Contractor Insists On Using hourly Despite Agreeing On A Fixed Price

[Trevor F]

I met a freelancer on another site, he suggested we use Upwork. We agreed on 1,500 as the total price. He asked me to post the job as 'hourly' here. I brought up the fact we agreed on a fixed price and that it makes the most sense to just pay the amount once the work is apporved. It's creating a website which is basically a 'final product', so paying fixed makes sense.

he delivers project, I approve it, I pay him. He insists on hourly and says that it's better and there is more protection. However, from I can tell, tracking someone's work doesn't = protection. He could just not finish the project. Or the project may not work, or be missing features. Is there any real protection in hourly? Should I be concerned he doesn't want to do a fixed rate? 

[John K]

Trevor, you are right to be concerned. He's not the only qualified freelancer at Upwork, surely, so he should agree to a fixed price payment. As I understand it, he could even create different milestones, with your approval, so that he gets paid along the way, instead of a lump sum at the end, but he'll only be paid if you approve the milestone(s). For a website, for example, it could be a milestone for completing the home page, another for some other pages, etc.

[Avery O]

Hi Trevor, 

I'm not privy to the steps on how a website is created so I cannot comment on whether or not a fixed-price or hourly contract is better for this project. 

However, I would like to share that the platform offers Hourly Protection for Clients where you have the option to dispute hours in your freelancer's work diary within the dispute period. This protects you from the obligation to pay for your freelancer's hours if they are not clearly documented in their Work Diary, and if the screen shots on their Work Diary is not related to the contract terms and requirements. 

You may check this help article to understand when you can dispute a freelancer's logged hours. Maybe you can use it in the future when you decide to use an hourly contract with your freelancer.

[Scott B]

If the freelancer committed to a fix bid than they should stick to it.  Agreeing to a fixed price and then changing it like this isn't appropriate.

Outside of the above, I find fixed bid projects in the development space to be folly.  The reality is that neither the client nor the freelancer is going to be willing to put in the work necessary to properly scope a fixed bid project unless the projects is small and an easily repeatable item.  In the corporate world you will find these things can take weeks of back and forth.  A consulting company, in that case, might be willing to deal with it due to the size of the contract and the potential for on-going business with a known company.  That's not the reality of the freelancer and the client on a site like UpWork.  So what can happen as a result?  Well first off if the freelancer thinks this through they will pad the bid substantially to cover the inevitable. The inevitable will be changes that comes with absolutely every single development project.  With every change there now has to be a discussion about whether that was really in the scope of the agreement and if not, a new price and milestone has to be added.  Those are great conversations [sarcasm].  

In addition let's say the freelancer doesn't do a good job estimating.  Of course they should honor the agreement. But what might actually happen behind the scenes?  Well first, the client might receive shoddy work because the freelancer realizes it's taking much longer and their hourly is dropping like a rock.  The client likely doesn't have any idea about good maintainable and scalable code.  So a less than ethical freelancer with a fast dropping hourly just does the minimum necessary to get the milestone completed.  Not good.  Worse, the freelancer realizes they are losing their shirt and decides to simply bail because even a bad review isn't worth losing more money.  Not good.

The client rightfully needs to protect their investment.  They can do so by setting weekly limits at whatever level they feel comfortable.  Check back after the few hours and make sure the right work is being completed and the right communications are taking place.  If the client starts to feel better and more confident with the freelancer, raise the weekly limit (or not).  The client does not need to set a 40-hour limit and then pray.  Any developer worth anything will provide iterative code and updates within a few hours of work.  There is no reason this should ever be a mystery to the client.  With this the client can control what is spent and the freelancer isn't getting into constant scope creep conversations on a fixed project that neither side could reasonable predict.  

[Scott E]

I'd go for fixed rate under the circumstances. Although it's pretty rare, you're right that he could do a bunch of work, never complete the project and still get paid... riding off into the sunset never to be seen again. Yes, you can view progress and dispute hours, but I'm assuming that's not so simple when making a website. If he was carving a flying horse from wood, then you'd be able to see the progress as the carving takes shape... but it's hard to tell when a screenshot might be random pages of code or something. 

I'd check his profile. If he's earned a lot of money, worked a lot of jobs, got a reasonably high JSS and a bunch of good reviews then there should be nothing to worry about and he probably just has a valid reason he doesn't like fixed rate jobs. Maybe he's more worried about you riding off into the sunset than, looking for an opportunity to do so himself!

If he's got hardly any history, minimal earnings, bad reviews etc... I'd consider hiring somebody else rather than insisting on fixed price. 

[Ravindra B]

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@Scott E wrote:

I'd go for fixed rate under the circumstances. Although it's pretty rare, you're right that he could do a bunch of work, never complete the project and still get paid... riding off into the sunset never to be seen again. Yes, you can view progress and dispute hours, but I'm assuming that's not so simple when making a website. If he was carving a flying horse from wood, then you'd be able to see the progress as the carving takes shape... but it's hard to tell when a screenshot might be random pages of code or something. 

I'd check his profile. If he's earned a lot of money, worked a lot of jobs, got a reasonably high JSS and a bunch of good reviews then there should be nothing to worry about and he probably just has a valid reason he doesn't like fixed rate jobs. Maybe he's more worried about you riding off into the sunset than, looking for an opportunity to do so himself!

If he's got hardly any history, minimal earnings, bad reviews etc... I'd consider hiring somebody else rather than insisting on fixed price. 

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For a website too, you can see the progress by running the source code on your own PC using your browser; you don’t have to rely on screenshots.

ETA: After reading Kathy's post, I too must add that you must specify that the freelancer must submit the source code to you at regular intervals (so you can run it and check) and at the end of the project.

[Tiffany S]

I agree that there's some validity to Trevor's concerns, but what about the flipside? How many freelancers would agree to a $1,500 fixed price contract with a new client that paid nothing until the entire project was complete? That's a lot of hours gambled on whether or not the client makes good.  And, given the discussion about it being difficult to see progress, etc., it doesn't sound as if milestones are going to be any more acceptable to the client.

[Jennifer D]

The big issue for me here is that the contractor agreed to a fixed price but is insisting on a different structure, and the client is unhappy and uncomfortable with this.

Trevor, like others have said, there are thousands and thousands of freelancers here. You are under no obligation at all to work with any one of them. If the freelancer is making you uncomfortable for whatever reason, work with someone else.

[Preston H]

It is inappropriate to use an hourly contract for fixed-price work.

It is inappropriate to use a fixed-price contract for hourly work.

To do either of these things is almost alway an indication of a scammer or a sign that somebody is trying to get away with something dishonest.

[Joachim M]

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@Trevor F wrote:

I met a freelancer on another site, he suggested we use Upwork. We agreed on 1,500 as the total price. He asked me to post the job as 'hourly' here. I brought up the fact we agreed on a fixed price and that it makes the most sense to just pay the amount once the work is apporved. It's creating a website which is basically a 'final product', so paying fixed makes sense.

he delivers project, I approve it, I pay him. He insists on hourly and says that it's better and there is more protection. However, from I can tell, tracking someone's work doesn't = protection. He could just not finish the project. Or the project may not work, or be missing features. Is there any real protection in hourly? Should I be concerned he doesn't want to do a fixed rate? 

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 Don't do it, you have no control over the result. If he stops working in the middle of the job you are screwed.