Overview
This section establishes the foundational scope for policies and procedures regarding how long and in what manner contractors must retain records for government review. It ensures that the government has a verifiable audit trail for all contract-related activities.
Key Rules
- Purpose of Retention: Records must be maintained specifically to satisfy the government’s requirements for records review and auditing.
- Broad Applicability: The rules apply to both prime contractors and subcontractors at all tiers.
- Definitions: In the context of this subpart, the terms "contracts" and "contractors" are legally inclusive of "subcontracts" and "subcontractors."
Practical Implications
- Flow-down Requirements: Prime contractors must ensure that record retention clauses are flowed down to subcontractors to remain compliant with federal audit standards.
- Audit Readiness: Contractors and subcontractors must maintain organized filing systems for the duration of the specified retention period to avoid non-compliance during a government audit.