All glossary terms
Contract Types & Pricing

Time and Materials

Contract based on direct labor hours at fixed rates plus materials at cost.

Related terms

Basic Ordering Agreement
Written understanding between agency and contractor for future contract terms — not itself a contract.
Blanket Purchase Agreement
Simplified method for repetitive purchases from qualified sources — like a charge account.
Contract Line Item Number
Unique identifier for each separately priced item or service in a contract.
Cost Accounting Standards
Rules governing how contractors accumulate and report costs on government contracts.
Cost-Plus-Award-Fee
Cost-reimbursement contract with a base fee and an award fee earned based on performance.
Cost-Plus-Fixed-Fee
Cost-reimbursement contract: allowable costs reimbursed plus an agreed-upon fixed fee.
Cost-Plus-Incentive-Fee
Cost-reimbursement contract where fee adjusts based on actual costs vs. target costs.
Direct Cost
A cost specifically identified with a particular contract (e.g., labor, materials on that contract).
Earned Value Management
Methodology integrating scope, schedule, and cost data to measure project performance.
Firm-Fixed-Price
Contract providing a fixed price regardless of actual contractor costs. Greater risk on the contractor.
Fixed-Price-Incentive-Fee
Contract with target cost, target profit, ceiling price, and profit-adjustment formula.
Forward Pricing Rate Agreement
Negotiated agreement establishing billing rates for future contract pricing.