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Breakout Session #1007 Jack Hott, CPCM, Subcontracts Officer, Battelle

CONTRACT CLOSEOUT – Contractor Pitfalls. Breakout Session #1007 Jack Hott, CPCM, Subcontracts Officer, Battelle Mike Swick, Subcontracts Representative, Battelle Date 4/24/07 Time 4:30 – 5:30. Pitfalls. Prime Contract Subcontract Final Billing and Release of Claims. Prime Contract.

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Breakout Session #1007 Jack Hott, CPCM, Subcontracts Officer, Battelle

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  1. CONTRACT CLOSEOUT – Contractor Pitfalls Breakout Session #1007 Jack Hott, CPCM, Subcontracts Officer, Battelle Mike Swick, Subcontracts Representative, Battelle Date 4/24/07 Time 4:30 – 5:30

  2. Pitfalls • Prime Contract • Subcontract • Final Billing and Release of Claims

  3. Prime Contract • What is closeout? • What is physically complete? • How do you know it is physically complete? • Are there any outstanding contract issues? • What actions are needed for administrative closeout? • How long do we have to close the contract?

  4. Prime ContractWhat is Closeout? • CLOSEOUT – The process of settling all outstanding issues to ensure that each party has met all of its obligations, and documenting the contract file accordingly. The Government Contracts Reference Book, Second Edition

  5. Prime ContractWhat is physically complete? • Physically Completed Contracts (FAR 4.804-4) • Required supplies delivered, inspected and accepted • All services performed and accepted • All options have expired

  6. Prime ContractHow do you know it is physically complete? • DD250 • Notice of Completion (NOC) • Period of Performance

  7. Prime ContractAre there any outstanding contract issues? • Request for Equitable Adjustments • Change Orders • Modifications • Contract Deliverables • Data Items (CDRL)

  8. Prime ContractWhat actions are needed for administrative closeout? • Property (property list, contractor acquired property) • Patent (DD882) • Security (DD254) • Small Business (SF294) • Subcontracts/Purchase orders/P-Cards closed

  9. Prime ContractHow long do we have to close the contract? • Firm-Fixed-Price (SAP) when received and final paid • Firm-Fixed-Price 6 months • Others 20 months (i.e. FP-EPA) • Indirect rates required 36 months (TM, CPAF, CPF, CR) FAR 4.804-1 Note: Contractors do not have this much time.

  10. Subcontract • What is closeout? • What is physically complete? • How do you know it is physically complete? • Are there any outstanding contract issues? • What actions are needed for administrative closeout? • How long do we have to close the contract?

  11. SubcontractWhat is closeout? • The primary objects of contract closeout are: • To identify and resolve, before memories fade, any uncompleted obligations or pending liablilities on the part of either the Government or the contractor • To ensure that contract-related decisions and actions have been properly documented The Government Contracts Reference Book, Second Edition

  12. SubcontractWhat is physically complete? • Physically Complete Contracts (FAR 4.804-4) • Required supplies delivered, inspected and accepted • All services performed and accepted • All options have expired

  13. SubcontractHow do you know when it is physically complete? • DD250 – N/A • Notice of Completion (NOC) – N/A • Period of Performance • Receipt and Acceptance • Program Management Acknowledgement

  14. SubcontractAre there any outstanding subcontract issues? • Request for Equitable Adjustments • Change Orders • Modifications • Subcontract Deliverables • Data Items

  15. SubcontractWhat actions are needed for administrative closeout? • Property (property list, contractor acquired property) • Patent (DD882) • Security (DD254) • Small Business (SF294) • Final Invoice • Closeout Audit • Release of Claims • Final Payment, De-Obligation of Excess Funds • Archiving of Records

  16. Final Billing And Release Of Claims • Have all direct costs been booked? • Have all final overhead rates been settled? • How are withholds addressed? • When does the final invoice need submitted? • What needs to be on the final release?

  17. Final Billing And Release Of ClaimsHave all Direct Costs been booked? • Direct Labor • Material/Subcontracts • ODC’s and Travel

  18. Final Billing And Release Of Claims Have all final overhead rates been settled? • Final Indirect Rates (FAR 42.705) • Quick Closeout Rates (FAR 42.708) • Interim Final Rate Adjustments

  19. Final Billing and Release of Claims How are withholds addressed? • Time and Material Withholds • Cost Reimbursement Fee • Withhold Recognition on Invoices

  20. Final Billing and Release of ClaimsWhen does the final invoice need submitted? • 120 Day Submission Requirement (FAR 42.705(b) and 52.216-7 (d)(5)) • Special Contract Terms • Expiring Funds

  21. Final Billing and Release of ClaimsWhat needs to be on the Final Release? • Firm-Fixed Price vs. Other Contract Types • Release vs. Contingent Release (FAR 52.216-7 (h)) • Refunds and Rebates

  22. CONTRACT CLOSEOUT – Contractor Pitfalls • Understand prime contract requirements • Subcontract closeout is similar to prime contract closeout, but must be completed earlier • Understand prime contract requirements and FAR 42 for final billing and Release of Claims Questions/Discussion

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