Time and Material Contract Notes: Definitions & Explanations PDF | Download eBooks
Study Time and Material Contract lecture notes PDF with project management definitions and explanation to study What is Time and Material Contract?. Study time and material contract explanation with project management terms to review project management course for online MBA programs.
Time and Material Contract Definition:
Time and material contract (also called time and means) is a hybrid type of contractual arrangement with aspects of both cost-reimbursable and fixed-price contracts.
A Guide to the Project Management Body of Knowledge by Project Management Institute
Time and Material Contract Notes:
The terms and conditions that the two parties i.e. customer and contractor, agreed upon are listed in a document that has a legal value. This document is called contract. There are two broad classes of contracts; fixed price contracts and cost-reimbursement contracts. However, sometimes, a third type of contract is also used in procurement. It is called time and material contract. Time and material contract is also termed as time and means contract. This type of contract is usually a combination of fixed price contract and cost-reimbursement contract. It usually involves paying the actual cost of labor in terms of labor hours, the actual cost of materials used, and a fixed additional amount in the name of the seller's overhead or profit. Time and materials contract is usually used when a precise statement of work or work scope cannot be determined.
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