Sign In
  • Question

    If Labor Hour contracts exclude materials, and travel is considered to be a form of materials under the FAR definition of Materials in FAR 16.601(a), how can travel be allowed under this contract type? Or is travel impermissible under Labor Hour contracts? What about ODCs in general? Are they allowed on Labor Hour contracts? If not, I'm assuming travel shouldn't be allowed either, but I'd like hear from someone who has the answer.


    Answer

     Per FAR 16.602 Labor Hour Contracts, as defined, do not contain material as defined below.

    16.602 -- Labor-Hour Contracts.

    Description. A labor-hour contract is a variation of the time-and-materials contract, differing only in that materials are not supplied by the contractor. See 12.207(b), 16.601(c) and 16.601(d) for application and limitations, for time-and-materials contracts that also apply to labor-hour contracts. See 12.207(b) for the use of labor-hour contracts for certain commercial services.
    “Materials” means—
    (1) Direct materials, including supplies transferred between divisions, subsidiaries, or affiliates of the contractor under a common control;
    (2) Subcontracts for supplies and incidental services for which there is not a labor category specified in the contract;
    (3) Other direct costs (e.g., incidental services for which there is not a labor category specified in the contract, travel, computer usage charges, etc.); and
    (4) Applicable indirect costs.

    Open full Question Details