22.103-2
Policy
Contractors must avoid routine overtime on government contracts unless it results in lower costs or is necessary for urgent needs, and must justify and schedule any approved overtime accordingly.
Overview
FAR 22.103-2 establishes the policy that contractors should avoid the use of overtime in performing government contracts, except in specific circumstances. Overtime should not be used as a regular employment practice unless it results in lower overall costs to the Government or is necessary to meet urgent program needs. When overtime, extra-pay shifts, or multishifts are approved, they must be scheduled to support these objectives and not as a standard practice.
Key Rules
- Minimize Overtime Usage
- Contractors must avoid using overtime as a regular practice unless justified by cost savings or urgent needs.
- Justification for Overtime
- Overtime is only acceptable if it leads to lower overall costs for the Government or is required to meet urgent program requirements.
- Scheduling of Overtime
- Any approved overtime or extra shifts should be scheduled to achieve cost savings or meet urgent needs, not for convenience.
Responsibilities
- Contracting Officers: Ensure contractors comply with overtime policies and approve overtime only when justified.
- Contractors: Avoid regular overtime, justify any overtime use, and schedule it only for cost savings or urgent needs.
- Agencies: Oversee contractor compliance and review overtime justifications.
Practical Implications
- This policy exists to control labor costs and prevent unnecessary overtime charges to the Government.
- Contractors must carefully document and justify any overtime use.
- Common pitfalls include using overtime as a routine practice or failing to provide adequate justification for its use.