Difference between revisions of "Contract Closeout - Procedures"
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===Quick Closeout Procedures=== | ===Quick Closeout Procedures=== | ||
Revision as of 12:08, 16 February 2017
Contents |
Introduction
As required by the Federal Acquisition Regulation (FAR) 4.804 and/or 42.708, all contracts must be closed if a contract has been completed.
Contract closeout procedures may be straightforward or complicated depending on the contract type. Contract closeout requires coordination between Finance and Accounting Group (F&A), Contracts Group, and respective management and the government entity that administers the contract.
The overall contract closeout process consists of six areas as described in the contract closeout document. These are listed below along with the responsible departments/organizations.
1. Closeout initiation – Contracts
2. Document collection and Verification – F&A Closeout
3. Financial Analysis – F&A Closeout
4. Subcontractor Release – Contracts/Subcontracts
5. Closeout package creation - Contracts
6. US Government Certification and Archiving – US Government
Definitions/Acronyms
ACO Administrative Contracting Officer
ACRN Accounting Classification Reference Number
CA Contract Administrator
CACS Contract Audit Closing Statement
CLIN Contract Line Item Number
CPAF Cost-Plus-Award-Fee
CPFF Cost-Plus-Fixed-Fee
CPIF Cost-Plus-Incentive-Fee
DCAA Defense Contract Audit Agency
DCMA Defense Contract Management Agency
DFAS Defense Finance and Accounting Service
FAD Final Acceptance Date FDD Final Delivery Date
GFE Government Furnished Equipment
GFM Government Furnished Material
GFP Government Furnished Property
IDIQ Indefinite Delivery Indefinite Quantity
MOCAS Mechanization of Contract Administration Services
MOD Modification
PCO Procuring Contracting Officer
POP Period of Performance
ULO Unliquidated Obligation
Overview
It is GovC’s policy to comply with Federal Acquisition Regulation requirements regarding contract closeout. Closeout timeframes are specified as follows:
- a. Fixed-price contracts, GSA Schedules requiring no settlement of applied G&A, and other contracts requiring no settlement of indirect rates should be closed within six months of contract completion.
- b. For cost type contracts containing the FAR 52.216-7: Allowable Cost and Payment clause, the final invoice (completion invoice) will be submitted within 120 days of final indirect rate settlement.
- c. Contracts that are not of a fixed price type, or do not require an indirect rate settlement, must have a submission of a closeout invoice within twenty months of the completion of the contract. Quick closeout procedures at FAR 42.708 (noted below) will be applied to the maximum extent practicable.
There are a number of requirements necessary regarding the closeout of government contracts. It is important for GovC employees involved in the closeout process to be familiar with those requirements to ensure compliance with contractual responsibilities. Contracts can generally be categorized into three types:
1) fixed price/no rate settlements,
2) cost type contracts, and
3) contracts that are not of a fixed price type, or do not require an indirect rate settlement
Checklist
- Issue an interim contract completion statement
- Ensure disposition of classified material is completed
- Final patent report submitted
- Final patent report is cleared
- Final royalty report submitted
- Final royalty report is cleared
- Ensure there are no outstanding value engineering change proposals
- Property clearance is received
- Plant clearance report is received
- All interim or disallowed costs are settled
- Price revision is completed
- Subcontracts are settled by the prime contractor
- Prior year indirect cost rates are settled
- Final subcontracting plan report is submitted
- Termination docket is completed
- Contract audit is completed
- Contractor's closing statement (release) is completed
- Contractor's final invoice/voucher has been submitted
- Evidence of final voucher paid
- Contract funds review is completed and excess funds deobligated
Quick Closeout Procedures
The first step is to determine whether a particular contract is subject to quick closeout. FAR 42.708 prescribes when contracts are eligible as follows:
1. The contract is physically complete,
2. The amount of unsettled indirect cost to be allocated to the contract is relatively insignificant
- (i) The total unsettled indirect costs to be allocated to any one contract does not exceed $1,000,000
- (ii) Unless otherwise provided in agency procedures, the cumulative unsettled indirect costs to be allocated to one or more contracts in a single fiscal year do not exceed 10 percent of the estimated.
Full Closeout Procedures
The overall contract closeout process consists of six areas.
Contract Closeout Procedures for Cost-Plus-Fixed Fee (CPFF)
Contract Closeout Procedures for Time and Material (T&M)
Contract Closeout Procedures for Firm-Fixed Price (FFP)
References
US Air Force Mocas Contract Closeout Guide
File:MOCAS Contract Closeout Guide.pdf
Defense Contract Management Agency Guide
