[psyklic]

I have also experienced the problematic client you describe. The client had neverending revisions. He could never present me with a final list, even after all items in the contract were complete. He then refused to pay, unless I added additional features not included in the contract. Even after adding some of these, he was never satisfied. He made a long list of false claims against me and threatened to sue unless I added more features. After this, I immediately halted work and (successfully) pursued the rest of the money in court.

My conclusion is that fixed-price bids are bad only if there is a lot of risk -- in this case, the bid amount was far lower than it should have been, the client was underfunded, etc.

Nowadays, I recommend making fixed-price bids that are large overestimates. I am taking a risk in making a fixed bid, and in return the client gets the surety of a fixed amount. If my fixed bid is supposed to literally be my average expected time times my hourly rate, then there is a 50/50 chance (or likely more depending on the client) I will lose money on the deal!