people in commercial negotiation. That is the scarcest resource in the engagement and no supplier invoices you for burning it.
- Defensive engineering. A supplier protecting a fixed margin builds exactly what the specification says, including the parts that are obviously wrong. Nobody raises the better idea, because the better idea is unpriced work.
- Change-request friction. Each variation carries assessment, pricing, approval and re-baselining overhead. Twenty small changes on a fixed-price contract cost far more than the same twenty changes absorbed at a sprint boundary.
- Onboarding paid twice. Three sequential three-month fixed-price contracts with different teams means paying for context acquisition three times. Continuity has a real, measurable value.
- The cost of being wrong late. A model that shows you working software every two weeks lets you cancel in month two. A model that shows you a status report lets you find out in month seven. That difference dwarfs any day-rate comparison.
What we will tell you against our own interest
- If your scope is clear, take the fixed price. It is cheaper for you and less profitable for us than a long team engagement.
- If you need two engineers, do not let us sell you an ODC.
- If you have no product owner available, do not buy a dedicated team from anyone until you do.
- If the whole engagement is one integration with a well-documented API, a four-week capped engagement is the right size and we will scope it that small.
Answers
Engagement and contracting questions
Which engagement model is cheapest?
Over a single well-defined module, fixed price usually wins. Over a twelve-month roadmap, a dedicated team is almost always cheaper per unit of shipped functionality, because you stop paying the estimation risk premium and the change-request overhead. Fixed price on ambiguous scope is the most expensive option we sell, and we will say so before you sign it.
What is the minimum commitment for each model?
Fixed-scope work starts at USD 12,000 for a discovery and prototype. Capped time and materials starts at a four-week engagement. A dedicated team starts at two engineers for three months. An offshore development centre needs roughly ten engineers and a three-year horizon to make structural sense.
How do you handle scope changes on a fixed-price contract?
Through written variation. Any request outside the signed statement of work is logged, impact-assessed within three business days, and priced as effort, schedule and cost. Nothing is built until you approve it in writing. We do not absorb scope silently, because silent absorption is how quality quietly degrades.
Who owns the intellectual property, and when does it transfer?
You own it, and it assigns to you on creation rather than on final payment. Repositories sit in your organisation from the first commit, cloud resources in your accounts. Every engineer signs an individual assignment and confidentiality agreement before they are given access.
What currencies can we be invoiced in?
USD, GBP, EUR, AED and INR. Payment by international wire over SWIFT, and domestic transfer for INR. Invoices are raised monthly in arrears for team-based models and against milestones for fixed-scope work, with 15-day terms as standard and 30-day terms available on request.
Can we switch models part way through an engagement?
Yes, and roughly a third of our clients do. The most common path is a fixed-price discovery, then capped time and materials for the first build phase, then a dedicated team once the roadmap outlives the project. Switching is a contract amendment, not a new procurement cycle.
What happens if we want to terminate early?
Fixed-scope contracts can be terminated for convenience with payment for accepted milestones plus work in progress. Team-based models require 30 days written notice, or 60 days for an offshore development centre. In all cases exit assistance is contractual: knowledge transfer, documentation handover and a defined question window.
Do you offer source code escrow?
Yes, through a third-party escrow agent, at your cost. It is genuinely useful where we operate a system you depend on but do not run yourself. It is unnecessary on the majority of our engagements, because the code is already in your repositories and your engineers already have commit access.
Tell us the constraint and we will tell you the model
Send the problem, the deadline and the budget ceiling. You get a call with the architect who would lead the work and a written recommendation naming a model, a price and the trade-off it carries, inside one business day.