rates shall include wages, indirect cost, general and administrative expense and profit; provided, however, that the fractional parts of an hour shall be payable on a prorated basis. Invoices or vouchers may be submitted once each month (or at more frequent intervals, if approved by the SCR), to the SCR or SCR's designee. Unless otherwise specified in this contract, the hourly rate applies to both employees of the Contractor and to employees of subcontractors within the stated labor categories only. Other employees of the subcontractor are invoiced per (b) below. (2) Total time paid for all of Contractor's personnel chargeable to Sandia in those occupational classifications set forth in the clause of Section I of this contract entitled "Allowable Charges," shall be recorded on readily auditable and certified correct time records. Each time record shall bear the name of the individual, occupational classification, dates and hours worked, and shall segregate total hours worked between: (i) Those hours worked hereunder, identified by reference to this contract, and (ii) Each suborder, if any, issued hereunder, and those hours worked on all other contracts. In addition, when work is performed on Sandia-controlled premises, the time involved shall be recorded on Sandia's form (or equivalent Contractor-supplied form acceptable to the SCR) which shall be certified by Contractor's representative and approved by a delegated Sandia representative as authorized by the SCR, and (iii) Unless provisions of Section I hereof otherwise specify, the hourly rate or rates set forth in Section I shall not be varied by virtue of the Contractor having performed work on an overtime basis. If Section I provides rates for overtime work, the overtime work will be reimbursable at over-time rates only to the extent the overtime work is authorized in writing by the SCR or his/her delegate and any unauthorized overtime work will be reimbursable at the standard time rates. (b) Materials (Including Subcontracts. Subject to approval by the SCR of individual invoices or vouchers, and pursuant to FAR Part 31 as supplemented by DEAR Subpart 931 in effect on the date of this contract, the Contractor shall be paid as follows: (1) Net invoice cost or charges for direct materials as provided in this contract. The Contractor shall maintain records, which will support all material costs claimed by paid invoices or storeroom requisitions, or by other substantiation acceptable to Sandia. Direct materials as referenced by this clause are defined as those materials which enter directly into the end product, or which are used or consumed directly in connection with the furnishing of such product. Reasonable and allocable material handling costs may be included in the charge for material to the extent they are clearly excluded from the hourly rate. Material handling costs are comprised of indirect costs, including when appropriate, general and administrative expense, allocated to direct materials. (2) The cost of subcontracts, which are authorized pursuant to the "Subcontracts" clause hereof shall be reimbursable costs hereunder, provided such costs are consistent with subparagraph (3) below.

Control #: SF 6432-TM Title: Standard Terms and Conditions for Time and Materials Labor-Hour Contracts Owner: Procurement Policy Department Release Date: 03/17/16 Page 8 of 25 Printed copies of this document are uncontrolled. Retrieve latest version electronically.