§ 254d. — Examination of records of contractor.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 41USC254d]
TITLE 41--PUBLIC CONTRACTS
CHAPTER 4--PROCUREMENT PROCEDURES
SUBCHAPTER IV--PROCUREMENT PROVISIONS
Sec. 254d. Examination of records of contractor
(a) Agency authority
(1) The head of an executive agency, acting through an authorized
representative, is authorized to inspect the plant and audit the records
of--
(A) 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 executive agency
under this subchapter; and
(B) 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).
(2) The head of an executive agency, acting through an authorized
representative, is authorized, for the purpose of evaluating the
accuracy, completeness, and currency of certified cost or pricing data
required to be submitted pursuant to section 254b of this title with
respect to a contract or subcontract, to examine all records of the
contractor or subcontractor related to--
(A) the proposal for the contract or subcontract;
(B) the discussions conducted on the proposal;
(C) pricing of the contract or subcontract; or
(D) performance of the contract or subcontract.
(b) Subpoena power
(1) The Inspector General of an executive agency appointed under
section 3 or 8G \1\ of the Inspector General Act of 1978 (5 U.S.C. App.)
or, upon request of the head of an executive agency, the Director of the
Defense Contract Audit Agency (or any successor agency) of the
Department of Defense or the Inspector General of the General Services
Administration may require by subpoena the production of records of a
contractor, access to which is provided for that executive agency by
subsection (a) of this section.
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\1\ See References in Text note below.
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(2) Any such subpoena, in the case of contumacy or refusal to obey,
shall be enforceable by order of an appropriate United States district
court.
(3) The authority provided by paragraph (1) may not be delegated.
(4) In the year following a year in which authority provided in
paragraph (1) is exercised for an executive agency, the head of the
executive agency shall submit to the Committee on Governmental Affairs
of the Senate and the Committee on Government Operations of the House of
Representatives a report on the exercise of such authority during such
preceding year and the reasons why such authority was exercised in any
instance.
(c) Comptroller General authority
(1) 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.
(2) Paragraph (1) does not apply to a contract or subcontract with a
foreign contractor or foreign subcontractor if the executive agency
concerned determines, with the concurrence of the Comptroller General or
his designee, that the application of that paragraph to the contract or
subcontract would not be in the public interest. However, the
concurrence of the Comptroller General or his designee is not required--
(A) 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
(B) where the executive 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).
(3) 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.
(d) Limitation on audits relating to indirect costs
An executive 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.
(e) Limitation
The authority of an executive agency under subsection (a) of this
section, and the authority of the Comptroller General under subsection
(c) of this section, with respect to a contract or subcontract shall
expire three years after final payment under such contract or
subcontract.
(f) Inapplicability to certain contracts
This section does not apply to the following contracts:
(1) Contracts for utility services at rates not exceeding those
established to apply uniformly to the public, plus any applicable
reasonable connection charge.
(2) A contract or subcontract that is not greater than the
simplified acquisition threshold.
(g) Form of original record storage
Nothing in this section shall be construed to preclude a contractor
from duplicating or storing original records in electronic form.
(h) Use of images of original records
An executive agency shall not require a contractor or subcontractor
to provide original records in an audit carried out pursuant to this
section if the contractor or subcontractor provides photographic or
electronic images of the original records and meets the following
requirements:
(1) The contractor or subcontractor has established procedures
to ensure that the imaging process preserves the integrity,
reliability, and security of the original records.
(2) The contractor or subcontractor maintains an effective
indexing system to permit timely and convenient access to the imaged
records.
(3) The contractor or subcontractor retains the original records
for a minimum of one year after imaging to permit periodic
validation of the imaging systems.
(i) ``Records'' defined
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.
(June 30, 1949, ch. 288, title III, Sec. 304C, as added and amended Pub.
L. 103-355, title II, Sec. 2251(a), title IV, Sec. 4103(d), Oct. 13,
1994, 108 Stat. 3318, 3341; Pub. L. 104-106, div. D, title XLIII,
Sec. 4321(e)(5), Feb. 10, 1996, 110 Stat. 675; Pub. L. 104-201, div. A,
title VIII, Sec. 808(b), Sept. 23, 1996, 110 Stat. 2607.)
References in Text
Section 3 and 8G of the Inspector General Act of 1978, referred to
in subsec. (b)(1), are sections 3 and 8G of Pub. L. 95-452, which are
set out in the Appendix to Title 5, Government Organization and
Employees. The reference to section 8G of the Act probably means the
section 8G which was renumbered by Pub. L. 103-204, Sec. 23(a)(3), Dec.
17, 1993, 107 Stat. 2408, and which relates to requirements for Federal
entities and designated Federal entities.
Amendments
1996--Subsec. (a)(2). Pub. L. 104-106 substituted ``section 254b''
for ``section 254c''.
Subsec. (d). Pub. L. 104-201 amended heading and text of subsec. (d)
generally. Prior to amendment, text read as follows: ``An executive
agency may not perform a preaward audit to evaluate proposed indirect
costs under any contract, subcontract, or modification to be entered
into in accordance with this subchapter 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 conducted by any
other department or agency of the Federal Government within one year
preceding the date of the contracting officer's determination.''
1994--Subsec. (f)(2). Pub. L. 103-355, Sec. 4103(d), added par. (2).
Change of Name
Committee on Government Operations of House of Representatives
treated as referring to Committee on Government Reform and Oversight of
House of Representatives by section 1(a) of Pub. L. 104-14, set out as a
note preceding section 21 of Title 2, The Congress. Committee on
Government Reform and Oversight of House of Representatives changed to
Committee on Government Reform of House of Representatives by House
Resolution No. 5, One Hundred Sixth Congress, Jan. 6, 1999.
Effective Date of 1996 Amendment
For effective date and applicability of amendment by Pub. L. 104-
106, see section 4401 of Pub. L. 104-106, set out as a note under
section 251 of this title.
Effective Date
For effective date and applicability of section, including amendment
by Pub. L. 103-355, see section 10001 of Pub. L. 103-355, set out as an
Effective Date of 1994 Amendment note under section 251 of this title.
Section Referred to in Other Sections
This section is referred to in sections 254b, 262 of this title.
