Transformation of Department of Defense Contract Closeout

Abstract

The Department of Defense (DoD) has tens of thousands of contracts physically completed but not formally closed-out. At issue are potentially millions of dollars that are obligated on those contracts which could be deobligated, thus making them available for use by DoD. At the request of the Deputy Assistant Secretary of the Navy for Research, Development and Acquisition (ASN(RD&A) Acquisition Management)), our team was formed to chart the current contract closeout process and to recommend ways to improve and transform the process while reducing the current backlog of physically completed contracts. This report identifies the steps necessary to affect contract closeout once a contract becomes physically complete. Utilizing data from available DoD and non-DoD sources and interviews from personnel managing and working within the contract closeout process, our team (1) identifies the major causes preventing contracts from closing in a timely manner, (2) provides recommended actions to reduce the size of the overaged inventory of physically completed contracts, and (3) recommends modification to the existing closeout process to include pre-award and administration period actions in order to reduce the number of contracts that become overaged.