CFCM Contract Closeout — Questions and Answers
Question 1: Under FAR 4.804-1, within how many months after all deliverables have been received should a contracting officer initiate closeout for a fixed-price contract that does not exceed the simplified acquisition threshold?
- 3 months
- 6 months (Correct answer)
- 12 months
- 24 months
Correct answer: 6 months
FAR 4.804-1(a)(1) specifies that fixed-price contracts not exceeding the simplified acquisition threshold should be closed out within 6 months after the contracting officer receives evidence of physical completion.
Question 2: Under FAR 4.804-1, what is the recommended maximum time for initiating closeout on contracts that require settlement of indirect cost rates?
- 12 months after physical completion
- 24 months after physical completion
- 36 months after physical completion (Correct answer)
- 48 months after physical completion
Correct answer: 36 months after physical completion
FAR 4.804-1(a)(3) allows up to 36 months after physical completion for contracts requiring settlement of indirect cost rates, reflecting the time needed for DCAA audits and rate negotiations.
Question 3: What is the primary purpose of a 'quick-closeout procedure' under FAR 42.708?
- To terminate underperforming contracts within 30 days
- To negotiate indirect cost rates on a contract-by-contract basis without waiting for a final rate audit (Correct answer)
- To close out contracts below the micro-purchase threshold without any documentation
- To bypass DCAA review when a contractor is in financial distress
Correct answer: To negotiate indirect cost rates on a contract-by-contract basis without waiting for a final rate audit
FAR 42.708 allows contracting officers and contractors to negotiate final indirect cost rates on a specific contract when the amount of unsettled costs is relatively small, avoiding years-long delays waiting for DCAA final audits across all contracts.
Question 4: Which of the following actions is required to be completed BEFORE a contract file can be officially closed under FAR 4.804-5?
- Issuance of a unilateral contract modification extending the period of performance
- Filing of the contractor's annual Equal Opportunity report
- Verification that all outstanding contractor claims and government claims have been settled (Correct answer)
- Approval of the contractor's forward pricing rate agreement for future contracts
Correct answer: Verification that all outstanding contractor claims and government claims have been settled
FAR 4.804-5 lists specific actions required before closing a contract file, including settling all contractor claims, disposing of government property, and ensuring final payment. Open claims prevent official closeout.
Question 5: On a cost-reimbursement contract, which document does the contractor typically submit to trigger final payment and initiate the closeout process?
- A final proposal revision (FPR)
- A contractor's release of all claims
- A final voucher or invoice covering all unreimbursed allowable costs (Correct answer)
- A physical completion certificate signed by the COR
Correct answer: A final voucher or invoice covering all unreimbursed allowable costs
The contractor submits a final voucher (for cost-reimbursement contracts) or final invoice (for fixed-price contracts) to request payment of all remaining allowable costs. This submission initiates the final payment and closeout sequence.
Question 6: During contract closeout, a 'contractor's release of claims' is significant because it:
- Waives the government's right to audit the contract after payment
- Transfers ownership of all deliverables to a third party
- Documents that the contractor has no further claims against the government arising from the contract (Correct answer)
- Authorizes the contracting officer to de-obligate remaining funds without contractor consent
Correct answer: Documents that the contractor has no further claims against the government arising from the contract
A contractor's release of claims is a written statement by the contractor confirming it has no remaining claims against the government for that contract. It protects the government from future disputes after final payment is made and the file is closed.
CFCM Contract Closeout
Under FAR 4.804-1, within how many months after all deliverables have been received should a contracting officer initiate closeout for a fixed-price contract that does not exceed the simplified acquisition threshold?