📊 Estimating & BusinessModerateAlso: time and materials, T and M contract, lump sum contract
Contract Types: T&M vs Fixed Price
Definition
Time and materials (T&M) charges based on actual hours and materials used. Fixed price charges a single agreed amount for a defined scope. T&M suits open-ended work; fixed price suits clearly defined scopes.
Common Questions
Real-World Example
CRM Services uses T&M for a water damage investigation, then writes a fixed-price bid for the repair phase.
Why It Matters
CRM Services uses both depending on project complexity.
Related Terms
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Bid vs. Estimate
🔨A bid is a firm, fixed price offer. An estimate is an approximation that may vary based on actual co...
Change Order
📊A change order is a formal written document that modifies the original scope, cost, or timeline of a...
Scope of Work
A scope of work is a written document defining exactly what work will be performed, what materials w...