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Zag2009

DEAR 970.5232-3 and records retention

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Our prime contract contains the clause DEAR 970.5232-3 (June 2007) Alt 1 (Dec 2000), which in short requires the prime contractor to retain records for 3 years after final payment on the prime contract or as otherwise agreed to with the government.  The flow down provision requires a "similar" clause be inserted into all subcontracts where costs incurred are a factor in determining the amount payable to the subcontractor. My question is should the flow down to subcontracts match the retention period of the prime?  In other words, does this clause mandate subcontractors to retain records for 3 years after final payment on the prime contract or is 3 years after final payment on their subcontract compliant with the flow down requirement? 

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Guest Vern Edwards
12 minutes ago, Zag2009 said:

In other words, does this clause mandate subcontractors to retain records for 3 years after final payment on the prime contract or is 3 years after final payment on their subcontract compliant with the flow down requirement? 

The prime contract clause doesn't answer your question, does it? That clause says "similar," not identical. So what makes sense?

It seems to me that it makes sense to require the sub to retain records until three years after final payment on the subcontract. If you can't buy that, then ask the DOE contracting officer.

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48 minutes ago, Vern Edwards said:

The prime contract clause doesn't answer your question, does it? That clause says "similar," not identical. So what makes sense?

It seems to me that it makes sense to require the sub to retain records until three years after final payment on the subcontract. If you can't buy that, then ask the DOE contracting officer.

I agree that is the reasonable approach and interpretation of the clause.  Thank you for your response.  As a follow up to my original question related to records, our prime contract was recently updated to include the clause DEAR 970.5204-3 (Oct 2014), Access to and Ownership of Records. As required, we incorporated this clause into all subcontracts that contain the clause DEAR 952.223-71 (which is on our prime).  My interpretation of the clause is that it imposes an obligation on the subcontractor to hold all government and contractor owned records generated in performance of the subcontract in accordance with 36 CFR Ch 12, Subpart B Records Management and the NARA approved disposition schedules.  The NARA approved disposition schedules are significantly longer than the 3 year requirement.  It seems to me to be completely unreasonable, for say a small business subcontractor, to have to follow a records retention requirement of 56 years for payroll records.  Note the deviation has not been incorporated into our prime contract, which would allow the prime to take on the record retention requirements in lieu of the subcontractor.  Thoughts? Am I interpreting this requirement correctly in terms of records retention?

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