1. Background and Purpose

One of the many important duties performed by the University Business Affairs Directorate’s Regional Offices is final administrative closeout of contracts, grants, and cooperative agreements. The purpose of this module is to provide general guidance to University research administrators and other interested parties relating to the process of closeout activities at the Regional Offices, and to shed some light on the overall system under which the terms and conditions of contracts, grants, and cooperative agreements are fulfilled.

2. Organizational Structure

This module will concern itself with:

1. a general overview of the closeout process, policies, and procedures;
2. specific details relative to individual deliverables and other actions unique to the closeout process, and
3. access to forms, instructions, and other web-based guidance and links.

3. Award Closeout

There are some basic assumptions necessary for understanding the essential nature of the closeout process as described here:

1. A Layered Process - Generally, award closeout is the process of documenting and assuring the fulfillment of the terms and conditions of the award, of certifying awardee compliance with applicable regulations and terms and conditions, and making final disposition of all award by-products, such as final vouchers, reports, patent disclosures, and property.
2. Types of Awards - Grants and cooperative agreements vary in important ways from Contracts as far as closeout is concerned. Many of the same forms and procedures are utilized for both, however.
3. Types of Delegations - Since ONR services all of the Department of Defense (Army, Air Force, and Navy) as well as 10 NASA Centers, we perform a full range of closeout duties, including subsets of the overall process. Generally speaking, the type of delegation ONR receives from the buying command will drive the type of closeout related documents. For example, under a "voucher only" delegation, ONR would not be required to assure that a final patent report had been received. For the purposes of this module, we will focus generically upon the ENTIRE closeout process.
4. Award-Specific Terms and Conditions - Each individual contract, grant, or cooperative agreement (heretofore, award) is potentially different in its closeout requirements than the next. An intimate knowledge of the specific terms and conditions of an award, especially relating to final deliverable requirements, is a pre-requisite for a complete understanding of the closeout process. Read the terms and conditions of each award for a full understanding of this aspect of the closeout process.

4. General

Deliverable requirements and other actions unique to the closeout process:

1. The Federal Acquisition Regulation (FAR) at 4.804-5 provides detailed procedures for the closeout process, and charges the office administering the contract with this responsibility after receiving evidence of its physical completion. Generally speaking, most of these requirements are applicable to grants. The primary purpose of these procedures is to ensure that—
   1. the Awardee has complied with the terms and conditions set forth in the award, including timely submission of all deliverables.
   2. disposition of classified material is completed;
   3. final patent report and royalty reports are cleared;
   4. plant and property clearance report is received and all property is fully dispositioned
   5. that final costs have been reviewed and accepted by any one of several audit approaches, any disallowed or open elements of costs are settled or dispositioned, including
      • subcontract settlement/closeouts
      • open year indirect cost rates
      • submission of the awardee’s final invoice, and
      • deobligation of excess funds has been recommended
2. Similarly, concerning grants and cooperative agreements, OMB Circular A-110, Subpart D- entitled, "After-the-Award Requirements" contains closeout guidance and other procedures for subsequent disallowances and adjustments. Specifically, 71, Closeout procedures, requires that recipients submit, "within 90 calendar days after the date of completion of the award, all financial, performance, and other reports as required by the terms and conditions of the award."

5. What do ONR ACO/agos do relative to the closeout process?

Let’s assume administrative final closeout duties are delegated to the ONR Regional Office Administrative Grants/Contracts Officer ACO/AGO. He or she will, with the help and assistance of other staff members in the Regional Offices expedite delivery of the necessary reports, and shepherd them through the submittal, review, and acceptance process. The ONR Office will:

• solicit the awardee for the required deliverables, including providing any forms, guidance or other counsel relative to this process to the awardee
• ensure that the awardee’s submittals meet the administrative requirements of the terms and conditions of the award (e.g., distribution was made correctly to the right parties, in the right format, etc.)
  NOTE: ONR ACOs/AGOs make no formal decision concerning technical acceptability of final performance deliverables)
• contact and follow up with the issuing agency/procurement offices following submittal of deliverables to gain their formal acceptance, or facilitate necessary or desirable changes to the deliverables; and
• conduct final administrative closeout of the award, including completion of relevant forms, certifications, and releases, review and acceptance of final cost

6. Let's Talk About the Close-Out Process Itself

1. When do we start?
   Once the award is physically complete, (See FAR 4.804-4 and OMB Circular A-110, ,____.71 Closeout procedures ) e.g., the period of performance has expired, the "clock begins ticking" for submission by the awardee of final deliverables mentioned in paragraph 4 above. The ACO/AGO will prompt the awardee with a letter or other communication (such as an e-mail) indicating the requirement to submit final deliverables, or otherwise reminding the awardee of its closeout-related obligations.
2. What is required?
   Final deliverable requirements are usually identified in the individual award terms and conditions. They may appear as an appendix, a data requirements list, or as a simple attachment. These attachments will generally include instructions relative to the distribution destination of these final deliverables, including numbers of copies and mailing addresses. In research and development, examples of final technical/performance deliverable may be a research report, data, software, or, more rarely, a prototype of some sort.
3. Why is this process important?
   The Government acceptance of the awardee final deliverables and reports is critical to the overall success of the project. In many instances, this act of final acceptance can cause the release of final payments to the awardee, and ultimately lead to release of the awardee from lingering obligations under the award. This acceptance may take many forms, again driven by the type of award and the individual terms and conditions.
   
   Some common forms of acceptance are:
   1. (1) Government Letterhead correspondence indicating or certifying acceptable final deliverables or performance. (This Certification may be executed by the awarding contracting officer, or his or her delegate, such as a Contracting Officer’s Representative (COR) or Program Manager/Officer (PM/PO.)
   2. (2) The Final DD Form 250 - Material Inspection and Acceptance Report (most commonly used in cost-type or fixed fee contracts)
   3. (3) Other electronic communication indicating final acceptances

7. Specific Deliverables
(frmats, forms, and other information)

• Final Technical Performance closeout

Generally due by: 60 to 90 days after the period of performance has expired, but one should refer to the specific terms and conditions of the award and its governing regulations

Format/Forms used: ONR Grantees are generally free to submit final technical reports on normal bond paper, but are also charged with including a complete "Report Documentation Page" SF 298) as the last page of each copy of every scientific and technical report prepared under their Grant. The form contains instructions for preparation.

Contractors may have a specific format to comply with for submission of final technical data, such as the DD Form 250, the final Material and Inspection Receiving Report. Look for and read an attachment to the contract called a "CDRL" - a contracts data requirements listing - which is a "one-stop shop" for all required deliverables, their due dates, and their distribution instructions.

Comments/Other:Many granting agencies, including ONR , reserve the right to direct its grantees to make additional distribution of technical reports in accordance with a supplemental distribution list provided by the Program Officer or COR. Also, any discrepancies in actual performance or delivery must be reconciled before the award can be closed.

Final Patents Closeout

Generally due by: At the end of the period of performance.

Format/Forms used: The Department of Defense uses the DD Form 882, "Report of Inventions and Subcontracts". There are other forms and procedures for NASA Awards.

Under NASA awards, each research grantee, research contractor and research subcontractor is required to report new technology to the NASA Technology Utilization Office, using a NASA Form 666A and/or NASA Form C-3043.

Comments/Other:May involve additional form submittal, such as a invention disclosure report, and involve complex legal issues, such as copyrights and royalties. Cost of the forms which you will need can be easily accessed and downloaded from the Forms Download page. An electronic copy of the NASA Grants and Cooperative Agreements Handbook is available.

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Final Cost Closeout

Generally due by: At the end of the period of performance.

Format/Forms used:SF 1034/1035 for contracts, and SF 269 or SF 272 for grants are commonly used forms on DoD agreements.

Comments/Other:The ONR ACO/AGO will conduct some type of final financial review of the costs incurred under a given award, to ensure that all costs are reasonable, allocable, and allowable. This review may take the form of :

• a desk review, where cost elements originally budgeted in the proposal are compared and contrasted with those costs actually incurred
• a full audit of the individual award, as conducted by the cognizant federal agency for audit of the awardee’s institution, either Department of Health and Human Services or Defense Contract Audit Agency. These are generally reserved for high-dollar awards.
• reliance on the OMB Circular A-133. Reports for the Institution - which characterize the overall abilities of the awardee’s management control and incurred cost systems. These reports are based upon generally-agreed to accounting principals, and establish a bench mark of transactional acceptance by reliance on the overall systemic tests of the awardee’s financial system.

During this financial review process, the ACO/AGO may disallow or accept final costs, and will execute the final completion voucher releasing any residual payments still due. He or she will also execute several forms internal to the government, including DD Forms 1593 and/or 1594, and a final contract/grant completion statement summarizing the acceptance of final deliverables.

Also, the award terms and conditions may require or urge submission of final financial peripheral documents, such as final releases from liabilities, obligations, and claims, refunds, rebates, and credits. Importantly, many of these same duties and requirements may "FLOW DOWN" to the prime contractor, in order to ensure final closeout of subcontractors and subrecipient monitoring.

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Final Property Closeout

Generally due by: At the end of the period of performance, usually 60 to 90 days thereafter.

These reports are generally concerned with that property where title is vested with the Government, e.g., federally owned.

Format/Forms used:DD Form 1662, NASA Form 1018 (for contract awards), and also generic letterhead inventories for most grants.

Comments/Other:The ONR ACO/AGO, working with the cognizant procuring office, will take the necessary steps to execute the responsibilities of the government when property has been provided to or acquired by the contractor. This process will ensure the final accounting for and disposition of all federally-owned property under the contract or grant, and will make final determinations as to vesting of title, final dispositioning, and reporting of the property closeout process to the specific, interested parties.

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Final Security Closeout

Generally due by: As applicable from the terms and conditions of the award

Format/Forms used, or reference:SeeDoD Directive 5220.22-R, Section VII, 7-104 and 7-106). Also, Form DD254

Comments/Other: For classified awards, prudent steps shall be taken by both the awardee and the contract administration office to ensure final disposition of all classified material generated to or access by the contractor in the performance of the contract. These procedures vary based on the type, access, and nature of the classified material involved. The ONR Regional Offices have access to industrial security specialists which can assist them in the performance of these duties. The awardee should direct any and all questions relating to these procedures to the cognizant administrative contracting officer for further guidance.

Disposition instructions or retention authority received from the authorized activity will be forwarded to the contractor and a copy provided the cognizant Industrial Security Office. After a classified contract is closed and Final Contract Completion Statement has been issued, all classified material approved for retention by the contractor is under the cognizance of the procuring contracting office and cognizant Industrial Security Office.