[jtbigwoo]

The flat fee game the OP describes is pretty much standard operating procedure even for big consulting companies like IBM and Accenture. First they agree to a flat fee (sometimes after a bit of requirements exploration) that cuts their margin for error fairly close. Then, after the work has gone down the road a bit, they bury the client under a blizzard of change requests for every last detail that wasn't documented in the initial requirements. The change requests are where the real money is made for consulting companies, especially if they're getting their employees to work unpaid overtime to fulfill the extra requirements.