In a fixed time and budget project, the customer wants development of a core component...

For a fixed time-and-budget engagement with an uncertain-scope core component, the contract should explicitly manage financial exposure created by agile discovery. Tiering the contract (D) separates predictable, well-defined deliverables under fixed terms from the uncertain component under agile terms (e.g., timeboxed iterations, capped spend, or negotiated backlog). This creates transparency for governance and protects margin by preventing agile uncertainty from overrunning fixed-price assumptions. Limiting the number of iterations (E) is a direct cost-control mechanism that enforces timeboxing and a hard cap on effort, helping keep profitability intact while still allowing iterative refinement. A governance committee (A) can improve oversight but does not directly cap cost. Requiring only internal resources (B) is an organizational staffing constraint, not a contract control for scope uncertainty, and may reduce flexibility. Providing “alternatives to scope change” at phases (C) is vague and less effective than explicit commercial structures and iteration caps for agile work.

==========