This document discusses using agile principles and practices in government contracting. It proposes that customer collaboration over contract negotiation better serves agile values. It describes how some Norwegian government projects have incorporated elements of agile, like sprints and product backlogs, while still using traditional cost-plus contracts. The document suggests a model of competitive bidding between suppliers to deliver user stories could further foster collaboration over negotiation. Overall, it argues that Norway provides a starting point but there is still room for improvement in aligning contracts with agile principles.

1. Agile
Contracts?
Agile Riga Day 2012
Johannes Brodwall, Principal Architect
Steria Norway
@jhannes

2. Motivation

3. Agile Manifesto
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan

4. Customer collaboration
over contract negotiation

5. Does «contract» make a
difference?

6. Hold on, I expected
a much fancier UI
for this.
?
Customer
Supplier

7. Most common contracts:
Fixed price
Time and material

8. Hold on, I expected
a much fancier UI
for this.
Crap
Customer
Supplier

9. Hold on, I expected
a much fancier UI
for this.
No problem, we’ll
work some more
Customer
Supplier

10. «Time and material»
creates the most happiness

11. «Time and material»
creates the most happiness
(Source: My best and worst projects)

12. So why care about the
rest?

13. Do you pay taxes?

14. How should your
government handle:
• We’re running out of money for pensions
• We need to change the rules!
• The current system is huge

15. How should govt spend
your money?
• A big, state-run project
• Hire a random company to do it all
• Just pay consultants until it’s done

16. Can Agile help?

17. Customer collaboration
over contract negotiation

18. PS2000 + Agile

19. Typical Norwegian public
sector project:
«We need to replace huge system X…

20. Typical Norwegian public
sector project:
«We need to replace huge system X…
… we’d like to use Scrum»

21. PS2000:
«Target price»

22. (Target price:
Set a budget,
report cost.
Supplier & client splits difference)

23. PS2000 + agile:
«Colocated»
«Sprints»
«Sprint reviews»
«Product owner»
«Product backlog»

24. … but also
«Negotation phase»
«Requirement phase»
«Acceptance test phase»

25. Whence PS2000?

26. Contract standard from
Norwegian Computing
Association

27. 2001: PS2000 with target
price

28. 2009: PS2000 + Agile

29. Norwegian trends:
• 2 Agile user groups with 100+ people at
meetings from 2005
• Conferences: Smidig 2007 + 2008
• Networking: Devs <-> PMs <-> customers
• Meetups about contracts
• Scrum certifications
• Large and diverse consultancy industry

30. Some project
highlights

31. LARM:
Domain: Electricity reserve power
Application: Operator UI
Internal Integration
Project size: 2 scrum teams plus support
Organization: Supplier + Customer teams
Colocated at customer site
Team size: 7 per team
Duration: 3 years (1,5 years left)
Sprint length: 3 weeks (customer present)
Releases: 3 times per year
Contract: Target pricing for whole scope

32. Smart move:
Reliable product backlog using
scenarios

33. Big win:
First release in use 1 year after
contract, containing most used
screen

34. Big loss:
Feature creep of individual user
stories

35. PERFORM:
Domain: State pension fund
Application: Case worker UI
External Integration
Process flow
Project size: 12-14 scrum teams plus support
Organization: Three suppliers with 3-6 teams
Colocated at customer site
Team size: 10 per team
Duration: 3 years
Releases: 3 times per year
Sprint length: 3 weeks, with shared demo
Contract: First release: Time & materials
Subsequent:
Target pricing per release

36. Smart move:
Contract on price per release
First release on T&M
«Competing» suppliers

37. Big win:
Delievered what was needed
Government is happy
Users are happy

38. Big loss:
Full time requirement spec
Hostile architecture team

39. Customer collaboration
over contract negotiation

40. Reality:
• We must compete
• We must commit

41. IMAGINE:
Project size: Some scrum teams with independent
users and product owners
Organization: Colocated at customer site
Team size: 6-8 per team
Duration: 3 years
Sprint length: 2 weeks, with shared demo
Releases: Every month
Bidding: Performance competition
Contract: Target estimate per user story

42. Bidding: Competitive
delivery

43. Project reference
Resumes
Hourly rates
Supplier
Supplier
Customer
Supplier
Supplier
Supplier Pre-
qualification
Supplier

44. Supplier
Supplier
Supplier

45. 6-10 weeks
Supplier
Supplier
Supplier

46. Analysis
Coding
Supplier
Analysis Analysis
Coding
Coding
Supplier
Analysis
Coding
Supplier

47. Analysis
Coding
Supplier
Analysis Analysis
Coding
Coding
Supplier
Analysis
Coding
Supplier

48. Pricing: Customer sets
budget

49. I need a screen
shot for X. We want
something simple.
Ok. 2
kEURO
Customer
Supplier

50. We’ve
spent half
the budget
Do you have
anything to
show for it?
Customer It’s not
tested yet.
Supplier
Okay, I’m
pulling the
plug

51. We’ve
spent the
budget
Stop!
Customer
Supplier

52. Supplier Commitment:
Δ☺
Δ$

53. Questions and
discussions

54. Conclusion

55. Customer collaboration
over contract negotiation

56. We need an answer for
large investments

57. Norway’s answer ain’t
half bad

58. Norway’s answer ain’t
half bad

59. We can do better

60. Thank you
johannes.brodwall@steria.no
http://johannesbrodwall.com
http://twitter.com/jhannes