Federal subcontractors often ask for one simple retention period they can apply to every file. The FAR does not work that way. FAR Subpart 4.7 contains a general framework and specific retention periods, and it expressly treats 'contracts' and 'contractors' as including subcontracts and subcontractors for that subpart.
The actual retention schedule should be tied to the clauses in the subcontract, the record category, final payment, and any unresolved claims or other reasons to preserve the file.
FAR Subpart 4.7 expressly includes subcontractors
FAR 4.700 states that, for the records-retention subpart, the terms contracts and contractors include subcontracts and subcontractors. FAR 4.703 generally requires covered records to be available for three years after final payment or for certain records the period specified in FAR 4.705 through 4.705-3, subject to the rule's details and exceptions.
That makes 'three years after final payment' a common reference point, but not a universal rule for every record.
Official source: FAR Subpart 4.7 — Contractor Records Retention.
Some periods are calculated from the fiscal year
FAR 4.704 explains that specific periods in FAR 4.705 are generally calculated from the end of the contractor's fiscal year in which a cost is charged or allocated to a Government contract or subcontract. Records with a series of entries use the fiscal year of the final entry.
A retention schedule based only on the invoice date may therefore dispose of records too early.
Official source: FAR 4.704 — Calculation of Retention Periods.
Reasons to keep records longer
- A contract clause specifies a longer period.
- A claim, appeal, litigation, or termination settlement remains unresolved.
- Certified cost or pricing data or a later pricing action relies on earlier records.
- A labor clause has its own recordkeeping period.
- Cybersecurity, export, quality, property, sourcing, or other compliance rules require separate retention.
- The company needs the records to support warranties, insurance, tax, or business obligations.
Build a clause-based retention matrix
For each federal subcontract, list the recordkeeping clauses, record categories, triggering date, minimum retention period, and any hold events that suspend destruction. Link the matrix to the contract closeout process so records are not destroyed merely because active performance ended.
Electronic storage is permitted under the FAR framework when integrity, indexing, and other requirements are satisfied.
Official source: FAR 4.703 — Policy.