These days we’re so used to working with technology that we often overlook how much paper we’re still using – and how long we’re supposed to keep that paper around! For government contractors, FAR subpart 4.7 provides the policies and procedures for contractor records retention. This subpart outlines which records should be retained and for what period of time, and also contains guidance on using photographic or electronic images to keep up with the times.
Retention periods range from 2 to 4 years depending on the type of record, after final payment (on the contract). Did you see the catch – “After final payment”? Usually an audit of your incurred cost submission determines your final rates and thus your final payment. The current statute of limitations for an incurred cost submission audit is 6 years. So, as you’re going through subpart 4.7 keep in mind that if your incurred cost submission for the contract year in question hasn’t been audited, you’ll need to add 6 more years of retention.