The iron triangle of procurement

In procurement, there is a concept called the “iron triangle.” The idea behind the iron triangle is simple. On one side, you have cost. On another side, you have time. And on the third side, you have scope. Within the triangle, you have quality.

From this framework, an important corollary follows: once you’ve fixed two sides, you can’t adjust the third. If you have a set budget and a set amount of time, you can’t really increase your scope (though you can manage it). If you have a fixed scope and budget, you can’t get something to done faster.

Although it has limitations (e.g., the “mythical person month”), the framework is surprisingly useful for understanding what an organization’s true goals are. It is also useful because understanding an organization’s constraints can help open up productive conversations about how to optimize within those constraints.

In government, for example, most procurements have two hard constraints: budget and time. Budget is fixed because of appropriations law. If you’re at an agency, and you’ve got an appropriated budget, you have a hard ceiling for your procurement. Meanwhile, time is ordinarily fixed, too. You might have another contract expiring. You might have a political (or legal) mandate to complete work by a date certain. You might be running up against fiscal-year limitations (again with the appropriations-law limitations).

So, what can you negotiate on when time and budget are constrained? According to the iron triangle, managing scope is your lever. How? By ensuring that you focus on what’s important to be delivered, and descoping what’s not. In the end, you can’t get around it.