Contract Closeout Policy

PURPOSE

A number of special requirements are necessary for the efficient and effective closeout of government contracts. It is important for [Contractor] employees involved in the closeout process to be familiar with those requirements to ensure that [Contractor] complies with its 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.

POLICY STATEMENT

It is [Contractor's] policy to comply with Federal Acquisition Regulation requirements regarding contract closeout. Closeout time frames 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.

SCOPE

This policy applies to all [Contractors] US Government Prime or Subcontracts.

RESPONSIBILITIES

Contract Administration is responsible for:

Preparing a Contract closeout checklist and documentation package for all completed contracts eligible for closeout. The checklist will indicate that:

o The contract is completed and delivered items have been verified against the statement of work, including the contract data requirements list.

o Verifying all direct costs and certifying that the direct costs are accurate and complete.

o Direct charges have been properly recorded and all expense report and invoices have been paid.

o Government property has been properly disposed and disposition documents have been provided to the Government Property Administrator.

o Disposition of any classified material is complete and DD Forms 254 and 441 have been completed as appropriate.

o There are no outstanding Value Engineering Change Proposals (FAR 48.201).

o DD Form 250 Material Inspection and Receiving Report is completed, if required.

o DD Form 882 and any final patent reports have been cleared, if applicable.

o All subcontractor releases, assignments, and required subcontract forms have been outlined. (Assist audits are required for flexibly priced subcontracts exceeding $500,000 that require final indirect rates when quick closeout procedures cannot be utilized.)

• Utilizing final indirect rates (obtain from contracts group) for each respective year in which direct costs were incurred. (Allowable direct costs by year as recorded on the cumulative allowable cost worksheet must reconcile with Schedule I from BearingPoint’s latest Incurred Cost Submission.)

• Approving final invoice to include the following certifications and releases:

o Contractor’s Release of Claims

o Contractor’s Assignment of Refunds, Rebates, Credits, and other Amounts .

o Assignee’s Release of Claims

o Assignee’s Assignment of Refunds

All closeout records will be maintained in accordance with [Contractors] Record Retention Policy.

Quick Closeout

If the contract is complete and the amount of unsettled indirect cost is relatively insignificant, quick closeout procedures can be considered for cost-type contracts. Indirect cost amounts are considered insignificant if:

• The total unsettled indirect cost allocated to any one contract does not exceed $1 million.

• Unless otherwise provided, cumulative unsettled indirect costs to be allocated to one or more contracts in a single fiscal year do not exceed 15 percent of the estimated total unsettled indirect costs allocable to cost-type contracts for that fiscal year.

Another consideration is whether agreement can be reached on a reasonable estimate of allocable dollars. No adjustment for over/under recoveries under quick closeout procedures are required in the determination of final indirect rates nor are quick closeout rates considered binding or precedent setting in the settlement of final indirect rates for other contracts.