Department of Transportation, Chapter 731
Rule Caption: Records, Maintenance, Right to Audit Records
Adm. Order No.: DOT 3-2013
Filed with Sec. of State: 7-18-2013
Certified to be Effective: 7-18-13
Notice Publication Date: 6-1-2013
Rules Amended: 731-005-0780
Subject: Under previous rules and contract specifications, contractors on ODOT public improvement projects were to maintain certain records and allow ODOT access to them for inspection and audit. ODOT’s expectation has been that records retained by contractors should include bidding records and contractor job-cost records. However, ODOT’s obtaining access from contractors to retained records was a reactive process that was, for the most part, completely dependent on the goodwill and discretion of the contractor. Recent claims disputes have demonstrated a need to clarify contractors’ legal obligations related to recordkeeping and claims substantiation and solidify ODOT’s legal authority to access contractor business records to ensure that the public contracting process remains transparent and competitive. Accordingly, ODOT has revised its administrative rules and, eventually, its standard contract specifications to specifically identify those records contractors must maintain in order to substantiate contractor claims. The revisions to ODOT’s rules are intended to provide ODOT with authority to obtain access to these contractor records.
Rules Coordinator: Lauri Kunze—(503) 986-3171
Records Maintenance; Right to Audit Records
(1) Contractors; all subcontractors at all tiers; all material suppliers at all tiers of aggregates, asphalt cement concrete, Portland cement concrete, and the supply and fabrication of structural steel items; and all Related Entities as defined by this rule, (collectively referred to in this Rule as “Record Keepers”) shall maintain all records, including fiscal records, regardless of when created, relating to their:
(a) Performance of the Contract or a subcontract;
(b) Ability to continue performance of the Contract or a subcontract; and
(c) Claims arising from or relating to performance under the Contract or a subcontract.
(2) Records to be maintained shall include, but are not limited to the following:
(a) Bidding estimates, worksheets, tabulations or similar documents;
(b) Job cost detail reports, including monthly totals;
(c) Payroll records (including without limitation, the ledger or register, and tax forms) and all documents which establish the time periods, individuals involved, the hours for the individuals and the rates for the individuals;
(d) Records that identify the equipment used by the Contractor and subcontractors at all tiers in the performance of Contract or subcontracts, including without limitation, equipment lists, rental contracts, and any records used in setting rental rates;
(e) Invoices from vendors, rental agencies, subcontractors, and lower tier subcontractors;
(f) Material quotes, invoices, purchase orders and requisitions;
(g) Contracts with subcontractors at all tiers and with suppliers;
(h) Contracts or documents of other arrangements with any Related Entity;
(i) General ledger;
(j) Trial Balance;
(k) Any financial statements kept or maintained (e.g., balance sheet, income statement, statement of cash flows and financial statement notes);
(L) Income tax returns;
(m) All worksheets used to prepare bids or claims, or to establish the cost components for the Pay Items, including without limitation, the labor, benefits and insurance, materials, equipment and subcontractors; and
(n) Other records further identified in the Contract.
(3) Such records must be maintained in accordance with generally accepted accounting principles or other accounting principles, that are accepted accounting principles and practices for the subject industry, and that satisfy all applicable state and federal tax law and regulation.
(4) Record Keepers shall maintain the records and keep the records accessible and available at reasonable times and places for a minimum period of three years from the date of final payment under the Contract, or until the conclusion of any audit, controversy, administrative proceeding or litigation arising out of or related to the Contract or a subcontract, whichever date is later, unless a shorter period is otherwise authorized in writing by the ODOT Contract Administration Engineer.
(5) Record Keepers are responsible for maintaining their own records and records relating to their own performance, their own ability to continue performance, and their own claims. Contractors submitting disputes or contract claims to ODOT shall provide ODOT access to records supporting such dispute or claims, or that are otherwise relevant to a dispute or claim, whether maintained by the Contractor, subcontractors, material suppliers or Related Entities.
(6) Except to the extent limited by section (9) of this Rule, ODOT and its authorized representatives shall, at reasonable times and places, have access to and an opportunity to inspect, examine, copy, and audit the Records identified in section (2) of this rule, or shall be provided a copy of such records upon request. Except for Records requested in connection with a dispute or contract claim issue, ODOT shall pay copy costs according to the rates used for public records requests under OAR 731-001-0025. Where such records are stored electronically, ODOT may request, and the Record Keeper shall promptly provide, access to or a copy of the electronically stored records and, if necessary to access or read such records, access to or use of software, as needed to allow ODOT to efficiently audit, inspect or copy the records.
(7) A “Related Entity,” as referred to in this rule, is an entity that furnishes any goods or services in fulfillment of any obligation of the Contractor under the Contract with ODOT, regardless of whether the entity qualifies as a subcontractor or a material supplier otherwise required to maintain records and provide access to said records under this rule, and
(a) Where 10% or more of the stock, partnership interest, beneficial interest or voting rights of the Entity are held by a Contractor; or
(b) Where a separate Entity holds 10% or more of the stock, partnership interest, beneficial interest or voting rights of a Contractor.
(8) Confidentiality of Communications
(a) Nothing in this Rule is intended to operate as a waiver of the confidentiality of any communications privileged under the Oregon Evidence Code. Nothing in this Rule limits records or documents that can be obtained by legal process.
(b) If records, identified in section (2) and provided under this rule, contain any information that may be considered exempt from disclosure as a trade secret under either ORS 192.501(2) or 646.461(4), or under other grounds specified in Oregon Public Records Law, ORS 192.410 through 192.505, the Record Keeper must clearly designate on or with the records those portions that the Record Keeper believes are exempt from disclosure, along with a justification and citation to the authority relied upon. To the extent allowed by the Oregon Public Records Law or some other applicable law related to the disclosure of public records, ODOT will not disclose records or portions of records the Record Keeper has designated as trade secrets to a third party, who is not a representative of ODOT, to the extent the records are exempt from disclosure as trade secrets under the Oregon Public Records Law or other applicable law, except to the extent ODOT is ordered to disclose in accordance with the Oregon Public Records Law or by a court of competent jurisdiction. Application of the Oregon Public Records Law or other applicable law shall determine whether any record or portion thereof is actually exempt from disclosure.
(9) An ODOT Project Manager’s authority to request or require access to the records identified in this rule shall be limited to items under section (2)(a) through (h), and (n) for purposes of reviewing a dispute or claim under the Contract, and performance and contract compliance issues. The ODOT Contract Administration Engineer (CAE), or the CAE’s designee, shall have access to all items under section (2) of this rule for purposes of reviewing a dispute or claim, performance under the Contract or a subcontract, contract compliance, general auditing, checking for collusive bidding, and reviewing qualifications.
Stat. Auth.: ORS 184.616, 184.619, 279A.050 & 279A.065
Stats. Implemented: ORS 279A.030, 279C.375 & 279C.440
Hist.: DOT 2-2005, f. 2-16-05, cert. ef. 3-1-05; DOT 3-2013, f. & cert. ef. 7-18-13
Oregon Secretary of State • 136 State Capitol • Salem, OR 97310-0722
Phone: (503) 986-1523 • Fax: (503) 986-1616 • firstname.lastname@example.org
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