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FAR and DFARS › FAR Part 52: Solicitation Provisions and Contract Clauses › Subpart 52.2

FAR 52.237-10 Identification of Uncompensated Overtime.

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 provision requires offerors to identify and account for uncompensated overtime in their proposals by using an adjusted hourly rate that spreads the same total salary over more hours. It ensures that proposed labor rates reflect the actual hours worked without additional pay, and that accounting practices are consistent. Contractors must also include their uncompensated overtime policy with the proposal.

Applies to: Offerors submitting proposals that include uncompensated overtime for exempt direct charge employees

What it requires

  • Apply the adjusted hourly rate (including uncompensated overtime) to all proposed hours, whether regular or overtime.
  • Identify all proposed labor hours subject to the adjusted hourly rate as either regular or overtime, by labor category, at the same level of detail, including prime and subcontract levels and indirect cost pools.
  • Ensure accounting practices used to estimate uncompensated overtime are consistent with cost accounting practices used to accumulate and report such hours.
  • Include a copy of the offeror's policy addressing uncompensated overtime with the proposal.

Key terms: Adjusted hourly rate (including uncompensated overtime) · Uncompensated overtime · Direct charge employees · Exempt from the Fair Labor Standards Act · Cost realism

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

The text

As prescribed in 37.115-3, insert the following provision:

Identification of Uncompensated Overtime (MAR 2015)

(a) Definitions. As used in this provision—

Adjusted hourly rate (including uncompensated overtime) is the rate that results from multiplying the hourly rate for a 40-hour work week by 40, and then dividing by the proposed hours per week which includes uncompensated overtime hours over and above the standard 40-hour work week. For example, 45 hours proposed on a 40-hour work week basis at $20 per hour would be converted to an uncompensated overtime rate of $17.78 per hour ($20.00 × 40 divided by 45 = $17.78).

Uncompensated overtime means the hours worked without additional compensation in excess of an average of 40 hours per week by direct charge employees who are exempt from the Fair Labor Standards Act. Compensated personal absences such as holidays, vacations, and sick leave shall be included in the normal work week for purposes of computing uncompensated overtime hours.

(b)(1) Whenever there is uncompensated overtime, the adjusted hourly rate (including uncompensated overtime), rather than the hourly rate, shall be applied to all proposed hours, whether regular or overtime hours.

(2) All proposed labor hours subject to the adjusted hourly rate (including uncompensated overtime) shall be identified as either regular or overtime hours, by labor categories, and described at the same level of detail. This is applicable to all proposals whether the labor hours are at the prime or subcontract level. This includes uncompensated overtime hours that are in indirect cost pools for personnel whose regular hours are normally charged direct.

(c) The offeror's accounting practices used to estimate uncompensated overtime must be consistent with its cost accounting practices used to accumulate and report uncompensated overtime hours.

(d) Proposals that include unrealistically low labor rates, or that do not otherwise demonstrate cost realism, will be considered in a risk assessment and will be evaluated for award in accordance with that assessment.

(e) The offeror shall include a copy of its policy addressing uncompensated overtime with its proposal.

(End of provision)

Sections it refers to

Sections that refer to it

← 52.237-9 Waiver of Limitation on Severance Payments to Foreign Nationals. · 52.238 [Reserved] →

Rule changes for FAR Part 52

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

FAR 52.237-10 Identification of Uncompensated Overtime · SpendQuery