Questions for outsourced projects

I would like to get the following information related to outsourced project.

1. What are the best practices to follow for the payment plan/structure when you are working with outsourced development firm?
2. Are there any standard templates available for software development contract that I can use?

1. The best practice might depend on what fits your needs the most. A fixed fee plan gives you budget predictability, which is perhaps the most advantageous to someone in your case. Some typical structures that come with that are:
   • Partial payment up front (like an initial deposit) and partial payment upon delivery. Some break it up into 3 or more payment milestones too.
   • Change requests. A fixed fee project requires you to know exactly what you want built. If you change the requirements during development, you'll incur a change request, which will cost you additional money. Typically, changes that occur after development has started are expensive.
   • Escrow. I definitely agree with 99desk that you should use an escrow system with which to pay your outsource agency.
2. I've found some nice software development contract templates on http://www.gantthead.com/ before. They need some cleaning up and revisions, but you can start with those.

-Always look at the reviews / work from the developer you want to hire.
-Don't hire a new developer with no record (You don't have to be his "genuine pig"
-Don't work with payment plans if you have never worked with the developer before.
(I lost $10k on a project because the developer stopped working after 75% of work, and the new developers didn't understand the code)
-If it's a big project with a lot of bugs and maintenance then http://www.activecollab.com/ is a must have software to handle 1 or more projects.
This software alone saved 10's of hours.