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متابعة

What is the advantage and disadvantage of time and material contract?

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تم إضافة السؤال من قبل Khalid Salah Amir Amir , Operation support Team leader , sudatel
تاريخ النشر: 2015/11/19
Scott Lancaster
من قبل Scott Lancaster , Senior Corporate Facilities Consultant , NEOM

The advantages are these contracts provide a high level of visibility and transparency in the billing process. When a consultant bills by the hour with expenses, they are ensured of being paid for their time, regardless of how long the project takes. The client has the freedom to change the specifications of the project, or to add new components, as it is understood that such changes will incur more time on the project, and hence a higher invoice. 

  • The disadvantages come when the consultant bills too many hours or bills haphazardly and there needs to be a complete and full understanding of margin and markup from the consultant. Otherwise they could exceed the client's budget. This can cause friction between the two if the budget runs out before the contract is completed. And the consultant is left with major cash flow stress.

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