Monday, July 15, 2013

Access to Records - Requirement up for Renewal

The Paperwork Reduction Act requires that the regulatory agencies periodically submit for OMB's (Office of Management and Budget) review and approval, previously approved information collection requirements. This is one mechanism for ferreting out and eliminating outdated and no longer necessary regulations. This process also provides the public with the opportunity to "weigh in" and comment on the regulations. Most of the time however, these requests are approved with little or no public comment. After all, who wants to waste their time bashing (or suggesting improvements to) regulations when for the most part, those regulations are based on statutory requirements. You're not going to eliminate the regulation unless you first change the law.

So it is today where we see that the FAR councils have requested OMB to review and approve an extension of information collection requirements concerning the examination of records by comptroller general and contract audit.

Government contractors are required to maintain certain records and to ensure the Comptroller General and/or agency have access to, and the right to, examine and audit 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, for a period of three years after final payment. This requirement is necessary for examination and audit of contract surveillance, and verification of contract pricing, and to provide reimbursement of contractor costs, where applicable.

The records retention period is required by the statutory authorities at 10 USC 2313.41, 41 USC 254, and 10 USC 2306. These statutory provisions are implements through the following FAR clauses:

  • 52.215-2, Audit and Records - Negotiation
  • 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders
  • 52.214-26, Audit and Records - Sealed Bidding

(By the way, none of these clauses require contractors to create or maintain any records that the contractor does not normally maintain in its usual course of business. That is a discussion for another day).

What's interesting about this request is the FAR council's estimate of hours required to comply with this regulation. They have estimated a total burden to Government contractors (and subcontractors) of 153 thousand hours per year or about 75 FTEs (full-time equivalents). That's based on contractors having to provide access to its books and records 10 times a year and taking one hour for each incident. That, to us, is a scoffingly low estimate.

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