10 Red Flags in a Software Development Proposal

10 Red Flags in a Software Development Proposal

Here are ten warning signs, why each matters and what to ask.

1. A vague scope

What it looks like: "Develop a mobile app with all required features." "Build a platform for managing customers." No list of screens, features or user roles.

Why it matters: vague scope is how projects grow without a price. The agency later says each detail you assumed was included is extra.

Ask: "Can you list every feature, screen and user type that is included, and everything that is not?"

2. No list of exclusions

What it looks like: the proposal says what you get, never what you don't get.

Why it matters: hidden exclusions are the most common source of surprise invoices. Content creation, third-party fees, extra design rounds, data migration and hosting are often left out.

Ask: "What is explicitly out of scope, and what would those items cost?"

3. No testing, QA or project management

What it looks like: the budget covers design and development only.

Why it matters: testing and management are 20 to 30 percent of real project effort. If they aren't priced, they aren't happening, and you will find the bugs yourself.

Ask: "What testing do you do, who does it and what is the cost of it?"

4. A price far below every other quote

What it looks like: one quote at half the price of the other three.

Why it matters: there are only a few ways to be that cheap: less scope, a junior team, cut testing, or a plan to recover margin through change requests. Software is labour, and labour has a real cost.

Ask: "Why is your price lower than others? What assumptions does it make?" Get the answer in writing.

5. An unrealistic timeline

What it looks like: a complex platform in four weeks. "We can start tomorrow and launch in a month."

Why it matters: the agency wants to win, or has not understood the work. Rushed projects skip steps and arrive late anyway.

Ask: "Walk me through the timeline by phase. What would cause delays?" Compare it with other quotes and your own sense of the work.

6. No clarity on who owns the code

What it looks like: silence on ownership, or terms saying the agency keeps rights until final payment or licenses the code to you.

Why it matters: if you don't own the code, you can't move to another team, and the agency has leverage over you.

Ask: "Do I own all source code, designs and accounts from the date I pay? Will repositories and hosting be set up in my name?"

7. No named team or a bait-and-switch

What it looks like: "our experienced team will handle it" with no names, roles or seniority. Senior people in the sales meeting, juniors on the project.

Why it matters: quality comes from the actual people doing the work.

Ask: "Who exactly will work on my project, in what role and for how many hours a week? Can I meet them before I sign?"

8. No plan for after launch

What it looks like: the proposal ends at delivery. No mention of bug fixes, support, hosting or maintenance.

Why it matters: software needs care after release. Without a plan, you can be left with a system nobody knows how to fix.

Ask: "What happens in the first 30 days after launch? Is there a warranty period? What does ongoing support cost?"

9. No change process

What it looks like: no mention of how new requests are handled, or "all changes are billed hourly" with no approval step.

Why it matters: every project changes. Without a process, you will argue about every change, or get billed without knowing.

Ask: "How are changes requested, estimated and approved? Will I see the cost before work starts?"

10. Pressure and gimmicks

What it looks like: a "discount expires Friday." Pushing you to sign before you've compared options. Large upfront payments with little to show.

Why it matters: a good agency is comfortable with you taking time. High pressure suggests they need the sale more than you need the product.

Ask: "Can I have two weeks to review this? Can payments be tied to milestones instead of dates?"

Bonus warning signs

They never push back. If every idea is "great" and nothing is questioned, they aren't thinking critically.. No questions asked. A proposal produced without asking about users, goals or constraints is a template.. Reluctance to share references. Confident agencies connect you with past clients.. Heavy jargon. If you can't understand the proposal, ask for plain language. Good agencies translate.. A payment schedule that front-loads money. Large upfront payments reduce your leverage.

Green flags to look for instead

Questions about your users, goals and constraints. A recommendation to start with a smaller first version. A clear list of assumptions and risks. Named people, roles and time commitments. Milestone-based payments. Honest talk about what could go wrong. A defined handover and support plan

A quick proposal checklist

Before signing, make sure the proposal covers:

If any box is empty, ask for it to be added.

What to do if you spot red flags

Ask directly. Raise the concern and see how they respond. Defensive replies are a signal.. Request a revised proposal. Good agencies will clarify and improve it.. Compare with other quotes. Differences show where something is missing.. Get a second opinion. A technical advisor can review the proposal in an hour or two.. Walk away if needed. A bad start rarely improves.

What a DECHY proposal includes

We write proposals that you can check against this list. Each one sets out the goals, the scope, what is not included and the assumptions behind the price. It names the people involved and shows how we will report progress.

Prices come as a range first, then as a fixed price or a capped budget once the scope is clear. Most custom software projects with us cost $25,000 to $80,000. Hourly work is priced at $35 to $55 an hour, and we explain which parts of the work it applies to.

The proposal also covers ownership, security and what happens after launch. You own the code, the designs and the accounts. Support after launch is optional, with care plans from $100 a month.

If a proposal from us is unclear on any point, ask, and we will put the answer in writing. Use the cost estimator for a first range, or request a proposal.

Next step

Have a proposal you are unsure about? Share it with us. We'll flag what to question, even if you decide to go with someone else. Talk to DECHY.