Contract closeout is the fourth phase in the generic project life cycle. It involves verifcation of all work and deliverables whether they have been met. As the buyer you need to make sure all parts of the contract have been fulflled.
Contract closeout is the fourth phase in the generic project life cycle. It involves verifcation of all work and deliverables whether they have been met. As the buyer you need to make sure all parts of the contract have been fulflled.
Contract closeout is the fourth phase in the generic project life cycle. It involves verifcation of all work and deliverables whether they have been met. As the buyer you need to make sure all parts of the contract have been fulflled.
One of the most frustrating aspects of contract management to
customers/clients is the length of time that it commonly takes to close out a project (from an administrative standpoint) after most or all of the contract scope of work has been completed. he closeout is the fourth phase in the generic project life cycle where all outstanding contractual issues are completed and documented in preparation for turning over the product or service to the customer. !hat are some of the activities that need to be performed as part of the contract closeout functions" !hat do you think are some of the factors that cause such a length in delay in the closure of the project/contract" Contract closeout involves verifcation of all work and deliverables whether they have been met as per the contract's scope of work/terms and conditions. Assessment of the work, cost, schedule and all the issues outstanding should be reviewed as part of the contract close-out phase. Contract close out also involves the post completion maintenance reuired on the pro!ect. "he delay could happen because of the change reuest raised during the contract e#ceution, issues in the pro!ect, back orders or missing materials, poor management etc. $ou should make sure all work is complete and accounted for when it comes down to the contract closeout. Contract closeout is when you have completed the entire pro!ect. "hat means submitting on everything you needed to submit on, buying the !ob completely out and performing all the work. As the buyer you need to make sure all parts of the contract have been fulflled and that all costs have been captured and all payments are made. Contract closeout ia a guide to ensure all closeout actions have been satisfactorily accomplished, functional specialists shall begin taking applicable actions to close the contract. %ne will think that closeouts should be the easiest part in the contract because it is when acuaintances have been made and everybody is !ust happy to end this long, e#ultant, but sometime treacherous !ourney. &owever, specifcations, payroll, over-allocation, bonuses, legal issues, along with training could all cost a lengthy closure. "he activities that are needed to preform contract closeouts are meetings, updated fnancial statements, clear and close communication, setting a close date, verifying that all deliverables are accepted, and updating records to re'ect fnal results. "he pro!ect needs to be evaluated to ensure that all the milestones have been met and that the pro!ect meets all specifcations. "he pro!ect should be evaluated and any failures or issues carefully looked at to see how they can be prevented or mitigated in future pro!ects. "he pro!ect should have met all specifcations and drawings to the current date. (verything should have been submitted on and approved before installed. %ne of the main processes of a contract closeout would be a thorough inspection and review of the pro!ects deliverables. "he end results of the pro!ects must be e#amined to ensure whether or not they meet the e#pectations of the stakeholders. )y doing this inspection the buyer is deciding whether the seller will need to revise any of the deliverables or whether the seller will receive pull or partial payment. )y not performing this review, the buyer is taking risks of paying for sub-par or une#ceptable work. *n-turn, stakeholders will not be satisfed and the pro!ect will be viewed as a failure. +recious resources would have been wasted on the part of the buyer and a new contract with a new vendor, e#tended deadlines and increased budget will have to be determined. "o close-out a pro!ect successfully, all of the parts have to come together and like building an entertainment stand that comes in a bo#, there are a lot of little pieces. "he hardest part during is keeping everything organi,ed. "he hardest part at the end is when you have a part left over - where was that supposed to go - is the stand going to fall apart without it- *f the pro!ect was properly maintained, then pieces should all meet up at the end, .should. being the key word. )alancing the /eeping up with the pro!ect schedule with prepare you for the pro!ect closeout. *f you submit on material and euipment as scheduled and perform the work according to the pro!ect schedule, you * agree with you and * like how you compared it to an entertainment stand. "his is true to all pro!ects, you can buy cheap, industry standard, and high cost parts. %ne thing that could become an issue with closing out a pro!ect, is that all 01*'s are answered for pro!ect completion. 2hich in the case of the entertainment stand, do * need another pieces to make it stronger, last longer, or am * missing a piece. "his could cause the pro!ect to prolong longer than it should. Closeout is completed when all administrative actions have been completed# all disputes settled# and $nal payment has been made. &ere is a list of actions to accomplish to close a contract as they are applicable3 0eview contract data and confrm all deliveries accepted *dentify and 4eobligate (#cess 1unds Complete any price revisions (nsure all subcontracts are settled by the prime contractor *ndirect costs are settled 5o outstanding value engineering change proposals 67(C+8 1inal patent report is cleared 1inal royalty report is cleared "ermination docket is completed Contractor9s fnal closing statement is completed Contractor9s fnal invoice has been submitted Contract audit is completed 4eobligate funds3 4eobligation of e#cess funds is one of the contract administration functions normally delegated to the Administrative Contracting %:ce at the Contract ;anagement %:ce !ho do you think typically drags out the close-out process# the owner or the vendor" %upport your answer. * think it would be the lack of e<ort from a certain party by not getting all contracts sign closed out or vendors agreeing to time constraints deliveries and etc... )oth parties should have an urgency to get the !ob done and have all *'s are crossed and the "'s are dotted *n my opinion, it is the customer or the owner who would drag the close-out process as they would like to make sure that all the deliverables or scope of the contract has been met. "here are various activities that customers/owners would want to be completed before the contract close out occur. e.g. =nloading of production and test databases, 0eturn of customer euipment, 0eturn of customer software or tools/data, Copies of all methodologies or technology used to provide the services. %wner has much more at stake at the time of close out and he would like to make sure that transition is completed successfully so that there are no pro!ect issues at a later point of time. &t is usually the owner not wanting to sign o' on the $nal product. he vendor is usually motivated by wanting that last payment( "he delay has something to do with the contract closeout activities, such as the procurement audits and the performance measures. "herefore, the delay is on the owner making sure that everything involving the contract has been processed and closed before notifying the vendor that the pro!ect is Another reason for delays in closing a pro!ect is due to constants .add-ons.. "his happens when the owner or others continuously reuire small changes that will improve the pro!ect outcome, whether a product or service. "hese changes represent .e#tras. perceived as being part of the original pro!ect intent. 6+ro!ect management, the managerial process. )y Cli<ord 1. >ray8 * can only assume that the owner would drag out the close-out process the most, mainly due to the fact that the owner would typically want to ensure that all of the aspects written within the contract are met before everything is said and done. 0ushing this particular process could be potentially detrimental to the owner, especially if some of the aspects of the contract are met and the contracts an overall criterion wasn9t met fully. * would think the client would be more likely to take longer to close out the pro!ect. %nce the client signs o< that all work is completed? any problems that might have been over looked might be additional charges to get f#ed. Also when the work is completed the fnal payment would be due and the client will have to write a check to the owner. )nother problem that often arises is that the *roject +anager is assigned to a new project/contract during the close-out phase# and naturally he/she becomes more preoccupied with the new assignment. ,ave you heard the term -Close-out +anagers- in any of your *+ courses" &f yes# what do you recall is the role of these managers" &f you have not heard the term before# what do you think it refers to" * have not heard of this term in my other +; course. &owever, this person is hire to make sure that the pro!ect is close-out correctly. "he Close-out ;anager make sure that all the "'s are cross and all *'s are dotted and to make sure the documents are completed. "hey also make sure that the best practices and areas of opportunities are document. * have not heard of the Close out ;anager term before. * think the Close out ;anager is the person who make sure the pro!ect goal is met an it is ready to be given to the customer. "he +; is ready to move forward to another pro!ect but need to make sure that the pro!ect is completed before they do. he close out manager has all responsibility to wrap up the project and $nali.e the paperwork. !ith a new project beginning# the *+ is tied up in scheduling and making it start smoothly that he/she doesn/t have time to return to the other project to complete everything. *+ has to be onsite at all times from the start of a project to basically the completion of work so that there isn/t time to be running back and forth# especially at the beginning of a new project which is very important to set the tone and schedule from the start. he completion phase is more attuned to administration. ) close-out manager is assigned to project at the close-out phase. ,e/she only focus and concentrate on the task of that particular contract close-out. ,e/she would only be limited to that purpose. +ro!ect closure is the last phase of the pro!ect management process. =pon the end of implementation phase, preliminary acceptance of the pro!ect result is accomplished? yet minor items may still be open, summari,ed on a list of open points http3//www.pro!ect-management-knowhow.com/pro!ect@closure.html 2hat i think it refers to is the handing o< of the pro!ect to the department or to the manager of who the pro!ect was for. *t is the testing phase making sure we are a go no go. * have not heard of this term. 2here * work the pro!ect manager or account rep is responsible for the closing of the !ob. "his includes getting paid and fnishing any punch list items that may still be open. )ecause there is usually some type of retainage in the contract, usually ABC it can be di:cult to collect sometimes. "he !ob would still be closed as the money would then be moved to bad debt and then if collected later would fall to the proft line. * haven't heard the term either. )ut, if it is pro!ect manager then his responsibilities and task during the close-out phase would include3 - (nsure that all pro!ect deliverables have been completed and formally accepted by the customer. - 4etermine if the measurable success indicators were achieved. - Conduct pro!ect close-out meetings, both internal and e#ternal. - 2rite the fnal pro!ect report. - 4ocument and share lessons learned. Dome of the activities that need to be performed as part of the contract closeout functions are? products and services are provided to the buyer, documents show receipt and acceptance of all the contract items, there are no pending investigations or claims, all contract issues have been settled, a termination has been completed if needed, contract audits are complete, and fnal invoice has been submitted and paid. Dome of the factors tat cause a length in delay in the closure of the pro!ect/contract are same as above, for e#ample? fnal invoice has not been submitted or paid, there are investigation or contract issues that have not been resolved, fnal funds have not been received, etc. *n my e#perience, there is usually another reason behind the delaying of fnal payment. Duch as outstanding obligations, unsatisfactory deliverables or petty disputes between seller and buyer. "here are many factors that cause a delay in the contract closeout and the contract is usually considered closed after the fnal payment is made as not many buyers will fork over all the money until they are satisfed with contractual deliverables. * think that the initial problem with contract close out is that both parties want to make sure that they have all that they need in order to bhe satisfed. *t is kind of like saying goodbye to yoru girlfriend at the end of the night. 5either party want to walk away. !hat is a close-out function or responsibility (i.e.# something that needs to get done) that is often overlooked or forgotten" * think one of the most important close-out functions or responsibility that may be overlooked is the Eesson Eearned document. "his is an important document that may be very helpful in contracts to come. (very contract must have had some learning curve, so it is important to document success as well as failure. +er our notes .%nce a contract comes to an end, it is important for the pro!ect manager and contract adminstrator to close out the pro!ect.. which is why a close-out manager is hired in order to .make sure all of the "s are corssed and *s are dotted. also per out notes a procurement audit should be done as well as it is to complete the contract fle.