(a)Definitions for the purposes of Time-and-Materials Contracts.Direct materials means those materials that enter directly into the end product, or that are used or consumed directly in connection with the furnishing of the end product or service.
Hourly rate means the rate(s) prescribed in the contract for payment for labor that meets the labor category qualifications of a labor category specified in the contract that are-
(1) Performed by the contractor;(2) Performed by the subcontractors; or(3) Transferred between divisions, subsidiaries, or affiliates of the contractor under a common control. Materials means -
(1) Direct materials, including supplies transferred between divisions, subsidiaries, or affiliates of the contractor under a common control;(2) Subcontracts for supplies and incidental services for which there is not a labor category specified in the contract;(3) Other direct costs (e.g., incidental services for which there is not a labor category specified in the contract, travel, computer usage charges, etc.); and(4) Applicable indirect costs.