Federal activity overview — Labor-Hour
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Labor-Hour Government Contracts & Federal Records
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A variation of a time-and-materials contract differing only in that materials are not supplied by the contractor. Payment is based on fixed hourly rates for direct labor hours at specified categories.
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FAR 16.602
Appropriate when the work is primarily labor with no significant materials component. Like T&M, requires a D&F that no other contract type is suitable.
Advantages: Simple pricing for labor-only efforts, flexible scope. Disadvantages: Same cost control concerns as T&M, requires close government monitoring of labor hours.
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Bureauify. (2026). Labor-Hour — Federal Contract Intelligence. Bureauify Federal Intelligence. Retrieved , from https://bureauify.com/glossary/labor-hour
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