Policy
Contractors must retain and make available all relevant records for at least three years after final payment, with specific requirements for electronic storage and longer retention in certain cases.
Overview
FAR 4.703 establishes the policy for contractor records retention, specifying what records must be made available, the required retention periods, and acceptable storage formats. Contractors must retain and provide access to all relevant records—including books, documents, accounting procedures, and supporting evidence—needed for contract negotiation, administration, and audit purposes. The standard retention period is three years after final payment, unless a longer period is specified by contract clauses, contractor practices, or delayed submission of final indirect cost rate proposals. The regulation also allows for electronic storage of records, provided certain integrity and accessibility requirements are met, and outlines procedures for retaining and transferring computer data.
Key Rules
- Retention Periods
- Contractors must retain records for 3 years after final payment or as specified in FAR 4.705-4.705-3, whichever is shorter, unless exceptions apply.
- Longer Retention Requirements
- Longer retention may be required by contract clauses, contractor's own practices, or late submission of final indirect cost rate proposals.
- Electronic and Photographic Records
- Contractors may store records electronically if imaging processes are reliable, records are indexed, and originals are kept for at least one year after imaging.
- Computer Data Retention
- Computer data must be retained on reliable media, with integrity and audit trails maintained, and not destroyed or overwritten during the retention period.
Responsibilities
- Contracting Officers: Ensure contractors are aware of and comply with retention and access requirements.
- Contractors: Retain, safeguard, and provide access to all required records for the specified periods; follow procedures for electronic and computer data storage.
- Agencies: May audit or request records as needed for contract oversight.
Practical Implications
- This policy ensures government access to contractor records for audits and contract administration.
- Contractors must implement robust recordkeeping and data management systems, especially for electronic records.
- Failure to comply can result in audit issues, payment delays, or contract disputes.