A buy-in occurs when a company agrees to produce a system or product for less money than it knows the project will require. For example, when a vendor of development services agrees to build a system for, say, $50,000, when good estimating techniques indicate it would take $75,000. If the contract for the system or product is written for “time and materials,” the project’s sponsors will ultimately pay the $75,000 for the finished system. Or the project will fail once the true cost is known. If the contract for the system or product is written for a fixed cost, then the developer will absorb the extra costs. A vendor would use the latter strategy if the contract opens up other business opportunities that are worth the $25,000 loss.

Buy-ins always involve deceit. Most would agree that buying-in on a time-and-materials project, planning to stick the customer with the full cost later, is wrong. Opinions on buying-in on a fixed-priced contract vary. You know you’ll take a loss, but why? To build intellectual capital for sale elsewhere? For a favor down the road? Or for some other unethical reason?

What about in-house projects? Do the ethics change if an in-house development team is building a system for use in-house? If team members know there is only $50,000 in the budget, should they start the project if they believe that its true cost is $75,000? If they do start, at some point senior management will either have to admit a mistake and cancel the project with a loss or find the additional $25,000. Project sponsors can state all sorts of reasons for such buy-ins. For example, “I know the company needs this system. If management doesn’t realize it and fund it appropriately, then we’ll just force their hand.”

These issues become even stickier if team members disagree about how much the project will cost. Suppose one faction of the team believes the project will cost $35,000, another faction estimates $50,000, and a third thinks $65,000. Can the project sponsors justify taking the average? Or should they describe the range of estimates?

Other buy-ins are more subtle. Suppose you are a project manager of an exciting new project that is possibly a career-maker for you. You are incredibly busy, working 6 days a week and long hours each day. Your team has developed an estimate for $50,000 for the project. A little voice in the back of your mind says that maybe not all costs for every aspect of the project are included in that estimate. You mean to follow up on that thought, but more pressing matters in your schedule take precedence. Soon you find yourself in front of management, presenting the $50,000 estimate. You probably should have found the time to investigate the estimate, but you didn’t. Is there an ethical issue here?

Or suppose you approach a more senior manager with your dilemma. “I think there may be other costs, but I know that $50,000 is all we’ve got. What should I do?” Suppose the senior manager says something like, “Well, let’s go forward. You don’t know of anything else, and we can always find more budget elsewhere if we have to.” How do you respond?

You can buy-in on schedule as well as cost. If the marketing department says, “We have to have the new product for the trade show,” do you agree, even if you know it’s highly unlikely that you’ll make the deadline? What if marketing says, “If we don’t have it by then, we should just cancel the project.” Suppose it’s not impossible to make that schedule; it’s just highly unlikely. How do you respond?

Assess the ethics of buying-in on a cost-andmaterials project from both the perspective of the categorical imperative.