Uncompensated Overtime

[Hope7]

Background: Below is a clause that we are finding in various CPFF (LOE) solicitations.

"Of the total staff-hours of direct labor set forth above, it is estimated that __ staff-hours are competitive time (uncompensated overtime). Competitive time (uncompensated overtime) is defined as hours provided by personnel in excess of 40 hours per week without additional compensation for such excess work. All other effort is defined as compensated effort. If no amount is indicated in the first sentence of this paragraph, competitive time (uncompensated overtime) effort performed by the contractor shall not be counted in fulfillment of the level of effort obligations under this contract."

Hypothetical Scenario: RFP (CPFF) directs offerors to identify Uncompensated Overtime (UCOT) hours IAW FAR 52.237-10, describe the use of UCOT, and cautions against unrealistic rates.

Contractor A does not intend to require their employees to work UCOT on a consistent or required basis; therefore, no UCOT hours are proposed. Consequently, the above LOE clause in the resultant contract states ??no UCOT hours performed will be counted in fulfilling the LOE.? During execution, an exempt employee works 50 hours in a particular week to meet a schedule. The clause as written would not allow the extra 10 hours to be counted toward total LOE, even though the Government receives the benefit of 50 hours of work for 40 hours pay. Contractor B proposes no UCOT.

Question: Why is Contractor A prohibited from counting the UCOT hours in their LOE? Contractor A did not state that they will NOT work UCOT hours; they merely did not propose it formally which would then be binding.

Based on my research, the Government?s concern with UCOT is to ensure contractors properly account for UCOT, and that the use of UCOT does not unduly introduce performance risk. If a contractor proposes UCOT of 50-hour workweeks and is awarded a contract, the Government would want to ensure that contractor deliver on those UCOT hours which presumably gave them a competitive edge and partly or largely formed the basis of their winning price.

The fact that Contractor A chose not to propose any UCOT should not preclude the incidental performance of UCOT, and should not penalize the contractor.

[Hope7]

Background: Below is a clause that we are finding in various CPFF (LOE) solicitations.

"Of the total staff-hours of direct labor set forth above, it is estimated that __ staff-hours are competitive time (uncompensated overtime). Competitive time (uncompensated overtime) is defined as hours provided by personnel in excess of 40 hours per week without additional compensation for such excess work. All other effort is defined as compensated effort. If no amount is indicated in the first sentence of this paragraph, competitive time (uncompensated overtime) effort performed by the contractor shall not be counted in fulfillment of the level of effort obligations under this contract."

Hypothetical Scenario: RFP (CPFF) directs offerors to identify Uncompensated Overtime (UCOT) hours IAW FAR 52.237-10, describe the use of UCOT, and cautions against unrealistic rates.

Contractor A does not intend to require their employees to work UCOT on a consistent or required basis; therefore, no UCOT hours are proposed. Consequently, the above LOE clause in the resultant contract states ??no UCOT hours performed will be counted in fulfilling the LOE.? During execution, an exempt employee works 50 hours in a particular week to meet a schedule. The clause as written would not allow the extra 10 hours to be counted toward total LOE, even though the Government receives the benefit of 50 hours of work for 40 hours pay. Contractor B proposes no UCOT.

Question: Why is Contractor A prohibited from counting the UCOT hours in their LOE? Contractor A did not state that they will NOT work UCOT hours; they merely did not propose it formally which would then be binding.

Based on my research, the Government?s concern with UCOT is to ensure contractors properly account for UCOT, and that the use of UCOT does not unduly introduce performance risk. If a contractor proposes UCOT of 50-hour workweeks and is awarded a contract, the Government would want to ensure that contractor deliver on those UCOT hours which presumably gave them a competitive edge and partly or largely formed the basis of their winning price.

The fact that Contractor A chose not to propose any UCOT should not preclude the incidental performance of UCOT, and should not penalize the contractor.

[Hope7]

Please respond to this question under the "Contract Administration" topic area. This question was inadvertently posted under Subcontracts & Subcoontracts Management, so I have re-posted it under the appropriate topic of "Contract Adminsitration." I apologize for any inconvenience.