
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC2313]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                PART IV--SERVICE, SUPPLY, AND PROCUREMENT
 
                   CHAPTER 137--PROCUREMENT GENERALLY
 
Sec. 2313. Examination of records of contractor

    (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.
    (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.
    (d) 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.
    (e) Limitation.--The authority of the head of an agency under 
subsection (a), and the authority of the Comptroller General under 
subsection (c), 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 for an amount not greater 
    than the simplified acquisition threshold.

    (g) 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.
    (h) 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.

    (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.

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 89-607, Sec. 1(2), 
Sept. 27, 1966, 80 Stat. 850; Pub. L. 98-369, div. B, title VII, 
Sec. 2727(c), July 18, 1984, 98 Stat. 1195; Pub. L. 99-145, title IX, 
Sec. 935, Nov. 8, 1985, 99 Stat. 700; Pub. L. 100-26, Sec. 7(g)(1), Apr. 
21, 1987, 101 Stat. 282; Pub. L. 101-510, div. A, title XIII, 
Sec. 1301(9), Nov. 5, 1990, 104 Stat. 1668; Pub. L. 103-355, title II, 
Sec. 2201(a)(1), title IV, Sec. 4102(c), Oct. 13, 1994, 108 Stat. 3316, 
3340; Pub. L. 104-106, div. A, title XV, Sec. 1502(a)(1), Feb. 10, 1996, 
110 Stat. 502; Pub. L. 104-201, div. A, title VIII, Sec. 808(a), Sept. 
23, 1996, 110 Stat. 2607; Pub. L. 106-65, div. A, title X, 
Sec. 1032(a)(2), Oct. 5, 1999, 113 Stat. 751.)

                                          Historical and Revision Notes
-------------------------------------------------------------------------------
---------------------------------
            Revised section                      Source (U.S. Code)            
   Source (Statutes at Large)
-------------------------------------------------------------------------------
---------------------------------
2313(a)...............................  41:153(b) (words after semicolon of  Fe
b. 19, 1948, ch. 65, Sec.  4(b)
                                         last sentence).                      (
words after semicolon of last
                                                                              s
entence), 62 Stat. 23.
2313(b)...............................  41:153(c).                           Fe
b. 19, 1948, ch. 65, Sec.  4(c);
                                                                              a
dded Oct. 31, 1951, ch. 652 (as
                                                                              a
pplicable to Sec.  4(c); of the
                                                                              A
ct of Feb. 19, 1948, ch. 65), 65
                                                                              S
tat. 700.
-------------------------------------------------------------------------------
---------------------------------

    In subsection (a), the words ``An agency named in section 2303 of 
this title'' are substituted for the words ``a procuring agency''. The 
words ``made by that agency under this chapter'' are inserted for 
clarity.
    In subsection (b), the word ``under'' is substituted for the words 
``pursuant to authority contained in''. The word ``provide'' is 
substituted for the words ``include a clause to the effect''. The words 
``are entitled'' are substituted for the words ``shall * * * have * * * 
the right''. The words ``of the United States'', ``duly authorized'', 
``have access to and'', and ``engaged in the performance of'' are 
omitted as surplusage.


                               Amendments

    1999--Subsec. (b)(4). Pub. L. 106-65 struck out par. (4) which read 
as follows: ``The Director (or any successor official) shall submit an 
annual report to the Secretary of Defense on the exercise of such 
authority during the preceding year and the reasons why such authority 
was exercised in any instance. The Secretary shall forward a copy of 
each such report to the Committee on Armed Services of the Senate and 
the Committee on National Security of the House of Representatives.''
    1996--Subsec. (b)(4). Pub. L. 104-106 substituted ``Committee on 
Armed Services of the Senate and the Committee on National Security of 
the House of Representatives'' for ``Committees on Armed Services of the 
Senate and House of Representatives''.
    Subsec. (d). Pub. L. 104-201 amended subsec. (d) generally. Prior to 
amendment, subsec. (d) read as follows: ``Limitation on Preaward Audits 
Relating to Indirect Costs.--The head of an 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 
chapter 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--Pub. L. 103-355, Sec. 2201(a)(1), amended section generally, 
striking out ``of books'' before ``and records'' in section catchline, 
and substituting subsecs. (a) to (i) for former subsecs. (a) to (d).
    Subsec. (f)(2). Pub. L. 103-355, Sec. 4102(c), added par. (2).
    1990--Subsec. (c). Pub. L. 101-510 struck out after cl. (2) ``If 
subsection (b) is not applied to a contract or subcontract based on a 
determination under clause (2), a written report shall be furnished to 
the Congress.''
    1987--Subsec. (d)(1). Pub. L. 100-26 substituted ``section 2306a'' 
for ``section 2306(f)''.
    1985--Subsec. (d). Pub. L. 99-145 added subsec. (d).
    1984--Subsec. (b). Pub. L. 98-369 substituted ``awarded after using 
procedures other than sealed bid procedures'' for ``negotiated under 
this chapter''.
    1966--Subsec. (b). Pub. L. 89-607, Sec. 1(2)(A), substituted 
``Except as provided in subsection (c), each'' for ``Each''.
    Subsec. (c). Pub. L. 89-607, Sec. 1(2)(B), added subsec. (c).


                    Effective Date of 1994 Amendment

    For effective date and applicability of amendment by Pub. L. 103-
355, see section 10001 of Pub. L. 103-355, set out as a note under 
section 251 of Title 41, Public Contracts.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 applicable with respect to any 
solicitation for bids or proposals issued after Mar. 31, 1985, see 
section 2751 of Pub. L. 98-369, set out as a note under section 251 of 
Title 41, Public Contracts.


                         Exemption of Functions

    Functions with respect to purchases authorized to be made outside 
limits of United States or District of Columbia under Foreign Assistance 
Act of 1961, as amended, as exempt, see Ex. Ord. No. 11223, May 12, 
1965, 30 F.R. 6635, set out as a note under section 2393 of Title 22, 
Foreign Relations and Intercourse.


                           Foreign Contractors

    Secretaries of Defense, Army, Navy, or Air Force, or their 
designees, to determine, prior to exercising authority provided in 
amendment of this section by Pub. L. 89-607 to exempt certain contracts 
with foreign contractors from requirement of an examination-of-records 
clause, that all reasonable efforts have been made to include such 
examination-of-records clause, as required by par. (11) of Part I of Ex. 
Ord. No. 10789, and that alternate sources of supply are not reasonably 
available, see par. (11) of Part I of Ex. Ord. No. 10789, Nov. 14, 1958, 
23 F.R. 8897, as amended, set out as a note under section 1431 of Title 
50, War and National Defense.

                  Section Referred to in Other Sections

    This section is referred to in sections 2306a, 2310, 2343 of this 
title; title 50 section 403c.
