Administrative Unilateral Closeout Memo

Why do you need to locate the contractor?

Why do you need a template?

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.

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

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!

You don't have one and neither do I. Case closed.

Just now, Vern Edwards said:

You don't have one and neither do I. Case closed.

I think the OP, should they be of mind, has that say!

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.

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.

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."

IAMBATMAN said:

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

I don't know of any FAR requirement for a release of claims prior to closeout. Where is that requirement? What could you do if the contractor told you to get lost?

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.

IAMBATMAN said:

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

Batman, have you read FAR 52.216-7(d)(4)-(6)?  That might be helpful to you.

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

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!!!!!!

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.

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?

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!

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.

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 -

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.

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.

Just now, Vern Edwards said:

And no, a FAR supp is not the FAR.

As always you caught me in poor wording.   It is a supplement to the FAR and as such carries the same weight as the FAR.

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.

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).

ji20874 said:

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!

"A release of claims is required only for a few contracts, including cost-reimbursement contracts, T&M contracts, and fixed-price construction contracts" can you point me to the reference?

ji20874 said:

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...").

The wording of the FAR supplement to which ji has addressed with his Fact 2 (emphasis added) -

"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."

To the "applicable" ji keeps pushing I do not disagree.  However in the context of this thread ji first stated and continues to state that a release is not required for close out.   The OP for this thread  provided in a post the following -  "When performing Contract Closeout, a release of claims is required," Per the citation I have provided from a FAR supplement if the OP was with Homeland Security and had one of the noted contract types or for whatever reason the contract or some higher up in Homeland Security decided the governments interest needed the release for risk avoidance then again the release would be needed before for close out. 

Now if the OP was with say Department of Commerce the OP could unilaterally close out the contract without the release but would need to document how doing so is in the Governments best interest.     

While I understand both ji and Vern's intention that close out could be simple and a template is not needed they both err in my view with their carte blanc comments as we do not know what type of contract the OP is trying to close-out, the value and the risks that must be considered and quite possibly documented in a unilateral close out memorandum that could be used because of or even absent any other agency guidance.  You see Vern and ji propose the easy out for everything.   I would suggest that doing so is not prudent, and quite honestly if a person were to read (as is a strong suggestion made in other posts in Forum) they  would find that even ji and Vern would suggest that following agency and bosses instructions are the most prudent course of action.   If the OP is "required" to do a memo and the issue of release needs to be addressed I can not write it for him/her but I darn sure can provide the best information I can to assist in the effort.  At this point I find nothing in the FAR and its supplements that a Release of Claims for any and all contract at close out is not required but that it shall be obtained in certain cases, unless the risk of not getting is noted as being in the Governments best interest and the agency and its bosses allow it.

Hmmm - https://www.dhs.gov/publication/low-risk-closeout

We do not see eye to eye but who says we have to.   

Now I am going to go enjoy my favorite whisky distilled in Hood River, OR as I am out of the mix unless ji or Vern want to address me or my comments further.

Vern Edwards said:

If I had that job I would have had it done in the time it is taking to finish this thread

Reminds me of an old comment from a senior Treasury official years ago - before DHS was established.  He said Customs could contract for a mainframe computer, have it installed, and fully operational before IRS could finish assembling their planning committee.

I don't want to address any comments.

It's embarrassing that a request for help in closing out a contract file has taken this much time and debate at Wifcon.

Here is a link to OPM's Position Classification Standard for Procurement Clerical and Technician Series, GS-1106.

https://www.opm.gov/policy-data-oversight/classification-qualifications/classifying-general-schedule-positions/standards/1100/gs1106.pdf

Read it and you will see that preparing a contract file for closeout was the procurement clerk's job.

When I was a CO, no CO did contract closeout. And I'm talking about contracts for space systems. A clerk, unlike some ACOs today, could read a regulation. But the procurement clerk position has all but disappeared since a succession of presidents, Reagan through Clinton, sought cost savings through elimination of the procurement clerks and the GS-1105 purchasing agents. Now you have to have a college degree, a CO certificate, and be a GS-12 to do the simple work required by FAR 4.804 and to conduct "simplified" acquisitions. Of course, the way some people here envision the job, maybe you need a Ph.D. and a presidential appointment.

Acquisition "reform" has resulted in contracting officers who come to Wifcon seeking a "template" for a memo that should say little more than:

We were unable to locate the contractor. It appears that they may no longer be in business. So we are closing out the file at this time by completing the checklist in FAR 4.804-5 to the best of our ability. Where we have been unable to obtain information needed from the contractor, we are entering, 'Not available."

/s/ Contracting Officer

If you can't find the contractor, just get on with it!

How low we have fallen. It's all part of the general decline of our Federal government.

Catwoman says bonne nuit.

IAMBATMAN said:

A release of claims is required only for a few contracts, including cost-reimbursement contracts, T&M contracts, and fixed-price construction contracts" can you point me to the reference?

Why are you asking this question, Batman?  You can find the references yourself, if you really want to.  Look in the payment clauses for those contract types (and for A-E contracts) and you will find a requirement for a release of claims before final payment.  Look in the payment clause for all or most other contract types, and you won't.  Simple.

But we're talking about closeout, right?  Look in FAR 4.804 and search for "release of claims" or anything similar -- you won't find it.  The FAR does not require a release of claims for any closeout, not a single one.  And it is absurd for a contracting professional to think that a release of claims is a necessary part of a closeout process.

This situation is not that uncommon.  Agencies often neglect close-outs for years.  Then they tackle the tasks in a mass effort or use a contractor.  

Lots of companies go out of business during that time contract performance occurred and getting to the close-out.  The way it’s generally handled is document the efforts to unsuccessfully locate and communicate with the contractor.  All the tasks that don’t require contractor input are done like verifying financial data.  Then the files are packed up and sent to the Records Retention Center.

ji20874 said:

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).

I love Istanbul, but haven't been there for a while. I wonder if the Pierre Loti Cafe is still in business.