Time and materials is a pricing model where payment follows actual effort — a day rate per seniority level multiplied by days worked.
Risk allocation. Effort risk sits with the buyer; in exchange there's no fixed-price risk premium.
When it fits. Open or evolving scope, exploratory work, agile delivery.
Controls. Not-to-exceed cap, committed team mix, milestone reporting, work-package-level reporting.
Common mistake. Comparing on day rate alone instead of the effective day rate across the weighted team mix.