Getting screwed by a top development company

[tconstandakis]

In short I signed up to have a multiple vendor site developed with one of the better known IT development companies in JHB, having at least half a dozen live and active sites. I had a brief which was quoted on loosely, and I accepted the quote. I paid my 50% deposit, I then had the Project Manager (PM) fly to CT to meet with me whereby we thrashed out the project. A spec doc was then done with was again quite loose and not entirely specific in detail.

Since then the project which was supposed to be 3-4 months of work has extended into an almost 18 month project which according to the latest e-mail is 60-70% complete. There are 2 key components in the system which were verbally agreed in the meeting with the PM, but the PM is no longer with the company, and the company is claiming that this is an additional cost. The cost is significant, and I certainly cannot afford it.

After much fighting, the below is the response. I am wanting to cut my losses with the company, and walk away as per option 2 below. This is where I need your advice. Am i doing the right thing by walking away, and hoping that a private developer can complete the project at a more reasonable cost using platform currently developed on? If so, can you recommend a developer who could assist in completing the project. The developer would preferably be in Cape Town.

I have run through all the documentation available as well as the recon and additions as well as your comments within the recon provided.

The physical system build is estimated at around 60-70% completed compared to the accepted quotation.

With regards to the changes requested a number of the items contested are in fact not within the scope of work agreed as per the accepted quote. Although discussions may have been had around this we work from the signed quotation which is the final spec of work required.

We cannot at this stage refund the development time already spent on this system, nor reimburse for the PM fees as requested. This is due to the invested time we have put in, as well as due to the fact that to date, delay charges have not been charged for all the delays incurred on this project. The latest being delay charges for February which total around R *****

Furthermore there are items on the recon which are part of the scope and can be implemented, and there are items which are not part of the original quote. The not included items are additional development such as a messaging system. The estimate on the additional requirements based on the latest recon for development and implementation totals to an estimated R*****. The price previously quoted which was valid for 14 days, was our 2011 pricing. The estimate provided is based on our 2012 pricing.

Moving forward from here we can do one of the following:

1) System completion by *****. This would require the finalisation of the original scope of work as per the quotation (30-40% remaining). Any additional items would be as per the separate quotation to be agreed in accordance with my comments on the recon and my estimate on cost above.

2) System completion by another party. We will provide the system to you as is at its current completion state. We will not charge the 50% balance payment but the previous payment for the deposit remains as is. You could then source a supplier to complete the system to your specifications. We would provide you with a perpetual licence for use of our platform free of charge. Should you elect this option we can discuss the restrictions of this licence however this would not impact your ability to move the project to another development house.
​

 

[Beachless]

Have you seen any demo's to confirm that you are going to get anything significant?

What is the licence they are referring to in option 2?

All in all this is a pretty common problem with the customer and development house not agreeing on deliverables because of a unspecific specification doc.

Do you not have emails or anything else that indicated these requirements?

 

[skimread]

It sounds like the project had a lot of scope creep to a point where you couldn't afford a professional dev house's fees and now you want to use a private developer.

Have you confirmed they system is X amount completed. You have a demo or \tested it at least?Function points? What documentation exists?
Doesn't sound like you have proper documentation which sounds partly your fault due to it only being verbal.

for use of our platform

Is there a specific reason for it being the dev company's platform? Another dev will need to ramp up on custom frameworks and might not want to code using it.

 

[Dean]

It sounds like the project had a lot of scope creep to a point where you couldn't afford a professional dev house's fees and now you want to use a private developer.

Have you confirmed they system is X amount completed. You have a demo or \tested it at least?Function points? What documentation exists?
Doesn't sound like you have proper documentation which sounds partly your fault due to it only being verbal.


Is there a specific reason for it being the dev company's platform? Another dev will need to ramp up on custom frameworks and might not want to code using it.

this.

 

[tconstandakis]

Have you seen any demo's to confirm that you are going to get anything significant?

What is the licence they are referring to in option 2?

All in all this is a pretty common problem with the customer and development house not agreeing on deliverables because of a unspecific specification doc.

Do you not have emails or anything else that indicated these requirements?

I have been supplied a url to view the demo site and for the large part it functions well. There are 2 key functions that they have not supplied and are crucial to the system. This has resulted in a ping pong scenario and a case of he-said, she-said.

When I met with the new PM in JHB, she kind of suggested that the problem is that the site was not setup to handle the 2 functionalities that I was looking for, and the ex-PM should have clarified this key component earlier. Also the PM never supplied a project plan after numerous requests, and this is clearly why the situation has occurred.

The e-mails have resulted in a ping pong scenario, and it not concrete enough to take it further.

 

[biometrics]

Have you got the latest source code?

Has there been spec creep?

 

[tconstandakis]

It sounds like the project had a lot of scope creep to a point where you couldn't afford a professional dev house's fees and now you want to use a private developer.

Have you confirmed they system is X amount completed. You have a demo or \tested it at least?Function points? What documentation exists?
Doesn't sound like you have proper documentation which sounds partly your fault due to it only being verbal.


Is there a specific reason for it being the dev company's platform? Another dev will need to ramp up on custom frameworks and might not want to code using it.

The signed quote suggested a provision of 20-30%. The additionals as quoted are approx. 125% more than the original quote. Hence my refusal to accept these costs. The company that i signed with was the most expensive of the 3 companies that quoted, but they had the most credibility of the 3, and yet it still went wrong...

I got a spec document but never received a project plan. My fault is having the "thrash out" meeting with the PM and not minuting. In hindsight the spec docs were not in sufficient detail.

I honestly believe that the company has setup the 2 scenarios to make the option of continuing with the additionals (option 1) as an unfeasible scenario, including the threat of delay charges etc.

I think I have no option but to walk away and see if I can find a developer to help finish for me.

 

[tconstandakis]

Have you got the latest source code?

Has there been spec creep?

The spec creep is what is in question. They claim it to be. They also want to charge me for items that I feel should be standard when creating a multi vendor platform such as e-mails and triggers.

I don't have the source code but they seem to be willing to allow access to their system/ code by a 3rd party developer (if i am reading this correctly)

 

[frikkie6000]

The spec creep is what is in question. They claim it to be. They also want to charge me for items that I feel should be standard when creating a multi vendor platform such as e-mails and triggers.

I don't have the source code but they seem to be willing to allow access to their system/ code by a 3rd party developer (if i am reading this correctly)

Too be honest I do not think you will get a completed project from them rather ask for the latest source code of what they have done

Up to date you have only paid 50% deposit right ?

 

[Beachless]

The signed quote suggested a provision of 20-30%. The additionals as quoted are approx. 125% more than the original quote. Hence my refusal to accept these costs. The company that i signed with was the most expensive of the 3 companies that quoted, but they had the most credibility of the 3, and yet it still went wrong...

I got a spec document but never received a project plan. My fault is having the "thrash out" meeting with the PM and not minuting. In hindsight the spec docs were not in sufficient detail.

I honestly believe that the company has setup the 2 scenarios to make the option of continuing with the additionals (option 1) as an unfeasible scenario, including the threat of delay charges etc.

I think I have no option but to walk away and see if I can find a developer to help finish for me.

I see it differently, it seems that with option 2 you will only get partial code and a licence to use the dll's.

This means that in future you will either be forced to go to them or rewrite a large portion of the code.

But without more info thats only an opinion...

 

[zippy]

A spec doc was then done with was again quite loose and not entirely specific in detail.

There are 2 key components in the system which were verbally agreed in the meeting with the PM

I hope you have learnt your lesson with regard to the above. If its not in the spec then its not in the price, im afraid. Depending on the amount of work and relationship, a lot of IT companies absorb this as its in their interests to complete a project and get it signed off.

Sounds to me that they have written you off as well.

 

[Beachless]

The signed quote suggested a provision of 20-30%. The additionals as quoted are approx. 125% more than the original quote. Hence my refusal to accept these costs. The company that i signed with was the most expensive of the 3 companies that quoted, but they had the most credibility of the 3, and yet it still went wrong...

I got a spec document but never received a project plan. My fault is having the "thrash out" meeting with the PM and not minuting. In hindsight the spec docs were not in sufficient detail.

I honestly believe that the company has setup the 2 scenarios to make the option of continuing with the additionals (option 1) as an unfeasible scenario, including the threat of delay charges etc.

I think I have no option but to walk away and see if I can find a developer to help finish for me.

I see it differently, it seems that with option 2 you will only get partial code and a licence to use the dll's.

This means that in future you will either be forced to go to them or rewrite a large portion of the code.

But without more info thats only an opinion...

 

[tconstandakis]

I think you are 100% correct. When I met with the new PM, she kind of suggested that the old PM had not made allowances for the functionality that I require, and which was in dispute. They have now quoted for this work but it is exorbitant IMHO and it seems like they are hoping that I will not accept it, else it could mean having to start development from scratch again.

 

[greggpb]

I dont know about jumping ship...... to risky..... I would take option one but renegotiate the price..

 

[FlatspinZA]

The Consumer Protection Act provides that they may not bill for additional work unless a formal quote has been provided, and a work order signed by yourself. I am not sure how this pertains to contracts entered into prior to the enactment of the law, but it might be worth finding out.

Does it state an estimated completion date anywhere in the initial contract , because if it does, and they're a year over target, you have good cause for complaint to the CPA? This is not necessarily to say you should use this avenue, but it is a leverage tool in any further negotations should you decide to let them complete the project.

It's a tricky situation when you move beyond the scope of the original project, because this opens both parties up to litigation if the documentation on either side is not solid. You have to ask yourself how far removed you are from the original specification?

Having a verbal agreement, with nothing in writing, with a previous employee isn't going to help your cause much, unless you can get the original PM to verify your agreement, with proof of communication of said agreement to the contracted company, and/or yourself. Unless, of course, the contract specifically excludes agreements made between yourself and an employee of the company without authorisation from a senior member.

If you can tell me what the original coding language is, and what frameworks they're relying on, I might be able to suggest a coder in CT who could complete your project - though you have to understand that another programmer is going to have to make sense of what has been laid down before he can even begin to complete the project.

 

[tconstandakis]

I asked them the following:

(1) Please clarify on the licensing (2) Please clarify on the restrictions (3) Is the development platform owned exclusively by ******? What restrictions/ hassles will another developer face when needing to use this platform? (4) Could additional features not as per original quote be setup in the future by the developer, or would these be additional costs charged by ******? (5) Will you provide the latest source code? (6) Would a large portion of the code need to be rewritten? (7) What is the original code language used? And what frameworks are you relying on?

Received this info from them

1) ******* will provide a perpetual license for use of the software under the domain name listed
2) The IP of the system remains the sole property of ******** for the duration of its lifespan and use. The license allows for yourself to build upon or extend the system at your will but however prohibits the resale, deconstruction, re-use on another domain name or de-compilation of the software or its parts to be used in any other system. When a new development house builds upon one of our systems ****** needs to provide permission for this use with the above mentioned terms including that the Third party development house may not on sell or reuse our software for any of its clients. Digital protection and watermarking is built into our systems.
3) Yes. The restrictions in point 2 will apply.
4) Your developer would be able to add in additional features.
5) We will provide the source code as is contained within your current development
6) We can’t advise on this as that would be up to the development house, however this should not be required.
7) OS: Linux, Languages: PHP / MySql. This is a custom framework and does not rely on any existing frameworks or open source frameworks.

 

[ChilliGirl]

I asked them the following:

(1) Please clarify on the licensing (2) Please clarify on the restrictions (3) Is the development platform owned exclusively by ******? What restrictions/ hassles will another developer face when needing to use this platform? (4) Could additional features not as per original quote be setup in the future by the developer, or would these be additional costs charged by ******? (5) Will you provide the latest source code? (6) Would a large portion of the code need to be rewritten? (7) What is the original code language used? And what frameworks are you relying on?

Received this info from them

1) ******* will provide a perpetual license for use of the software under the domain name listed
2) The IP of the system remains the sole property of ******** for the duration of its lifespan and use. The license allows for yourself to build upon or extend the system at your will but however prohibits the resale, deconstruction, re-use on another domain name or de-compilation of the software or its parts to be used in any other system. When a new development house builds upon one of our systems ****** needs to provide permission for this use with the above mentioned terms including that the Third party development house may not on sell or reuse our software for any of its clients. Digital protection and watermarking is built into our systems.
3) Yes. The restrictions in point 2 will apply.
4) Your developer would be able to add in additional features.
5) We will provide the source code as is contained within your current development
6) We can’t advise on this as that would be up to the development house, however this should not be required.
7) OS: Linux, Languages: PHP / MySql. This is a custom framework and does not rely on any existing frameworks or open source frameworks.

They are trying to ride you like a human centipede............

 

[ponder]

They are trying to ride you like a human centipede............

Hey some people are game for that schit

 

[Majick]

Take into a account that any new developer that works on their code will need some time to get acquainted with their code. Also if you take the option to get the source code make sure you hire a developer to at least get it up and running when you receive it (so that you are sure there is no missing parts, might be a nightmare to obtain some database script they forgot to send you months later). Test all the functionality.

Good luck.