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    I understand that Labor Hours with Fixed Rates and has a maximum number of hours is still considered Firm Fixed Price. I also understand that if there is any language that the Government will pay for the vendors material then it is a Time and Material. What I need to know is if the contract contains both fixed rates for labor and fixed prices for stock parts if it is a FFP or a T&M. Thanks!


    Answer

    If you have fixed labor rates and a maximum number hours per labor category, then you have a Labor Hour contract.  Through in a not-to-exceed amount on materials then you have a T&M.  See FAR 16.6, Time-and-Materials, Labor-Hour, and Letter Contracts. 

    For a Firm-fixed price (FFP) contract see FAR 16.602.  Firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract.

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