The assumption about per line of code is tenuous.  We write
custom software in Powerhouse (75%) and Cobol (25%).  We have
spent a great deal of effort to produce Cobol code as close in
cost as Powerhouse code even though its a 3GL vs 4GL.  How do
we do it? Well we have a lot of macros, subroutines, standards
and skeleton programs to get that productivity.
 
I price like this.  How much effort does it take an average
programmer/analyst to do this job with the tools available to
him at the client.  What is the real loaded cost of that
person.  I have to be reasonably close to this number if I am
to get the job.  Individual programs is a pure crap shoot.
However, entire systems with design included it becomes quite
viable.  Why, in our experience, it is design where you can
reduce or increase your programming costs significantly.  Your
approach to design is totally different when you fix price a
project from start to finish and you try to figure out not only
how to do it but how to do it profitably.  Lines of code has
absolutely no effect on cost.
 
In one case, we found it was cheaper to use QUERYCALC and pay
for QUERYCALC for the client and provide better response time,
then it was to implement in COBOL or Powerhouse.
 
In summary, Lines of code have no effect on cost or
productivity.  Design has a greater impact on cost and
productivity.  In pricing your services, price according to
market ie internal costs of customer but be prepared to turn
down projects that you cannot make a decent profit on.
 
Hope this helps.
 
Terry Warns
WL SOFTWARE
Troy, MI  48098
1-800-397-7097