FAR and DFARS › FAR Part 37: Service Contracting › Subpart 37.1
FAR 37.115-2 General policy.
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 states that using uncompensated overtime is not encouraged. When buying professional or technical services based on hours worked, solicitations must require offerors to identify uncompensated overtime hours and rates for certain personnel. Contracting officers must also assess risks to ensure technical expertise is not degraded.
Applies to: Contractors bidding on or performing professional or technical services contracts based on hours provided
What it requires
- Identify uncompensated overtime hours and the uncompensated overtime rate for direct charge Fair Labor Standards Act—exempt personnel in proposals and subcontractor proposals.
- Apply the adjusted hourly rate (including uncompensated overtime) to all proposed hours, whether regular or overtime.
Key terms: uncompensated overtime · adjusted hourly rate · Fair Labor Standards Act—exempt personnel · indirect cost pools · cost realism analysis
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(a) Use of uncompensated overtime is not encouraged.
(b) When professional or technical services are acquired on the basis of the number of hours to be provided, rather than on the task to be performed, the solicitation shall require offerors to identify uncompensated overtime hours and the uncompensated overtime rate for direct charge Fair Labor Standards Act—exempt personnel included in their proposals and subcontractor proposals. This includes uncompensated overtime hours that are in indirect cost pools for personnel whose regular hours are normally charged direct.
(c) Contracting officers must ensure that the use of uncompensated overtime in contracts to acquire services on the basis of the number of hours provided will not degrade the level of technical expertise required to fulfill the Government's requirements (see 15.305 for competitive negotiations and 15.404-1(d) for cost realism analysis). When acquiring these services, contracting officers must conduct a risk assessment and evaluate, for award on that basis, any proposals received that reflect factors such as:
(1) Unrealistically low labor rates or other costs that may result in quality or service shortfalls; and
(2) Unbalanced distribution of uncompensated overtime among skill levels and its use in key technical positions.
(d) Whenever there is uncompensated overtime, the adjusted hourly rate (including uncompensated overtime) (see definition at 37.101), rather than the hourly rate, shall be applied to all proposed hours, whether regular or overtime hours.
← 37.115-1 Scope. · 37.115-3 Solicitation provision. →
Rule changes for FAR Part 37
- Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 6, 7, 10, 18, 26, 37, and 41 ↗ · proposed 2026-06-23 · comments due 2026-07-23
- Federal Acquisition Regulation: Preventing Organizational Conflicts of Interest in Federal Acquisition ↗ · proposed 2025-01-15 · comments due 2025-03-17
- Federal Acquisition Regulation: Sustainable Procurement ↗ · final rule 2024-04-22 · effective 2024-05-22
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.