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Matt, a contracting officer, provides a tutorial on time and materials contracts. These contracts are commonly used in construction and product development when the size of the project or potential changes cannot be estimated. Unlike fixed price contracts, time and materials contracts allow payment for both time and materials used. Federal acquisition regulations outline detailed provisions for these contracts, including acquiring supplies or services based on direct labor hours and fixed hourly rates. Time and materials contracts are appropriate when the scope of the project is uncertain or evolving.