Board of Director Minutes
Contents |
Agency Authority[1]
(a)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 this chapter; 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 section 2306a 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)DCAA Subpoena Authority
(1)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 (a).
(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 redelegated.
(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 and to interview any current employee regarding such transactions.
(2)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)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.
[g] Defective Pricing Audits[2]
Contractors are required to submit cost or pricing data if a contract (or a contract modification) exceeds $2M. Audits to detect defective pricing are performed to assess the validity of the contractor's cost or pricing data. When such audits are conducted, a number of approaches are used to uncover incomplete or outdated cost or pricing data. These include:
(1) reviewing minutes of board of directors meetings or correspondence concerning capital expenditures;
(2) reviewing contractor newsletters announcing new or improved manufacturing processes or the purchase of new machinery that will reduce production costs.
Related Topics/Links
Corporate Family[3] Corporations and disclosures go beyond the legal entity holding the contract. Algese 2 SCARL v. United States, No. 15-1279C (Fed. Cl. March 14, 2016),
