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    Home/FAR Navigator/22/22.1/22.103/22.103-5

    FAR Navigator

    • 1Federal Acquisition Regulations System
    • 2Definitions of Words and Terms
    • 3Improper Business Practices and Personal Conflicts of Interest
    • 4Administrative and Information Matters
    • 5Publicizing Contract Actions
    • 6Competition Requirements
    • 7Acquisition Planning
    • 8Required Sources of Supplies and Services
    • 9Contractor Qualifications
    • 10Market Research
    • 11Describing Agency Needs
    • 12Acquisition of Commercial Products and Commercial Services
    • 13Simplified Acquisition Procedures
    • 14Sealed Bidding
    • 15Contracting by Negotiation
    • 16Types of Contracts
    • 17Special Contracting Methods
    • 18Emergency Acquisitions
    • 19Small Business Programs
    • 22Application of Labor Laws to Government Acquisitions
      • 22.000Scope of part.
      • 22.001Definitions.
      • 22.1Subpart 22.1
        • 22.101Labor relations.
        • 22.102Federal and State labor requirements.
        • 22.103Overtime.
          • 22.103-1Definition.
          • 22.103-2Policy.
          • 22.103-3Procedures.
          • 22.103-4Approvals.
          • 22.103-5Contract clauses.
        • 22.1000Scope of subpart.
        • 22.1001Definitions.
        • 22.1002Statutory and Executive order requirements.
        • 22.1003Applicability.
        • 22.1004Department of Labor responsibilities and regulations.
        • 22.1005[Reserved]
        • 22.1006Solicitation provisions and contract clauses.
        • 22.1007Requirement to obtain wage determinations.
        • 22.1008Procedures for obtaining wage determinations.
        • 22.1009Place of performance unknown.
        • 22.1010Notification to interested parties under collective bargaining agreements.
        • 22.1011[Reserved]
        • 22.1012Applicability of revisions to wage determinations.
        • 22.1013Review of wage determination.
        • 22.1014Delay over 60 days in bid opening or commencement of work.
        • 22.1015Discovery of errors by the Department of Labor.
        • 22.1016Statement of equivalent rates for Federal hires.
        • 22.1017[Reserved]
        • 22.1018Notification to contractors and employees.
        • 22.1019Additional classes of service employees.
        • 22.1020Seniority lists.
        • 22.1021Request for hearing.
        • 22.1022Withholding of contract payments.
        • 22.1023Termination for default.
        • 22.1024Cooperation with the Department of Labor.
        • 22.1025Ineligibility of violators.
        • 22.1026Disputes concerning labor standards.
        • 22.1101Applicability.
        • 22.1102Definition.
        • 22.1103Policy, procedures, and solicitation provision.
        • 22.1300Scope of subpart.
        • 22.1301Definitions.
        • 22.1302Policy.
        • 22.1303Applicability.
        • 22.1304Procedures.
        • 22.1305Waivers.
        • 22.1306Department of Labor notices and reports.
        • 22.1307Collective bargaining agreements.
        • 22.1308Complaint procedures.
        • 22.1309Actions because of noncompliance.
        • 22.1310Solicitation provision and contract clauses.
        • 22.1400Scope of subpart.
        • 22.1401Policy.
        • 22.1402Applicability.
        • 22.1403Waivers.
        • 22.1404Department of Labor notices.
        • 22.1405Collective bargaining agreements.
        • 22.1406Complaint procedures.
        • 22.1407Actions because of noncompliance.
        • 22.1408Contract clause.
        • 22.1500Scope.
        • 22.1501Definitions.
        • 22.1502Policy.
        • 22.1503Procedures for acquiring end products on the List of Products Requiring Contractor Certification as to Forced or Indentured Child Labor.
        • 22.1504Violations and remedies.
        • 22.1505Solicitation provision and contract clause.
        • 22.1600Scope of subpart.
        • 22.1601Definitions.
        • 22.1602Policy.
        • 22.1603Exceptions.
        • 22.1604Compliance evaluation and complaint investigations and sanctions for violations.
        • 22.1605Contract clause.
        • 22.1700Scope of subpart.
        • 22.1701Applicability.
        • 22.1702Definitions.
        • 22.1703Policy.
        • 22.1704Violations and remedies.
        • 22.1705Solicitation provision and contract clause.
        • 22.1800Scope.
        • 22.1801Definitions.
        • 22.1802Policy.
        • 22.1803Contract clause.
        • 22.1900Scope of subpart.
        • 22.1901Definitions.
        • 22.1902Policy.
        • 22.1903Applicability.
        • 22.1904Annual Executive Order Minimum Wage Rate.
        • 22.1905Enforcement of Executive Order Minimum Wage Requirements.
        • 22.1906Contract clause.
      • 22.2Subpart 22.2
      • 22.3Subpart 22.3
      • 22.4Subpart 22.4
      • 22.5Subpart 22.5
      • 22.6Subpart 22.6
      • 22.8Subpart 22.8
      • 22.9Subpart 22.9
    • 23Environment, Energy and Water Efficiency, Renewable Energy Technologies, Occupational Safety, and Drug-Free Workplace
    • 24Protection of Privacy and Freedom of Information
    • 25Foreign Acquisition
    • 26Other Socioeconomic Programs
    • 27Patents, Data, and Copyrights
    • 28Bonds and Insurance
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    • 30Cost Accounting Standards Administration
    • 31Contract Cost Principles and Procedures
    • 32Contract Financing
    • 33Protests, Disputes, and Appeals
    • 34Major System Acquisition
    • 35Research and Development Contracting
    • 36Construction and Architect-Engineer Contracts
    • 37Service Contracting
    • 38Federal Supply Schedule Contracting
    • 39Acquisition of Information Technology
    • 40Reserved
    • 41Acquisition of Utility Services
    • 42Contract Administration and Audit Services
    • 43Contract Modifications
    • 44Subcontracting Policies and Procedures
    • 45Government Property
    • 46Quality Assurance
    • 47Transportation
    • 48Value Engineering
    • 49Termination of Contracts
    • 50Extraordinary Contractual Actions and the Safety Act
    • 51Use of Government Sources by Contractors
    • 52Solicitation Provisions and Contract Clauses
    • 53Forms
    Up to 22.103
    subsectionUpdated April 16, 2026

    FAR 22.103-5—Contract clauses.

    Plain-English Summary

    FAR 22.103-5 tells contracting officers when to include two labor-related contract clauses: the notice of labor disputes clause at 52.222-1 and the payment for overtime premiums clause at 52.222-2. It ties the first clause to solicitations and contracts involving programs or requirements designated under FAR 22.101-1(e), which are the kinds of acquisitions where labor disputes could affect timely performance and government operations. It ties the second clause to cost-reimbursement contracts expected to exceed the simplified acquisition threshold, but it also creates two important exceptions: cost-reimbursement contracts for vessel operation and certain cost-plus-incentive-fee contracts with specified fee swing and contractor share thresholds. In practice, this section is about making sure the government gets advance notice of labor disputes that could disrupt performance and about controlling when overtime premium costs may be paid under cost-reimbursement arrangements. For contracting officers, it is a clause-selection rule that must be applied at solicitation and contract award; for contractors, it signals when they must notify the government of labor issues and when overtime premium costs may or may not be reimbursable.

    Key Rules

    Insert labor dispute notice clause

    The contracting officer must include FAR 52.222-1, Notice to the Government of Labor Disputes, in solicitations and contracts for programs or requirements designated under FAR 22.101-1(e). This clause is mandatory whenever the acquisition falls within that designated category.

    Apply overtime premium clause to covered cost-reimbursement contracts

    The contracting officer must include FAR 52.222-2, Payment for Overtime Premiums, when a cost-reimbursement contract is contemplated and the expected contract amount exceeds the simplified acquisition threshold. The rule is aimed at controlling reimbursement of overtime premium costs in larger cost-reimbursement acquisitions.

    Exception for vessel operations

    The overtime premium clause is not required for a cost-reimbursement contract for operation of vessels. This is a specific carve-out from the general rule, so the contracting officer should not insert 52.222-2 in that situation.

    Exception for qualifying CPIF contracts

    The overtime premium clause is also not required for a cost-plus-incentive-fee contract if the contract provides a swing from target fee of at least plus or minus 3 percent and the contractor’s share is at least 10 percent. Both conditions must be met for the exception to apply.

    Clause selection is mandatory at solicitation and award

    The section directs the contracting officer to insert these clauses in both solicitations and contracts when the stated conditions are met. This means the decision must be made early, before award, and carried through consistently into the final contract document.

    Responsibilities

    Contracting Officer

    Determine whether the acquisition involves a program or requirement designated under FAR 22.101-1(e) and, if so, insert FAR 52.222-1 in the solicitation and contract. Also determine whether a cost-reimbursement contract is contemplated, whether the expected amount exceeds the simplified acquisition threshold, and whether either exception applies before deciding whether to include FAR 52.222-2.

    Contractor

    If the labor dispute notice clause is included, provide the required notice to the government of labor disputes as required by the clause and manage performance planning accordingly. If the overtime premium clause is included, ensure overtime premium charges are handled in accordance with the contract terms and understand that reimbursement may be limited or conditioned by the clause.

    Agency/Program Office

    Identify requirements that may be designated under FAR 22.101-1(e) so the contracting officer can apply the labor dispute notice clause correctly. For cost-reimbursement acquisitions, support the contracting officer with accurate acquisition planning, including contract type, estimated value, and whether any exception to the overtime premium clause applies.

    Practical Implications

    1

    This section is mainly a clause-coverage check: if the acquisition fits the trigger, the clause must be included, and missing it can create compliance problems later.

    2

    The labor dispute clause matters most where performance interruptions could affect critical government needs, so contractors should be ready to notify the government quickly if labor issues arise.

    3

    For cost-reimbursement contracts, overtime premium costs are a common audit and billing issue; parties should confirm whether 52.222-2 applies before work starts.

    4

    The two exceptions to the overtime premium clause are easy to overlook, especially the CPIF exception, which requires both the fee swing and contractor share thresholds to be met.

    5

    Contracting officers should verify the acquisition type and dollar threshold early, because the clause decision depends on the contemplated contract structure, not just final negotiations.

    Official Regulatory Text

    (a) The contracting officer shall insert the clause at 52.222-1 , Notice to the Government of Labor Disputes, in solicitations and contracts that involve programs or requirements that have been designated under 22.101-1 (e). (b) The contracting officer shall include the clause at 52.222-2 , Payment for Overtime Premiums, in solicitations and contracts when a cost-reimbursement contract is contemplated and the contract amount is expected to exceed the simplified acquisition threshold; unless- (1) A cost-reimbursement contract for operation of vessels is contemplated; or (2) A cost-plus- incentive-fee contract that will provide a swing from the target fee of at least plus or minus 3 percent and a contractor’s share of at least 10 percent is contemplated.

    Back to 22.103FAR Navigator
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