Glossary term
Time-and-Materials (T&M)
A contract type paying fixed hourly labor rates plus materials at cost, used when the extent of work cannot be estimated with confidence.
A time-and-materials contract pays negotiated fixed hourly rates for specified labor categories, plus the actual cost of materials. Because it provides no incentive for cost control, the FAR treats T&M as the least preferred contract type and requires a determination that no other type is suitable, along with a ceiling price. Labor Hour (LH) contracts are a variant with no materials component.
Categories
- contract-types
Related terms
- Firm-Fixed-Price (FFP)A contract type where the price is set at award and does not change regardless of the contractor's actual costs.
- Cost-Plus-Fixed-Fee (CPFF)A cost-reimbursement contract where the contractor is repaid allowable costs plus a negotiated fee that does not vary with actual cost.
- FAR (Federal Acquisition Regulation)The primary regulation governing federal executive-agency purchasing — codified at 48 CFR Chapter 1.