If the people defending this type of tactic are self employed, I hope you never get featured on watchdog or rogue traders.
Nope, major corporation.
And, Nope, I’m not defending sharp practice. If the OP feels he has been ripped off, he should challenge the supplier.
HOWEVER, fixed price / lump sum puts the risk onto the contractor, and they need to price that risk, legitimately, in their bid. We frequently have scenarios where clients demand a fixed price bid. It’s complex work, normally with a degree of uncertainty, so we need to give justification for those costs – ie x hours, y £/hr, z sub contract. If costs were to go above the bid price, we would have to ask for more budget, or suck it up. (I would much prefer to bid on a time and cost basis…..)
Many clients are entirely reasonable and open to negotiate a revised cost. Others, less so.
On the other hand, if the costs are less than the bid cost, who should benefit from the efficient delivery? Preferably, both parties should share the benefit. Is it fair and equitable for a client to want the risk certainty of a fixed price and then screw the supplier down to actual costs if they can deliver more effiently?
(fwiw this does seem to be an example of a piss take)