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1. Timeframe(s) for Closing Contracts Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 1 FAR 4.804- 1 Category Timeframe Contract Type Using SAP* Immediately All Other than using SAP* Within 6 months Firm fixed price (FFP) Indirect cost rates involved Within 36 months Fixed price incentive (FPI), cost reimbursement (CR), time and materials (T&M), labor hour (LH) All other Within 20 months Fixed price with economic price adjustment (FP EPA), basic ordering agreement (BOA)/blanket purchase agreement (BPA) In litigation Do not close All In termination After all termination actions have been completed All *Simplified acquisition procedures (SAP) = typically $7.5M (see FAR 13 for exclusions)

2. Step 1 – Determining Physical Completion Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 2 Contractor Made all deliveries of items required by the contract? Performed all services required by the statement/scope of work (SOW)? Government Inspected all items delivered? Accepted all services performed? Issued a notice of contract termination? Has the term of the contract expired? Have all options been executed?

3. Step 2 – Determining the Responsible Office Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 3 Contracting office Contract administration office (CAO): when contract administration is assigned to another office from the contracting office CO may delegate authority for contract administration and closeout to CAO in the contract: Specific tasks will be listed out for CAO to perform (like FAR 42.302(a) ) If not listed, is contracting office’s responsibility FAR 4.804- 2 : Regulation recognizes closeout by either the contracting office or CAO

4. Step 3 – Building the Closeout File (Use a Checklist) Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 4 Get organized and use a checklist to assist with compliance – who would look back and say, “I wish we didn’t use so many checklists”? Consult FAR 4.804- 5 , agency policies and procedures, and the unique requirements of the contract to determine what information should be incorporated into the closeout checklist and file List of contents from VAO’s closeout process checklist: Closeout file summary Physical completion statement Final contractor performance evaluation report (e.g., CPARS or local) Record of actions taken Contractor’s closing statement or release of claims (if applicable) Final payment/settlement Funds review or excess funds deobligation Contract completion statement Lessons learned Classified information disposition Final patent report (if applicable)

5. Contract Closeout: Don’t Be a Holdout Step 4 – Settling of Indirect Cost Rates (if applicable) 10 Here is the fork in the road: Do you have a cost- type contract? If yes … Cost- type contract indirect cost rates must be settled within 36- month timeframe Either apply quick closeout procedures or request an audit to determine the final indirect cost rate FAR 42.7 – Indirect Cost Rates

6. Applying Quick Closeout Procedures Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 6 FAR 42.708 – CO shall: Negotiate settlement of direct and indirect costs in advance of determination of final costs and rates if: o Contract action is physically complete o Amounts of unsettled costs to be allocated are “relatively insignificant” and do not exceed the lesser of $1M or 10% of total contract amount o Perform risk assessment if quick closeout is appropriate, and include: Consideration of contractor’s financial systems Other concerns of contract auditors Any other pertinent information o Agreement can be reached between parties for a “reasonable amount” of allocable dollars Determination of final indirect costs provided for by the Allowable Cost and Payment clause ( FAR 52.216- 7 ) Indirect cost rates used shall not be considered binding when establishing final indirect cost rates for other contracts

7. Sending an Audit Request Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 7 Contract audit responsibilities Auditor responsible for: o Submitting information and advice to requesting activity o Reviewing financial and accounting aspects o Performing other analysis Unless extenuating circumstances, Defense Contract Audit Agency (DCAA) is responsible Assignment COs may request audit services directly from the responsible audit agency in the Directory of Federal Contract Audit Offices Responsible audit agency may decline (in writing) on case- by- case basis Directory DCAA maintains the Directory of Federal Contract Audit Offices Agencies may obtain a copy of the directory or information concerning cognizant audit offices (see FAR 42.103(b) )

8. Step 5 – Resolving Payment History and Funding Issues Check payment history Solve any funding issues Ensure contractor is paid in full For cost-type contracts, ensure all prime’s subcontractors have been paid Release/deobligate excess funds Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 8

9. Step 6 – Managing GFP and Technical Data Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 9 Government-furnished property (GFP) ( FAR 45.401 ) Government retains all title to GFP until properly disposed of ( 52.245- 1 ) Keep, return, or destroy? Property (physical) rights Technical data (intellectual) rights Full rights in data and copyrights can be found at FAR 27.4

10. Step 7 – Managing Disposition of Sensitive Data Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 10 FAR 4.4 (Safeguarding Classified Information Within Industry): Contractor authorization to retain classified documents (if applicable) Final patent report is cleared o Within 60 days of receipt o If not received, CO should notify contractor of obligations and government’s rights Royalty reports: Final royalty report is cleared Check applicable data rights clauses in FAR 52

11. Step 8 – Communicating with Contractor Contract Closeout: Don’t Be a Holdout Communicate the closeout process and request any required documents Contractor is part of integrated project team (IPT) Records Financials Remaining modifications/excess funds Release of claims Final invoice 16

12. Step 9 – Communicating with Stakeholders Effectively communicate with stakeholders on actions needed CO has ultimate authority (see FAR 4.804- 5 ) COR Certificate of completion Issues final Contractor Performance Assessment Reporting System (CPARS) report Delivers files to CO for incorporation into contract file Finance & accounting: Request to process final payment Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 12

13. Step 10 – Finalizing Indirect Cost Rates (if applicable) Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 13 Building on Step 4 for cost-type contracts subject to settlement of indirect cost rates, this step is for negotiating final costs and requesting final invoice Quick closeout procedure or audit activity is complete Final negotiation occurs to settle interim and/or disallowed costs and final indirect rates ( FAR 4.804-5(a) ) Contractor submits completion invoice or voucher within 120 days (or as authorized by CO) Driven by the Allowable Cost and Payment clause at FAR 52.216- 7

14. Step 11 – Finalizing Completion Statement and Initiating Modification (if required) Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 14 Completion statement includes (see FAR 4.804- 5(b) ): Contracting office name/address Contract number Last modification number (if applicable) Contract last call or order number (if applicable) Contractor name/address Amount of excess funds (if applicable) Voucher number/date of final payment (if paid) Contractor number and date of final invoice Statement that all required contract administrative actions have been fulfilled/ completed and contract requirements fulfilled Name/signature of CO and date of issue Visit your agency’s policy to know if a closeout modification is required and what items the modification should address

15. Contract Closeout: Don’t Be a Holdout Contracts Awarded Under SAP Considered closed when CO receives evidence of receipt of property and final payment, unless otherwise specified by agency ( FAR 4.804- 1(a)(1) ). 20

16. Terminated Contracts FAR 49 covers contract termination FAR 12.403 Termination for cause/default (T4D) Termination for convenience (T4C) Terminations may also be complete or partial Close out when all termination documentation has been completed ( FAR 4.804- 1(c)(2) ) Contract Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 16

17. Conducting Final CPARS Evaluation Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 17 Required ( FAR 42.1502 ): At least annually and upon completion of the work Greater than the simplified acquisition threshold (SAT) and includes: Individual orders greater than the SAT Multiple- agency awards greater than the SAT Construction contracts greater than $750K Architecture- engineer (A-E) contracts greater than $35K To be entered in CPARS

18. Tracking Closeouts Through FPDS- NG Closed Status Closed Status Date Closed By Federal Procurement Data System – Next Generation (FPDS- NG) Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 18

19. File Retention Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 19 FAR 4.7 – Contractors FAR 4.805 – Government agencies Record Period/Timeframe Contracts (includes related records and unsuccessful proposals) 6 years after final payment Contractor payrolls (construction) 3 years after completion Unsolicited proposals Agency procedures Canceled solicitation 6 years after cancellation Administrative copies When business use ceases General contractor files (e.g., no specific contract, multiple/combined contract(s), etc.) Until obsolete FPDS- NG data 6 years after submittal Investigations, pending cases, protests, litigations, or similar Until final clearance

20. Current Trends in Contract Closeout Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 20 Department of Defense (DoD) Defense Federal Acquisition Regulation Supplement (DFARS): Expediting Contract Closeout ( DFARS Case 2017-D042 , 5/20/2021) DFARS: Contract Closeout Authority for DoD Services Contracts ( DFARS Case 2021-D012 , 8/30/2021) Office of Inspector General (OIG): Federal Emergency Management Agency (FEMA) Needs to Reduce the $579 Million Backlog of Projects in Its New York Public Assistance Grant Program ( OIG- 21- 23 , 3/5/2021) Government Accountability Office (GAO): Additional Management Attention and Action Needed to Close Contracts and Reduce Audit Backlog ( GAO- 17- 738 , 9/28/2017)

21. Tips & Tricks Keep on top of upcoming contract expirations Create a contract log or spreadsheet Use fixed- price contracts as much as possible to reduce need for audits Use quick closeout authority (when possible) for cost- type contracts Hire a contractor to support closeout functions for the CO Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 21

22. Summary Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 22 Congratulations! We’ve reached the end of our webinar, and you should be able to: Describe the overall contract closeout process, including the acquisition workforce roles and responsibilities within it Identify the FAR guidelines and timeframe to close out contract files Discuss current trends in contract closeout and how they affect process and outcomes Apply methods (tips & tricks) to improve administration of the contract closeout process

23. VAO eLearning Modules Role and Responsibilities of the Contracting Officer's Representative (COR) During Contract Closeout or Termination Contract Closeout Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 23

24. VAO Resources Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 24 Acquisition News articles: Closeout New Group Targets Contract Closeouts for DoD USPS Should Follow Its Own Policies for Contract Close Your Contracts Properly DO Ensure Proper Contract Closeout, DON’T Overlook Required Processes Checklists File Documentation Checklist (see Section F) Step- by- Step Process Checklist Quick Reference Guide A COR’s Guide to Contract Closeout Acquisition Q&A During contract closeout, can an agency deobligate an insignificant amount of remaining funding without issuing a modification? Documents Templates: Contracting Officer's Representative Certification of Completion Completion Letter to Contractor for Fixed Price Contracts Completion Letter to Contractorsfor Cost Reimbursement Contracts Memorandum to Finance Regarding Final Payment Contractor Authorization to Retain Classified Release of Excess Funds Under Terminated Contracts Closeout Letter to Contracting Officer Representative COR Evaluation of Contractor Performance

25. Other Resources Federal Procurement Data System V1.5 Training Videos - Topic 10 Close Out General Services Administration (GSA) Contract Closeout Quick Reference Guide Defense Contract Management Agency (DCMA) Manual 2501- 07 Contract Closeout Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 25

26. Questions and Answers It’s not too late! At any time, please send questions regarding this presentation to [email protected] Or use the Ask the Expert tab on the webinar landing page located just below the video Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 26

27. Don’t Forget – Collect CLP Credit! Earn CLP credit for this presentation by taking and passing the content- related quiz Link is on the webinar landing page Download the certificate and view your transcript at any time Contract Closeout: Don’t Be a Holdout Virtual Acquisition Office™ a Unison company. All rights reserved. © 2021 27

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