Software development contract – Dedicated team

The article is a part of Code Inspiration’s software development outsourcing Knowledge Base.

After quick overview of the scope of the software development agreement in our previous article, let’s proceed with a detailed overview of a software development contract for a dedicated team.

In time and material contract the main idea is in calculating only actually spent hours for the development. In fixed price model – to reflect a specified in advance timeline for completion and budget.

Dedicated team software development agreement

What is the main idea of a software development agreement for the dedicated team?

  • First of all, in dedicated team model you should define team composition, i.e. how many team participants would be engaged and which would be their roles.
  • Further it comes to the timeline of the contract, for how long the team would be working according to this contract.
  • How many hours should each of the team members spend per month.
  • What is the monthly budget for the team and what is the total budget for the software development agreement.

4 points mentioned above are considered to be integral parts of any software development agreement created to hire a dedicated team.

Now, let’s get more details on each of the points mentioned above.

Dedicated team composition

A team can consist of minimum 2 people and the numbers can go up to infinity :). However, the standard team for the project is usually around 6 team members. As an example, let’s name the roles which are usually engaged in a native mobile app development project:

  • IOS developer
  • Android developer
  • Full-stack developer
  • QA
  • PM
  • Designer

Dedicated team timeline

It is rare to see a software development contract for a dedicated team with a term of less than 6 months. Usually this type of contract is created for a term of 6 months or one year with a possibility to prolong. Nowadays, when things are far away from being stable because of post-COVID situation, it is rare to see contracts for 2 or more years as well.

Time of engagement per month

The main benefit of hiring a dedicated team is absence of necessity to use all the units full time. If you need QA only 20 hours per week, and designs in the very beginning – you can simply discuss it with the software development company and reflect it in the contract. While most of the development team is usually hired full time to do the progressive development, DevOps services, design services are not necessarily required for a full time load.

Dedicated team budget

The budget is usually discussed per month. Based on amount of team members and their expected efforts the sum can vary from month to month. That’s why for this type of contracts it is very convenient to use a payment schedule, which reflects monthly invoices together with a total sum per contract.

After putting together all integral parts of the agreement, it is good time to think of specific points important for you and your company. This can cover multiple aspects, such as, for example:

  • communication channels,
  • daily stand-ups for the team,
  • releases and development methodology,
  • annual leave policy,
  • travel policy,
  • technical qualification of the team members,
  • procedure to change a developer on the project,

and many other points which will describe the rights and responsibilities of both parties.

Software development contract – dedicated team, other aspects

Before signing the contract pay special attention to the procedure of prolongations, penalties if any, and procedures set to terminate the contract in advance.

One common situation on with a dedicated team model is necessity to get more developers on board while doing development. There are 2 easy ways to reflect it in the contract. Either to add a point indicating a price for a new unit which could be added per request. Or simply do a so-called supplementary agreement for each new team member with a notice that the additional agreement is an integral part of the general one.

Hope this structure will help you to concentrate on important points while negotiating on your software development agreement for your future dedicated team.

The article is a part of Code Inspiration’s software development outsourcing Knowledge Base.