4.804-5
Procedures for closing out contract files
FAR 4.804-5 mandates a thorough, documented process for contract closeout, requiring all administrative actions and reports to be completed and verified before final file closure.
Overview
FAR 4.804-5 outlines the detailed procedures for closing out contract files once a contract is physically complete. The regulation assigns responsibility to the contract administration office to initiate and manage the administrative closeout process, ensuring all contractual and regulatory requirements are satisfied before final closure. This includes verifying the disposition of classified materials, clearing patent and royalty reports, settling costs and subcontracts, completing audits, and deobligating excess funds. The contracting officer must then prepare a contract completion statement with specific information and ensure proper file documentation.
Key Rules
- Initiation of Closeout
- The contract administration office starts closeout after confirming physical completion and must review contract funds for possible deobligation.
- Completion of Administrative Actions
- All required actions (e.g., property clearance, audit, final invoice, patent/royalty reports) must be verified as complete before closeout.
- Patent Report Procedures
- Final patent reports should be cleared within 60 days; if not received, the contractor must be notified, and legal counsel consulted if there is no response.
- Contract Completion Statement
- The contracting officer must prepare a detailed completion statement once all closeout actions are verified.
- File Documentation
- The signed original completion statement must be filed appropriately, with copies placed in relevant contract administration files.
Responsibilities
- Contracting Officers: Ensure all closeout actions are completed, prepare and file the contract completion statement, and manage notifications regarding patent reports.
- Contractors: Submit required reports (patent, royalty), final invoices, and closing statements; settle subcontracts and costs.
- Agencies: Oversee compliance with closeout procedures and provide legal counsel as needed.
Practical Implications
- This section ensures contracts are properly closed, reducing risk of unresolved obligations or unreturned funds. Failure to follow these steps can delay closeout, impact future awards, or result in audit findings. Contractors and contracting officers must coordinate closely to ensure all documentation and actions are completed promptly.