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Incremental Delivery Contract

A contract that sets scheduled checkpoints during delivery so stakeholders can review progress and, at each review, choose to accept the current increment, request changes, or terminate the work.

Key Points

  • Built around regular inspection points or reviews at defined intervals.
  • Customer can accept the increment, ask for modifications, or stop the project at each checkpoint.
  • Fits iterative and incremental delivery, enabling frequent feedback and adaptation.
  • Helps manage risk and investment by making go/no-go decisions in stages.

Example

A company contracts a vendor to build an internal app. The contract sets a review every two sprints. After each review, the product owner either accepts the delivered features, requests adjustments for the next sprint, or halts the engagement if the product no longer meets business needs.

PMP Example Question

Which contract type is designed with periodic review points where the customer can accept the delivered increment, request changes, or discontinue the work?

  1. Fixed-Price with Economic Price Adjustment
  2. Time and Materials Contract
  3. Incremental Delivery Contract
  4. Level of Effort Agreement

Correct Answer: C — a contract with periodic inspection points allowing accept, modify, or stop decisions

Explanation: An incremental delivery contract explicitly includes recurring inspection points to evaluate progress and make continue/change/stop decisions based on delivered increments.

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