37.113
Severance payments to foreign nationals
FAR 37.113 restricts severance payments to foreign nationals under service contracts outside the U.S., allowing exceptions only through a formal waiver process and mandatory contract clauses.
Overview
FAR 37.113 addresses the rules and limitations regarding severance payments to foreign nationals under service contracts performed outside the United States. The section outlines when such payments are allowable as contract costs, establishes limitations, and provides procedures for waivers. It also prescribes the use of specific solicitation provisions and contract clauses to ensure compliance. The regulation aims to prevent excessive or inappropriate severance payments funded by the U.S. government, while allowing for exceptions under certain circumstances with proper justification and approval.
Key Rules
- Cost Allowability Limitations
- Severance payments to foreign nationals are generally unallowable unless they meet specific criteria or a waiver is granted.
- Waiver Procedures
- Agencies may waive the cost allowability limitations if it is determined to be in the best interest of the government, following the procedures in 37.113-1.
- Solicitation Provision and Contract Clause
- Contracting officers must include the appropriate provision and clause in solicitations and contracts as outlined in 37.113-2.
Responsibilities
- Contracting Officers: Ensure proper clauses are included in contracts, evaluate requests for waivers, and document decisions.
- Contractors: Comply with limitations on severance payments, request waivers when necessary, and maintain supporting documentation.
- Agencies: Review and approve waiver requests, monitor compliance, and provide oversight.
Practical Implications
- This section exists to control government costs and prevent abuse related to severance payments for foreign nationals.
- Contractors must be diligent in understanding when such payments are allowable and follow the waiver process if needed.
- Failure to comply can result in disallowed costs and potential contract disputes.