In 2013, DoD, along with the Institute for Defense Analyses (IDA), a Federally Funded Research and Development Center, initiated a study to identify unnecessary requirements for which costs exceed benefits with the goal of reducing unnecessary and costly statutes and regulations. The study focused on six broad areas based on industry input including (i) acquisition of commercial items, (ii) contract auditing and management, (iii) component specific supplements to DFARS, (iv) application of earned value management, (v) TINA (Truth in Negotiations), and (vi) application of the Buy American Act (BAA).
Twelve of DoD's largest suppliers were invited to participate in the study which ended in December 2014. Each of these companies provided input into the areas they chose to address. None of the companies provided input into the component specific supplements to DFARS area. Two areas, earned-value management and contract auditing and management, generated the most responses.
Over the next few days, we will be posting highlights of this study, focusing primarily on topics contract audit and management topics. Today we will discuss the contractor recommendations to change record retention policies related to original scanned images.
Two of the 12 contractors participating in this study recommended changes to the retention of original paper records. The crux of their arguments that that requiring originals of scanned images to be retained for one year is unnecessarily burdensome.
FAR 4.703 includes language that states original records need not be maintained or produced in an audit if the contractor provides photographic or electronic images of the original records and meets certain requirements. One of those requirements is for Government contractors to maintain their original records for a minimum of one year after imaging to permit periodic validation of the imaging system.
The study concluded that there is no compelling evidence to make changes to to policies. The FAR 4.703 requirement to retain original hard copies of scanned images to allow verification that scanned copies are accurate seems reasonable. The study noted that DCAA (Defense Contract Audit Agency) has no policies that add to this requirements but did recommend that DCAA might want to revisit it's policy on the frequency of testing scanned images to original documents.
The full Eliminating Requirements Imposed on Industry Study report can be downloaded here.
Go on to Part 2