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. 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.
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