Change Number: Change 155 GSAM Case 2021-G525
Effective Date: 08/30/2022

542.7003 Additional internal controls.

      (a)  The contracting officer should not rely solely on contractual audit rights. The contracting officer should establish internal controls or procedures for any flexible or variable features of these contracts:

           (1)  Cost-reimbursement.

           (2)  Time-and-materials or labor-hour.

           (3)  Requirements or indefinite-quantity.

     For example, for a time-and-materials or labor-hour contract performed at a Government facility or elsewhere, the contracting officer should provide for the review of time records. The contracting officer should provide for this review even if the contractor is subject to supervision by Government personnel.

      (b)  The contracting officer should establish these internal controls or procedures prior to the commencement of contract performance. Use any reasonable and reliable method or procedure that will enable the Government to determine the correctness of the charges for such matters as the time spent on the job and materials or supplies received. If needed, obtain assistance from the Assistant Inspector General for Auditing or the Regional Inspector General for Auditing.