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

FAR 52.237-8 Restriction on Severance Payments to Foreign Nationals.

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 tells contractors that severance payments to foreign nationals working on service contracts performed outside the United States are generally not allowable costs unless the agency grants a waiver before contract award. It also explains the factors the agency considers when deciding whether to grant that waiver.

Applies to: Service contracts performed outside the United States that involve foreign national employees

What it requires

  • Take or plan appropriate actions within your control to minimize the amount and number of severance pay payments to foreign national employees under the contract

Key terms: severance payments · foreign nationals · waiver · cost allowability · collective bargaining agreement

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

The text

As prescribed in 37.113-2(a), use the following provision:

Restriction on Severance Payments to Foreign Nationals (AUG 2003)

(a) The Federal Acquisition Regulation (FAR), at 31.205-6(g)(6), limits the cost allowability of severance payments to foreign nationals employed under a service contract performed outside the United States unless the agency grants a waiver pursuant to FAR 37.113-1 before contract award.

(b) In making the determination concerning the granting of a waiver, the agency will determine that—

(1) The application of the severance pay limitations to the contract would adversely affect the continuation of a program, project, or activity that provides 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;

(2) The Contractor has taken (or has established plans to take) appropriate actions within its control to minimize the amount and number of incidents of the payment of severance pay to employees under the contract who are foreign nationals; and

(3) The payment of severance pay is necessary in order to comply with a law that is generally applicable to a significant number of businesses in the country in which the foreign national receiving the payment performed services under the contract, or is necessary to comply with a collective bargaining agreement.

(End of provision)

Sections it refers to

  • 37.113-2 Solicitation provision and contract clause.
  • 31.205-6 Compensation for personal services.
  • 37.113-1 Waiver of cost allowability limitations.

Sections that refer to it

  • 31.205-6 Compensation for personal services.
  • 37.113-2 Solicitation provision and contract clause.

← 52.237-7 Indemnification and Medical Liability Insurance. · 52.237-9 Waiver of Limitation on Severance Payments to Foreign Nationals. →

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 52.237-8 Restriction on Severance Payments to Foreign Nationals · SpendQuery