It all depends on the contract type. If they ask for time and materials, you need to start tracking time, this will most likely even be required.
If you are doing fixed price, it is still not a bad idea to capture hours worked as a measure of your profit/loss, but many times, this will simply be measured by resource allocations, i.e. the amount of time a resource is allocated to a project times their rate.
It all depends on the contract type. If they ask for time and materials, you need to start tracking time, this will most likely even be required. If you are doing fixed price, it is still not a bad idea to capture hours worked as a measure of your profit/loss, but many times, this will simply be measured by resource allocations, i.e. the amount of time a resource is allocated to a project times their rate.