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Welcome to Act Notes Tutorials! I am Matt, a contracting officer, here to explain the time and materials contract type. This type of contract is commonly used in construction and product development, where payment is based on both time spent and materials used. Time and materials contracts are ideal when project size is uncertain or changes are expected during development. Unlike fixed price contracts, these contracts outline direct labor hours and fixed hourly rates for labor, overhead, expenses, profit, and materials. Use a time and materials contract when project scope or changes are unpredictable.
