contract closeout

What is a contract closeout and its purpose?

When is a contract completed? When is a contract ready for closeout? What are some specific issues that can

occur during a contract closeout? Contract closeout checklist

1. To verify that both parties fulfilled their contractual obligations.

2. To assess the success of the contract and lessons learned for future contracting.

It is usually a simple, but detailed administrative procedure agencies should perform after the contract is completed.

All goods and services have been received and accepted;

All reports have been delivered and accepted;

All administrative actions have been accomplished;

All agency-furnished equipment and material have been returned;

And final payment has been made to the contractor.

All services have been satisfactorily performed, and all products have been delivered and accepted by the agency ;

Final payment has been made;

All property, inventory, and ownership issues are resolved including disposition of any equipment or licenses purchased under the contract;

Contractor is aware of and is in compliance with records retention requirements and a plan has been developed for contract file maintenance;

Any deficiencies found as part of the closeout process are documented and communicated to all appropriate parties

A performance bond is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor.

A payment bond is a surety bond posted by a contractor to guarantee that his subcontractors and material suppliers on the project will be paid.

Retainage is a portion of the agreed upon contract price deliberately withheld until the work is substantially complete to assure that contractor or subcontractor will satisfy its obligations and complete a construction project.

This usually occurs in construction contracts where a 10% retainage is typically withheld and not due until the work is substantially complete.

Establishing a new contract creates a range of issues and potential risks that need to be managed. 

Transition Plan Executive Summary Transition Approach Team Organization Work Execution Subcontractors Property Knowledge Transfer Schedule Handover and Acceptance

Any deficiencies found as part of the closeout process are documented and communicated to all appropriate parties

Vendor Performance Tracking System Exceptional performance Unethical business practices Repeated delivery and performance issues

Report vendor performance on purchases $25,000 or greater

The scope & accuracy of the data collected is dependent upon the participation of agencies.

All products or services required were provided to the buyer.

Documentation adequately shows receipt and formal acceptance of all contract items.

No claims or investigations are pending on this contract.

Any buyer-furnished property or information was returned to the buyer.

All actions related to contract price revisions and changes are concluded.

All outstanding subcontracting issues are settled. If a partial or complete termination was involved, action

is complete. Any required contract audit is now complete.