1. 1 ONR: The Closeout Process Presented By: C.C. Everley ONR Seattle Regional Office April 2008 DISTRIBUTION STATEMENT C: Approved distribution authorized to U.S. Government agencies and their contractors; Administrative Or Operational Use 28 APR 2008

2. 2 ONR’s Regional Offices SEATTLEATLANTA CHICAGOSAN DIEGO BOSTON

3. 3 The information to be presented can be found at www.onr.navy.mil www.onr.navy.mil Title: ONR UBA: Closeout of Contracts and Grants

4. 4 ONR: The Closeout Process General overview of the closeout process, policies and procedures General overview of the closeout process, policies and procedures Details about deliverables and other actions unique to the closeout process Details about deliverables and other actions unique to the closeout process Forms, instructions and web-based guidance and links Forms, instructions and web-based guidance and links

5. 5 What is closeout? It is a layered process 1.The process of documenting and assuring the fulfillment of the terms and conditions of the award 2.Of certifying awardees compliance with applicable regulations and terms and conditions. 3.Making final disposition of all award by- products, such as final vouchers, reports, patent disclosures and property.

6. 6 Why is Closeout important? Government acceptance of the 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. Government acceptance of the 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.

7. 7 “ Contract closeout is the most unheralded phase of the procurement process, yet, when performed efficiently and effectively, it can protect the government’s interests and free up significant dollars for current-year program priorities.” From ESI Int’l Contracting Programs Catalog 2005-2006

8. 8 Contracts   FAR 4.804-5   Certification of final costs   Small Business requirements Assistance Awards   DoDGARS http://www.dtic.mil/whs/directives/corres/html/32106r.ht m http://www.dtic.mil/whs/directives/corres/html/32106r.ht m   NASA Grant Handbook Differences

9. 9 1. Awardee has complied with the terms and conditions set forth in the award, including timely submission of set forth in the award, including timely submission of the deliverables the deliverables 2. Disposition of classified information is completed 3. Final patent and technical reports are accepted by the agency agency 4. Plant and property clearance received and all property is fully dispositioned is fully dispositioned PURPOSE OF CLOSEOUT IS TO ENSURE THAT……

10. 10 PURPOSE IS TO ENSURE THAT…… 5. Final costs have been reviewed and accepted, any disallowed costs are settled including: costs are settled including: >Subcontract settlement/closeouts >Open year indirect cost rates >Submission of final invoice >De-obligation of funds completed (for which we have delegation) or recommended to we have delegation) or recommended to the buying agency the buying agency 6. Small Business requirements have been fulfilled

11. 11 Types of Delegations ONR services all of DoD, as well as non DoD customers (NIH, NASA, DOI, etc.) Functions performed depend on the delegation we receive from the buying command Functions performed depend on the delegation we receive from the buying command Some delegations we have: Full delegation (Most DoD) Property and Closeout (Most NASA) Voucher only Property only (NIH)

12. 12 Award-Specific Terms & Conditions EACH AWARD IS DIFFERENT A thorough knowledge of specific terms and conditions, especially relating to final deliverable requirements is a prerequisite for a complete understanding of the closeout process

13. 13 Contracts FAR 52 provisions provide detailed procedures for contract closeout FAR 52 provisions provide detailed procedures for contract closeout DFARS, NMCARS DFARS, NMCARS Grants & Cooperative Agreements DoD Grant and Agreement Regulations (DoDGARs) provides procedures for assistance instruments DoD Grant and Agreement Regulations (DoDGARs) provides procedures for assistance instruments Also, OMB Circular A-110 Subpart D “After-the Award- Requirements” provides additional guidance Also, OMB Circular A-110 Subpart D “After-the Award- Requirements” provides additional guidance NASA Awards NASA Grant Handbook provides assistance for NASA awards NASA Grant Handbook provides assistance for NASA awards (i.e. Army/Air Force) have their own terms and conditions Other agencies (i.e. Army/Air Force) have their own terms and conditions

14. 14 Role of the ONR ACO/AGO (Administrative Grants/Contracting Officer) With the help of other staff members: Solicit the awardee for the required deliverables, including providing any forms, guidance or other counsel relative to the closeout process Solicit the awardee for the required deliverables, including providing any forms, guidance or other counsel relative to the closeout process Ensure that the submittals meet the administrative requirements of the terms and conditions of the award Ensure that the submittals meet the administrative requirements of the terms and conditions of the award Distribution was correct, in the correct format etc.

15. 15 AGO/ACO Role Continued.. Contact and follow up with issuing agency/procurement offices following submittal to gain acceptance or facilitate necessary changes to the deliverables Conduct formal administrative closeout of the award, including completion of relevant forms, certifications and releases, review and acceptance of final cost reports and certification of final vouchers

16. 16 When does ONR start the Process? Once the award is physically complete, e.g., the period of performance has expired, the “clock begins ticking” for submission by the awardee of final deliverables required for the award Often the awardee is notified via e-mail that the award has expired and is reminded of the deliverables required and due date

17. 17 Awardees Responsibilities Make sure that all reports are sent to the correct people/agencies Make sure that all reports are sent to the correct people/agencies Generally, awards will include instructions relative to the distribution of each deliverable including number of copies and mailing addresses Generally, awards will include instructions relative to the distribution of each deliverable including number of copies and mailing addresses

18. 18 Helpful Tool…. AdminWeb Database for awardees to submit reports Can be found at: http://www.onr.navy.mil/ Can be found at: http://www.onr.navy.mil/

19. 19 Typical Deliverables and Due Dates In General : Final Technical Reporting 90 days after expiration Final Patent Reporting 90 days after expiration Final Cost Reporting 90 days after expiration Final Property Reporting 90 days after expiration Final Security Reporting 90 days after expiration Final Small Business Reporting 30 days after expiration

20. 20 Helpful Tool…. All required documents can be found on the ONR website: http://www.onr.navy.mil/

21. 21 Final Technical Report Usually due by 90 days after award expiration-check award terms and conditions for clarification and required distribution Format: contractor/recipient can use any format acceptable to the awarding agency. They should contact the Program Manager if questions arise. Include form SF 298 “Report Documentation Page” Acceptance is provided by awarding agency

22. 22 Technical Performance DD 250 (For some contracts) DD 250 : Material Inspection and Receiving Report Instructions will be noted in Section E and/or in the CDRL (Contract’s Data Requirements Listing) in the contract. Acceptance is provided by awarding agency

23. 23 Final Patent Report Form DD 882 Acceptance is provided by awarding agency *Patent reports are usually required even if they are negative

24. 24 Final Cost Reporting Assistance Awards DoD: Form SF 269 NASA: Form SF 272 Contracts Voucher Form: SF1034/SF 1035 Also need to submit: Contractor’s Release and Assignment forms

25. 25 Final Property Reporting The final property reports are generally concerned with where title to property vests- i.e. with the Government or the recipient. Forms Used: DoD : DD 1662 (soon to be obsolete) DoD : DD 1662 (soon to be obsolete) NASA: Contracts : NASA form 1018 NASA: Contracts : NASA form 1018 Grants : Letter with signature (e-mail in some instances) will suffice for negative reports or for instances where title vests with the recipient.

26. 26 ACO Role in Final Property Reporting Vesting of Title Determination Coordinate Disposition of Property with Plant Clearance Officer Reporting of the Property Closeout Process to interested parties

27. 27 Final Security Closeout * Government obtains awardee certification

28. 28 What is “Acceptance” of a Final Report? Definition of acceptance: FAR 46.101 Acceptance can take many different forms and is driven by the type of award and the individual terms and conditions. Common forms of acceptance: Government correspondence indicating or certifying acceptable final deliverables or performance Government correspondence indicating or certifying acceptable final deliverables or performance DD 250-Material and Acceptance Report (most often used in cost-type or fixed fee contracts) DD 250-Material and Acceptance Report (most often used in cost-type or fixed fee contracts) Electronic communication from Program Managers Electronic communication from Program Managers

29. 29 Administrative Contracting Officer Duties in Accepting Final Costs The ONR ACO/AGO will conduct a 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 : Primary reliance on the financial audit which characterizes the overall abilities of the awardee’s management control and incurred cost systems. The audits are generally performed by an independent auditor and reviewed by the cognizant audit agency. Primary reliance on the OMB Circular A-133 financial audit which characterizes the overall abilities of the awardee’s management control and incurred cost systems. The audits are generally performed by an independent auditor and reviewed by the cognizant audit agency.OMB Circular A-133

30. 30 Additional Forms of Cost Acceptance When Needed 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.

31. 31 Cost Acceptance/Non-Acceptance During the 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 a final contract/grant completion statement summarizing the acceptance of final deliverables. The forms will be sent to the awarding agency for final actions that are needed Award will be administratively closed for all functions that were delegated

32. 32 Quick Closeout (For Contracts Only) Reference: FAR 42.708 Only applies to finalization of provisional indirect rates on cost contracts (not necessary when rates are already fixed or predetermined) Usually more applicable to major cost type subcontracts awarded to for-profit entities under non-profit/university prime contracts

33. 33 Quick Closeout (For Contracts Only) Maximum indirect cost allocation to one contract using QC is $1 million & total indirect cost allocations per FY to all contracts using QC cannot exceed 15% of total indirect costs allocated to all cost contracts Contact ONR ACO for guidance/coordination for either potential prime or subcontract application.

34. 34 Impact of Prioritizing Closeouts Reduced backlog of expired awards by 45% Reduced age of “old dogs” by 50% Achieved active/expired ratio of 75% / 25% Currently operating in maintenance mode

35. 35 Collaborative Workspace Collaborative Workspace Firewall

36. 36 What’s in The Future… Public Law 106-107 Grants Streamlining Grants Streamlining Electronic Reporting Systems Across Agencies Electronic Reporting Systems Across Agencies

37. 37 My Contact Information C.C. Everley C.C. Everley everlec@onr.navy.mil everlec@onr.navy.mil@onr.navy.mil (206) 548-7239 (206) 548-7239