FAR 22.103-4—Approvals.
Plain-English Summary
FAR 22.103-4 explains how overtime use and overtime premium payments are approved in federal contracts. It covers the contracting officer’s review of contractor overtime requests, the written findings required to justify overtime, who may serve as the agency approving official, when approval is needed before inserting overtime premium amounts into the Payment for Overtime Premiums clause at 52.222-2, and special approval rules for time-and-materials and labor-hour contracts under 52.232-7. It also addresses when no approval is needed, how approvals may be structured at different organizational levels, how to handle requests for overtime above the amount already authorized, when overtime should not be approved at Government expense, and the need for periodic review by the administering office and auditor. Finally, it states that overtime approvals are normally prospective but may be retroactive in emergencies. In practice, this section is meant to control Government exposure to overtime premium costs while still allowing overtime when it is truly necessary to meet schedule, recover from excusable delay, or remove unavoidable production bottlenecks.
Key Rules
Written necessity finding required
Overtime may be approved only after the agency approving official makes a written determination that it is necessary to meet essential schedules, recover from delays beyond the contractor’s control and without its fault or negligence, or eliminate foreseeable production bottlenecks that cannot be removed any other way.
Advance approval before clause use
The designated approving official must approve both the use of overtime and the total dollar amount before any amount is included in paragraph (a) of the Payment for Overtime Premiums clause at 52.222-2.
Special rule for T&M and labor-hour
For time-and-materials and labor-hour contracts, the contracting officer must approve payment of overtime premiums under 52.232-7(a)(8). This is a separate approval requirement tied to payment under those contract types.
No approval for other contract types
For contract types other than time-and-materials and labor-hour, no separate approval is required to pay overtime premiums under this section.
Approvals may be broad or narrow
The agency approving official may approve overtime for an individual contract, project, program, plant, division, or company, whichever is practical. This allows the Government to tailor approval scope to the situation.
Excess overtime requests follow a process
If the contractor later needs overtime beyond the amount already authorized, the request must go to the contract administration office first, then to the contracting officer, and then to the agency’s designated approving official if the contracting officer supports approval. The contracting officer must modify the clause to reflect any approved increase.
No premium for contractor’s own obligation
Government-funded overtime premiums should not be approved when the contractor is already contractually obligated, without entitlement to extra compensation, to meet the delivery date.
Periodic review and allowability
When overtime is authorized, the administering office and auditor should periodically review its use to ensure the premiums are allowable under FAR Part 31. Only overtime in departments or sections individually evaluated and found to need overtime should be considered.
Prospective approval is the norm
Approvals should ordinarily be given before the overtime is worked. Retroactive approval is allowed only when emergency circumstances justify it.
Responsibilities
Contracting Officer
Review the contractor’s overtime request, determine whether additional overtime beyond the authorized amount should be supported, route supported requests to the agency approving official, and modify the contract clause when additional overtime is approved. For time-and-materials and labor-hour contracts, approve payment of overtime premiums as required by 52.232-7.
Agency Approving Official
Make the written necessity determination for overtime, approve the use of overtime and the total dollar amount before the clause amount is included, and approve overtime at whatever organizational level is practical for the contract or contractor.
Contractor
Submit overtime requests as required by the contract clause, justify the need for overtime, and seek approval before exceeding the authorized overtime amount unless emergency circumstances support retroactive approval. The contractor must also ensure overtime claims are consistent with the contract and allowable cost principles.
Office Administering the Contract
Receive and review contractor requests for overtime exceeding the authorized amount, determine whether to support the request, and forward approved requests to the contracting officer for further action.
Auditor
Periodically review authorized overtime use with the administering office to verify that overtime premiums are allowable under FAR Part 31 and that only properly evaluated departments or sections are included.
Agency
Designate the approving official and establish a practical approval structure that can apply to an individual contract, project, program, plant, division, or company as appropriate.
Practical Implications
Contractors should not assume overtime will be reimbursed just because it was used; the Government needs a documented necessity finding and, in many cases, advance approval.
Contracting officers need to distinguish between approval to use overtime and approval to pay overtime premiums, especially on time-and-materials and labor-hour contracts.
A common pitfall is trying to charge Government-funded overtime for work the contractor was already obligated to perform on time at no extra cost.
Approvals should be tied to specific departments or production areas that were actually evaluated; broad, unsupported blanket approvals can create allowability problems.
If overtime needs increase during performance, the contractor must follow the contract administration process rather than simply incurring the cost and expecting retroactive acceptance.
Periodic review matters: even approved overtime can become unallowable if it is not consistent with FAR Part 31 or if the underlying necessity no longer exists.
Retroactive approval is the exception, not the rule, so emergency situations should be documented carefully to support why prior approval was not possible.
Official Regulatory Text
(a) The contracting officer shall review the contractor’s request for overtime. Approval of the use of overtime may be granted by an agency approving official after determining in writing that overtime is necessary to- (1) Meet essential delivery or performance schedules; (2) Make up for delays beyond the control and without the fault or negligence of the contractor; or (3) Eliminate foreseeable extended production bottlenecks that cannot be eliminated in any other way. (b) Approval by the designated official of use and total dollar amount of overtime is required before inclusion of an amount in paragraph (a) of the clause at 52.222-2 , Payment for Overtime Premiums. (c) Contracting officer approval of payment of overtime premiums is required for time-and-materials and labor-hour contracts (see paragraph (a)(8) of the clause at 52.232-7 , Payments Under Time-and-Materials and Labor-Hour Contracts). (d) No approvals are required for paying overtime premiums under other types of contracts. (e) Approvals by the agency approving official (see 22.103-4 (a)) may be for an individual contract, project, program, plant, division, or company, as practical. (f) During contract performance, contractor requests for overtime exceeding the amount authorized by paragraph (a) of the clause at 52.222-2 , Payment for Overtime Premiums, shall be submitted as stated in paragraph (b) of the clause to the office administering the contract. That office will review the request and if it approves, send the request to the contracting officer. If the contracting officer determines that the requested overtime should be approved in whole or in part, the contracting officer shall request the approval of the agency’s designated approving official and modify paragraph (a) of the clause to reflect any approval. (g) Overtime premiums at Government expense should not be approved when the contractor is already obligated, without the right to additional compensation, to meet the required delivery date. (h) When the use of overtime is authorized under a contract, the office administering the contract and the auditor should periodically review the use of overtime to ensure that it is allowable in accordance with the criteria in part 31 . Only overtime premiums for work in those departments, sections, etc., of the contractor’s plant that have been individually evaluated and the necessity for overtime confirmed shall be considered for approval. (i) Approvals for using overtime shall ordinarily be prospective, but, if justified by emergency circumstances, approvals may be retroactive.