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The text discusses the common contract type for service-oriented clients, specifically time and materials (T&M) contracts. It emphasizes that service providers utilize direct labor hours charged at loaded labor rates, which include a basic wage plus additional percentages to cover indirect costs. For example, if an employee earns $10 an hour, the loaded labor rate would be higher to account for these extra expenses. In T&M contracts, materials are reimbursed based on actual costs, and there are opportunities to negotiate General and Administrative (G&A) costs for materials. While the T&M rates are fixed, the hours can vary, highlighting the flexibility in labor billing.