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 Overview of discussion
To verify that both parties fulfilled their contractual obligations. To assess the success of the contract and lessons learned for future contracting. Purpose of Contract Closeouts
It is usually a simple, but detailed administrative procedure agencies should perform after the contract is completed. What is a contract closeout?
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. A Contract is completed When:
All services have been satisfactorily performed, and all products have been delivered and accepted by the agency ; • Final payment has been made; • All property, inventory, and ownership issues are resolved including disposition of any equipment or licenses purchased under the contract; • Contractor is aware of and is in compliance with records retention requirements and a plan has been developed for contract file maintenance; • Any deficiencies found as part of the closeout process are documented and communicated to all appropriate parties When is A contract ready for closeout?
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. Performance and Payment Bonds
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. • This usually occurs in construction contracts where a 10% retainage is typically withheld and not due until the work is substantially complete. Payment withholding or Retainage
Establishing a new contract creates a range of issues and potential risks that need to be managed. • Transition Plan • Executive Summary • Transition Approach • Team Organization • Work Execution • Subcontractors • Property • Knowledge Transfer • Schedule • Handover and Acceptance Transition to new vendor
Any deficiencies found as part of the closeout process are documented and communicated to all appropriate parties • Vendor Performance Tracking System • 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. Vendor performance tracking system
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. Contract closeout checklist