Time and materials contracts. Applicants should avoid using time and materials contracts in their procurement actions. This contract type creates the risk that costs could go beyond what the parties anticipated, so applicants should only use it when no other contract type is suitable. In light of this risk, time and materials contracts must include a ceiling amount on the price of the contract.13Including a ceiling shifts the risk to the contractor for any overages. For Public Assistance, such contracts should be limited for work that is necessary immediately after a disaster and should not exceed 70 hours.14

"Piggyback" contracts. "Piggybacking" occurs when an applicant has disaster-related work performed by another jurisdiction' s contractor.15 Because the competitive process for the existing contract could not have included the full scope of the new work, the new work has not been competitively bid. The resulting costs may therefore be higher than if the work had been bid out separately. FEMA therefore discourages such contracts and will use the reasonableness of eligible work as a basis to determine reimbursable costs.

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