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Under cost-reimbursement contracts, companies are reimbursed based on allowable costs instead of the delivery of a completed product or service. Time-and-materials contracts provide for acquiring supplies or services on the basis of direct labor hours at a set rate. It also includes the actual cost for materials.
T&M contracts are a hybrid of fixed-price and cost-reimbursement contracts.
Under cost-reimbursement contracts, companies are reimbursed based on allowable costs instead of the delivery of a completed product or service. Time-and-materials contracts provide for acquiring supplies or services on the basis of direct labor hours at a set rate.
A cost-reimbursement contract is a contract where a contractor is paid for all of its allowed expenses to a set limit, plus additional payment to allow for a profit. Cost- reimbursement contracts contrast with a fixed-price contract, in which the contractor is paid a negotiated amount regardless of incurred expenses.
Fixed price is exactly as the name suggests. A software provider will define a scope of work with your help, and then deliver that exact scope of work for an agreed upon price. With T&M, you are billed for the time and any related costs associated with the project as they occur.
A cost-reimbursement contract is a contract where a contractor is paid for all of its allowed expenses to a set limit, plus additional payment to allow for a profit. Cost- reimbursement contracts contrast with a fixed-price contract, in which the contractor is paid a negotiated amount regardless of incurred expenses.
A cost-plus-fixed-fee contract is a cost-reimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, but may be adjusted as a result of changes in the work to be performed under the contract.
(a) Description. A cost-sharing contract is a cost-reimbursement contract in which the contractor receives no fee and is reimbursed only for an agreed-upon portion of its allowable costs.
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