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  • Question

    I have a contract that states it is a Fixed Labor Rate with Cost Reimbursable for Travel and ODC's. Payment terms are T&M. Can I assume that the contract type is in fact T&M? Is there another contract type that I could be confusing this one with? thanks


    Answer

    My assumption is that your contract includes payment clause FAR 52.232-7, Payments under Time-and-Materials and Labor-Hour Contracts (Aug 2012), as specified at FAR 32.111(a)(7).  Based on this assumption, what you have is a normal T&M contract type.
     
    Contract Type is the “compensation arrangement” between the government and the contractor.  This clause covers all three areas mentioned in your question (T&M, travel and ODCs):  labor is addressed in the clause at paragraph (a);  Travel and Other Direct Costs (ODC) are addressed in paragraph (b) (1)  (ii) (C) of the clause.  Consequently, this would be a Time and Materials contract type.  T&M is neither a Cost Type nor Fixed Price type of contract, but a special “type” all to itself as set forth in FAR subpart 16.6.


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