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FAR and DFARS › FAR Part 37: Service Contracting › Subpart 37.1

FAR 37.113-1 Waiver of cost allowability limitations.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section lets the head of an agency waive certain cost allowability limits on severance payments to foreign nationals, but only for contracts supporting U.S. military or agency personnel overseas and performed outside the U.S. The waiver must be granted before contract award and cannot be granted for military banking contracts or certain Philippines-based severance payments. It matters because it defines a narrow exception to when such severance costs can be reimbursed.

Applies to: Contracts supporting U.S. armed forces or executive agency employees outside the United States

What it requires

  • Obtain any waiver before contract award

Key terms: severance payments · foreign nationals · cost allowability limitations · waiver · military banking contracts

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) The head of the agency may waive the 31.205-6(g)(6) cost allowability limitations on severance payments to foreign nationals for contracts that—

(1) Provide significant support services for (i) members of the armed forces stationed or deployed outside the United States, or (ii) employees of an executive agency posted outside the United States; and

(2) Will be performed in whole or in part outside the United States.

(b) Waivers can be granted only before contract award.

(c) Waivers cannot be granted for—

(1) Military banking contracts, which are covered by 10 U.S.C. 3744(d); or

(2) Severance payments made by a contractor to a foreign national employed by the contractor under a DOD service contract in the Republic of the Philippines, if the discontinuation of the foreign national is the result of the termination of basing rights of the United States military in the Republic of the Philippines (section 1351(b) of Public Law 102-484, 10 U.S.C. 1592, note).

Sections it refers to

  • 31.205-6 Compensation for personal services.

Sections that refer to it

  • 37.113-2 Solicitation provision and contract clause.
  • 52.237-8 Restriction on Severance Payments to Foreign Nationals.

← 37.113 Severance payments to foreign nationals. · 37.113-2 Solicitation provision and contract clause. →

Rule changes for FAR Part 37

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 37.113-1 Waiver of cost allowability limitations · SpendQuery