Navigating Alternative Fee Arrangements (AFAs)
Customers are demanding more than just your expertise—they want predictability, transparency, and value.
Alternative Fee Arrangements (AFAs) deliver on those expectations, offering cost certainty and outcome-focused pricing.
But for firms like yours, AFAs also shift the pricing risk. Managing delivery costs, scope changes, and profitability becomes critical. That’s where we come in.
What are Alternative Fee Arrangements (AFAs)
Forecasting Challenges
Accurately estimating time, materials, and complexity is tough. Underestimations can lead to unplanned costs that the supplier must absorb
Additional overheads
Cost control and contract management often require extra effort—both before and during the project
Cashflow pressures
AFAs may tie payments to outcomes rather than effort, requiring upfront investment and careful cashflow planning.
Scope creep
Without tight scope definition, clients may request additional work without adjusting the price—eroding profitability
Flexibility
Once contracts are in place, adapting to evolving requirements or better solutions can be difficult
Quality
Pressure to stay within fixed fees may lead teams to rush or cut corners, impacting quality and client satisfaction
Contractual
Unclear deliverables or timelines can lead to disputes and strained relationships
Market & economic factors
Unexpected rises in resource costs or inflation can make fixed arrangements expensive to deliver and reduce margins
Why Alternative Fee Arrangements (AFAs) Matter
AFAs aren’t just a pricing model—they’re a strategic opportunity to:
Build stronger client relationships
Differentiate your firm in a competitive market
Win more work with value-aligned pricing
"with the right tools and governance, AFAs become a strategic advantage. Without them? they can feel like a gamble"
There are many challenges to AFAs, pricing risk increases as the fees diverge from the cost of delivery
Accurate pricing
is the biggest barrier to successful adoption and scale of AFAs
the parley will help you navigate AFAs with confidence by delivering:
A Proven Framework
Built on decades of experience, our bid governance model ensures the right people, processes, and decisions are in place.
The Financial Evaluation Tool
A financial model designed to transform how you manage bids and investment decisions. It streamlines cost capture, risk analysis, pricing strategy, and forecasting into one agile, transparent framework. With tailored templates and visual financial models, the fetool empowers teams to make confident, data-driven decisions throughout the bid lifecycle.
Training & Guidance
From financial modelling to commercial strategy, we equip your teams with the skills to win and deliver profitable AFAs.
