FAR 22.103-3—Procedures.
Plain-English Summary
FAR 22.103-3 explains the procedures contracting officers must follow to avoid unnecessary Government payment of overtime premiums and to control when overtime is included in contract pricing. It covers three main topics: how solicitations should be written so they do not invite overtime at Government expense, how contracting officers should negotiate prices or estimated costs without overtime and shift premiums when possible, and what to do when overtime will actually be needed during performance. The section is designed to protect the Government from paying premium labor costs unless those costs are truly necessary for the work and cannot reasonably be avoided through scheduling, sourcing, or negotiation. In practice, this means the contracting officer must think ahead about delivery and performance schedules, ask offerors whether their pricing includes overtime or shift differentials, and, if overtime is expected, obtain a contractor request that identifies the overtime needed over the life of the contract. The contractor’s request must include the information required by the Payment for Overtime Premiums clause, which gives the Government a basis to evaluate and control those costs. This section is especially important in negotiated procurements where labor timing, staffing patterns, and production schedules can materially affect price and cost realism.
Key Rules
Avoid overtime in schedules
Solicitations normally should not set delivery or performance schedules that would require overtime at Government expense. The default rule is to structure the requirement so the contractor can perform within normal working hours unless the Government has a real need for accelerated timing.
Seek pricing without premiums
During negotiations, contracting officers should try to determine whether offers include overtime and shift premiums. If possible, they should negotiate prices or estimated costs without those premiums, or satisfy the requirement through another source rather than paying premium labor costs in the contract.
Confirm overtime assumptions
The contracting officer should ask offerors how much of their pricing depends on overtime or shift differentials. This helps the Government understand whether the proposed price reflects premium labor and whether that premium is justified by the requirement.
Obtain overtime request when needed
If it becomes clear during negotiations that overtime will be required for performance, the contracting officer must get a contractor request covering all overtime expected during the contract period, to the extent it can be estimated with reasonable certainty.
Include required request data
The contractor’s overtime request must contain the information required by FAR 52.222-2(b), Payment for Overtime Premiums. That information supports review of the need for overtime and the amount of premium compensation to be authorized.
Responsibilities
Contracting Officer
Write solicitations to avoid schedules that would require overtime at Government expense unless necessary; during negotiations, determine whether offers include overtime and shift premiums; try to negotiate prices or estimated costs without those premiums or obtain the requirement from another source; and, when overtime is expected, secure the contractor’s overtime request for the full contract life to the extent reasonably estimable.
Contractor
Disclose whether its pricing is based on overtime or shift premiums when asked; if overtime will be required, submit a request covering the overtime expected during contract performance and include the information required by FAR 52.222-2(b).
Agency/Program Requirement Owner
Help define delivery and performance needs so schedules do not unnecessarily drive overtime costs, and support decisions about whether accelerated performance is truly required.
Practical Implications
This section is a cost-control tool: if the schedule can be adjusted, the Government should usually avoid paying premium labor rates.
Contracting officers should not assume overtime is acceptable just because a contractor proposes it; they need to test whether the requirement can be met without it.
A common pitfall is writing an aggressive delivery schedule first and then discovering that overtime premiums are embedded in the price.
Another risk is failing to document the basis for overtime when it is truly needed, which can make later review or payment authorization difficult.
Contractors should be prepared to explain labor assumptions clearly, because hidden overtime or shift premiums can affect price evaluation, cost realism, and contract administration.
Official Regulatory Text
(a) Solicitations normally shall not specify delivery or performance schedules that may require overtime at Government expense. (b) In negotiating contracts, contracting officers should, consistent with the Government’s needs, attempt to- (1) Ascertain the extent that offers are based on the payment of overtime and shift premiums; and (2) Negotiate contract prices or estimated costs without these premiums or obtain the requirement from other sources. (c) When it becomes apparent during negotiations of applicable contracts (see 22.103-5 (b)) that overtime will be required in contract performance, the contracting officer shall secure from the contractor a request for all overtime to be used during the life of the contract, to the extent that the overtime can be estimated with reasonable certainty. The contractor’s request shall contain the information required by paragraph (b) of the clause at 52.222-2 , Payment for Overtime Premiums.