As a Federal contractor, you already know that the FAR requires you to retain certain project records (books, documents, etc.) for audit and inspection purposes – typically for a period of at least three years after final payment.  But did you know that the regulations allow contractors to cut the clutter by converting paper records to an electronic format?

FAR 4.703(c) includes an express provision allowing contractors to “[duplicate or store] original records in electronic format.”  The benefits of e-storage are well-known and obvious.  Electronic records take up less space and make it significantly easier to find what you need in short order.


But, before you start to purge all of your company’s paper files, bear in mind these key FAR requirements for electronic storage and retention:

·         The e-file must maintain the contractor’s complete records.  In other words, it is not just enough to save your electronic copies.  If you are clearing our paper copies, the entire file must be scanned or otherwise converted to an e-copy.

·         The contractor must establish procedures for ensuring that the scanning or imaging process for converting paper files is effective and preserves the entire document (including signatures, text, graphics, etc.); and

·         The contractor must create an efficient indexing system for providing timely and convenient access to files.  In other words, if the government comes calling with an audit, you must be able to promptly locate the requested files.

One last important note – if you create electronic files today,  that does not mean that you can toss all of your paper files tomorrow.  The FAR still requires you to retain the original paper file for at least one year after it is scanned.