Monday, November 11, 2013

Contract Closeouts - Cost-Type Contracts

In the past year, DCAA has completed many languishing incurred cost audits and reaching agreement with contractors on final indirect expense rates. Now that the rates are settled, contractors are looking to submit their final billings for costs and to close out many old contracts.

Approval and payment by the Government of a contractor's final voucher under cost-type Government contracts constitutes complete and final payment to the contractor. When you get ready to close out a cost-type contract, there are a few things to keep in mind. First, unless you can "quick-close" the contract, you will need to have your indirect rates settled for all years in which costs were booked to the contract. "Settled" in this case means negotiated or agreed-to between you (the contractor) and the ACO (administrative contracting officer) or, in some cases the auditor.

Next, you will be required to submit a voucher designated as a "completion voucher" or sometime "final voucher". The cumulative costs and fee shown on this voucher should agree with Schedule I of your incurred cost submissions, Schedule of cumulative direct and indirect costs claimed and billed by contract and subcontract (see FAR 52.216-7(d)(2)((i)(I)).

In addition to the completion voucher, contractors are also required to submit the following documents:

  1. Contractor's release of claims
  2. Contractor's assignment of refunds, rebates, credits, and other amounts

There are a lot of differing versions of these documents. Use the ones requested or required by your particular contracting activity. The "release of claims" says that you will not go back and request any more money from the Government for the particular contract. The assignment of refunds, rebates, etc., simply agrees to remit back to the Government any refunds, rebates, credits, and other amounts related to costs that were incurred and paid under the contract. It also requires contractors to cooperate with the Government in any suit to recover such funds.

Over the next few days, we will be discussing various aspects of the contract close-out process to help contractors streamline their practices to make the process as efficient as possible.

No comments:

Post a Comment