PMP Exam Set E – Q82

Which of the following statements best describes Time & Material (T&M) contracts?

A. T&M contracts are hybrid type of contractual agreements that could contain aspects of both cost-reimbursable and fixed-price type arrangements
B. T&M contracts are the best form of contracts when the scope of work and the number of hours of work for a specific resource category is clearly known.
C. T&M contracts are the same as Fixed Price contracts except that the total value is calculated using Fixed rates and the effort data is available to the purchaser as well as the seller. Once this is agreed upon, it becomes the same as a Fixed Price project.
D. T&M contracts are very risky since the value of the project is not known. It is best to go in for a fixed price (FP) contract.

A. T&M contracts are hybrid type of contractual agreements that could contain aspects of both cost-reimbursable and fixed-price type arrangements