FAR 22.103-2—Policy.
Plain-English Summary
FAR 22.103-2 states the Government’s policy on overtime use in contract performance. It covers the general preference for performing contracts without overtime, the special concern about overtime as a regular employment practice, and the two main exceptions: when overtime will produce lower overall cost to the Government or when overtime is needed to meet urgent program needs. It also addresses approved overtime, extra-pay shifts, and multishift operations, directing that these be scheduled in a way that supports the policy objectives. In practice, this section is a cost-and-management control rule: contracting officers and contractors should treat overtime as the exception, not the norm, and should be able to justify it based on cost savings or mission urgency. The section matters because overtime can increase labor costs, affect productivity and quality, and create labor-management or schedule risks if used routinely without a sound rationale.
Key Rules
Avoid overtime when practicable
Contracts should be performed without overtime whenever possible. The policy sets a default expectation that normal working hours are preferred unless there is a valid reason to depart from that approach.
No regular overtime practice
Overtime should not become a standard or routine employment practice. Even if overtime is sometimes allowed, it should not be used in a way that effectively makes extended hours the normal method of performance.
Allow overtime for lower cost
Overtime may be used when it results in lower overall cost to the Government. This requires a real cost comparison, not just a preference for faster completion or convenience.
Allow overtime for urgent needs
Overtime is also permitted when necessary to meet urgent program needs. The urgency must be tied to mission requirements, schedule pressures, or other program demands that justify the extra hours.
Schedule approved overtime wisely
When overtime, extra-pay shifts, or multishift operations are approved, they should be scheduled to support the policy’s goals. That means using them efficiently and only to the extent needed to achieve cost savings or meet urgent needs.
Responsibilities
Contracting Officer
Apply the policy when evaluating contract performance approaches, and ensure any approved overtime, extra-pay shifts, or multishift arrangements are justified by lower overall cost or urgent program needs. The contracting officer should also avoid approving overtime arrangements that would make overtime a routine practice without adequate support.
Contractor
Perform the contract without overtime whenever practicable, and avoid using overtime as a regular employment practice. If overtime, extra-pay shifts, or multishifts are proposed or used, the contractor should be prepared to show that they are cost-effective or necessary to meet urgent program needs and should schedule them efficiently.
Agency/Program Office
Identify and communicate urgent program needs that may justify overtime, and support decisions with schedule or mission requirements. The agency should also ensure that overtime use aligns with broader cost, schedule, and performance objectives.
Practical Implications
Overtime is not prohibited, but it must be justified; contractors should expect scrutiny if overtime appears routine or excessive.
A common pitfall is assuming that faster completion alone justifies overtime; the policy focuses on lower overall cost to the Government or urgent program needs.
Approved overtime, extra-pay shifts, and multishifts should be planned carefully to avoid unnecessary premium labor costs and inefficiencies.
Contractors should document the basis for overtime use, especially where cost savings or urgency is the rationale, to support negotiations and contract administration.
Contracting officers should watch for proposals or performance patterns that rely on overtime as the default staffing model, since that can conflict with the policy’s intent.
Official Regulatory Text
Contractors shall perform all contracts, so far as practicable, without using overtime, particularly as a regular employment practice, except when lower overall costs to the Government will result or when it is necessary to meet urgent program needs. Any approved overtime, extra-pay shifts, and multishifts should be scheduled to achieve these objectives.