Ask “what does a dedicated development team cost” and you will get a rate card. It is the least informative document in the whole transaction. This post contains no prices — deliberately. What it contains is the structure: what a monthly team fee actually pays for, why blended rates mislead, which drivers move a real quote, and the questions that expose what any vendor’s number really contains.
What a monthly team fee actually covers
The naive reading is “salaries plus margin”. The honest breakdown of a standing team’s fee looks more like this:
- Recruiting and keeping people who clear a senior bar — the scarce input is not an engineer, it is an engineer you would trust with your architecture. Finding and retaining those is a permanent cost, not a one-off.
- The tech lead’s non-typing time — architecture, review, mentoring, saying no. On a good team a meaningful share of senior time goes into work that never appears as a commit and prevents most of the expensive mistakes.
- Delivery discipline — review gates, test and eval suites, documentation and decision records as part of the definition of done. Teams that skip this look cheaper up front and charge you the difference later, in your own currency: outages and rework.
- Continuity — keeping the same named people on your account is a cost the vendor either carries deliberately or quietly avoids by rotating staff. You are paying for it either way; the only question is whether you get it.
When a fee looks surprisingly low, one of these lines has usually been removed. It is almost always continuity or the review discipline, because those are the two you cannot see in a demo.
Why blended rates mislead
A blended rate compresses a whole team into one number, and that compression has two failure modes. The first is composition: an average tells you nothing about the mix behind it, and the mix is the product. The second is the swap: you interview seniors, sign at the blended number, and the actual staffing drifts junior over time while the invoice stays identical. The rate never lied — it just never said anything specific enough to be false.
This is why our engagements are priced as a fixed monthly team fee per named engineer, with no blended rates and nobody swapped mid-engagement to a cheaper profile. A per-person price is harder to game precisely because it is attached to a person — one you interviewed — rather than to an average nobody is accountable for.
The drivers that move a real quote
- Seniority — the verifiable kind — titles inflate; interviews do not. If a vendor charges for seniors, they should let you interview the tech lead before signing. We do.
- Continuity commitments — a vendor who contractually keeps your team intact carries retention cost. One who does not has moved that cost onto you, disguised as re-onboarding and rework.
- Management: included or yours — if the squad comes with a tech lead who owns delivery, management is in the fee. If it does not, you are the management, and your calendar is the invisible line item no quote ever shows.
- Exit-readiness — your repos, your cloud, current documentation and handover drills cost the vendor something every month. Their absence costs you everything at the end. A quote that is silent on exit has priced it at your expense.
The costs that never appear on an invoice
Three of the largest costs in any engagement are invisible in a vendor comparison spreadsheet. Your own management attention: a team without an accountable lead consumes your senior people’s time, which you were presumably buying the team to free up. Rework: code that passed no real review gets written twice, and the second time is on your schedule. And churn: every replaced engineer resets context to zero, and the relearning happens on your clock while the invoice continues. Cheap quotes win spreadsheets precisely because spreadsheets cannot see any of this.
Questions to ask about any quote
- Is this rate blended, or attached to named people I can interview?
- What happens to the team — and the price — if someone leaves? Who pays for onboarding the replacement?
- What delivery ownership is included? Who runs the process day to day — you or me?
- What is in the definition of done? Are documentation, tests and decision records part of the fee or an extra?
- What does leaving cost? Whose repos, whose cloud accounts, and what does the handover actually contain?
The cheapest team is the one still shipping in year two without consuming your management and without a rewrite in the middle. How we structure and price standing teams is laid out on our services page — and when you want the numbers for your case, that conversation is a technical call, not a sales call.