CONTRACT CLOSEOUT
OVERVIEW OF DISCUSSION
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
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PURPOSE OF CONTRACT CLOSEOUTS
1.
To verify that both parties fulfilled their
contractual obligations.
2.
To assess the success of the contract and
lessons learned for future contracting.
WHAT IS A CONTRACT CLOSEOUT?

It is usually a simple, but detailed
administrative procedure agencies should
perform after the contract is completed.
A CONTRACT IS COMPLETED WHEN:
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.
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WHEN IS A CONTRACT READY FOR CLOSEOUT?
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All services have been satisfactorily performed, and all products have been
delivered and accepted by the agency ;
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Final payment has been made;
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All property, inventory, and ownership issues are resolved including
disposition of any equipment or licenses purchased under the contract;
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Contractor is aware of and is in compliance with records retention
requirements and a plan has been developed for contract file maintenance;
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Any deficiencies found as part of the closeout process are documented and
communicated to all appropriate parties
PERFORMANCE AND PAYMENT BONDS

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.
PAYMENT WITHHOLDING OR RETAINAGE

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.
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This usually occurs in construction contracts
where a 10% retainage is typically withheld and
not due until the work is substantially complete.
TRANSITION TO NEW VENDOR
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Establishing a new contract creates a range of issues
and potential risks that need to be managed.
Transition Plan
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Executive Summary
Transition Approach
Team Organization
Work Execution
Subcontractors
Property
Knowledge Transfer
Schedule
Handover and Acceptance
VENDOR PERFORMANCE TRACKING SYSTEM
Any deficiencies found as part of the closeout
process are documented and communicated to all
appropriate parties
 Vendor Performance Tracking System
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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.
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CONTRACT CLOSEOUT CHECKLIST
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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.
QUESTIONS?