FEMA generally limits the use of Time and Materials contracts to a reasonable timeframe based on the circumstances during which the Applicant could not define a clear scope of work. Therefore, the Applicant should define the scope of work as soon as possible to enable procurement of a more acceptable type of contract. 

Time and materials contracts do not provide incentives to the contractor for cost control or labor efficiency. FEMA will only reimburse costs under a time and materials contract if all of the following apply:

• No other contract was suitable
• The contract has a ceiling price that the contractor exceeds at its own risk
• The Applicant maintains a high degree of oversight to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls