Completion & Closeout
Sub-Sections 6.1-6.6

Section Six: Contract Completion and Closeout

6.1 Key Information

6.1.1 Contract Completion And Closeout Phase Process Flow

The Contract Completion and Closeout phase of the procurement lifecycle is defined as the procedural and administrative tasks required to change the status of a contract from “active” to “complete”.

The following are the major steps in the process flow for the Contract Completion and Closeout phase:

Completion Closeout

6.2 Verify Final Receipt

6.2.1 Contract Completion

For contracts where all obligations have been met, including the finalization of all legal, administrative, and managerial tasks, the contract is considered to be complete.

It is helpful to have a contract closeout checklist prior to providing final acceptance of the contract. Tasks that support contract completion include:

  • Verifying all contractual obligations have been completed
  • Verifying all contractor invoices have been submitted and paid (except final invoice)
  • All testing reports received and analyzed
  • All inspections completed and accepted
  • Any government-furnished property has been returned
  • Closing subcontracts by the seller
  • Classified materials, security badges/keys returned/accounted for
  • Agreeing that no claims, issues, or unresolved matters exist on the contract
  • All required contract audits have been completed
  • Out-brief with contractor’s personnel/management
  • Contractor performance evaluation completed by contract administrative team
  • Obtaining all warranties or other final deliverables
  • Signing a formal notice of contract completion
  • Complete punch list items
  • Certificates of substantial/final completion, as applicable
  • Any other administrative or jurisdictional requirements

6.3 Document Final Acceptance

As applicable, acceptance is a formal acknowledgement that the contractor’s performance was in total agreement with the promises made in the contract; that all requirements were met; all deliverables/goods have been received and accepted; and, all invoices have been received and paid with exception of final payment.

Contract acceptance can be formalized in a letter or other communication to the contractor stating that the contract has been accepted and is complete.

6.4 Issue Final Payment

In accordance with HRS §103D-310(c), final payment can only be released to business entities who are compliant with the laws governing firms conducting business in the State of Hawaii.  Typically agency buyers will verify compliance via Hawaii Compliance Express, an online, one-stop website to check vendor compliance, or receipt of equivalent hard copies prior to final payment.  Final payment are to be made in accordance with guidance provided in Section 5.7 of this Procurement Manual. The invoice for final payment may be submitted by the contractor at any point toward the completion of the contract; however, the contract manager should not approve payment of the invoice until they formally accepted the goods or services delivered in accordance with the contract terms and that all items on the Closeout Checklist have been completed and the vendor is compliant in accordance with HRS §103D-310(c).

The Contract Manager should ensure that any deficiencies or issues found prior to acceptance of the goods, services or construction.

6.5 Closeout Contract

Contracts for the provision of goods may not specify an end date but obligations under the contract are usually considered to be complete following the delivery and acceptance of the last item(s) required under the contract. Acceptance implies that the items delivered have met the agreed upon standards.

Contracts for the provision of services may specify an end date when all contract deliverables have to be provided. The contract ends if the services are satisfactorily completed by the due date.

In both service and goods contracts, contract closure should be completed as soon as possible after all commitments have been met.

6.5.1 Contract Files

Each State agency will maintain records necessary to support each purchasing and contracting transaction. All contracts, regardless of complexity or dollar value, must be properly documented with a complete record of all contracting activities. At a minimum, procurement files shall be retained in accordance with the document retention requirements set forth in HRS §103D-320 and contain the documents required by HAR §§3-122-58 and 201.

6.6 Lessons Learned Review

It is a best practice to conduct a review of lessons learned, that is, learning from experience and identifying the successes and the areas for improvement and how these can translate into improved contract management and project delivery in the future. The lessons learned review should be focused on facilitating a forum for discussion amongst contract parties with input from key stakeholders.

The principal objectives of the review are to:

  • Identify learning opportunities for application in the supplier’s execution of future contracts;
  • Identify areas for improvement in client contract documentation and processes;
  • Identify learning opportunities for improvement across State and agency contracts; and
  • Provide suppliers with the opportunity to give feedback to the State and purchasing agency.

A lessons learned review should be performed for all major contract at contract closeout. The purchasing officer should meet with State and contractor stakeholders to discuss the contract and project, identifying what went well and not so well and how these findings can improve contractor and State execution of future contracts and projects. The purchasing officer should then draft a report of the findings and provide it to the stakeholders interviewed for review and comment. Once comments have been incorporated, the report should be included in the contract file, and a copy provided to the CPO. The CPO will use these reports to identify patterns and opportunities for improvement within the State.