ENGAGEMENT

Time & Material

You pay for hours worked, not outcomes delivered. The vendor takes no delivery risk; you take all of it.

Last reviewed: 2026-05-24 byKevin Riedl wiki β†—

Time & Material is the default engagement model for staffing agencies and most freelance contracts. You pay an hourly or daily rate; the vendor logs hours; the bill arrives monthly. There is no contractual deliverable, only contractual effort.

The model is honest in the sense that nobody pretends the vendor owns the outcome. It is also the worst-aligned of the common engagement models: the vendor’s incentive is to bill more hours, not to finish faster. Smart customers cap T&M engagements with a budget ceiling and a clear scope, which is essentially reinventing a Statement of Work without the legal teeth.

Wavect uses T&M for exploratory engagements where the scope genuinely cannot be defined upfront. We do not use it as a default. If a vendor pushes you toward T&M for work that has a clear deliverable, they are pushing the risk onto you.

// FAQ

FAQs

FAQs

Yes: when the scope genuinely cannot be defined upfront. Early discovery, exploratory research, ongoing platform maintenance with unpredictable demand. Outside those cases, T&M is almost always the vendor offloading risk onto you.
Budget ceiling, sprint-level scope, weekly burn-down report, and a clean exit clause. If the vendor resists any of those, they are billing for hours, not outcomes. Cap the contract or move to an SoW.
Because their margin is the spread between what they pay the engineer and what they bill you per hour. The longer the engagement runs, the more they earn. The model is profitable for them precisely because it carries no delivery risk.