One question that comes up when comparing software proposals is why two vendors can present very different prices for a system that, at first glance, appears to be the same.
At Flexora, we are often asked why we quote the way we do, especially when the client already has a significantly cheaper proposal in hand. This post is our straight answer: which factors can explain a price difference, what evidence we have for each one, and which parts are our interpretation rather than proven fact.
Why can one software quote cost double another?
Two vendors may not be pricing the same work even if they call it the same. One may estimate based on a verbal conversation; the other, based on documented requirements. One may include QA (quality assurance), post-delivery support, technical documentation, and a clear delivery and transition process; the other may not. But that is not the only possible explanation: the difference can also come from team composition and seniority, the vendor’s cost structure, the technology used, the level of specialization, or simply a different margin.
A large price difference alone does not prove that one vendor is overcharging or the other is omitting work. Before drawing that conclusion, it is worth putting both proposals on the same footing.
Undocumented scope is a common source of the gap
A quote built on a verbal conversation and a quote built on documented requirements are not the same exercise. Without a clear definition of use cases, roles, and permissions, each vendor may be estimating on a different basis — which sometimes means one is pricing a more complete version of the same request rather than charging more for the same thing.
A McKinsey study with Oxford University, Delivering large-scale IT projects on time, on budget, and on value, based on a database of over 5,400 IT projects, looked at, among other things, projects considered large-scale, meaning those with an initial budget above USD 15 million, and found that these averaged 45% cost overrun, 7% schedule overrun, and 56% less value than anticipated. These figures are not directly transferable to a custom software project for a Paraguayan small business. However, the research analyzes factors such as requirements and change management, quality, scope, talent, and project management that can serve as a framework for understanding why an estimate may deviate.
Who does the work, and how the team is organized, also affects cost
An individual freelancer and a team with development, QA, and project management are not automatic substitutes, even if they quote the “same” system — but it is also wrong to assume one is risky and the other safe by default. A freelancer may have less structure and be perfectly appropriate for scoped work; a team brings redundancy, specialization, and separation of roles, which helps on more complex projects. Neither structure guarantees quality, documentation, or continuity by itself.
Worth verifying: who will actually do the work, what experience they have, who reviews code before it goes to production, how absences are covered, and what documentation is left behind at the end.
In our experience, when a team with little experience works without sufficient technical review, the risk of rework increases — this is an observation from our practice, not a market statistic.
Technical quality is not always visible in the demo
Different technical choices can be reasonable depending on the scale, criticality, and budget of each project — a simpler solution isn’t automatically a worse one. That said, building with automated testing, test environments, and version control from the start usually takes more effort than delivering something that runs today with little test data, and that difference often goes unnoticed until the system runs at real volume.
If your company already works with spreadsheets, previous systems, or other information sources, migrating and cleaning that data can add real work. Check explicitly whether it is included, excluded, or still pending estimation, rather than assuming the cheaper proposals always leave it out.
What happens after delivery is worth making clear
Ongoing maintenance, which covers updating dependencies, fixing bugs that surface in real-world use, and adapting the system as the business changes, is a real cost that does not go away once the system is in production. FullScale, an industry vendor, publishes a rough rule of 15% to 20% of the original construction cost per year — it is not a universal rate, it depends on the system, the SLA, the infrastructure, and the agreed support model (FullScale). Leaving maintenance out of the initial price does not automatically make a proposal incomplete. What matters is that it spells out what support exists after delivery, for how long, what it covers, and what it costs.
The same applies to hosting, domain, certificates, and monitoring: they may be recurring costs or third-party services, and a correct comparison must identify them even if billed separately.
We do not have a source that quantifies user training. In our experience it is one of the first items cut when the price gets tight, but that is our observation, not a market fact.
Code ownership and vendor exit
What rights each party has over the developed code, whether you have access to the repository and the documentation needed to continue with another vendor, and whether there are third-party components or licenses with different terms — are all questions worth settling in writing, whether the quote is cheap or expensive. We explore this distinction between ownership, licenses, code access, and documentation in how to compare custom software quotes.
How to normalize two quotes before comparing price
Comparing only the total can be misleading if each proposal includes different elements. Before deciding based on price, it is worth placing each proposal in the same table:
| Factor | Proposal A | Proposal B | Comparable? |
|---|---|---|---|
| Functional scope | |||
| Exclusions | |||
| Discovery / requirements gathering | |||
| UX/UI | |||
| Team and seniority | |||
| QA and test types | |||
| Data migration | |||
| Integrations | |||
| Deployment | |||
| Documentation | |||
| Training | |||
| Defect correction post-delivery | |||
| Maintenance | |||
| Hosting / infrastructure | |||
| Rights, licenses, and code access | |||
| Third-party costs |
Only once those rows line up does comparing the totals mean anything. If one proposal excludes something another includes, it is worth estimating that element separately before concluding which is cheaper.
Local integrations: why the price varies in Paraguay
Regarding integrations with SIFEN/DNIT and other local systems, we did the research and did not find studies specific to the Paraguayan market that would allow us to put a reliable number on that cost increase. We prefer to say this plainly rather than make up a figure. If your project needs SIFEN, ask for evidence of comparable prior projects, ask how the vendor works with the DNIT Technical Manual and current technical notes (e-Kuatia: Technical Documentation), and confirm that the analysis, development, and testing involved are actually included. We go into this further in our post on the risks of choosing the cheapest developer.
How we build our quote at Flexora
When we quote, we try to make the number reflect the actual work: documented requirements gathering, a team with code review, testing, a post-delivery plan, and technical documentation with clear conditions of access to the repository and developed code. If the quotes you’re comparing differ by a lot, the first move is not to rule out the expensive one or distrust the cheap one. It’s to go line by line through what each one includes, using the table above as a starting point. There’s a practical guide for that in how to compare custom software quotes.
If your project needs to automate processes you currently do manually in addition to a custom system, you can also review our process automation and integrations service, which often forms part of the same scope conversation.