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Matt, a contracting officer, explains Time and Materials contracts used in construction and product development. This type of contract involves payment for time and materials used in the project, suitable for uncertain projects where costs cannot be estimated. It is detailed in the Federal Acquisition Regulation Subpart 16.6, involving direct labor hours and fixed hourly rates. Time and Materials contracts are used when project size or changes are unpredictable, unlike fixed price contracts. Use this contract type when project scope or costs are uncertain.
