Fixed-price contracts put all of the risks associated with the project not being completed on the outsourcing partner by waiting to pay them until the work is completed, conveniently protecting your budget as well. Fixed-price models are perfect for long-term projects with a high value to the outsourcing partner since in it incentivizes them to complete the work more efficiently and derive more value from the contract.
T&M requires your outsourcing partner to bid for the project based on your requirements, depth of scope and the amount of work that will be completed. This model works really well if your teams are great at outlining your project needs. That way your outsourcing partner will spend less time reworking problems, shortening your project completion time and saving you money.