CHAPTER 14
Time-and-Materials and Labor-Hour Contracts
The time-and-materials (T&M) and labor-hour (LH) contract types combine characteristics of the cost-reimbursement and fixed-price contract types. LH contracts are similar to fixed-price contracts in that the government pays a fixed price for labor. The hourly rate includes wages, overhead, fringe, G&A, and profit. An LH contract is identical to a T&M contract, with the exception that the contractor does not procure the material. The contract ends when specific conditions identified in the contract’s PWS are met.
Similarly, a T&M contract is a combination of a labor-hour contract and a cost-reimbursement contract. As in an LH contract, the hourly rate includes wages, overhead, fringe, G&A, ...
