Designing a guideline for selecting a supplier for an agile fixed budget & resource contract in the public sector

When you have stable and non-ambiguous requirements then a classic contract for
IS between a supplier and a public sector institution based on a requirements specification
may be well suited. However, if you have to accept many changes or have ambiguous
requirements then you may end up with “endless” re-negotiation of the requirements; you
need a more flexible way to develop IS. A new way of coping with many changes is to use an
agile development approach and a fixed budget and resources contract. This paper presents an
example case. We analyse the case and design a guideline for how to implement a fixed
budget and resources contract in the public sector. The guideline includes elements to cope
with challenges in a tender process such as transparency, criteria for supplier selection, and
live assessment of resource skills and capabilities, as well as achieving the flexibility for
change needed.