https://www.henricodolfing.com/2019/10/case-study-hertz-acce...?
https://www.henricodolfing.com/2019/10/case-study-hertz-acce...?
https://www.digitalhealth.net/2021/05/nhs-digital-denies-con...
Things like this are way too common these days and not only with software, I have seen it myself may times. If I were a CEO (I far from it), I would make sure that the contract states exactly what is needed plus cost recovery if delayed more than 6 months.
edit: typos
That initially sounds incredibly shady, however it's not infrequent for projects to fail for reasons outside the contractor's control. Maybe the client can't make up their mind as to what they want, or internal politics mean funding gets cut for the project and it's terminated halfway through. Big contractors absolutely will sign a contract with clauses around deliverables and timelines, but they'll also refer every little deviation from what's listed in that contract to a change control committee to ensure it's accounted for, and doesn't come back to bite them in the ass.
Mostly you don't want to run a project like that, because as you work through the implementation you find variations from what was originally documented, or new edge cases that need dealing with. In many cases you're better off taking the risk of overspend or overrun than ending up with some software that perfectly fulfils a set of requirements that don't reflect reality.
Having used this particular one in the past. You want to have your details in order before you build anything (waterfall). But at that point you might as well make it yourself in house. But you are already committed to it (sunk cost).
It is great for middle managers who want to still 'code', but not really, but want to be architects. They get a 'cheap' team and maybe look like they are still doing things. I personally got the leftovers of that on a few projects when the manager realized it was basically a double time job to manage his own team and the offshore one too. The manager will get bored with it or overwhelmed by it and realize 'oh wait I need 3 of my devs and 2 PMs to manage this bad boy'.
If you think you have the 'they will build the right thing' kind of guys you need to test for that. Even then a 'good shop' can turn into something else later on as they switch people in and out on you.
> Even then a 'good shop' can turn into something else later on as they switch people in and out on you.
YES! Those super talented consultants are in high demand for new deals. They often lead the charge on the proposal, initial project work and early conversations with the client, but may rotate off to focus on landing a new opportunity.