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I am relatively new to the contracting world and have been tasked with closing many POs (my company is the prime) in support of contract closeout. My question is not exclusive to a singular PO or situation, which I know makes it difficult to answer, but I am looking for general opinions on if the below scenario should require complete closeout documentation and formal closeout:

 

FFP contract for commercial services - payment records show that our supplier invoiced us for $100.00 less than the contractual value. Should I receive documentation stating that the supplier will not invoice anything further along with a final invoice? Or, since the work seems to have been completed 4 years ago, let it go and unilaterally deobligate the remaining funds?

 

Company procedure dictates that we need to receive many documents for each service, no matter the contract type. In my limited perspective many times for these small dollar value, commercial services it seems superfluous to require formal final invoicing and documentation. I can’t find any specific FAR references, so I am wondering what individuals on this boards experiences might be.

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Impress your boss -- suggest that any P.O. where the work has been completed more than 36 months ago, where any uninvoiced value is less than $1,000 or 10% of the invoice value (whichever is more) can be closed without any further documentation from the supplier. Then do even more by drafting a procedure to that effect so that others may benefit from it.

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The Contractor Purchasing System Review (CPSR) Guidebook (pages 115-116), which provides guidance for government review to approve a purchasing system, reads as follows:

Review
I. Policies and Procedures
When reviewing the contractor’s policies and procedures, the analyst should ensure that
the contractor’s policy, at a minimum, requires the close-out of purchase orders and
subcontracts utilizing the guidelines found in FAR 4.804-5
II. Practice
Review each closed-out file requested, and ensure that the purchase order / subcontract
close-out process is in compliance with the policy and procedures set forth by the
contractor.
Post-Review
Ensure that you have a complete understanding of the purchase order/subcontract close-out
process that the contractor has set forth, and that the contractor has been compliant in
practice for each of the sample files you have reviewed.
 

Edited by Neil Roberts
page reference

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