Contracting agile developments for mission critical systems in the public sector

Although Agile is a well established software development paradigm, major concerns arise when it comes to contracting issues between a software consumer and a software producer. How to contractualize the Agile production of software, especially for security & mission critical organizations, which typically outsource software projects, has been a major concern since the beginning of the "Agile Era." In literature, little has been done, from a foundational point of view regarding the formalization of such contracts. Indeed, when the development is outsourced, the management of the contractual life is non-trivial. This happens because the interests of the two parties are typically not aligned. In these situations, software houses strive for the minimization of the effort, while the customer commonly expects high quality artifacts. This structural asymmetry can hardly be overcome with traditional "Waterfall" contracts. In this work, we propose a foundational approach to the Law & Economics of Agile contracts. Moreover, we explore the key elements of the Italian procurement law and outline a suitable solution to merge some basic legal constraints with Agile requirements. Finally, a case study is presented, describing how Agile contracting has been concretely implemented in the Italian Defense Acquisition Process. This work is intended to be a framework for Agile contracts for the Italian public sector of critical systems, according to the new contractual law (Codice degli Appalti).