Proposal Comparison Sample

#1: Establish not-to-exceed cap to limit hourly billing risk

Propose $475,000 total cap (6% buffer over $447,400 estimate). Protects against timeline extensions while vendor retains hourly flexibility. Industry standard for T&M with cap: 10-15% buffer, so 6% is vendor-friendly. Frame as: 'We're committed to this project working - a reasonable cap protects both sides from runaway costs while maintaining your hourly model flexibility.'

#2: Reduce change order markup from 20% to 15% to align with market standard

Present market data showing typical change order markup is 10-15%, not 20%. On expected $40K-$50K in change orders, this saves $2K-$2.5K. Say: 'We understand markup covers administrative costs, but 20% is above market. Can we align with industry standard at 15%? This demonstrates partnership rather than margin maximization.'

#3: Clarify and lock in 'standard hourly rates' for change orders in contract appendix

Request detailed rate card showing: Senior Architect $285/hr, Consultant $195/hr, Junior $135/hr with change orders at 20% markup ($342/$234/$162). Append to contract. Prevents vendor from later claiming higher base rates. Say: 'Let's document what we discussed verbally to avoid any future misunderstandings. Can you add the rate card we reviewed to Appendix B?'

#4: Transfer IP ownership of custom scripts and automation to client

Current contract: vendor retains IP. Request perpetual, irrevocable license or full IP transfer for work product created specifically for your migration. Say: 'We're paying $447K - custom automation created for our specific environment should transfer to us. Either full ownership or perpetual license with right to modify. This is standard in consulting agreements.'

#5: Clarify AWS Enterprise Support requirement - negotiate alternative

Challenge assumption: 'Client has existing AWS Enterprise Support.' If you don't, either: (1) TechConsult leverages their AWS support, or (2) Accept AWS Business Support ($100/month instead of $15K/year). Say: 'We don't have Enterprise Support and $15K/year isn't budgeted. Can you leverage your partner status for support escalations, or will Business tier suffice?' Saves $6K-$7K on project.

#1: Cap travel expenses at $8,000 total to prevent cost overruns

Proposal estimates 4 on-site visits but no cap. Request $8,000 total cap with pre-approval required for any visit exceeding $2,000. Say: 'We appreciate the travel estimate, but let's cap total travel at $8K to ensure budget certainty. This aligns with 4 visits as proposed. If more visits needed, we'll approve additional budget based on clear justification.'

#2: Include estimated third-party tool costs in fixed fee or provide detailed itemization with $3K cap

Current: Third-party tools 'billed at cost' with no estimate or cap. Risk: $1K-$5K uncertainty. Request either: (1) Include in fixed $385K fee (preferred), or (2) Provide itemized list of expected tools with $3,000 cap. Say: 'For true fixed-fee certainty, can we include expected third-party tools in the $385K? If not, please provide detailed list with $3K cap so we can budget accurately.'

#3: Negotiate inclusion of 14-day hypercare support in base fee

Current: Project ends at cutover plus 2 weeks 'reasonable assistance' (undefined). CloudScale offers 30/60/90-day hypercare at $8K/$14K/$18K. Negotiate 14-day hypercare inclusion in $385K base fee (split the difference between 2-week assistance and 30-day package). Say: 'First 2 weeks post-cutover are critical. Can we extend 'reasonable assistance' to defined 14-day hypercare with 4-hour response times? This de-risks go-live for both of us.'

#4: Reduce travel markup from 15% to 10% to align with market standard

Industry norm for travel markup: 0-10% (many vendors bill at cost). 15% is above market. On $6K-$8K estimated travel, reducing to 10% saves $300-$400. Say: 'We understand markup covers booking admin, but 15% is high. Can we reduce to 10% which is market standard? Small dollar impact but shows partnership approach.'

#5: Clarify scope handling if discovery reveals 16-17 applications instead of 15

Fixed fee assumes 15 apps per RFP. What if discovery finds 16-17 (common)? Request: Up to 17 applications included in fixed fee; 18+ requires change order. Say: 'Application inventory can have gaps. Can we build in small buffer - up to 17 apps covered in fixed fee? Anything beyond that, we'll negotiate change order. This provides reasonable discovery flexibility.'

#1: Include network configuration, disaster recovery, and cost optimization in base scope - non-negotiable

These aren't optional. Present as requirement: 'To be considered, proposal must include network/VPN setup, full DR implementation, and AWS cost optimization review. These are production requirements. Please revise base scope and pricing to include these deliverables.' If Stratton can't include in $463K, they're not competitive. Acceptable: $490K-$510K all-inclusive. Above $510K, select CloudScale instead.

#2: Reduce expense markup from 18% to 12% maximum

18% administrative markup on expenses is above 10-15% market standard. On $21,500 expenses, reducing to 12% saves $1,290. Say: 'Your 18% expense markup is above market norms. Can we reduce to 12%? This is still reasonable admin coverage but aligns with industry standards.' If Stratton resists, request expense cap at $25K total (including markup) to limit exposure.

#3: Remove or cap the scope increase rate escalation clause

Current: Scope increase >15% allows undefined rate increases. Completely unacceptable - creates open-ended cost exposure. Request: (1) Remove clause entirely (preferred), or (2) Cap rate increases at 10% maximum and apply only to incremental work (not retroactive to base scope). Say: 'We can't accept undefined rate escalation. Either remove this clause or cap increases at 10% on incremental work only. Without this change, we can't sign the contract.'

#4: Name the AWS subcontractor and disclose/cap subcontractor markup

'Subcontractor TBD' is insufficient for $463K commitment. Request: (1) Name specific AWS partner Stratton will use, with right to approve, (2) Disclose subcontractor's portion of cost and Stratton's markup (cap at 15%), or (3) Contract directly with AWS partner, eliminating Stratton markup. Say: 'We need to know who's doing the AWS work before signing. Please name the subcontractor and disclose your markup, or allow us to contract directly.'

#5: Reduce required internal resource commitment from 50% to 30% of 2 senior staff

960 hours internal effort (50% × 2 people × 24 weeks) is excessive vs. competitors' 20-30% requirement. Request reduction to 30% = 576 hours, saving 384 hours internal effort ($36,480 internal cost at $95/hr loaded rate). Say: 'We can't commit 2 FTEs at 50% time for 6 months. We can provide 30% time (~12 hours/week combined). If you need more client resources, your pricing should reflect lower hours from your team.' Forces Stratton to internalize work instead of offloading to client.

#6: Request 3-5 reference customers for cloud migration practice specifically (post-2022)

Given cloud practice launched 2022 (only 2 years old), request recent references. Say: 'Can you provide 3 references from cloud migration projects completed in 2023-2024? Specifically looking for AWS migrations similar to ours in size and complexity.' If Stratton can't provide 3 solid references, this validates inexperience concern and supports vendor down-select to Proposal B instead.