4.804-4
Physically completed contracts
A contract is considered physically completed when all deliveries and services are accepted, all options have expired, or the government issues a complete termination notice, which triggers the closeout process.
Overview
FAR 4.804-4 defines when a contract is considered "physically completed" for the purposes of contract closeout. This determination is crucial because it triggers the start of the contract closeout process and related administrative actions. The section outlines specific criteria for standard contracts and provides separate rules for rental, use, and storage agreements.
Key Rules
- Standard Contracts
- A contract is physically completed when all required deliveries are made and accepted, all services are performed and accepted, all options have expired, or the government issues a notice of complete contract termination.
- Rental, Use, and Storage Agreements
- These are physically completed when the government issues a notice of complete contract termination or when the contract period expires.
Responsibilities
- Contracting Officers: Must determine and document when a contract is physically completed to initiate closeout procedures.
- Contractors: Must ensure all deliveries, services, and options are fulfilled as required, and respond to any notices of termination.
- Agencies: Must oversee and ensure proper contract closeout based on physical completion status.
Practical Implications
- This section clarifies the point at which contract closeout activities should begin, helping prevent delays and administrative errors.
- Contractors and contracting officers must be clear on the criteria to avoid disputes or premature closeout.
- Common issues include misunderstanding when all obligations are truly fulfilled, especially regarding options or partial terminations.