B-199672.OM, JAN 23, 1981

B-199672.OM: Jan 23, 1981

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WERE AMENDED BY SECTION 801 OF THE GENERAL ACCOUNTING OFFICE ACT OF 1974. (THE ADDITIONAL 3 MONTH PERIOD IS INCLUDED IN THE NARS GENERAL RECORDS SCHEDULE FOR ADMINISTRATIVE CONVENIENCE.). THE ACTING DIRECTOR'S SPECIFIC PROBLEM CONCERNS CONTRACT FILES WHICH WERE "INITIATED" BEFORE THE 1975 AMENDMENT BECAME EFFECTIVE BUT TERMINATED (FINAL PAYMENT MADE) AFTERWARD. WHICHEVER IS LATER. IT IS OUR UNDERSTANDING THAT BY "INITIATION" THE ACTING DIRECTOR MEANS THE OPENING OF A RECORD BY THE CONTRACTING AGENCY AT SOME POINT DURING THE FIRST STAGES OF A PROCUREMENT ACTION. THE ACTING DIRECTOR'S CONCERN IS BASED ON A MISTAKEN UNDERSTANDING OF THE EFFECT OF THE ACT. NOTE) STATES THAT: "THE AMENDMENT *** SHALL GO INTO EFFECT 6 MONTHS AFTER THE DATE OF ENACTMENT AND WILL HAVE NO EFFECT ON CLAIMS RECEIVED IN THE GENERAL ACCOUNTING OFFICE BEFORE THAT TIME.".

B-199672.OM, JAN 23, 1981

SUBJECT: CLARIFICATION OF DISPOSAL DATE FOR CONTRACT FILES, B-199672

DIRECTOR, OISS - SUSAN BURTNER:

THIS RESPONDS TO YOUR MEMORANDUM DATED JULY 15, 1980, AS CLARIFIED BY A MEMORANDUM FROM MS. NORMA STAPLESON ON OCTOBER 2, 1980, SUBMITTING A COPY OF A LETTER RECEIVED FROM THE ACTING DIRECTOR, RECORDS DISPOSITION DIVISION, NATIONAL ARCHIVES AND RECORD SERVICE (NARS). THESE DOCUMENTS CONCERN A PROBLEM WHICH HAS ARISEN AS TO THE PROPER DISPOSITION OF CONTRACT CASE FILES.

ON JANUARY 2, 1975 SECTIONS 71A AND 237 OF 31 U.S.C. WERE AMENDED BY SECTION 801 OF THE GENERAL ACCOUNTING OFFICE ACT OF 1974, PUB. L. 93 604, 88 STAT. 1965, TO REDUCE THE TIME FOR FILING CLAIMS WITH GAO FROM 10 TO 6 YEARS, AND THEREAFTER TO BAR SUCH CLAIMS. SECTION 802 DELAYED THE EFFECTIVE DATE OF THE AMENDMENT UNTIL JULY 2, 1975, THE BEGINNING OF FISCAL YEAR 1976. THE ACTING DIRECTOR SUGGESTS THAT AS A RESULT OF THE AMENDMENT:

"RECORDS CREATED PRIOR TO FY76 MUST BE HELD 10 YEARS AND 3 MONTHS WHILE THOSE CREATED THEREAFTER *** MAY BE DESTROYED WHEN ONLY 6 YEARS AND 3 MONTHS OLD." (THE ADDITIONAL 3 MONTH PERIOD IS INCLUDED IN THE NARS GENERAL RECORDS SCHEDULE FOR ADMINISTRATIVE CONVENIENCE.)

THE ACTING DIRECTOR'S SPECIFIC PROBLEM CONCERNS CONTRACT FILES WHICH WERE "INITIATED" BEFORE THE 1975 AMENDMENT BECAME EFFECTIVE BUT TERMINATED (FINAL PAYMENT MADE) AFTERWARD. THE ACTING DIRECTOR QUESTIONS WHETHER TO PROTECT THE GOVERNMENT UNDER THE STATUTE: (1) THESE FILES CAN BE DESTROYED 6 YEARS AND 3 MONTHS AFTER FINAL PAYMENT, OR (2) THEY MUST BE RETAINED UNTIL EITHER 10 YEARS AND 3 MONTHS AFTER "INITIATION" OR 6 YEARS AND 3 MONTHS AFTER FINAL PAYMENT, WHICHEVER IS LATER. IT IS OUR UNDERSTANDING THAT BY "INITIATION" THE ACTING DIRECTOR MEANS THE OPENING OF A RECORD BY THE CONTRACTING AGENCY AT SOME POINT DURING THE FIRST STAGES OF A PROCUREMENT ACTION.

YOU REQUEST OUR VIEWS IN THIS MATTER.

THE ACTING DIRECTOR'S CONCERN IS BASED ON A MISTAKEN UNDERSTANDING OF THE EFFECT OF THE ACT. SECTION 802 OF THE LEGISLATION (SEE 31 U.S.C.A. SEC. 71A, NOTE) STATES THAT:

"THE AMENDMENT *** SHALL GO INTO EFFECT 6 MONTHS AFTER THE DATE OF ENACTMENT AND WILL HAVE NO EFFECT ON CLAIMS RECEIVED IN THE GENERAL ACCOUNTING OFFICE BEFORE THAT TIME."

EXPLAINING WHAT WAS INTENDED BY THIS LANGUAGE, THE SENATE REPORT INCLUDES THE STATEMENT:

"SECTION 802 PROVIDES THAT THE REDUCTION IN TIME ALLOWED FOR FILING CLAIMS IN THE GAO WILL NOT GO INTO EFFECT UNTIL SIX MONTHS AFTER ENACTMENT, AND MAKES IT CLEAR THAT THE ENACTMENT OF THE NEW TIME LIMIT WILL NOT AFFECT CLAIMS FILED BEFORE SUCH ENACTMENT."

S. REP. NO. 93-1314, 93D CONG., 2D SESS. 6 (1974); SEE ALSO, H. R. REP. NO. 93-1300, 93D CONG., 2D SESS. 12-13 (1974).

THUS, THE CONGRESS INTENDED IN SECTION 802 TO PERMIT POTENTIAL CLAIMANTS A LIMITED PERIOD IN WHICH TO FILE CLAIMS WITH GAO WHICH AT THE TIME THE STATUTE WAS ENACTED IN 1975 WERE ENFORCEABLE UNDER THE 10 YEAR RULE, BUT WHICH WOULD BE BARRED UNDER A 6-YEAR RULE. FOR EXAMPLE, A CLAIM WHICH AROSE IN 1968 AND THUS UNDER THE 10-YEAR RULE COULD BE RAISED AT GAO UNTIL 1978, WOULD BE BARRED AFTER JULY 2, 1975 (7 YEARS AFTER IT AROSE) UNLESS RAISED BETWEEN JANUARY 1, 1975 AND THAT DATE. AS WE STATED IN RANDALL W. CLEVELAND - OVERTIME COMPENSATION, B-178715, MAY 13, 1975 (COPY ATTACHED):

"UNLESS CLAIMS ARE RECEIVED PRIOR TO THE END OF THE 6 MONTH GRACE PERIOD, ANY PORTION OF THE CLAIM ACCRUING MORE THAN 6 YEARS FROM THE DATE THE CLAIM IS RECEIVED IN OUR OFFICE WOULD BE BARRED."

THUS, THE DATE OF THE FILE'S "INITIATION" IS NOT RELEVANT. ACCORDINGLY, WITH THE EXCEPTION OF FILES RELATED TO ON-GOING LITIGATION OR TO CLAIMS WHICH HAVE BEEN FILED WITH GAO, NO CONTRACT FILE NEED BE RETAINED FOR PURPOSES OF THE STATUTE BEYOND 6 YEARS AFTER THE LATEST DATE A CLAIM COULD ACCRUE, I.E., THE DATE FINAL PAYMENT IS TENDERED.

DIGEST

IN REDUCING TIME FOR FILING CLAIMS AT GAO FROM 10 TO 6 YEARS, 1975 AMENDMENT TO 31 U.S.C. SECS. 71A AND 237 PROVIDED 6-MONTH GRACE PERIOD AFTER WHICH 6-YEAR RULE BARRED OLDER CLAIMS WHICH HAD NOT BEEN FILED. THEREFORE, CONTRACT FILES GENERALLY NEED NOT BE RETAINED BEYOND 6 YEARS AFTER CLAIM COULD ACCRUE, I.E., AFTER FINAL PAYMENT, NOTWITHSTANDING THAT FILES MAY HAVE BEEN OPENED BEFORE AMENDMENT.