As prescribed in 970.2201-2-2, the contracting officer shall insert the clause at 970.5222-2, Overtime Management, in management and operating contracts.
Overtime Management (DEC 2000)
(a) The Contractor shall maintain adequate internal controls to ensure that employee overtime is authorized only if cost effective and necessary to ensure performance of work under this contract.
(b) The Contractor shall notify the Contracting Officer when in any given year it is likely that overtime usage as a percentage of payroll may exceed 4%.
(c) The Contracting Officer may require the submission, for approval, of a formal annual overtime control plan whenever Contractor overtime usage as a percentage of payroll has exceeded, or is likely to exceed, 4%, or if the Contracting Officer otherwise deems overtime expenditures excessive. The plan shall include, at a minimum—
(1) An overtime premium fund (maximum dollar amount);
(2) Specific controls for casual overtime for non-exempt employees;
(3) Specific parameters for allowability of exempt overtime;
(4) An evaluation of alternatives to the use of overtime; and
(5) Submission of a semi-annual report that includes for exempt and non-exempt employees—
(i) Total cost of overtime;
(ii) Total cost of straight time;
(iii) Overtime cost as a percentage of straight-time cost;
(iv) Total overtime hours;
(v) Total straight-time hours; and
(vi) Overtime hours as a percentage of straight-time hours.
(End of clause)