Labor Hour Contract Law and Legal Definition

Labor hour contract is another form of “time and material contract” in which the required materials are neither included in the contract nor supplied by the contractor. The owner of the contract supplies the materials, and pays a fixed price which includes overhead and profit for a negotiated number of labor hours. Labor hour contract is a variation of the time and materials contract, differing only in that the materials are not supplied by the contractor. Labor hour contract and time and materials contracts are used only after the contracting officer executes a determination that no other contract type is suitable.