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Definition[]

A time and materials contract is a contract that

provides for acquiring supplies or services on the basis of (1) direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit and (2) materials at cost, including, if appropriate, material handling costs as part of material costs.[1]

Overview[]

The materials covered by a time and materials contract can include direct materials, subcontracts for supplies or incidental services, other direct costs, and applicable indirect costs.

References[]

  1. Fed. Acquisition Regs. §16.601.
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