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FAR 52.215-2, “Audit and Records-Negotiation,” is the standard clause that gives a federal contracting officer, and in some cases the Comptroller General, the right to examine a contractor’s records, and that obliges the contractor to keep those records available for a set period, normally until 3 years after final payment. The clause text is published at acquisition.gov (checked 2026-10-29, FAC 2026-01); the basic clause is dated June 2020, with Alternates I (March 2009), II (August 2016) and III (June 1999).
For research institutions the clause matters because it is the contract-side counterpart to grant record rules: a cost-reimbursement research contract from a federal agency can carry it, while a grant is governed by 2 CFR 200 instead. Read it alongside our guide to record retention policy under 2 CFR 200.334 to see how the two regimes differ.
What the clause is and who it applies to
FAR 52.215-2 is a contract clause, not a program. It is inserted into negotiated federal contracts, and its text does three things: it defines the records the government may examine, it names who may examine them, and it sets how long the contractor must keep them available. Paragraph (a) defines “records” broadly as books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether they are in written form, in electronic form or in any other form.
When the audit right applies
The clause does not give the same access in every contract. The access depends on the contract type and on what the contractor was required to submit.
- Paragraph (b), cost and pricing records. For cost-reimbursement, incentive, time-and-materials, labor-hour or price-redeterminable contracts, the contracting officer or an authorized representative may examine and audit all records and other evidence sufficient to reflect properly all costs claimed to have been incurred or anticipated to be incurred. The right includes inspecting the contractor’s plants, or parts of them, at reasonable times.
- Paragraph (c), certified cost or pricing data. If the contractor was required to submit certified cost or pricing data, the contracting officer may examine records that support the proposal, including computations and projections related to the proposal, negotiation, pricing or performance of the contract. Our guide to the TINA threshold explains when certified data is required.
- Paragraph (e), reports. If the contract requires cost, funding or performance reports, the contracting officer may examine the records that support them.
Who can audit, and what they can ask for
Under paragraph (d), the Comptroller General of the United States, or an authorized representative, may examine directly pertinent records involving transactions related to the contract, and may interview current employees. The clause adds that the contractor is not required to create or maintain any record that it does not keep in the ordinary course of business or under law.
Alternate I extends the access in paragraph (d) to an Inspector General and replaces paragraph (g) with a flow-down that is not limited by the simplified acquisition threshold; the Inspector General’s interview authority does not flow down to subcontracts. Alternate III deletes paragraph (d) and substitutes a new availability paragraph.
Retention periods: how long records must be kept available
Paragraph (f) requires the contractor to make records available at its office at all reasonable times for examination, audit or reproduction until 3 years after final payment under the contract, or for any shorter period specified in FAR subpart 4.7 (Contractor Records Retention), or for any longer period required by statute or by other clauses in the contract. FAR 4.703 sets the default in the same terms: keep records for 3 years after final payment, or for the periods in FAR 4.705 through 4.705-3 for certain records.
| Situation | How long records stay available | Source |
|---|---|---|
| Ordinary completed contract | Until 3 years after final payment (or a shorter period in FAR subpart 4.7) | 52.215-2(f); FAR 4.703 |
| Contract completely or partially terminated | Records of the terminated work: until 3 years after the final termination settlement | 52.215-2(f)(1) |
| Appeals under the Disputes clause, litigation, or settlement of claims | Related records: until such appeals, litigation or claims are finally resolved | 52.215-2(f)(2) |
| Statute or another contract clause requires longer | The longer period | 52.215-2(f); FAR 4.703 |
| Contractor keeps records longer for its own purposes | Retention beyond the default is addressed in FAR 4.703(b) | FAR 4.703(b) |
| Final indirect cost rate proposal submitted late | The FAR 4.705 periods are automatically extended one day for each day the proposal is not submitted after its due date | FAR 4.703 |
Keeping records as images or electronic data
Contractors may keep electronic copies of records. Originals need not be produced in an audit if the imaging procedures are reliable and secure, an effective index allows timely access, and the contractor retains the original records for at least one year after imaging (FAR 4.703(c)). Computer data must be kept on a reliable medium and may not be destroyed or overwritten during the retention period.
Alternates I, II and III
| Version | What changes from the basic clause |
|---|---|
| Basic clause (June 2020) | Paragraphs (a) through (g) as described above |
| Alternate I (March 2009) | Extends the paragraph (d) access to an Inspector General, replaces paragraph (g) with a flow-down to all subcontracts without the threshold; IG interview authority does not flow to subcontracts |
| Alternate II (August 2016) | Adds paragraph (h), which applies 2 CFR part 200, subpart F (the Uniform Guidance audit requirements) |
| Alternate III (June 1999) | Deletes paragraph (d) and substitutes a new availability paragraph |
Alternate II is the one a research administrator is most likely to care about, because it ties a contract’s audit terms to the same subpart F audit rules that apply to grants and cooperative agreements. Check which alternate your contract actually incorporates: the clause number is the same in each case, and the alternate is identified in the contract’s clause list.
Flow-down to subcontracts
Paragraph (g) requires the contractor to include the substance of the clause in subcontracts that exceed the simplified acquisition threshold (as defined in FAR 2.101 at the time of subcontract award) and that are cost-reimbursement, incentive, time-and-materials, labor-hour or price-redeterminable, require certified cost or pricing data, or require reports under paragraph (e). The clause may be altered only as necessary to identify the contracting parties and the contracting officer under the government prime contract. For the commercial-contract version of audit access, see our guide to audit rights clauses in vendor contracts.
Compliance steps for a contractor
- Identify which contracts carry 52.215-2 and which alternate, from the clause list in the contract.
- Map the record categories in paragraphs (a), (b), (c), (d) and (e) to where the organization actually keeps them: accounting, proposal files, performance and cost reports.
- Set the retention end date for each contract from final payment (or final termination settlement), and then check FAR subpart 4.7 and any longer statutory or contract requirement.
- Place a hold on records tied to an open appeal, litigation or claim until it is finally resolved.
- Confirm the clause was flowed down to qualifying subcontracts.
Common mistakes
- Treating 3 years as a fixed number from contract end. The clock runs from final payment, not from the end of performance, and terminations, disputes and claims have their own triggers.
- Ignoring the late-proposal extension. A late final indirect cost rate proposal extends the FAR 4.705 periods day for day.
- Discarding originals too early. Discarding originals within a year of imaging, or without a reliable, secure, indexed imaging system (FAR 4.703(c)).
- Assuming grant record rules apply to a contract. A contract with this clause follows the clause and FAR subpart 4.7, unless Alternate II brings in 2 CFR 200 subpart F audit rules.
- Dropping the flow-down. Qualifying subcontracts need the substance of paragraph (g) included.
Related clauses and rules
| Item | Relationship to 52.215-2 |
|---|---|
| FAR subpart 4.7, Contractor Records Retention (FAR 4.703) | Sets the default retention period that 52.215-2(f) points to |
| 2 CFR part 200, subpart F | Applied to the contract by Alternate II, paragraph (h) |
| Certified cost or pricing data | Triggers the examination right in paragraph (c) and the flow-down in paragraph (g) |
For related reading, see other transaction authority compared with grants and contracts, cost accounting standards, and our guide to CMMC compliance for research institutions.
FAQ
What does FAR 52.215-2 require?
It requires a contractor to keep records available for government examination and audit, and it sets who may examine them: the contracting officer, the Comptroller General, and under Alternate I an Inspector General. Records must stay available until 3 years after final payment unless a shorter FAR subpart 4.7 period or a longer statutory or contract period applies.
How long must records be kept under FAR 52.215-2?
Until 3 years after final payment, or 3 years after the final termination settlement for terminated work, and until final resolution for records tied to appeals, litigation or claims. A longer statute or clause period overrides these.
Does FAR 52.215-2 apply to grants?
No. It is a contract clause. Grants follow 2 CFR part 200, although Alternate II of the clause applies 2 CFR 200 subpart F to a contract that incorporates it.
Does it flow down to subcontractors?
Yes, for subcontracts above the simplified acquisition threshold that are cost-type or similar, that require certified cost or pricing data, or that require paragraph (e) reports. Only the parties and contracting officer identification may be altered.
Sources
- FAR 52.215-2, Audit and Records-Negotiation, acquisition.gov, https://www.acquisition.gov/far/52.215-2, checked 2026-10-29.
- FAR 4.703, Policy (Contractor Records Retention), acquisition.gov, https://www.acquisition.gov/far/4.703, checked 2026-10-29.
