What limits the use of a time-and-materials contract?

The use of a time-and-materials contract is limited by the requirement that specific conditions be met, including a suitability determination. This means that contracting officers must assess whether this contract type is appropriate for the project at hand, considering factors such as the nature of the work, the unpredictability of costs, and the ability to define clear performance metrics. Such a contract is often used when it is difficult to estimate the extent or duration of the work required, and it safeguards the government by ensuring that a detailed assessment has been carried out before opting for this type of agreement. This ensures that the use of time-and-materials contracts aligns with best practices and regulatory requirements to avoid unnecessary financial risk.

The option focusing on cost suggests that time-and-materials contracts might inherently be less expensive than other types; however, this isn't always the case since the unpredictability of costs can lead to higher expenses. The mention of project duration exceeding five years does not specifically limit the use of time-and-materials contracts, as such contracts do not have inherent duration restrictions barring specific project-related considerations. Lastly, requiring multiple approvals from external contractors is not a standard limitation associated with time-and-materials contracts; the primary concern relates to the contract type's suitability for the project's specific circumstances