Chapter 6 › X.C.1–X.D Contract Types and Time-and-Materials Contracts

Which contract types will FEMA pay for?

FEMA term

Fixed price, cost-reimbursement, time-and-materials; cost-plus-percentage-of-cost

Short answer

FEMA reimburses fixed-price and cost-reimbursement contracts, and time-and-materials contracts only in limited cases. Cost-plus-percentage-of-cost and percentage-of-construction pricing is prohibited.

What FEMA requires

You must oversee every contract to make sure the contractor performs to its terms. Time-and-materials (and time-and-equipment) contracts are used only for a reasonable period until you can define the scope of work.

<table class="pt-table"><thead><tr><th>Contract type</th><th>FEMA treatment</th></tr></thead><tbody><tr><td>Fixed price</td><td>Eligible</td></tr><tr><td>Cost-reimbursement</td><td>Eligible</td></tr><tr><td>Time-and-materials</td><td>Allowed only if no other type was suitable, the contract has a ceiling price the contractor exceeds at its own risk, and you maintain a high degree of oversight</td></tr><tr><td>Cost-plus-percentage-of-cost or percentage-of-construction</td><td>Prohibited; FEMA does not pay the percentage markup</td></tr></tbody></table>

Documentation

For time-and-materials contracts, daily or weekly logs or records of performance meetings showing oversight. Source: PAPPG Table 15.

Watch out · Govstar practitioner advice

Convert time-and-materials work to a fixed-price or unit-price contract as soon as the scope is clear. The longer it runs, the harder it is to defend.

Govstar summarizes FEMA’s Public Assistance Program and Policy Guide in plain language and links to the official text. Govstar is independent and not affiliated with FEMA. This is general guidance, not legal advice.