Time and materials

The simplest form of fee structure is identical to the payments made to small contractors under some small maintenance contracts. Under this arrangement, municipalities agree to pay a private firm a specified fee for the performance of a specified service. For example, a firm might be paid for the time it spends repairing burst pipes and a unit rate for the installation of pipework. Municipalities tend to avoid this form of payment as it means they carry the risks of an elongated programme. Evidence suggests that many operators (or the people they employ) extend the job unnecessarily. However, many contracts will include a time-and-materials component for 'extras', and many urgent jobs are undertaken under this arrangement.