37.115
Uncompensated overtime
Contractors must clearly disclose any uncompensated overtime in service contract proposals to ensure fair competition and maintain performance standards.
Overview
FAR 37.115 addresses the use of uncompensated overtime in service contracts, particularly those involving professional and technical services. Uncompensated overtime refers to hours worked by contractor employees beyond the standard 40-hour workweek without additional compensation. This section establishes policies to ensure that the use of uncompensated overtime does not result in unfair competitive advantages or negatively impact contract performance. It also requires specific solicitation provisions to address and disclose the use of uncompensated overtime in proposals.
Key Rules
- Scope of Uncompensated Overtime
- Applies to service contracts, especially those for professional and technical services, where contractors may propose uncompensated overtime to lower labor rates.
- General Policy
- Contracting officers must ensure that the use of uncompensated overtime does not compromise contract performance or create an uneven playing field among offerors.
- Solicitation Provision
- Solicitations for certain service contracts must include a provision requiring offerors to identify any uncompensated overtime included in their proposals and to disclose their labor practices.
Responsibilities
- Contracting Officers: Must evaluate the impact of uncompensated overtime on contract performance and ensure proper disclosure in solicitations.
- Contractors: Must clearly identify and disclose any uncompensated overtime in their proposals and ensure labor practices are transparent.
- Agencies: Oversee compliance and ensure fair competition among offerors.
Practical Implications
- This section exists to prevent contractors from gaining an unfair advantage by proposing lower labor rates through uncompensated overtime, which could affect performance quality.
- It impacts proposal preparation, evaluation, and contract administration for service contracts.
- Common pitfalls include failing to disclose uncompensated overtime or not evaluating its impact on performance.