4.804-1 Closeout by the office administering the contract
Source: FAR 4.804-1 on acquisition.gov
FAR 4.804-1 sets clear timelines and procedures for contract file closeout, ensuring efficient administrative closure unless litigation or unresolved terminations prevent it.
Overview
FAR 4.804-1 establishes the time standards and procedures for closing out contract files by the office administering the contract. It specifies different closeout timelines based on contract type and outlines exceptions where files cannot be closed. The regulation aims to ensure timely and efficient contract closeout, reduce administrative burden, and facilitate the deobligation of excess funds.
Key Rules
- Time Standards for Closeout
- Simplified acquisition contracts: Close upon evidence of receipt of property and final payment, unless agency rules specify otherwise.
- Firm-fixed-price contracts (not simplified): Close within 6 months after evidence of physical completion.
- Contracts requiring settlement of indirect cost rates: Close within 36 months after evidence of physical completion.
- All other contracts: Close within 20 months after evidence of physical completion.
- Closeout Procedures
- Use procedures in FAR 4.804-5 for contracts in (a)(2)-(4), with modifications as needed based on the extent of administration performed.
- Quick closeout procedures (FAR 42.708) should be used when appropriate to save costs and deobligate excess funds.
- Exceptions to Closeout
- Do not close files if the contract is in litigation/appeal or if termination actions are incomplete.
Responsibilities
- Contracting Officers: Must follow specified closeout timelines, use appropriate procedures, and ensure exceptions are observed.
- Contractors: Must provide required evidence (e.g., property receipt, completion) and resolve outstanding issues.
- Agencies: May specify additional requirements and oversee compliance with closeout standards.
Practical Implications
- Ensures contracts are closed efficiently, freeing up resources and funds.
- Delays can occur if litigation, appeals, or unresolved terminations exist.
- Using quick closeout procedures can significantly reduce administrative workload and speed up deobligation of funds.
(a) Except as provided in paragraph (c) of this section, time standards for closing out contract files are as follows:
(1) Files for contracts using simplified acquisition procedures should be considered closed when the contracting officer receives evidence of receipt of property and final payment, unless otherwise specified by agency regulations.
(2) Files for firm-fixed-price contracts, other than those using simplified acquisition procedures, should be closed within 6 months after the date on which the contracting officer receives evidence of physical completion.
(3) Files for contracts requiring settlement of indirect cost rates should be closed within 36 months of the month in which the contracting officer receives evidence of physical completion.
(4) Files for all other contracts should be closed within 20 months of the month in which the contracting officer receives evidence of physical completion.
(b) When closing out the contract files at 4.804-1(a)(2), (3), and (4), the contracting officer shall use the closeout procedures at 4.804-5. However, these closeout actions may be modified to reflect the extent of administration that has been performed. Quick closeout procedures (see 42.708) should be used, when appropriate, to reduce administrative costs and to enable deobligation of excess funds.
(c) A contract file shall not be closed if-
(1) The contract is in litigation or under appeal; or
(2) In the case of a termination, all termination actions have not been completed.