Federal glossary · Contract type
Time and Materials (T&M) is a contract type (FAR 16.6) where the government pays fixed hourly labor rates (fully burdened, including profit) plus actual material costs at cost. Used when scope cannot be precisely defined. Requires CO determination that no other contract type is suitable and a ceiling price the contractor exceeds at its own risk. Contractor must maintain adequate timekeeping. Riskier for government than FFP; riskier for contractor than cost-reimbursement.
Example: A 5-year IDIQ with task orders or a GSA Schedule purchase.
Reference record · Sources: Federal Acquisition Regulation · Verified Jul 2, 2026 · Covers definition, governing source
Also known as
Time and Materials (T&M) is a contract type (FAR 16.6) where the government pays fixed hourly labor rates (fully burdened, including profit) plus actual material costs at cost. Used when scope cannot be precisely defined. Requires CO determination that no other contract type is suitable and a ceiling price the contractor exceeds at its own risk. Contractor must maintain adequate timekeeping. Riskier for government than FFP; riskier for contractor than cost-reimbursement.
is a contract type concept federal contractors and grant writers run into across solicitations, regulations, and award filings
Time and Materials describes a specific contract structure that the federal government uses. For example: Example: A 5-year IDIQ with task orders or a GSA Schedule purchase. The contract type controls risk allocation, payment timing, reporting cadence, and how performance is measured — all of which affect whether the work is profitable and whether it fits a contractor's capability profile. Knowing whether a solicitation is structured as a Time and Materials versus another vehicle is one of the first signals of how the government expects the work to be executed and what kind of contractor they're trying to attract. Misreading the contract type can mean either over-pricing risk you don't actually carry or under-pricing risk you do. The related terms above name the adjacent vehicles Time and Materials most commonly competes with or rolls up under.
Example: A 5-year IDIQ with task orders or a GSA Schedule purchase.
Meaning in practice
Time and Materials describes how the government structures the work, price, and risk.
Where you’ll see it
You will see it in solicitations, CLIN schedules, pricing tables, and award summaries. Example: Example: A 5-year IDIQ with task orders or a GSA Schedule purchase..
Common confusion
People often confuse a contract type with a vehicle, a task order, or a program name.
What to do next
Check payment timing, scope, and risk allocation before you bid or price the work.
Get notified when usage of Time and Materials changes in contracts or guidance.
Search active federal contracts and solicitations related to Time and Materials on Bureauify.
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