Overview
This section establishes the specific starting points and methodologies for determining how long government contractors must retain financial and performance records. It ensures consistency by tying retention clocks to the contractor’s fiscal year and the lifecycle of cost data.
Key Rules
- Standard Calculation: Retention periods begin at the end of the contractor’s fiscal year in which a cost entry is charged or allocated to a contract.
- Series of Entries: For records containing multiple entries over time, the retention period starts from the end of the fiscal year in which the final entry was made.
- Annual Block Disposal: Contractors are instructed to "cut off" records in annual blocks to facilitate bulk disposal once the required period expires.
- Successor Contracts: If old records are used as certified cost or pricing data for a new contract, the retention clock resets and runs from the date of the new contract.
- Interfiled Records: If different categories of records are mixed together and cannot be easily screened, the entire collection must be retained for the longest period applicable to any record within that group.
Practical Implications
- Contractors must synchronize their document destruction policies with their internal fiscal year-end procedures rather than the calendar year or the contract end date.
- Poor record organization (interfiling) can create significant administrative burdens and increased storage costs, as the "longest period" rule prevents the early disposal of shorter-term documents.