Time and materials
A pricing arrangement that charges agreed labor rates for actual time worked, plus eligible materials and expenses under the contract. The total depends on the work performed, subject to any agreed ceiling or not-to-exceed limit.
Time and materials in practice
Hypothetical: a company hires legal counsel for a sale process at agreed hourly rates, with specified reimbursable expenses. Because the number of negotiation rounds is uncertain, the parties agree on a spending ceiling and require approval before increasing it. The contract determines which time and expenses are billable.
Source: FAR 16.601: US federal time-and-materials contracts include ceiling provisions; private terms vary.
Terms Related to Time and materials
Shayne Fitz-Coy
Shayne Fitz-Coy is a serial entrepreneur, hands-on investor, and CEO of Rustic Pathways. He co-founded Sabot Family Companies, a Patient Capital...