FAR 4.804—Closeout of contract files.

Closeout by the office administering the contract.

FAR 4.804-1 sets the time standards and basic conditions for closing out contract files in the office that administers the contract. It covers when files are considered closed for simplified acquisition procedures, firm-fixed-price contracts, contracts that require settlement of indirect cost rates, and all other contracts, and it ties those deadlines to either receipt of evidence of receipt of property, final payment, or physical completion. The section also explains that the contracting officer must use the closeout procedures in FAR 4.804-5 for most closeouts, but may tailor those procedures to reflect how much administration has already been performed. It further encourages use of quick closeout procedures under FAR 42.708 when appropriate to reduce administrative cost and deobligate excess funds. Finally, it identifies two situations where a contract file may not be closed: when the contract is in litigation or under appeal, and when termination actions are still incomplete. In practice, this section is about timely administrative completion, proper documentation, and avoiding premature closeout that could interfere with disputes, terminations, or final financial reconciliation.

Closeout of the contracting office files if another office administers the contract.

FAR 4.804-2 explains how the contracting office closes its own contract file when another office, usually the contract administration office, has been responsible for administering the contract. It covers two different closeout paths: simplified acquisition procedures, where the file may be considered closed when the contracting officer has evidence of receipt of property and final payment unless agency rules say otherwise, and all other contracts, where the file is closed as soon as practicable after the contracting officer receives a contract completion statement from the contract administration office. The section also requires the contracting officer to verify that all required contractual actions are complete and to prepare a written statement confirming that fact. That statement serves as the authority to close the file and must be placed in the official contract file. In practice, this provision is about ensuring the contracting office does not close its records prematurely and that there is a documented basis for file closure when administration has been handled elsewhere.

Closeout of paying office contract files.

FAR 4.804-3 is a very short closeout rule focused on one specific administrative file: the paying office contract file. It addresses when that file is considered ready to be closed and identifies the trigger for closeout as the issuance of the final payment voucher. In practice, this section is about the last step in the payment process, not the broader contract closeout actions handled elsewhere in FAR Part 4, such as property disposition, final invoice review, or completion of all contract administration tasks. Its purpose is to ensure the paying office does not keep an open file after the final payment action has been completed, which supports accurate records management, file control, and timely administrative closure. For contracting personnel and finance staff, the rule means that once the final payment voucher is issued, the paying office’s contract file should be closed without delay.

Physically completed contracts.

FAR 4.804-4 defines when a contract is considered "physically completed" for contract closeout purposes. It covers two main subject areas: the standard rule for supplies and services contracts, including required deliveries, Government inspection and acceptance, completion and acceptance of services, and expiration of any option periods; and a special rule for rental, use, and storage agreements, which are physically completed either when the Government issues a notice of complete contract termination or when the contract period expires. The purpose of the section is to establish a clear milestone for determining when a contract has reached the point where closeout actions can proceed, such as final administrative review, property disposition, and file closure. In practice, this rule matters because physical completion is one of the key triggers for contract closeout timelines and helps contracting offices decide when a contract is ready to move from performance administration to final settlement and archival processing. It also prevents premature closeout by requiring both performance completion and Government acceptance, where applicable, before a contract is treated as physically complete.

Procedures for closing out contract files.

FAR 4.804-5 explains the administrative closeout process for physically completed contracts and the documentation that must exist before a contract file can be formally closed. It covers who starts closeout, how the contract administration office must review contract funds and identify excess funds for possible deobligation, and the specific completion items that must be verified before closeout can proceed. Those items include disposition of classified material, clearance of final patent and royalty reports, resolution of value engineering change proposals, plant and property clearance, settlement of interim or disallowed costs, price revisions, subcontract settlement, prior-year indirect cost rate settlement, termination docket completion, audit completion, contractor closing statement completion, final invoice submission, and contract funds review. The section also addresses the special patent-report procedure, including the 60-day target for clearing final patent reports and the contracting officer’s duty to notify the contractor and consult legal counsel if the report is not received. Finally, it requires a formal contract completion statement with specified data elements and directs where the signed statement must be filed. In practice, this section is the checklist and recordkeeping rule set that helps agencies ensure all financial, property, legal, and administrative matters are resolved before closing a contract file.