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Labor Hour

Contract paying only for labor time without materials.

Definition

Labor Hour Contract paying only for labor time without materials.

Definition

Labor Hour contracts are similar to T&M but pay only for direct labor hours at specified rates. Materials and other direct costs are not included. They're used when the only variable is the amount of labor needed.

Related Terms

  • FFP

    Firm Fixed Price - contract where price doesn't change regardless of costs.

  • T&M

    Time and Materials - payment based on labor hours and materials used.

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