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Administrative Unilateral Closeout Memo


IAMBATMAN

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The short questions might have helped you figure out what to do but let me add a few more.   

Why are you asking?   

Is there a specific reason you are in a quandary on how to close out the contract? 

Does the contractor owe you something?   A release, return of classified material, info on government furnished property and possibly its disposal, settlement of indirect rates, etc.?   

With a little more info on what is driving your question would most likely generate answers that would help and not generate questions.

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43 minutes ago, Vern Edwards said:

@C CulhamAll Batty asked for was a 'template" for a memo. Something he or she could cut and paste. Do you have one?

As always sometimes a post has hidden facts that would help in a response.  I posed the questions for that purpose.

To your question no, but what about you do you have one?   I direct to the OP's question might have ideas for agency document that could be used absent a template, whether used to cut and paste or not!

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When performing Contract Closeout, a release of claims is required, in the event that the contractor cant be reached and after attempts prove unsuccessful, it is recommended that the CO begin Administrative Unilateral Closeout. Does anyone have experience conducting  an Administrative Unilateral Closeout.

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28 minutes ago, IAMBATMAN said:

When performing Contract Closeout, a release of claims is required, in the event that the contractor cant be reached and after attempts prove unsuccessful, it is recommended that the CO begin Administrative Unilateral Closeout. Does anyone have experience conducting  an Administrative Unilateral Closeout.

When deobligating funds and closing out a contract, unless the government is making a payment or waiving some contractual requirement as consideration for the release of claims, the government will have a hard time enforcing any release signed by the contractor.  See, e.g., Supply & Service Team GmbH, ASBCA No. 59630 (March 1, 2017), ("Moreover, SST received nothing from the government from its agreement to sign these de-obligation modifications, which means that that they lacked consideration and they could not be deemed to be binding upon SST in any event.")

I know that doesn't answer your question and you will have supervisors and policy memos that tell you to try to get a "bilateral" mod to deobligated funding.  But, from an enforceability standpoint, they are both administrative actions/notifications by the government that are not binding on the contractor.  It's just that in some cases you get the contractor to acknowledge that you have deobligated funding, and in other cases you don't.

 

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1 hour ago, IAMBATMAN said:

When performing Contract Closeout, a release of claims is required, in the event that the contractor cant be reached and after attempts prove unsuccessful, it is recommended that the CO begin Administrative Unilateral Closeout. Does anyone have experience conducting  an Administrative Unilateral Closeout.

Thank you for the clarification.  My first thought is look to your agency's policies etc.   If nothing exists to assist here is reference that may help you out in creating a memo that may be viewed as satisfactory.  

https://www.commerce.gov/sites/default/files/2021-02/CAM 1304.804 Closeout.pdf

 

"2.6.2 Contractor Is No Longer in Business Unfortunately, it is not uncommon to have open contracts with companies that are no longer conducting business. In these instances, the Government shall take every reasonable measure to locate the company and/or its principals. The contract file should be documented with every attempt made to locate the company and its officials. If all of the above attempts prove unsuccessful, it is recommended that an administrative unilateral closeout process be implemented. In addition to the documentation required for the specific contract type, the following factors should be addressed, as applicable: a. Is the contract physically complete and has Government acceptance of goods/services been received? b. Was the contractor previously paying any funds? c. What is the status of indirect cost rate settlement (if contract is other than firm fixed price)? d. Have all reasonable measures been taken to locate the company and documented in the contract file? e. Has the contract been terminated for convenience or default? f. Any other pertinent information relative to the contractor or performance of the contract (e.g., unsettled subcontract cost, litigation, etc.) should be considered. It is recommended that the contracting officer check with Office of General Counsel and the Office of Inspector General to ascertain if any actions are pending."

 

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3 hours ago, IAMBATMAN said:

When performing Contract Closeout, a release of claims is required...

I'm with Vern.  Batman, where is there a FAR requirement for a release of claims for closeout?

Contract file closeout is a unilateral administrative action for the Government's administrative convenience.  It has zero impact on the rights and obligations of the parties to the contract.  Please read FAR 4.804.  Then, do what FAR 4.804 tells you to do.

Maybe your office requires a release of claims for closeout as part of your own homemade procedures, with no basis in the FAR or common sense?  If so, I regret your office's unnecessary and no-value-added rules.

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1 hour ago, ji20874 said:

I'm with Vern.  Batman, where is there a FAR requirement for a release of claims for closeout?

So apparently you, and dare I say Vern Edwards, believe that the supplements to the FAR, by specific example 48 CFR 3004.804-570, are not the FAR.  Interesting!!!!!!

 

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2 minutes ago, IAMBATMAN said:

so FAR 4.804-5(a)(13) Contractor’s closing statement isn't a release of claims?

No, it is not. 

And even if it was, that listing is not a list of required documents for closeout.  For example, look at (3) for final royalty report -- does this mean you MUST have a final royalty report in the contract file before closeout?  No -- what if there were no royalties?  Or (6) for property clearance -- does this mean you MUST produce a property clearance report?  No -- what if there was no government property?  Or (11) for termination docket -- does this mean you MUST create a termination docket?  What if there was no termination?  

Read what the listing is -- it says in (a) that "the administrative closeout procedures must ensure that..."  So if any of those items in the list are applicable, they need to be dealt with -- but none of those items in the list requires the creation of a document.  This mindset flows into (b), where it says "[w]hen the actions in paragraph (a)...have been verified..."  See, the first key word is actions, not documents, and the other key word is verified, not created or included in the file.  That whole listing in (a) is a listing of actions to verify, not documents to produce for closeout.

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5 minutes ago, IAMBATMAN said:

so FAR 4.804-5(a)(13) Contractor’s closing statement isn't a release of claims?

You let out a little info beyond you OP.   How about just a little more.   What Department and what agency are you performing the closeout for?

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1 hour ago, C Culham said:

So apparently you, and dare I say Vern Edwards, believe that the supplements to the FAR, by specific example 48 CFR 3004.804-570, are not the FAR.  Interesting!!!!!!

48 CFR 3004.804-570 does not require obtaining a release of claims for every closeout action.  Read what it actually says:  "When applicable and prior to contract closure, the contracting officer shall obtain the listed DHS and Department of Defense (DOD) forms from the contractor for closeout."  The key words are "When applicable."  

A release of claims is required only for a few contracts, including cost-reimbursement contracts, T&M contracts, and fixed-price construction contracts -- and for all of these, the release is required before final payment, long before closeout.  If it isn't applicable, then it isn't applicable and need not be obtained for closeout.  When it is applicable, it should have already been obtained long before closeout occurs. 

Agency supplements are not the FAR.  They are agency supplements to the FAR.  Read FAR 1.101:  "The Federal Acquisition Regulations System consists of the Federal Acquisition Regulation (FAR), which is the primary document, and agency acquisition regulations that implement or supplement the FAR." 

Read the FAR!  It is amazing what can be learned through reading!

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The phrase "closing statement" appears only twice in the FAR, at 4.804-5 and at 49.303-5. At the latter, it's a closing statement of costs. I assume that FAR 4.804-5 is referring to FAR 49.303-5, which is not a release of claims. Release of claims is a term of art that is widely understood to mean just what it says. As for FAR supps, it a supp calls for a release, then Batty should cite it.

And no, a FAR supp is not the FAR.

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Just now, ji20874 said:

48 CFR 3004.804-570 does not require obtaining a release of claims for every closeout action. 

Nice punt.  Let me be clear I never said this -

1 hour ago, ji20874 said:

Batman, where is there a FAR requirement for a release of claims for closeout?

You did and it is not a true statement whether you want to defend it or not.  What is true is that if Batman worked for DHHS a release would be required ("shall")in certain circumstances.  I never said "always" but  FAR 48 CFR 3004.804-570 does require it none the less.  

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Batty's an ACO(!) with a job to do. If I had that job I would have had it done in the time it is taking to finish this thread, especially now that C Culham is in the mix. Right now I'd be sharing a glass of wine in a Paris Bistro with Anne Hathaway (Cat Woman), discussing Proust's portrayal of Misia Sert as Princess Yourbeletieff and planning dinner at Le Florimond in the 8th. We'd buy a small dessert to take back to the apartment. And Madeleines.

Closeout used to be a procurement clerk task.

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Just now, Vern Edwards said:

Batty's an ACO(!) with a job to do. If I had that job I would have had it done in the time it is taking to finish this thread, especially now that C Culham is in the mix. Right now I'd be sharing a glass of wine in a Paris Bistro with Anne Hathaway (Cat Woman), discussing Proust's portrayal of Misia Sert as Princess Yourbeletieff and planning dinner at Le Florimond in the 8th. We'd buy a small dessert to take back to the apartment. And Madeleines.

Closeout used to be a procurement clerk task.

Why don't you be on your way then, I have Batman covered you do not need to stick around with me in the mix!

PS - I am very interested where in FAR 4.804 the words "procurement clerk" are stated.  

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Fact 1:  The FAR never requires a release of claims for closeout.

Fact 2:  The FAR supplement Carl cited does not require a release of claims for closeout.  It merely reminds personnel in that agency that if a release of claims was otherwise needed (such as prior to final payment for some contracts), it should be included in the file before closeout begins ("When applicable...").

Some people make closeout way too hard.  If it were me doing the closeout, I'd be like Vern (but somewhere else, so as not to crash his party -- maybe Istanbul, which is delightful at this time if year).

 

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