How long must contractors retain contract files?

Contractors are required to retain contract files for a period of 3 years as this duration aligns with various federal regulations. This retention period is critical because it allows for the necessary documentation to be available for audits, reviews, or investigations that may occur after a contract has been completed.

The justification for this 3-year retention period typically originates from the Federal Acquisition Regulation (FAR) and related policies, which aim to ensure transparency and accountability in contracting activities. Such files may include essential elements like the contract terms, modifications, financial records, and correspondence that could serve as evidence in any disputes or claims regarding the contract.

Choosing a shorter retention time, such as 1 or 2 years, would not provide sufficient time to address any issues or inquiries that might arise after the contract has concluded. Retaining files for a longer period, such as 5 years, could impose unnecessary storage burdens without added benefits, as the standard accountability needs are adequately met within the 3-year frame.