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In this tutorial, Matt, a contracting officer, explains that a time and materials contract is used in construction and product development. It involves being paid for both time and materials used. This type of contract is used when project size and potential changes cannot be estimated. Unlike a fixed price contract, a time and materials contract includes direct labor hours, fixed hourly rates, overhead expenses, and the actual cost of materials. It is recommended to use a time and materials contract when project requirements are uncertain.
