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Subcontracts Lacked Supporting Documentation and Were Susceptible to Fraud - (FAR) 31.201-2(d)

Federal Acquisition Regulation (FAR) 31.201-2(d) states:

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, are allocable to the contract, and comply with applicable cost principles in this subpart and agency supplements. The contracting officer may disallow all or part of a claimed cost that is inadequately supported.

To comply with requirements, each subcontract file should contain the following information:

  • The approved purchase requisition
  • The written solicitation (where required)
  • The written responses to requests for proposals or requests for quotations
  • A memorandum justifying sole-source procurement (if no competition)
  • A technical evaluation
  • A price and cost analysis
  • A memorandum of negotiations
  • The basis of the award form
  • A copy of purchase orders or subcontracts and all change orders
  • Insurance certifications
  • Copies of suppliers’ invoices
  • Correspondence, internal and external, related to the purchase order and subcontract
  • Other purchase order and subcontract documentation as required by the purchase orders and subcontracts’ terms and conditions
  • The final contractor release forms
  • A procurement documentation checklist indicating the documentation in the file

General Recommendations

  • Develop an adequate records system to support claimed subcontract costs and verify the contractor’s completed actions.

SOURCE: AUDIT REPORT NO. E-267-11-002-P MAY 16, 2011

The recommendations are derived from audit reports of the Office of the Inspector General. The source refers to the audit report, which is available on this site as part of the Audit Database Project: an educational tool for compliance with USAID regulations.  Please see the disclaimer of this site before using recommendations.

Tags: Awards and Contracts

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