52.222-2
Payment for Overtime Premiums
Overtime premium payments are strictly limited unless justified and approved, requiring contractors to provide detailed documentation for any excess requests.
Overview
FAR 52.222-2, Payment for Overtime Premiums, establishes the conditions under which overtime work and associated premium payments are authorized and reimbursed under government contracts. The clause sets a specific dollar threshold (negotiated and inserted in the contract) for allowable overtime premium payments, with exceptions for certain emergency or operational circumstances. Contractors must seek approval and provide detailed justification if they anticipate exceeding the agreed overtime premium amount, ensuring transparency and cost control for the government.
Key Rules
- Overtime Premium Threshold
- Overtime is only authorized up to a specified dollar amount or under certain exceptions (emergencies, indirect labor, continuous operations, or cost savings).
- Exceptions to Threshold
- Overtime premiums are allowed beyond the threshold for emergencies, indirect labor, continuous operations, or when it lowers overall government costs.
- Requests for Additional Overtime
- Any request to exceed the specified overtime premium must include detailed information about the work unit, impact on schedule, effect on other contracts, and reasons alternatives are not feasible.
Responsibilities
- Contracting Officers: Must set the overtime premium threshold during negotiations and evaluate requests for additional overtime based on provided justifications.
- Contractors: Must monitor overtime usage, comply with the set threshold, and submit detailed requests for approval if additional overtime is needed.
- Agencies: Oversee compliance and ensure overtime payments are justified and cost-effective.
Practical Implications
- This clause controls labor costs by limiting overtime premium payments unless justified by specific circumstances.
- Contractors must maintain detailed records and be prepared to justify overtime needs.
- Failure to comply can result in disallowed costs or contract disputes, making proactive communication and documentation essential.