22.103-4 Approvals
Source: FAR 22.103-4 on acquisition.gov
Overtime premiums in government contracts require written approval based on strict criteria, with specific processes and oversight to ensure necessity and compliance.
Overview
FAR 22.103-4 outlines the procedures and requirements for obtaining approvals for the use and payment of overtime premiums in government contracts. It specifies when and how contracting officers and agency officials must review, approve, and document overtime requests, and clarifies the types of contracts and circumstances under which such approvals are necessary. The regulation aims to ensure that overtime is only authorized when essential for contract performance and that government funds are used appropriately.
Key Rules
- Overtime Approval Criteria
- Overtime may be approved only if necessary to meet essential schedules, recover from uncontrollable delays, or resolve unavoidable production bottlenecks.
- Approval Process
- Agency approval (in writing) is required before including overtime amounts in certain contract clauses (e.g., 52.222-2).
- Contract Type Distinctions
- Overtime premium payment approval is required for time-and-materials and labor-hour contracts, but not for other contract types.
- Scope of Approval
- Approvals can be granted for various organizational levels (contract, project, plant, etc.).
- Requests Exceeding Authorized Overtime
- Additional overtime requests must follow a specific review and approval process, including contract modification if approved.
- Limitations on Approval
- Overtime premiums should not be approved if the contractor is already obligated to meet delivery dates without extra compensation.
- Ongoing Oversight
- Contract administrators and auditors must periodically review overtime use for allowability and necessity.
- Timing of Approvals
- Approvals should generally be prospective, but retroactive approval is allowed in emergencies.
Responsibilities
- Contracting Officers: Review overtime requests, ensure proper approvals, modify contracts as needed, and enforce compliance.
- Contractors: Submit overtime requests with justification, comply with approval processes, and avoid unauthorized overtime premium claims.
- Agencies: Designate approving officials, provide written approvals, and oversee ongoing compliance and reviews.
Practical Implications
- This section ensures overtime is only used when truly necessary and prevents unnecessary government spending on overtime premiums. Contractors must follow strict procedures for requesting and justifying overtime, and failure to do so can result in disallowed costs. Contracting officers and agencies must maintain oversight to ensure compliance and proper use of funds.
(a) The contracting officer shall review the contractor’s request for overtime. Approval of the use of overtime may be granted by an agency approving official after determining in writing that overtime is necessary to-
(1) Meet essential delivery or performance schedules;
(2) Make up for delays beyond the control and without the fault or negligence of the contractor; or
(3) Eliminate foreseeable extended production bottlenecks that cannot be eliminated in any other way.
(b) Approval by the designated official of use and total dollar amount of overtime is required before inclusion of an amount in paragraph (a) of the clause at 52.222-2, Payment for Overtime Premiums.
(c) Contracting officer approval of payment of overtime premiums is required for time-and-materials and labor-hour contracts (see paragraph (a)(8) of the clause at 52.232-7, Payments Under Time-and-Materials and Labor-Hour Contracts).
(d) No approvals are required for paying overtime premiums under other types of contracts.
(e) Approvals by the agency approving official (see 22.103-4(a)) may be for an individual contract, project, program, plant, division, or company, as practical.
(f) During contract performance, contractor requests for overtime exceeding the amount authorized by paragraph (a) of the clause at 52.222-2, Payment for Overtime Premiums, shall be submitted as stated in paragraph (b) of the clause to the office administering the contract. That office will review the request and if it approves, send the request to the contracting officer. If the contracting officer determines that the requested overtime should be approved in whole or in part, the contracting officer shall request the approval of the agency’s designated approving official and modify paragraph (a) of the clause to reflect any approval.
(g) Overtime premiums at Government expense should not be approved when the contractor is already obligated, without the right to additional compensation, to meet the required delivery date.
(h) When the use of overtime is authorized under a contract, the office administering the contract and the auditor should periodically review the use of overtime to ensure that it is allowable in accordance with the criteria in part 31. Only overtime premiums for work in those departments, sections, etc., of the contractor’s plant that have been individually evaluated and the necessity for overtime confirmed shall be considered for approval.
(i) Approvals for using overtime shall ordinarily be prospective, but, if justified by emergency circumstances, approvals may be retroactive.