10 U.S.C. § 3841 (ARMED FORCES)
§ 3841. Examination of records of contractor
(a) 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.
(b) Agency Authority.—
(1) The head of an 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 agency under a chapter 137 legacy provision; 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 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 chapter 271 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.
(c) DCAA Subpoena Authority.—
(1) Authority to require the production of records.—
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).
(2) Enforcement of subpoena.—
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) Authority not delegable.—
The authority provided by paragraph (1) may not be redelegated.
(d) Comptroller General Authority.—
(1) In general.—
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.
(2) Exception for foreign contractor or subcontractor.—
Paragraph (1) does not apply to a contract or subcontract with a foreign contractor or foreign subcontractor if the head of the 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 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).
(3) Additional records not required.—
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.
(e) Limitation on Audits Relating to Indirect Costs.—
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.
(f) Limitation.—
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.
(g) 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 for an amount not greater than the simplified acquisition threshold.
(h) Forms of Original Record Storage.—
Nothing in this section shall be construed to preclude a contractor from duplicating or storing original records in electronic form.
(i) Use of Images of Original Records.—
The head of an 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.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1835(a), (b), Jan. 1, 2021, 134 Stat. 4239.)
heading: Editorial Notes
heading: Codification
text: The text of subsecs. (a), (e), (g), (h), and (i) of section 2313 of this title, which were transferred to this section, redesignated as subsecs. (b), (f), (h), (i), and (j), respectively, and amended by Pub. L. 116–283, § 1835(b)(1)–(3), (6), was based on Pub. L. 103–355, title II, § 2201(a)(1), Oct. 13, 1994, 108 Stat. 3316, which amended section 2313 generally.
The text of subsec. (b) of section 2313 of this title, which was transferred to this section, redesignated as subsec. (c), and amended by Pub. L. 116–283, § 1835(b)(1), (4), was based on Pub. L. 103–355, title II, § 2201(a)(1), Oct. 13, 1994, 108 Stat. 3316; Pub. L. 104–106, div. A, title XV, § 1502(a)(1), Feb. 10, 1996, 110 Stat. 502; Pub. L. 106–65, div. A, title X, § 1032(a)(2), Oct. 5, 1999, 113 Stat. 751.
The text of subsec. (c) of section 2313 of this title, which was transferred to this section, redesignated as subsec. (d), and amended by Pub. L. 116–283, § 1835(b)(1), (5), was based on Pub. L. 103–355, title II, § 2201(a)(1), Oct. 13, 1994, 108 Stat. 3317; Pub. L. 110–417, [div. A], title VIII, § 871(b), Oct. 14, 2008, 122 Stat. 4555.
The text of subsec. (d) of section 2313 of this title, which was transferred to this section and redesignated as subsec. (e) by Pub. L. 116–283, § 1835(b)(1), was based on Pub. L. 104–201, div. A, title VIII, § 808(a), Sept. 23, 1996, 110 Stat. 2607, which amended subsec. (d) generally.
The text of subsec. (f) of section 2313 of this title, which was transferred to this section and redesignated as subsec. (e) by Pub. L. 116–283, § 1835(b)(1), was based on Pub. L. 103–355, title II, § 2201(a)(1), title IV, § 4102(c), Oct. 13, 1994, 108 Stat. 3317, 3340.
heading: Prior Provisions
text: A prior section 3841, added Pub. L. 85–861, § 1(94), Sept. 2, 1958, 72 Stat. 1483, related to separation or transfer to retired reserve of reserve nurses and medical specialists at age 50 if in a reserve grade below major, prior to repeal by Pub. L. 86–559, § 1(22), June 30, 1960, 74 Stat. 271.
heading: Amendments
text: 2021—Subsec. (a). Pub. L. 116–283, § 1835(b)(2), redesignated subsec. (i) of section 2313 of this title as subsec. (a) of this section.
Subsec. (b). Pub. L. 116–283, § 1835(b)(1), (3), redesignated subsec. (a) of section 2313 of this title as subsec. (b) of this section, realigned margins of pars. (1) and (2), and substituted “made by that agency under a chapter 137 legacy provision” for “made by that agency under this chapter” in par. (1)(A) and “chapter 271” for “section 2306a” in par. (2).
Subsec. (c). Pub. L. 116–283, § 1835(b)(1), (4), redesignated subsec. (b) of section 2313 of this title as subsec. (c) of this section, inserted heading and substituted “subsection (b)” for “subsection (a)” in par. (1), and inserted headings and realigned margins of pars. (2) and (3).
Subsec. (d). Pub. L. 116–283, § 1835(b)(1), (5), redesignated subsec. (c) of section 2313 of this title as subsec. (d) of this section and inserted headings and realigned margins of pars. (1) to (3).
Subsec. (e). Pub. L. 116–283, § 1835(b)(1), redesignated subsec. (d) of section 2313 of this title as subsec. (e) of this section.
Subsec. (f). Pub. L. 116–283, § 1835(b)(1), (6), redesignated subsec. (e) of section 2313 of this title as subsec. (f) of this section and substituted “subsection (b)” for “subsection (a)” and “subsection (d)” for “subsection (c)”.
Subsecs. (g) to (i). Pub. L. 116–283, § 1835(b)(1), redesignated subsecs. (f) to (h) of section 2313 of this title as subsecs. (g) to (i), respectively, of this section.
heading: Statutory Notes and Related Subsidiaries
heading: Effective Date
text: Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title.