Contracts are awarded to responsible prospective contractors only 1. The general standards include having the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them 2.
FAR 16.301-3 lists, as a limitation on cost-reimbursement contracts, that the contractor's accounting system is adequate for determining costs applicable to the contract or order 3.
Records that answer an auditor
A contractor is responsible for accounting for costs appropriately and for maintaining records, including supporting documentation, adequate to demonstrate that costs claimed have been incurred 4.
FAR 4.703 generally has contractors make records available for 3 years after final payment, with other periods for certain records 5. For time-and-materials and labor-hour payments, FAR 52.232-7 refers to individual daily job timekeeping records 6.
If the Government terminates a contract that includes FAR 52.212-4 for its convenience, the settlement includes reasonable charges the contractor can demonstrate, using its standard record keeping system, have resulted from the termination, and that paragraph does not give the Government a right to audit the contractor's records 7.
Choose systems that produce the records
Bids2Bank's audit export lists each sealed handoff in chain order with its re-verification and chain-link result 8, and signs the whole file 9. Deleting a workspace keeps the sealed handoff chain 10 and the team audit log 11.
Worked example. Contractor H moves timekeeping from a shared spreadsheet to a system where each employee records hours daily against a contract charge code and a supervisor approves them weekly. When a customer later asks how an invoice's hours were built, H prints the approved daily entries behind it.
Indented paragraphs are invented worked examples. Tool links open Bids2Bank and need a free account.