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Contract closeout is the administrative procedure associated with the end of the business agreement with the supplier and the archiving of documents in the contract file. Contract closeout occurs after the supplier has successfully completed contract performance and has been accordingly compensated or when the contract is terminated for default or convenience. The primary purpose of contract closeout is to ensure that the supplier has complied with all contractual requirements and that the client’s needs have been met and fulfilled. Contracts that are improperly performed or that fail to offer best value to the Postal Service are appropriate for termination for default or termination for convenience and are addressed in detail in Section 5-13, Terminate Contract.
A contract is considered performed and fully completed when:
The CO is responsible for ensuring that the following contract closeout activities are performed:
- Scope verification — occurs at the end of the tasks and phases associated with the project to ensure that all the scope requirements for that task, phase, or project have been accomplished; demonstrates that sound business judgment was applied to the overall purchase project.
- Financial review — determines whether all the invoices are paid and whether the actual expenditures matched the planned budget. Invoices and payment are explained, in detail, in Sections 5-11, Process Invoices, and 5-12, Make Payment.
- Product/service delivery and acceptance — acknowledges receipt of products and services conforming to contract specifications during the Receipt and Inspection and Acceptance topics of the Complete Delivery task of USPS Supplying Practices Process Step 4: Deliver and Receive Requirements.
- Client sign-off — after the client accepts the products or services defined in the contract, it must sign off on products or services after delivery; acknowledgement of receipt of the products or services allows for closeout of the contract.
- Lessons learned — purchase/SCM team members must capture and share the lessons learned from the project, including analyzing data and discussing project results with participants; lessons learned are used to improve future purchase projects and the overall purchasing process; the information is then summarized and archived, as explained by the Share Lessons Learned topic of the Manage Delivery and Contract Performance task of USPS Supplying Practices Process Step 5: Measure and Manage Supply.
- Inventory management and disposal — products that have been accepted may no longer require input from the supplier and will remain the responsibility of the Postal Service; the item manager must ensure that products are being properly stored for future use, as explained in Section 5-4, Develop, Finalize, and Implement Inventory Control Plan; products that the supplier has delivered and have already been utilized are appropriate for disposal or investment recovery, which are explained in detail in Section 6-1, Dispose.
- Personnel reassignment — as the end of the contract approaches, it is the client’s responsibility to ensure that purchase/SCM team members from the client organization are assigned current projects or deployed to future projects, and it is the CO’s responsibility to ensure that purchase/SCM team members from SM are assigned current projects or deployed to future projects.
- Close and archive files — project-related plans, reports, and any other pertinent documentation, as well as the contract files must be closed out and archived by the CO at the end of the project; the contract file must contain sufficient documentation to permit an outside party to review and understand the process and business decisions that resulted in contract award, contract modification, and contract expiration; the warning notices and records associated with contracts terminated for default or convenience must also be placed in the contract file.
Upon completion of contract closeout procedures, the CO must officially signify that client sign-off has been completed and include any related questions or recommendations in the contract file.
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