Time and material contract

time and material contract

[¦tīm ən mə′tir·ē·əl ‚kän‚trakt]
(industrial engineering)
A contract providing for the procurement of supplies or services on the basis of direct labor hours at specified fixed hourly rates (which rates include direct and indirect labor, overhead, and profit), and material at cost.

Time and material contract

Work agreed to between the owner and the contractor, with payment based on the contractor’s cost for labor, equipment, materials, and an add-on factor to cover overhead and profit; or based on material costs plus a specified amount per hour of labor, which includes direct labor, overhead and profit.
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