A contract is not over when the last deliverable is accepted. It is over when the government and the contractor have completed closeout: confirmed that everything owed has been delivered and paid, settled any open items and filed the record. Closeout is unglamorous, often slow and easy to neglect, but doing it well recovers money, protects your firm and makes the next contract easier.
What closeout is
The FAR sets out closeout procedures and target timeframes that vary by contract type. Simplified acquisitions are expected to close quickly after final delivery and payment; firm-fixed-price contracts within a few months of physical completion; cost-reimbursement contracts within a longer period, because final indirect rates must be settled first. The contracting officer verifies that performance is complete, that all deliverables and reports have been received, that government property has been accounted for, that any disputes are resolved and that final payment has been made. Then the file is closed.
The contractor’s checklist
Contractors have their own work to do, and much of it is easier if you start before the period of performance ends:
- Confirm every deliverable has been submitted and accepted, with records of each
- Submit the final invoice, marked as final, with any required release of claims
- Resolve open modifications, especially any that adjusted funding or price
- Account for and dispose of government-furnished property as the property clause and the property administrator direct
- Return badges, keys, equipment and access credentials, and deactivate system accounts
- Submit final reports required by clauses: subcontracting reports, labor reports, property reports and others
- Complete any required patent, data or technical data deliverables
- Settle with subcontractors and obtain their final releases
- For cost-type contracts, submit the final indirect cost rate proposal and, once rates are settled, the final voucher
Releases and final payment
Most closeouts include a release of claims, in which the contractor certifies that final payment satisfies all obligations under the contract except for any specifically excepted items. Read it carefully. If you have an outstanding request for equitable adjustment, an unresolved claim or a pending modification, list it as an exception; signing an unconditional release can forfeit the right to pursue it. Final payment, once accepted, generally bars later claims as well. The same caution applies to subcontractor releases you collect.
Records and retention
Federal contracts require contractors to retain records for a period after final payment, generally three years for most records, with longer periods for some categories. Keep the complete contract file: the solicitation, proposal, award, every modification, correspondence with the contracting officer, deliverables and acceptance records, invoices and payments, timekeeping and cost records. Audits, performance evaluation disputes and future proposals can all send you back to it. Store it in a form your firm can actually retrieve.
Closeout as business development
The end of a contract is also the moment to capture its value. Request a final performance evaluation if one has not been entered, and respond thoughtfully if it has. Write an internal summary of the work: scope, value, period, key results, challenges and the government contacts who can serve as references. This becomes the past performance citation you will use for years, and it is far easier to write while the team that did the work is still in the building.
Closeout protects money you are owed, ends your obligations cleanly and leaves the government with a tidy record of a contractor who finished the job properly. Contracting officers notice. In a field where reputation follows you from one agency to the next, finishing well is nearly as important as starting well.