What is a potential drawback of using Time and Materials contracts?

Using Time and Materials contracts can indeed require significant monitoring effort. This type of contract typically involves paying a contractor for the actual time spent on the project along with the costs of materials used. Because the total project cost is not fixed, the client must closely monitor both the hours worked and materials used to ensure they align with budget expectations. Without careful oversight, projects can easily exceed initial estimates, leading to potential cost overruns and budget management challenges. This monitoring can be both time-consuming and resource-intensive, necessitating detailed tracking and reporting to keep costs in line.

In contrast to this correct option, the other statements don’t accurately reflect the typical characteristics or drawbacks of Time and Materials contracts. For example, these contracts do not provide precise budgeting due to their variable nature, which makes option A incorrect. While there can indeed be disputes over cost reimbursements, this is not universally considered a primary drawback of Time and Materials contracts in the same way that the need for substantial monitoring is recognized. Additionally, asserting that they are used only for fixed scope projects is misleading, as Time and Materials contracts are typically preferred when project scopes are unclear or subject to change.