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Contract Close Out

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Question: Are there other remedies to pay a final voucher without program office approval.

Situation: Work was performed by contractors with many task orders. Some orders were completed and closed out years ago but others remained open until a new effort to close out the remaining task orders was initiated. This was work back in the Y2K era and personnel and organizations have changed, money has expired and memories are vague.

Funding will be sought after verification of services rendered by the program office. However, if a program office is unwilling or cannot verify services are there other ways to process a final voucher for payment?

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I would not recommend paying an invoice without evidence that the work was done. Contact the contractor and ask for documentation or other evidence you can present to the program office to show that the work was, in fact, performed. If possible, contact former program office officials that might have knowledge of what was done.

If, after gathering as much information as possible, there is sufficient evidence that the work was performed, the program office should certify that the work was performed. If the program office is unreasonable and refuses to certify the work was performed, then elevate the issue until you get to someone who is reasonable. The legal office may also be of assistance in convincing the program office in such a situation, as I am sure they don't want to have to defend a Board or COFC appeal where the evidence shows the work was performed.

If there is not sufficient evidence that the work was performed, either from the contractor or the program office, then deny the invoice.

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Thank you Iron Man. Sound advice!

I would not recommend paying an invoice without evidence that the work was done. Contact the contractor and ask for documentation or other evidence you can present to the program office to show that the work was, in fact, performed. If possible, contact former program office officials that might have knowledge of what was done.

If, after gathering as much information as possible, there is sufficient evidence that the work was performed, the program office should certify that the work was performed. If the program office is unreasonable and refuses to certify the work was performed, then elevate the issue until you get to someone who is reasonable. The legal office may also be of assistance in convincing the program office in such a situation, as I am sure they don't want to have to defend a Board or COFC appeal where the evidence shows the work was performed.

If there is not sufficient evidence that the work was performed, either from the contractor or the program office, then deny the invoice.

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If, after gathering as much information as possible, there is sufficient evidence that the work was performed, the program office should certify that the work was performed.

If there is "sufficient evidence" that the work was performed, why is it necessary for the program office to "certify" that the work was performed?

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If there is "sufficient evidence" that the work was performed, why is it necessary for the program office to "certify" that the work was performed?

Disbursements may be made only on vouchers certified as to (1) the correctness of the facts in the certificate, voucher, and supporting documentation; (2) the correctness of computations on the voucher; and (3) the legality of a proposed payment under the appropriation or fund involved. 31 USC ? 3528. In my experience, the contracting officer is not the certifying official. This certification usually comes from the office that receives the goods/services. If the program office is responsible for certifying (or not certifying) the voucher, it should do so.

Perhaps the program office is not shirking their duty but they have a good reason why the invoice should not be paid. Forcing the issue with the program office will ensure that all relevant facts (maybe even ones the contracting officer could not discover) has been properly considered.

Finally, the concept of ?sufficient evidence? to support payment of a voucher is subjective. Every persons judgment is different, and what I consider sufficient may be different from the original poster?s. If the issue is reviewed by a third party (e.g., an IG, Board, Court), that third party may disagree and conclude there was not sufficient evidence to pay the voucher. In such a case, if I were a contracting officer, I would want the support of the program (and legal office) and not be in the unenviable position of having directed payment of a voucher without the certification of the program office that the goods were received or work was completed.

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Would a certification be necessary for a final voucher at $0? In this case the contract is over seven years old, expiring in 2003. The project offce personnel have moved on and there is no project office institutional knowledge remaining.

Disbursements may be made only on vouchers certified as to (1) the correctness of the facts in the certificate, voucher, and supporting documentation; (2) the correctness of computations on the voucher; and (3) the legality of a proposed payment under the appropriation or fund involved. 31 USC ? 3528. In my experience, the contracting officer is not the certifying official. This certification usually comes from the office that receives the goods/services. If the program office is responsible for certifying (or not certifying) the voucher, it should do so.

Perhaps the program office is not shirking their duty but they have a good reason why the invoice should not be paid. Forcing the issue with the program office will ensure that all relevant facts (maybe even ones the contracting officer could not discover) has been properly considered.

Finally, the concept of ?sufficient evidence? to support payment of a voucher is subjective. Every persons judgment is different, and what I consider sufficient may be different from the original poster?s. If the issue is reviewed by a third party (e.g., an IG, Board, Court), that third party may disagree and conclude there was not sufficient evidence to pay the voucher. In such a case, if I were a contracting officer, I would want the support of the program (and legal office) and not be in the unenviable position of having directed payment of a voucher without the certification of the program office that the goods were received or work was completed.

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See, e.g., DOD Financial Management Regulation, Vol. 5, Ch. 33. Program personnel would be "receiving officials."

The program personnel are responsible for receiving the work and inspecting it. The CO is responsible for accepting it. The certifying official in the finance office certifies the invoice or voucher as payable, relying on information provided by the contracting officer/program office (e.g., a completed DD Form 250). The certifying official then forwards the invoice or voucher to the disbursing officer, who pays the bill. Except as may be required by local policies and procedures, there is no need for the program office to "certify" anything.

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At this agency we have a stamp for the project officer to recommend payment stating that all goods and services have been received and inspected - paraphrasing a little here. Then the Contracting Officer or Specialist has a similar stamp stating approved for payment. Signatures and dates are required for both. I appreciate all the feedback in this thread from everyone.

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Absent agency procedures to the contrary, it is not necessary for a project officer to "recommend" payment. All he or she need do is verify that the work was received (done) and that it conformed to contract requirements. Unless the project officer has been delegated authority to accept the work, the contracting officer can verify that the work was acceptable. It is the contracting officer's determination of acceptability that authorizes payment.

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Question: FAR 4.804.5 requires a contract audit. Can anyone state what that entails and who completes it? Thanks.

Absent agency procedures to the contrary, it is not necessary for a project officer to "recommend" payment. All he or she need do is verify that the work was received (done) and that it conformed to contract requirements. Unless the project officer has been delegated authority to accept the work, the contracting officer can verify that the work was acceptable. It is the contracting officer's determination of acceptability that authorizes payment.

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Question: FAR 4.804.5 requires a contract audit. Can anyone state what that entails and who completes it? Thanks.

At closeout, a contract (i.e., incurred cost) audit is required only for cost-reimbursement, fixed-price incentive, and time-and-materials contracts, and for some claims, and only in accordance with agency policy and procedure. To see what an incurred cost audit entails read the DCAA Audit Manual, Chapter 6, http://www.dcaa.mil/cam/Chapter_06_-_Incur..._Procedures.pdf.

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Thank you Vern.

At closeout, a contract (i.e., incurred cost) audit is required only for cost-reimbursement, fixed-price incentive, and time-and-materials contracts, and for some claims, and only in accordance with agency policy and procedure. To see what an incurred cost audit entails read the DCAA Audit Manual, Chapter 6, http://www.dcaa.mil/cam/Chapter_06_-_Incur..._Procedures.pdf.

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Doesn't contract audit in this case also apply to DCAA review of completion invoices or vouchers that occurs after final indirect rates are settled, per FAR 42.705-( b ), and the terms in the Allowable Cost & Payment clause at 52.216-7(d)(5), or DCAA review of completion invoices or vouchers that use the Quick Closeout Procedure described at 42.708, and the Allowable Cost & Payment clause at 52.216-7(f) - Quick Closeout Procedures?

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Would anyone know whether a terminated contract with settlement should be closed out. It seems redundant but perhaps still required. Thanks.

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Would anyone know whether a terminated contract with settlement should be closed out. It seems redundant but perhaps still required. Thanks.

If it is a partial termination, do not close the contract out until the contractor completes the unterminated portion.

See these FAR cites:

4.804 -- Closeout of Contract Files.

4.804-1 -- Closeout by the Office Administering the Contract.

( c) A contract file shall not be closed if --

(1) The contract is in litigation or under appeal; or

(2) In the case of a termination, all termination actions have not been completed.

4.804-4 -- Physically Completed Contracts.

(a) Except as provided in paragraph (B) below, a contract is considered to be physically completed when --

(2) The Government has given the contractor a notice of complete contract termination.

(B) Rental, use, and storage agreements are considered to be physically completed when --

(1) The Government has given the contractor a notice of complete contract termination; or

(2) The contract period has expired.

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Thanks everyone for the termination contract close out responses.

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Would anyone know why we ask for a contractor release statement. It basically states the contractor has and/or will be paid x dollars and no further claims will be submitted. Does the FAR require it?

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Would anyone know why we ask for a contractor release statement. It basically states the contractor has and/or will be paid x dollars and no further claims will be submitted. Does the FAR require it?

FAR Subparagraph 4.804-5(a)(14) states:

4.804-5 Procedures for closing out contract files.

(a) The contract administration office is responsible for initiating (automated or manual) administrative closeout of the contract after receiving evidence of its physical completion. At the outset of this process, the contract administration office must review the contract funds status and notify the contracting office of any excess funds the contract administration office might deobligate. When complete, the administrative closeout procedures must ensure that?

(1) Disposition of classified material is completed;

(2) Final patent report is cleared;

(3) Final royalty report is cleared;

(4) There is no outstanding value engineering change proposal;

(5) Plant clearance report is received;

(6) Property clearance is received;

(7) All interim or disallowed costs are settled;

(8) Price revision is completed;

(9) Subcontracts are settled by the prime contractor;

(10) Prior year indirect cost rates are settled;

(11) Termination docket is completed;

(12) Contract audit is completed;

(13) Contractor?s closing statement is completed;

(14) Contractor?s final invoice has been submitted; and

(15) Contract funds review is completed and excess funds deobligated.

That way, the Contracting Officer can perform the completion statement containing the information in FAR Subparagraph 4.804-5( b ) and return excess funds, if any, to the Requesting Activity.

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Guest carl r culham

From a FAR perspective you get the release because it is required in certain cases. Some agency procurement and finance offices have adopted a broadder view of requiring the release which in some cases is not demanded by any contract clause they just do it "because" they have seen it done on some contracts and think it is a good idea to require of all.

See FAR clauses 52.212-4 (Alt. 1), 52.232-5, 52.232-7 and 52.232.10.

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From a FAR perspective you get the release because it is required in certain cases. Some agency procurement and finance offices have adopted a broadder view of requiring the release which in some cases is not demanded by any contract clause they just do it "because" they have seen it done on some contracts and think it is a good idea to require of all.

See FAR clauses 52.212-4 (Alt. 1), 52.232-5, 52.232-7 and 52.232.10.

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From a FAR perspective you get the release because it is required in certain cases. Some agency procurement and finance offices have adopted a broadder view of requiring the release which in some cases is not demanded by any contract clause they just do it "because" they have seen it done on some contracts and think it is a good idea to require of all.

See FAR clauses 52.212-4 (Alt. 1), 52.232-5, 52.232-7 and 52.232.10.

Thanks.

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The reason for obtaining a release is to confirm that all issues have been settled and to identify any issues which have not been settled. That is simply good business sense. You don't want to have to deal with a contractor who comes back months or even years from now seeking more money. See Rixie Iron & Metal Co., ASBCA No. 40835, 91-2 BCA ? 23897:

The purpose of a waiver or release of claims is to put an end to the matter in controversy, and it bars a subsequent claim unless that claim is reserved at the time of the execution thereof. Mingus Constructors, Inc. v. United States, 812 F.2d 1387 (Fed. Cir. 1987).

A release is required when a contract is subject to final settlement action, e.g., under a cost-reimbursement, incentive, or T&M contract, or when a contract is terminated. The release is required for final payment.

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The reason for obtaining a release is to confirm that all issues have been settled and to identify any issues which have not been settled. That is simply good business sense. You don't want to have to deal with a contractor who comes back months or even years from now seeking more money. See Rixie Iron & Metal Co., ASBCA No. 40835, 91-2 BCA ? 23897:

A release is required when a contract is subject to final settlement action, e.g., under a cost-reimbursement, incentive, or T&M contract, or when a contract is terminated. The release is required for final payment.

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