22.103-4
Approvals
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.