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Service-oriented clients often engage in time and materials contracts to acquire supplies and services, utilizing direct labor-hours with loaded labor rates. A loaded labor rate includes a base wage, such as $10 per hour, plus additional percentages to cover indirect costs. This means clients pay more than just the labor cost to account for these extra expenses. In time and materials contracts, materials are reimbursed at cost, and there may be opportunities to negotiate general and administrative (G&A) costs on materials. While the fixed rates for time and materials exist, the number of hours worked is not fixed, allowing for flexibility in labor costs.