What is an essential characteristic of time and materials contracts?

Time and materials contracts are designed to compensate contractors based on the actual time spent and the materials used on a project. This type of contract is characterized by its flexibility, allowing for payment at specified hourly rates for labor, in addition to direct reimbursement for the cost of materials required for the project. This model ensures that contractors are paid fairly for their work and the materials they supply, allowing projects to adapt to changing circumstances without being locked into a fixed price.

The essence of option B highlights this characteristic, making it the correct choice. In scenarios where the scope of work cannot be precisely determined in advance, time and materials contracts provide a suitable framework for budgeting and resource allocation. Other characteristics such as requiring detailed audits or being exclusively for government use are not defining traits of this contract type, nor do these contracts lack provisions for materials, as they explicitly include such provisions.