10 U.S.C. § 3841: Examination of records of contractor

In this section, the term “records” 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. a contractor performing a cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable contract, or any combination of such contracts, made by that agency under a chapter 137 legacy provision; and a subcontractor performing any cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable subcontract or any combination of such subcontracts under a contract referred to in subparagraph (A). the proposal for the contract or subcontract; the discussions conducted on the proposal; pricing of the contract or subcontract; or performance of the contract or subcontract. The Director of the Defense Contract Audit Agency (or any successor agency) may require by subpoena the production of any records of a contractor that the Secretary of Defense is authorized to audit or examine under subsection (b). Any such subpoena, in the case of contumacy or refusal to obey, shall be enforceable by order of an appropriate United States district court. The authority provided by paragraph (1) may not be redelegated. Except as provided in paragraph (2), each contract awarded after using procedures other than sealed bid procedures shall provide that the Comptroller General and his representatives are authorized to examine any records of the contractor, or any of its subcontractors, that directly pertain to, and involve transactions relating to, the contract or subcontract and to interview any current employee regarding such transactions. where the contractor or subcontractor is a foreign government or agency thereof or is precluded by the laws of the country involved from making its records available for examination; and where the head of the agency determines, after taking into account the price and availability of the property and services from United States sources, that the public interest would be best served by not applying paragraph (1). Paragraph (1) may not be construed to require a contractor or subcontractor to create or maintain any record that the contractor or subcontractor does not maintain in the ordinary course of business or pursuant to another provision of law. The head of an agency may not perform an audit of indirect costs under a contract, subcontract, or modification before or after entering into the contract, subcontract, or modification in any case in which the contracting officer determines that the objectives of the audit can reasonably be met by accepting the results of an audit that was conducted by any other department or agency of the Federal Government within one year preceding the date of the contracting officer’s determination. The authority of the head of an agency under subsection (b), and the authority of the Comptroller General under subsection (d), with respect to a contract or subcontract shall expire three years after final payment under such contract or subcontract. Contracts for utility services at rates not exceeding those established to apply uniformly to the public, plus any applicable reasonable connection charge. A contract or subcontract that is for an amount not greater than the simplified acquisition threshold. Nothing in this section shall be construed to preclude a contractor from duplicating or storing original records in electronic form. The contractor or subcontractor has established procedures to ensure that the imaging process preserves the integrity, reliability, and security of the original records. The contractor or subcontractor maintains an effective indexing system to permit timely and convenient access to the imaged records. The contractor or subcontractor retains the original records for a minimum of one year after imaging to permit periodic validation of the imaging systems. Not later than 180 days after the date of the enactment of this Act [ Jan. 2, 2013 ], the Director of the Defense Contract Audit Agency shall revise guidance on access to defense contractor internal audit reports (including the Contract Audit Manual) to incorporate the requirements of this section. Written determination that access to such reports is necessary to complete required evaluations of contractor business systems. A copy of any request from the Defense Contract Audit Agency to a contractor for access to such reports. A record of response received from the contractor, including the contractor’s rationale or justification if access to requested reports was not granted. The revised guidance shall include appropriate safeguards and protections to ensure that contractor internal audit reports cannot be used by the Defense Contract Audit Agency for any purpose other than evaluating and testing the efficacy of contractor internal controls and the reliability of associated contractor business systems. A determination by the Defense Contract Audit Agency that a contractor has a sound system of internal controls shall provide the basis for increased reliance on contractor business systems or a reduced level of testing with regard to specific audits, as appropriate. Internal audit reports provided by a contractor pursuant to this section may be considered in determining whether or not a contractor has a sound system of internal controls, but shall not be the sole basis for such a determination. Not later than one year after the date of the enactment of this Act, the Comptroller General of the United States shall initiate a review of the documentation required by subsection (a). Not later than 90 days after completion of the review, the Comptroller General shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the results of the review, with findings and recommendations for improving the audit processes of the Defense Contract Audit Agency.”