4.704 Calculation of retention periods
Source: FAR 4.704 on acquisition.gov
Contractors must calculate record retention periods based on the end of the fiscal year of the final relevant entry, and adjust retention if records are reused or interfiled.
Overview
FAR 4.704 outlines how contractors must calculate the retention periods for records related to government contracts. The regulation specifies that retention periods, as detailed in FAR 4.705, begin at the end of the contractor’s fiscal year in which a cost is charged or allocated to a contract or subcontract. If a record contains multiple entries, the retention period starts from the fiscal year of the final entry. Contractors are advised to organize records in annual blocks for efficient retention and disposal. If records from a prior contract are used as certified cost or pricing data for a new contract, the retention period resets and begins from the date of the new contract. When different categories of records are interfiled and cannot be separated for disposal, the entire set must be kept for the longest retention period applicable to any of the categories involved.
Key Rules
- Start of Retention Period
- Retention periods start at the end of the fiscal year when a cost is charged or allocated, or when the last entry is made for records with multiple entries.
- Records Used for Successive Contracts
- If prior contract records are used for certified cost or pricing data in a new contract, the retention period starts from the new contract date.
- Interfiled Records
- If different record categories are mixed and cannot be separated, retain all for the longest required period.
Responsibilities
- Contracting Officers: Ensure contractors understand and comply with retention period calculations.
- Contractors: Properly calculate, organize, and retain records according to these rules.
- Agencies: Oversee contractor compliance and provide guidance as needed.
Practical Implications
- Ensures accurate and consistent record retention for audit and review purposes.
- Impacts how contractors organize and dispose of records, especially when records are reused or interfiled.
- Common pitfalls include miscalculating retention periods or prematurely disposing of interfiled records.
(a) The retention periods in 4.705 are calculated from the end of the contractor’s fiscal year in which an entry is made charging or allocating a cost to a Government contract or subcontract. If a specific record contains a series of entries, the retention period is calculated from the end of the contractor’s fiscal year in which the final entry is made. The contractor should cut off the records in annual blocks and retain them for block disposal under the prescribed retention periods.
(b) When records generated during a prior contract are relied upon by a contractor for certified cost or pricing data in negotiating a succeeding contract, the prescribed periods shall run from the date of the succeeding contract.
(c) If two or more of the record categories described in 4.705 are interfiled and screening for disposal is not practical, the contractor shall retain the entire record series for the longest period prescribed for any category of records.