Contract Closeout Requirements

Refer to: OMS

1. PURPOSE.    This circular establishes contract closeout requirements for the Indian Health Service (IHS) in accordance with Federal Acquisition Regulation (FAR) Subpart 4.804. Contracting Officers are responsible for ensuring compliance with contract closeout procedures detailed below.
2. DEFINITIONS.   
   1. Administrative Completion.    A contract is administratively complete when all audits, releases, and payments are finalized and the required documentation is in the contract file.
   2. Contract Officer (CO).    An individual authorized to enter into and administer agreements on behalf of the government.
   3. Contracting Officer’s Representative (COR).    An individual designated and authorized in writing by the contracting officer to perform specific contract-related technical or contract monitoring and management functions.
   4. Deobligation.    The cancellation or downward adjustment of previously incurred obligations. Such adjustments may be attributable to cancellation of a contract, price revisions, corrections of amounts previously recorded, or other differences between the contract balance and payments made.
   5. Excess Funds.    Any funding amount remaining obligated on a contract at the time of contract closeout that is not needed to pay for contract performance or for contract adjustments.
   6. Obligation.    A definite commitment (action) that creates a legal liability of the government to pay for goods and services ordered or received.
   7. Physical Completion.    A contract is deemed “physically completed” when the contractor has fully performed its obligations under the contract, the Government has accepted the goods/services provided, and the contract period (including any exercised option periods) has expired.
3. APPLICABILITY.    The following contract closeout requirements are applicable to all contracts that a Contracting Officer (CO) determines are physically and administratively complete. In accordance with FAR 4.804-1(c), a contract should not be closed out if:
   1. The contract or order under the contract is in litigation or under appeal; or
   2. In the case of a termination, if all termination actions have not been completed.
4. STANDARD CLOSEOUT TIMEFRAMES.    The applicable timeframe for closing a contract is based upon both the type of contract and date of physical completion. The time standards for closing out contract files are provided in FAR Subpart 4.804-1.
5. CLOSEOUT REQUIREMENTS.    The following requirements apply for the closeout of contracts, purchase orders, delivery or task orders, and blanket purchase agreements (BPAs):
   1. The CO shall complete the FAR 4.804-5(a) checklist and ensure that all of the relevant documentation (e.g., contractor’s closing statement, contractor’s final invoice, contract audit, etc.) is included in the contract file and uploaded in the Purchase Request Information System Management (PRISM). The signed Release of Claims must also be uploaded in PRISM.
      
      In the event a CO has made at least three attempts to contact the contractor regarding the Release of Claims and the CO has not received a response from the contractor, the CO will prepare a memo to the contract file to document the date, time, and method of attempted contact, to include all pertinent information regarding the email address, telephone number, and physical address used to contact the contractor. The CO must upload all contract documents to the designated electronic filing system. Upon completion of these actions, the CO shall proceed with closeout procedures.
      
      The same process applies to an unresponsive contractor. If a response has been received from a contractor but the contractor has not submitted a signed Release of Claims within 14 calendar days the CO prepares a memo to the contract file to document the date, time, and method of attempted contact, to include all pertinent information regarding the email address, telephone number, and physical address used to reach the contractor. The CO must upload all contract documents to the designated electronic filing system. Upon completion of these actions, the CO shall proceed with closeout procedures.
   2. The CO shall attempt to obtain a completed Contract Completion Statement (Circular Exhibit 23-05-A, DD Form 1594) or other written statement from the COR or other authorized program office representative to properly document evidence of receipt and final acceptance of supplies and/or completion and final acceptance of services and final payment to the contractor. The written statement or form with all required information, such as the DD Form 1594 form, must be signed and uploaded in PRISM.
   3. The CO must modify the contract to release any excess funds on the contract. The CO shall provide documentation that the Unified Financial Management System (UFMS) and PRISM are in agreeance to the amount that is undeliverable. If the amounts do not match, the CO shall work with the COR to research and audit the file to correct any discrepancies. Contracts with undeliverable amounts are not eligible for closeout.
   4. Contracts with undeliverable amounts that are under $100.00 are eligible for manual closeouts and are not required to perform steps A-C above. The CO is required to obtain a written statement from a COR or other program point of contact to verify completion. The CO will then contact the UFMS Helpdesk to manually close. The CO shall include all supporting documents including electronic communications in the contract file.
6. SUPERSEDURE.   
   
   This IHS Circular supersedes IHM Part 5-5.17 C – Contract Closeout.
7. EFFECTIVE DATE.   
   
   This IHS Circular is effective upon the date of signature.

Distribution: IHS-wide
Date: 10/25/2023