How Long Should I Keep My Records?

As a general rule, contractors must make available records, which includes books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether such items are in written form, in the form of computer data, or in any other form, and other supporting evidence to satisfy contract negotiation, administration, and audit requirements of the contracting agencies for three years after final payment (see FAR 4.7) or, for certain records delineated below, the period specified or three years, whichever comes first. If a particular contract specifies a longer period, the longer period applies.

If a contractor does not meet the original due date for submission of its final indirect cost rate proposals (six months after the end of its fiscal year) the retention periods are automatically extended one day for each day the proposal is not submitted after the original due date.

Retention periods 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. Typically, contractors cut off the records in annual blocks and retain them for block disposal under the prescribed retention periods.

When records generated during a prior contract are relied upon by a contractor for cost or pricing data in negotiating a succeeding contract, the prescribed periods shall run from the date of the succeeding contract.

Following are the FAR required retention periods for specfic records.

Financial and cost accounting records.

• Accounts receivable invoices, adjustments to the accounts, invoice registers, carrier freight bills, shipping orders, and other documents which detail the material or services billed on the related invoices: Retain 4 years.
• Material, work order, or service order files, consisting of purchase requisitions or purchase orders for material or services, or orders for transfer of material or supplies: Retain 4 years.
• Cash advance recapitulations, prepared as posting entries to accounts receivable ledgers for amounts of expense vouchers prepared for employees’ travel and related expenses: Retain 4 years.
• Paid, canceled, and voided checks, other than those issued for the payment of salary and wages: Retain 4 years.
• Accounts payable records to support disbursements of funds for materials, equipment, supplies, and services, containing originals or copies of the following and related documents: remittance advices and statements, vendors’ invoices, invoice audits and distribution slips, receiving and inspection reports or comparable certifications of receipt and inspection of material or services, and debit and credit memoranda: Retain 4 years.
• Labor cost distribution cards or equivalent documents: Retain 2 years.
• Petty cash records showing description of expenditures, to whom paid, name of person authorizing payment, and date, including copies of vouchers and other supporting documents: Retain 2 years.

Pay administration records.

• Payroll sheets, registers, or their equivalent, of salaries and wages paid to individual employees for each payroll period; change slips; and tax withholding statements: Retain 4 years.
• Clock cards or other time and attendance cards: Retain 2 years.
• Paid checks, receipts for wages paid in cash, or other evidence of payments for services rendered by employees: Retain 2 years.

Acquisition and supply records.

• Store requisitions for materials, supplies, equipment, and services: Retain 2 years.
• Work orders for maintenance and other services: Retain 4 years.
• Equipment records, consisting of equipment usage and status reports and equipment repair orders: Retain 4 years.
• Expendable property records, reflecting accountability for the receipt and use of material in the performance of a contract: Retain 4 years.
• Receiving and inspection report records, consisting of reports reflecting receipt and inspection of supplies, equipment, and materials: Retain 4 years.
• Purchase order files for supplies, equipment, material, or services used in the performance of a contract; supporting documentation and backup files including, but not limited to, invoices, and memoranda; e.g., memoranda of negotiations showing the principal elements of subcontract price negotiations (see 52.244-2): Retain 4 years.
• Production records of quality control, reliability, and inspection: Retain 4 years.