Monday, April 21, 2014

GSA Schedule Contracts - Access to Records

We're going to keep with our major theme of the past few weeks - GSA Schedule Contracts (or MAS Contracts) by discussing GSA's access to contractor books and records. Its nice to get a GSA contract, sit back and watch the orders start flowing in (okay, it would be nice but it doesn't happen that quite that easily). What a lot of companies don't realize when they get into the GSA program is the degree to which they must open up their books and records to the GSA contract auditors and the length of time for which they must be maintained and made available.

The basic access to records clause is found in GSAR (GSA FAR Supplement) 552.215-71 included in every GSA contract. That clause states:
The Contractor agrees that the Administrator of General Services or any duly authorized representative shall have access to and the right to examine any books, documents, papers and records of the Contractor involving transactions related to this contract for over billings, billing errors, compliance with the Price Reduction clause and compliance with the Industrial Funding Fee clause of this contract. This authority shall expire  three years after final payment. The basic contract and each option shall be treated as separate contracts for purposes of applying this clause.
The GSA auditors have interpreted this clause very broadly and believe that it gives them the authority to ask for any documents related to the contract, not just those enumerated in the clause. This causes friction when contractors start objecting to or questioning auditors' requests for documents that do not specifically relate to billing and compliance issues. But, because of the fear that auditors will dig deeper into contractors that dig in their heals, the auditors probably get more leeway in the documents they are able to solicit.

Failure to provide relevant information during contract negotiations can lead to charges of overbilling. In that regard, Contractors must ensure that they have properly classified sales to the proper category of customers. Otherwise, GSA may try to make a case that all sales are considered related to the contract.

Note also the clause allows GSA to come in and perform their audits for a period of three years after final payment. Sometimes "final payment" does not occur until long after the period of performance which serves to extend the length of time during which the Government can come back and perform their audits.

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