Department of Commerce Low Risk Closeout Initiative

The Department of Commerce (DoC), Enterprise Services-Acquisition (ES-A) contract portfolio includes expired contracts that are over-age, as the period of performance or final delivery date of these contracts has expired, and the time prescribed for contract file closeout has elapsed. To clear this backlog of over-age contracts ES-A is implementing a limited-use case procedure that will enable closeout of these contracts in an efficient and cost-effective manner.

These procedures include identification of those expired contracts that can be closed out in a streamlined manner based on certain criteria under which they are considered to be low risk. These contracts are identified in the attached spreadsheet (ES-A_Low Risk Closeout List). To facilitate the closeout of these contracts, ES-A requests that contractors with contracts identified on this list submit any outstanding invoices no later than April 1, 2024 (within 60 days after the publication of this notice).

ES-A's contract closeout backlog presents not only a significant burden to legacy acquisition and financial systems, but also impedes ES-A's efforts to appropriately archive expired contracts and prepare for transition and migration to modernized financial and procurement systems in the future. The procedures ES-A developed to significantly reduce the backlog of expired contracts will enable DoC to expeditiously close those actions.

ES-A developed the procedures using risk-based management principles by first identifying and classifying open, expired contracts as low risk based on the following criteria: i) the contract is Fixed Price or Time-and-Material with fully burdened hourly labor rates with either no or fixed indirect rates on materials; ii) the contract expired and the additional time allowed for contract file closeout under Federal Acquisition Regulation (FAR) 4.804-1(a) has elapsed; and iii) the contract has had no invoice or payment activity within the past 12 months and there are no known outstanding invoices.

Notwithstanding ES-A's intention to expeditiously closeout the actions identified in the aforementioned list, contractors' rights are protected under 41 U.S.C. chapter 71 Contract Disputes (commonly known as the Contract Disputes Act of 1978), which establishes procedures for filing claims against Federal Government contracts. Normal contract file retention requirements will apply after closeouts (See FAR 4.805, Storage, handling, and disposal of contract files.)