Join Bob McGannon for an in-depth discussion in this video Using time-and-materials (T&M) contracts, part of Project Management Foundations: Procurement.
- In the world of dieting people look…for the super food with high nutrition and low calories.…In baseball, people look for the five tool player,…the person that can hit, hit for power,…throw, field, and is a fast runner.…The contracting world has a similar tool…the time and materials contract.…It can be applied to most any service purchase scenario,…but does require mindful ongoing management…by the project manager.…
Time and Material or T&M contracts are a hybrid…of both fixed price and cost plus contracts.…T&M contracts are typically used…for the purchase of services not products.…Most T&M contracts will have a fixed duration…for a certain number of months with an agreed amount…to be paid per hour or day for a specific skilled resource.…This type of contract is often used…when the work cannot be clearly specified,…and total costs cannot be reasonable estimated.…
Payment is based on the hours worked…by the seller not the work completed.…In addition, T&M contracts typically have…a not-to-exceed dollar value clause…
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- Define project procurement.
- Distinguish when to use vendors and partners.
- Compare and contrast building versus buying.
- Identify different types of contracts.
- List types of payment approaches.
- Test your market.
- Build and use a request for information (RFI).