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the time and material contracts are used to build customers for a standard labor rate per hour used plus the actual cost of material used now the standard labor rate per hour being built does not necessarily relate to the underlying cost of the labor instead it may be based on the market rate for the services of someone having a certain skill set or the cost of labour plus a designated profit percentage now time and material contracts are generally used when the buyer and the seller are not very much clear about the scope of the work and the time in which the scope of work would be completed now an example of time and material contract is hiring a project manager at $100 per hour or renting out car at $60 per day the rate includes direct and indirect cost both apart from this the overhead and the profits now a time and material contract is a hybrid contract that includes features of both fixed price and cost reversible contract the resemble cost immersive all contracts in that they can
