Report ODCs and labor hour contracts? in For Beginners Only Posted September 14, 2021 · Edited September 14, 2021 by Paula C added additional text 24 minutes ago, ji20874 said: See FAR 16.602 for your answer. When you read this citation, remember that ODCs are "materials" as that term is defined in para. (b)(1)(ii) of the clause at FAR 52.232-7. So what you are saying is that if materials are acquired via means other than purchasing them outright, i.e., subcontracting, travel, indirect costs, etc., then "materials" can be billed on a labor hour contract? I was taught that "materials or ODCs" could only be included on a T&M contract not a labor hour. From 52.232-7 (b)(1)(ii) (A) Direct including supplies transferred between divisions, subsidiaries, or affiliates of the Contractor under a common control; (B) Subcontracts for supplies and incidental services for which there is not a labor category specified in the contract; (C) Other direct costs (e.g., incidental services for which there is not a labor category specified in the contract, travel, computer usage charges, etc.); and (D) Applicable indirect costs.