[Code of Federal Regulations]
[Title 32, Volume 1]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR3.7]

[Page 15-17]
 
                       TITLE 32--NATIONAL DEFENSE
 
              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE
 
PART 3_TRANSACTIONS OTHER THAN CONTRACTS, GRANTS, OR COOPERATIVE AGREEMENTS FOR PROTOTYPE PROJECTS--Table of Contents
 
Sec.  3.7  Comptroller General access.

    (a) A clause must be included in solicitations and agreements for 
prototype projects awarded under authority of 10 U.S.C. 2371, that 
provide for total government payments in excess of $5,000,000 to allow 
Comptroller General access to records that directly pertain to such 
agreements.
    (b) The clause referenced in paragraph (a) of this section will not 
apply with respect to a party or entity, or subordinate element of a 
party or entity, that has not entered into any other contract, grant, 
cooperative agreement or ``other transaction'' agreement that provides 
for audit access by a government entity in the year prior to the date of 
the agreement. The clause must be included in all agreements described 
in paragraph (a) of this section in order to fully implement the law by 
covering those participating entities and their subordinate elements 
which have entered into prior agreements providing for Government audit 
access, and are therefore not exempt. The presence of the clause in an 
agreement will not operate to require Comptroller General access to 
records from any party or participating entity, or subordinate element 
of a party or participating entity, or subordinate element of a party or 
participating entity, which is otherwise exempt under the terms of the 
clause and the law.
    (c)(1) The right provided to the Comptroller General in a clause of 
an agreement under paragraph (a) of this part, is limited as provided by 
subparagraph (c)(2) of this part in the case of a party to the 
agreement, an entity that participates in the performance of the 
agreement, or a subordinate element of

[[Page 16]]

that party or entity, if the only cooperative agreements or ``other 
transactions'' that the party, entity, or subordinate element entered 
into with government entities in the year prior to the date of that 
agreement are cooperative agreements or transactions that were entered 
into under 10 U.S.C. 2371 or Section 845 of the National Defense 
Authorization Act for Fiscal Year 1994 (Pub. L. 103-160; 10 U.S.C. 2371 
note).
    (c)(2) The only records of a party, other entity, or subordinate 
element referred to in subparagraph (c)(1) of this part that the 
Comptroller General may examine in the exercise of the right referred to 
in that subparagraph, are records of the same type as the records that 
the government has had the right to examine under the audit access 
clauses of the previous cooperative agreements or transactions referred 
to in such subparagraph that were entered into by that particular party, 
entity, or subordinate element.
    (d) The head of the contracting activity (HCA) that is carrying out 
the agreement may waive the applicability of the Comptroller General 
access requirement if the HCA determines it would not be in the public 
interest to apply the requirement to the agreement. The waiver will be 
effective with respect to the agreement only if the HCA transmits a 
notification of the waiver to the Committees on Armed Services of the 
Senate and the House of Representatives, the Comptroller General, and 
the Director, Defense Procurement before entering into the agreement. 
The notification must include the rationale for the determination.
    (e) The HCA must notify the Director, Defense Procurement of 
situations where there is evidence that the Comptroller General Access 
requirement caused companies to refuse to participate or otherwise 
restricted the Department's access to companies that typically do not do 
business with the Department.
    (f) In no case will the requirement to examine records under the 
clause referenced in paragraph (a) of this section apply to an agreement 
where more than three years have passed after final payment is made by 
the government under such an agreement.
    (g) The clause referenced in paragraph (a) of this section, must 
provide for the following:
    (1) The Comptroller General of the United States, in the discretion 
of the Comptroller General, shall have access to and the right to 
examine records of any party to the agreement or any entity that 
participates in the performance of this agreement that directly pertain 
to, and involve transactions relating to, the agreement.
    (2) Excepted from the Comptroller General access requirement is any 
party to this agreement or any entity that participates in the 
performance of the agreement, or any subordinate element of such party 
or entity, that, in the year prior to the date of the agreement, has not 
entered into any other contract, grant, cooperative agreement, or 
``other transaction'' agreement that provides for audit access to its 
records by a government entity.
    (3)(A) The right provided to the Comptroller General is limited as 
provided in subparagraph (B) in the case of a party to the agreement, 
any entity that participates in the performance of the agreement, or a 
subordinate element of that party or entity if the only cooperative 
agreements or ``other transactions'' that the party, entity, or 
subordinate element entered into with government entities in the year 
prior to the date of that agreement are cooperative agreements or 
transactions that were entered into under 10 U.S.C. 2371 or Section 845 
of the National Defense Authorization Act for Fiscal Year 1994 (Pub. L. 
103-160; 10 U.S.C. 2371 note).
    (B) The only records of a party, other entity, or subordinate 
element referred to in subparagraph (A) that the Comptroller General may 
examine in the exercise of the right referred to in that subparagraph 
are records of the same type as the records that the government has had 
the right to examine under the audit access clauses of the previous 
agreements or transactions referred to in such subparagraph that were 
entered into by that particular party, entity, or subordinate element.
    (4) This clause shall not be construed to require any party or 
entity, or any

[[Page 17]]

subordinate element of such party or entity, that participates in the 
performance of the agreement, to create or maintain any record that is 
not otherwise maintained in the ordinary course of business or pursuant 
to a provision of law.
    (5) The Comptroller General shall have access to the records 
described in this clause until three years after the date the final 
payment is made by the United States under this agreement.
    (6) The recipient of the agreement shall flow down this provision to 
any entity that participates in the performance of the agreement.

[65 FR 35576, June 5, 2000. Redesignated at 67 FR 54956, Aug. 27, 2002]