Buyers tend to choose a commercial model based on which looks cheapest or which procurement prefers. It is better chosen on a single question: how precisely can you describe what done looks like?
That question determines which model puts your interests and the supplier's on the same side.
Fixed price: when you can define done
Fixed price works when the outcome is specific enough to write down and agree. Migrate these workloads. Build this pipeline. Achieve this certification.
You get budget certainty and the supplier carries the delivery risk, which is a genuine transfer of risk and is worth paying for. What you give up is flexibility: every change is a change request, because the price was set against a scope.
The incentive to understand is that the supplier now benefits from finishing efficiently. That aligns with you on speed and against you on scope creep, so the scope has to be written carefully at the start. If you cannot describe the outcome precisely, fixed price is the wrong instrument and you will spend the engagement negotiating.
Day rate: when the problem is still being understood
Day rate suits work where the shape will change as you learn: investigation, incident-driven work, or building something whose requirements are genuinely emerging.
You keep complete flexibility and carry the cost risk. The honest weakness is that it pays for time rather than outcomes, so it depends on trust and on your ability to judge progress.
Day rate without a cap or a review point is an open commitment, and it is on you to add one.
Cap it. Agree a number of days and a checkpoint at which you decide whether to continue. Any supplier worth engaging will suggest this before you do.
Retainer: when you need capability, not a project
A retainer buys a set amount of availability each month for design authority, review and escalation. It suits teams that need senior input regularly without justifying a full-time hire.
It works when the value is continuity: someone who already understands your estate, is available when a decision comes up, and does not need three days of context every time.
It fails when it becomes an insurance policy nobody claims on. If months pass without using the days, either the need was not real or nobody is initiating. Both are worth catching early.
Choosing between them
- You can write down exactly what done means, and it will not change: fixed price.
- You know roughly the direction but not the shape, or you are still diagnosing: day rate, capped, with a review point.
- You need judgement available rather than a deliverable: retainer.
- You are unsure: buy a small piece of investigation first, then choose. Committing to a model before understanding the problem is how both sides end up unhappy.
A note on rates
Comparing day rates between suppliers is close to meaningless without knowing who is doing the work. A lower rate for someone learning on your estate is more expensive than a higher rate for someone who has done it before, and the difference is usually larger than the rate gap.
Ask what a day includes, who specifically provides it, and what happens when that person is unavailable. Those answers tell you more about cost than the number does.
