Development firms often charge their design and engineering services at a fixed price, which can be difficult to determine. Countless factors influence the project scope. A time and materials (T&M) contract eliminates the need for a complicated bidding process, saves time, allows flexibility, and encourages collaboration.
What is a time and materials quote?
Since full project scope is hard to determine in the early stages of design, a time and materials (T&M) quote can help a company get the device they are looking for while accounting for the unknowns associated with changes to the design. A T&M quote outlines how long it is estimated for a designer and any subcontractors to perform the work and the estimated cost of materials needed to complete the project.
What is included in a time and materials contract?
A time and materials contract quotes a fixed rate for all labor, including administrative work. It will also include material markup to cover overhead and profit for the design firm. Some quotes set a maximum number of labor hours and a not-to-exceed cap that indicates a maximum amount the design firm can charge.
What are the benefits of a time and materials quote?
Time and materials quotes ensure a contractor is paid for the actual cost of direct labor, materials, equipment, and any overheads. They also offer a variety of benefits to the client:
- Flexibility for long-term projects.
- Ability to modify the scope or vary workloads.
- Shortened timeline.
- Opportunity for increased involvement and collaboration.
- Confidence in knowing they are only paying for what is needed.
T&M contracts can lead to a more personalized experience. A quality design firm focused on customer service will regularly interact with their client to inform them of revised materials or designs. The client can prioritize different stages of product development, deciding when and how to add more complicated and expensive features. In addition, T&M contracts account for longer work hours or overtime needed to get the project done within a tight timeline.
What type of project is a time and materials quote appropriate for?
When project timeline and scope are not clear or can’t be determined, a time and materials quote is often the most cost-effective, efficient option. Undefined scopes are likely to change, making it difficult to accurately estimate a fixed price in the beginning of a project. T&M contracts allow engineers and their client to find cost-effective, quality solutions at opportune stages, such as the design phase of product development.
To maintain transparency and eliminate surprises down the line, clear communication is essential at every step of the process. At Via Biomedical, we establish and maintain straightforward relationships with our clients through frequent meetings and project status updates. Our project managers use a wide range of tools for tracking, reviewing, and reporting. We work with you as a team, developing your product to your specifications, on time and on budget. Contact us to learn more about our process.