Pay BillJonathan Hall: Okay, everyone. This is a 5-Minute Warning. We will be starting in 5 minutes, so,
Jonathan Hall: Good morning, everyone. My name is John Hall. I’m a member of BMSS here in Huntsville. Before we dive in, let me share a little bit more about who we are here at BMSS. We were established in 1991. We’ve grown to be one of the top 70 CPA firms in the country, with over about 400 employees across our family of companies.
Jonathan Hall: We assist clients in a variety of industries and solutions, providing accounting, advisory, IT,
Jonathan Hall: payroll, PEO, and wealth solutions in an effort to bring our clients peace of mind and provide exceptional client service.
Jonathan Hall: Additionally, we are an independent member of the BDO Alliance, one of the nation’s largest associations of accounting and consulting firms. Through this alliance, we’re able to combine the personalized service of a local firm with the resources and reach of a nationwide network, ensuring our clients receive the very best of support available.
Jonathan Hall: To learn more about us, visit us at BMSS.com. First, there’s a couple of housekeeping items just to mention to you. If you have any questions during the webinar, feel free to use the Q&A button located in the Zoom control panel at the bottom of your screen.
Jonathan Hall: We’ll answer all the questions at the end of the presentation as time allows. If we do not get to your question, we’ll try to follow back up to you via the email address that you provided to us.
Jonathan Hall: There will also be polling questions. If you’d like to receive CPE credit, please answer those questions as you pop up. Megan is always really great at saying, hey, there’s another polling question.
Jonathan Hall: We’re very fortunate to have Meghan Clark and Brendan Kelly with us this morning, to talk about government contract closeouts and why they’re important to your business.
Jonathan Hall: guys, based upon the amount of registrants that we got for this, this topic looks to be very much pressing on most people’s minds, so I know that everybody’s gonna leave here with exactly what they wanted to get out of this webinar.
Jonathan Hall: Before we get started, let me give you a little bit of background information on our two speakers. Meghan Clark is a highly experienced government contracts manager with over 15 years of expertise in federal contracting. She’s based here in Huntsville, Alabama.
Jonathan Hall: Meghan’s career began in 2009 with Canberra Corporation. Since then, she’s built a comprehensive background in contracts, subcontracts.
Jonathan Hall: business development, program management, proposal development, and closeouts. She has extensive experience working with various Department of Defense services, as well as civilian agencies, such as Department of Homeland Security, NASA, the VA, DLA, MDA, and other.
Jonathan Hall: Her work spans both commercial and international contracts, and she’s highly knowledgeable in navigating the FAR, DFARS, GSA guidelines.
Jonathan Hall: In addition to her role here at BMSS, Megan is an active leader in the contracting community, serving as Vice President of the NCMA Huntsville Chapter and Director at Large for, Women in Defense. She holds a degree in business management with a minor
Jonathan Hall: in Contract Management from Athens State University. Thank you, Megan, for, doing this today. Also, just, gonna hit, talk a little bit about Brendan as well. Brendan Kelly is a contracting professional.
Jonathan Hall: With more than 10 years of experience in commercial contract review and negotiations, complemented by over 2 years of focused experience in government contracting as the NCMA Huntsville president-elect.
Jonathan Hall: Brendan is engaged with his local community and is committed to the growth of contracted professionals around him. Brendan brings a practical, business-minded approach and is committed to his professional mission by fostering collaboration, strengthening educational opportunities.
Jonathan Hall: and supporting the continued growth of the contracting profession. Megan and Brendan, welcome. I’m gonna let you guys take it from here. Thank you so much for taking time out to develop this webinar, and also to host it today.
Meaghan Clark: Awesome. Well, good morning, everybody. Today we are going to be talking about contract closeouts. Why does it matter? What’s the timeline? Some good pitfalls.
Meaghan Clark: That we’ve seen in our experience, and there is no time better than to have this, webinar until now, because it’s the end of the year, government year, and so, you know, you might be seeing a lot of those closeout requests, and we’re going to kind of walk through why you’re receiving those, why it’s important to be timely, and
Meaghan Clark: And just kind of let you know.
Meaghan Clark: good practices and tips and tricks, if you need those. But just better break it down and help you understand the whole process. So, next slide.
Meaghan Clark: So this is today’s agenda.
Meaghan Clark: Sorry, I gotta move this thing out, my way.
Meaghan Clark: go back to the next… I’m sorry, can you go back to the next slide? Sorry. So, today’s agenda, we’re going to talk about what is a closeout, why are closeouts necessary, how do you… how do you avoid the risk, when to begin a closeout, the traps in closeouts, and best practices, and
Meaghan Clark: In each chapter, we’re kind of going to break down some examples and go through that for the far. Next slide.
Meaghan Clark: Okay, so today’s training goal is Closeout is for you guys to understand, it’s not paperwork. You will see that it is paperwork. If you have done a closeout, you understand it is paperwork, but it’s not just paperwork. There’s a bigger picture to closeouts, and why it’s important to have timely
Meaghan Clark: good, organized files and documents for Closeout. So,
Meaghan Clark: We’re gonna go through, like, a development, a clear understanding, how to avoid the risk, common pitfalls, and then just so that by the end of this webinar, we hope that you have more confidence in your closeouts, confidence in your… your policies and procedures for closeouts, and why they’re just important.
Meaghan Clark: Next slide.
Meaghan Clark: I’m gonna hand it over now to Brendan.
Brendan Kelly: Hey guys, thanks so much for joining us today.
Brendan Kelly: I think it’s important to start off with understanding what a closeout is before we move into some of these things that we can, you know, help prevent in Closeout process. So, here’s your FAR definition for it, the administrative process that confirms all contractual duties are complete.
Brendan Kelly: And the file can be officially closed. So, let’s go to the next slide, because I was… this one’s a fun one. Hope this one doesn’t fall flat.
Brendan Kelly: I’m a big Game of Thrones fan, and I was cackling when I made this one. Those that are familiar with Game of Thrones, you know who Hodor is, right? So, he’s a guy that gets PTSD from holding the door open. Well, this is his contract’s cousin, Clodor.
Brendan Kelly: He, he has PTSD from people not closing out properly or keeping their file structures clean. And those that have, you know, worked with Closeouts before, I’m sure some of you rather face a dragon from Game of Thrones than deal with some of these de-op sheets, right? So…
Brendan Kelly: Let’s get into it really quick. Closeout’s just your final control point. Again, it’s the coordinated process of documentation. How do we do this? What’s the control piece? Where’s our correspondence back and forth? Where’s the funding come from? Does it match? But it starts with performance being accepted by your officers.
Brendan Kelly: The final invoice being closed, reviewing and, reviewing your funds, excess de ops, and true-ups. That’s gonna be where we spend a lot of our time in our closeout process.
Brendan Kelly: As we go through the funding process, that’s where you’re gonna spend most of your time, you know, making sure that your systems match, that your cents and pennies match, and if they don’t, where’s the documentation proving the differences?
Brendan Kelly: A lot of our contracts that we see also have property patents, royalty.
Brendan Kelly: And then the Closeout statement. That’s your official, here’s the document, GFP’s been returned, everything’s done, clearances are full. The contract office, the government, and the contractor all agree
Brendan Kelly: that we got what we wanted. The process was done, we delivered the process, the funds were provided and closed out.
Brendan Kelly: And the product is now officially done. So when we look at this, don’t turn your contracting administrators into Clodores. Let’s make sure that we’re doing this the right way. Alright, hopefully put some of this in the chat if you like Game of Thrones, but I’m a huge nerd, and this one really cracked me up.
Brendan Kelly: But if you go to the next slide.
Brendan Kelly: We look at, normally, what starts the actual closeout process, and we’ll go into it more, because you shouldn’t start when this happens, but the closeout process officially begins with what we call a trigger, and that’s generally a physical completion of the contract. So, if you have a supply contract, for instance, that’s going to be when your deliveries are completed, everything’s been accepted and inspected.
Brendan Kelly: And that’s your process. I know a lot of contracts I work with are services contract, though.
Brendan Kelly: So your services contractors are really gonna be, the trigger’s gonna be started right when the performance is completed and accepted by the government. So your, you know, your pop-in date, those processes, services done.
Brendan Kelly: But then, unfortunately, we also have, at times, closeouts due to termination. So, whether it’s a, you know, complete termination notice from the government to the contractor, that’s your trigger to start that closeout process for that one as well.
Brendan Kelly: But what we want to get into today is not necessarily with the closeout, it’s going to be how do you prepare to be ready for when this happens? So if one of these triggers does pop up, you don’t want to be caught,
Brendan Kelly: missing some of those areas, or having to catch up and spend additional time and money on your end to make sure it’s done. So how do we get to that piece? So, if you go to the next slide.
Brendan Kelly: It is a team effort. So, when it comes to a closeout.
Brendan Kelly: You know, different companies operate in different formats. Larger companies have entire orgs dedicated to closeout, and I know businesses that have a single person that handles it from beginning to end. So it really depends on the niche that you’re in and the focus that you’re looking at. But regardless of your company size, the whole closeout process is a full team effort.
Brendan Kelly: And just like any sports analogy, you gotta have somebody lead the way, you know, be that quarterback process. So these are the areas of…
Brendan Kelly: starting point. So your Contract Administrative Office is going to initiate the closeout. So they’re going to send you the notice of Closeout piece. They’re going to help track the funds and the required clearances and send that information to you.
Brendan Kelly: In my personal experience, your contract administrator, that’s gonna be your quarterback, the one gathering all the documents from your financial side, communicating back to the contract office.
Brendan Kelly: And really coordinating a lot of these pieces for you. Again, that could be a different hat in your company, but having somebody centralize that information is really, really important to ensure completion versus missing some of those steps.
Brendan Kelly: hopefully you have a great relationship with your core. I think that’s really important and vital as you go through this process. That makes Closeout a lot simpler as well. They confirm the acceptance and your performance completion.
Brendan Kelly: And one of the areas that I really like to focus on when it comes to Closeout is that correspondence piece. So as we document, as we communicate, as we make changes throughout the lifecycle of the contract, storing that correspondence along with those changes is so vital when it comes to some of these questions at the end of the closeout process.
Brendan Kelly: Having that confirmed acceptance right off the bat clears up a lot of those categories.
Brendan Kelly: And I’m sure some of you guys have dealt with course changing, or contract administrators changing throughout the lifecycle of the contract. This really helps you keep a clean portfolio ready to go throughout your contract files, and allows you to keep the process simple when it comes down to, you know, end of the day closing.
Brendan Kelly: Now, your finance paying office. If you’re not paying these guys enough, I need you to, because this is where the bread and butter of Closeout, in my opinion, really shows its worth.
Brendan Kelly: We have, you know, a lot of closeouts where
Brendan Kelly: hundreds of… hundreds of millions of dollars, hundreds of lines of funding. And then some of these were maybe purchased from another company 10 years ago, and the contract is now closing out. And so you’ve got to cross-reference two cost accounting systems. Did the lines match? Did we fund on the same levels? Do we have those things matched up perfectly?
Brendan Kelly: And if we don’t, do we have, again, the documentation as to why? So this is where I love to spend a lot of my time. I love spreadsheets, I know that sounds awful, but I really enjoy looking through the numbers, you know, breaking them down individually.
Brendan Kelly: And, it’s like an investigative search. So, when you’re looking through that process, I like to really, really spend a lot of time and ensure that every penny and dollar matches so we can close out effectively with the government.
Brendan Kelly: And then your contracting officer, once everything is finalized, closed, de-obbed, true up.
Brendan Kelly: They give you the final say. They give you the, this is done, here’s your completed packet, and…
Brendan Kelly: we move on. We’ll talk about storing that information later, but this is the team process that’s going to help you get through a closeout, and it’s really ensuring that you have a static, organized process throughout, great communication with your partners, and then moving through the, you know, the process seamlessly, so…
Brendan Kelly: If you go to the next slide, please.
Brendan Kelly: I’ll send it back to you, Megan.
Meaghan Clark: Alright, so now we’re going to talk about why closeouts are necessary to avoid risk. When you open files.
Meaghan Clark: you know, open files create open exposure, financial audits, claims, and all the records, and admission of, you know, risk. So, we are going to go through what that looks like, and then hopefully how we can avoid that, and, help you guys out with closeouts. Next slide.
Meaghan Clark: Okay, so open contracts leave risk on the table.
Meaghan Clark: Every unresolved item is a possible future
Meaghan Clark: you know, exception. So, we’re gonna go, you know, financial. If you have financial compliance, audit, claims, and records, right? So, financially, unused funds remain obligated, or costs remain unsettled. We… we have this in the later slides, but when I think about financial and closing out a contract, I think about it
Meaghan Clark: you know, how you have to true up your checkbook. So, you know, back in the day when we write… I still write checks, I don’t know about you guys, but I write checks still, but, you know, you write a check, and it doesn’t clear the bank, or it’s still obligated, or, you know, you…
Meaghan Clark: you’re not balancing that checkbook, right? That provides risk, and government is tax dollar money, and with it not being obligated, it’s not used, it’s not being used properly with our tax dollars. So that’s a huge risk, financially, is the unused funds.
Meaghan Clark: You know, it’s just simple math, right? Like, you have $10,000 on a travel plan, you only use $8,000 of that. Well, we need to de-ob the $2,000, give it back to the government, so they can either realign it or, re-obligate it to another contract so it can be…
Meaghan Clark: used. Growing up in contracts, it’s always one of those use-it-or-lose-it terms, and that’s why July, August, September is so, such busy months for… I mean, for closeouts, because they’re trying to
Meaghan Clark: de-obligate and re-obligate so they don’t lose it in the next year’s budget. So, financial, you know, that’s a huge… that’s, to me, the biggest risk of all of closeouts. But there’s a compliance risk, right? You know, there’s reports that your contracts that you have to… you have to complete, and in certain amount of times, you know, your release of claims.
Meaghan Clark: if there’s clearances, that need to be transferred over, I mean, that’s one of the huge things, too. Compliance, or I would… I guess I’m going to jump down to records, is, you know, you have government property on one contract, you’re the incumbent, you win the follow-on. Well, you have all your information, you still own, or you still have possession of that closeout.
Meaghan Clark: I mean, not Closeout, of that government property, but it’s all labeled with the old contract number. Well, now you have to relabel it, and close that out, and relabel it to the new contract.
Meaghan Clark: number. There’s just so many moving pieces to closeouts in general, you know, with the records and the compliance, the reports, and if you don’t do all those things well, well, then you’re going to have audit problems. You’re going to have weak evidence for audit,
Meaghan Clark: the government comes in to audit your property, and it all still has the old contract number, but you’ve been working for 8 to 10 months on the new contract, you know, that’s tracking, right? That’s going to provide a major risk for the government of tracking their materials. Same with
Meaghan Clark: Tracking their funds, you know, they want to move it.
Meaghan Clark: they have reports that they have to finalize, so there’s a lot of risk when we leave contracts open for too long, and we don’t follow the timelines per the FAR.
Meaghan Clark: for the new con… the follow-on contracts and… and the new ideas, you know, we can’t… we can’t integrate, right? Right now, there’s a huge
Meaghan Clark: conference with Integrace, with Sibers, etc, we can’t integrate new ideas into this government property if no one knows where it’s at. So, we’ll go into that later on in some of these slides, of what kind of documents to look at, or what we have to complete and sign off on, when we close out a contract, but to me, compliance records are so important, because
Meaghan Clark: where does this stuff live? Where do we stand? Did you get paid? Or did you… did you deliver the statement of work and all the seedrals, right? So that’s… that’s really important on why closeouts are important, the risk.
Meaghan Clark: Next slide.
Meaghan Clark: Okay, so we’re gonna break it down. Oh, here’s the polling question. Number 2.
Meaghan Clark: Okay, so we’re gonna break it down,
Meaghan Clark: To the financial risk, the money does not clean itself up.
Meaghan Clark: when you balance that checkbook, you gotta balance it. It doesn’t do it by itself, right? Money in, money out. So at the start of the closeout, the administrating office must review the fund, you know, status, notify the contracting office of excess funds that can be delegated. And so this is a huge process, right? What’s been obligated? What’s been spent? What’s remaining? What can we de-obligate…
Meaghan Clark: And this is where, a lot of that detailed
Meaghan Clark: Closeouts with finance… finance comes in. You know, the type of contract is so important to understand. What are your,
Meaghan Clark: what are you allowed to go back for? You know, if you have a cost plus fixed fee, and you have approved indirect rates, you know, did you bill those rates properly? You know, your G&A might be a little higher, might be a little lower. You never really want it lower, because you don’t ever want to have to pay the government back, but if it’s a little higher.
Meaghan Clark: And you close out that contract before you’re supposed to, then you’re not going to get that money back.
Meaghan Clark: But if you leave it, you know, if you get all your audits in, your ICE reports, you get your audited indirect rates, then you can go back and,
Meaghan Clark: go request the government in your final invoice pay… your final invoice for payment, those additional indirect rates, right? So it’s just so under… it’s important to understand what can be… what’s still remaining, why is it remaining, was it not used, how does that, you know, really
Meaghan Clark: How does that,
Meaghan Clark: look in the deliverables. If you said, you know, hey, we need this kind of money to produce this work, you know, what does all that look like? Did you provide your statement of work? Did you provide your seed drills, your deliverables, right? So, Closeout converts maybe dollars into documented decisions. So,
Meaghan Clark: there’s maybe dollars left on that, we don’t know why, but we have the DL of it. So now the… now the number is X, so…
Meaghan Clark: financial risk is huge in closeouts. To me, like I said on the slide before, I think it’s the number one risk, and it’s because it’s our tax-paying dollars in the government, and so we want to make sure that we’re utilizing those properly and timely.
Meaghan Clark: So, next slide.
Meaghan Clark: So then we talked about audit and record.
Meaghan Clark: So, no evidence is no defense. I’m a contract person, I’ve been a contract person for 17 years. It is audit, audit, I mean, document, document, document, and the reason why is because we have so many audits in the government. We have DCAA audits for your accounting systems, we have DCMA audits for your property system, and your PSRs, and ISO. Oh my goodness, ISO is a huge, you know, audit
Meaghan Clark: structure, and from cradle to grave, if you do not have your documents in place and clean, and clear and organized, this could cause huge audit risk. So, you know, a complete file lets a future
Meaghan Clark: a reviewer answer questions quicker. You know, Brendan notated that earlier on, you know, if you have a company, and you like to acquire other companies, and you’re constantly acquiring a company, you know, one a year or two a year, well, now you’re, you know, cross-referencing,
Meaghan Clark: SharePoint documents, you’re talking about accounting systems, you might be in 3 accounting systems for a short time, you’re trying to, you know, mitigate those over, you know, migrate those over to mitigate the risk.
Meaghan Clark: So, just complete file structure is so important.
Meaghan Clark: you know, that helps you answer the questions, why did we… what did we buy, and was it accepted? Well, if it was paid, a lot of your service contracts have the, you know, if it’s paid, then it’s accepted. But when you have the more of the, you’re building something, what documentation did they provide you to say, yes, this was received, and it’s to… it’s to specs, we’re gonna pay you at that time.
Meaghan Clark: And that helps them understand what did they pay, and why did they pay that, right? And then what obligations, releases, and clearances remain? You know, just… that helps us
Meaghan Clark: I get… in closeouts, we would get something years ago. Well, you know, Jim Bob was my program manager, and he’s no longer here, and so trying to track down, did that
Meaghan Clark: Did… did everything get…
Meaghan Clark: property get transferred over was so… sometimes so hard, and so that’s why you’ll see later on in the… just the time frames that we have to closeouts, it’s just so important that we get those timely, so that if someone does leave the company, or if they move to a different, you know, division, tracking those people down in the closeout, you know, from a closeout perspective, is… can be very difficult, but if you have a clean
Meaghan Clark: record.
Meaghan Clark: of contract documentation. It makes your audit life so much easier. I actually like ISO. I think it’s just…
Meaghan Clark: It makes you organize, it makes you have a process, and… but it also just super helps you
Meaghan Clark: make sure you’re documenting and filing things away. Your DD254s, your… just your property, right? Just your property forms, your… your invoices, DFAS pay you. It… it just…
Meaghan Clark: I cannot…
Meaghan Clark: I love cleanliness, I love organized folders, and it’s because I started my career… I started my career in PC, but then I went and spent a lot of my contracts career in closeouts, and
Meaghan Clark: You’ll see it, but it’s been a long time ago, but, you know, tracing down
Meaghan Clark: folders and documents that we would have to print them out and stick them in these cute little red and blue folders. That’s so hard if you missed an email. You know, now, thankfully, we have technology and we can just slide that email over into those folders.
Meaghan Clark: So, we love to set up clients, contracts folders from, like, a 1 through 10 is how I do it. It’s very ISO from beginning to end. It doesn’t matter which auditor comes in, whether that be a security audit or a DCAA audit for accounting. We have everything from cradle to grade, and we can just whip out those documents, and it just makes it safe.
Meaghan Clark: doing that up front helps the closeouts at the end. So that’s how I… I recommend records to be clean, clear, and just have them. Just have your records in a local, place.
Meaghan Clark: Next slide.
Meaghan Clark: this goes back to records, no evidence, no defense, right? But these are some of the documents that you’ll see in a closeout package. So.
Meaghan Clark: what I just talked about is keeping your… your life cycle of the contract, from proposal to… to award, to mods, to all the things, all the deliverable, miscellaneous expenses, all that into a folder. You know, this is then… this is the closeout package. This is what, you know, if you’re a subcontractor, your primes are going to be sending you. It’s gonna… they want to know what your… we showed that we billed you $100,000, do you agree?
Meaghan Clark: Yep, okay, we’re gonna… you’re gonna release… you’re gonna sign a release of claims.
Meaghan Clark: you’re gonna, sign that there was no patents created, you know, with the money that was provided and obligated and spent on your contract. If there are any patent reports, what does that look like? You know, if you asserted your rights at the beginning of, your contract, and you said, hey, I own this software, and now we’re gonna take this software and integrate it into something ABCX,
Meaghan Clark: And now… now, what does that look like? You can… the government wants to know what’s there, so you have to sign that patent report. There’s subcontractor releases. Did you have subcontractors? Did they do all… everything that they were supposed to do? Did they return all their government property? Did they have any patent reports?
Meaghan Clark: Final business reporting, you know, small business reporting, did you… Sure, everything was up.
Meaghan Clark: in, you know, SAM.gov now, I mean, back in the day, they had so different… many different, systems you have to log in. They’re consolidating those, thankfully, into the SAM.gov reporting, but is all that completed? You know, so we can truly close out this contract. It is done in…
Meaghan Clark: And you can shelve it as… so they’re asking you for all these closeout documents, final technical reports. Did you provide what you said you’re going to provide, you know, with your seed drills?
Meaghan Clark: And then, obviously, the property. I feel like the… I talk a lot about the property, is because I feel like people miss that. I mean, if you have a contract, and you have a government-furnished laptop, you know, you’re probably going to see, like, this little barcode, and that’s the tracking. Well, that tracking’s tied to this contract, so when you switch contracts or, you know, you cross hands in the government, that number has to change, so we have to change it.
Meaghan Clark: You have to disclose that, you have to report that.
Meaghan Clark: So this is just some examples of the type of contract document closeouts.
Meaghan Clark: Closeout documents. Whew, it’s early.
Meaghan Clark: That you’re gonna be seeing, and that we wanted you just to be aware of, if you’ve never heard of these things.
Meaghan Clark: will eventually, because you’re going to have some closeouts that you have to sign these off. And honestly, the contract is not going to be closed until these things are signed off on. Your final invoice has been submitted, release of claims, patent, all those documents have been signed, stamped, and then stored away for a couple years. So, next slide.
Meaghan Clark: Back to Brendan.
Meaghan Clark: Oh, we have an attendee check-in list over here.
Brendan Kelly: polls. I can’t… I can’t participate in the polls. I tried to click it the last time, and it won’t let me. It says I’m not allowed to, so…
Brendan Kelly: Remember, these are for your CPA credits, or CPE credits, so please make sure you’re, you’re,
Brendan Kelly: Answering the questions, if you’re… if that’s what you’re here for.
Brendan Kelly: But we touched on this a little bit earlier, when to begin a closeout, but Brendan, you said there’s a trigger. That’s when I begin a closeout, right?
Brendan Kelly: well, I’m here to tell you that that is not correct. If you’re doing it correctly, you have a great policy in place, you have procedures in place, and personally, I think the closeout begins as the contract starts, and it starts with the documentation of it. So, if you go to the next slide, please.
Brendan Kelly: So, you would not know it by my car, but my SharePoint files are incredibly clean, organized, and in place. I think that just helps everything go so much more smoothly. So, a nice process setup.
Brendan Kelly: I do almost the same thing Meghan does when it comes down to the file structure. I have the same process I use for every contract.
Brendan Kelly: And as I work with companies, I set those up as well. So we do… every contract should have the same file structure, should have the same processes in place and put into play.
Brendan Kelly: But that’s where it really begins. If you’re auditing, or you’re going through this closeout, and you’re trying to find documentation, and you’re having to shovel through a thousand different PDFs, it’s going to be a while before you’re in a place that you can, you know, successfully say, we feel confident here. But…
Brendan Kelly: If you have everything from the award process down, you have your deliverables in place, you know where your GFP is supposed to be, you have everything where it needs to be, by the time it comes to closeout, whether it’s the same people that started the contract or not, that structure’s gonna help you as a business close out super, super easy.
Brendan Kelly: In the performance process itself, I am a huge component of acceptance evidence. I know I brought it up earlier, but this is, in my opinion, one of the biggest pieces for not having to go back to the core and remind them at the end of the day, hey, remember we did this, remember you did that for me?
Brendan Kelly: This is your email documentation. These are your signed, fully executed agreements. Any, you know, notice or solicitation that comes out throughout the contract where it changes
Brendan Kelly: During the COVID years, you had the work-from-home policies come through. Those are things that have to be documented and accepted back and forth from the contractor and the Corps.
Brendan Kelly: Keeping that in place in your files is going to set you up for success at the end of the day. It takes out most of a step in the whole process, and it’s fantastic for your contract person to be presented, or to be present and ready to go to present that documentation over.
Brendan Kelly: As you’re getting closer to the con… or the closeout, though, you know that your physical contract is ending, so that termination, that trigger, is about to pop. Within the 90 to 100 day period before that ends, you want to really start looking at, you know, is this going to be a clear trigger?
Brendan Kelly: Some contracts have a built-in 6-month extension, or maybe additional processes, right? You want to clarify that that’s going to be optioned out. Is it going to end on this date? You want to look at any mods that you have.
Brendan Kelly: depending on the organization you’re working with, sometimes mods can be 60 to 90 days out. So if you sent in, you know, a rough order of magnitude for a request of funding.
Brendan Kelly: And it could be another 90 days before you see those funds come back. So what do you have in the system at the time? We’re getting close to the closeout. What do we need to close on our end prior to the physical trigger happening? And that goes for invoices, property reports, and funding as well.
Brendan Kelly: And the physical completion. That’s when your trigger happens. The contract ends. Services are done.
Brendan Kelly: We should, at that point, immediately launch a formal administration workflow.
Brendan Kelly: We have a team in place. If you have great policies and procedures, if you have these things structured into your company, this is going to be another Monday for you, and it’s going to be an easy process. But I’m a big fan in getting that workflow in place, having somebody as that quarterback we talked about
Brendan Kelly: generally, in my experience, it’s going to be your contract administrator for that contract. Working through the process, getting you set.
Brendan Kelly: For success in the next 6 to 36 months, depending on your contract type.
Brendan Kelly: And then you have your final payment. So the, you know, paying off is filed and retaining the evidence for you. Depending on the contract type, which we’ll go over in the next slide, that could be anywhere for, you know, 2 years, 3 years. So as you look through that process with your indirect rate, sometimes that extends out the process and ensuring that those rates are finalized. So…
Brendan Kelly: the closeout does not begin when the trigger happens. I think that’s one of the biggest issues I see in working closeouts, is we don’t start the process until there’s a need.
Brendan Kelly: I’ve even seen where we don’t start the process until DCMA is hounding down your neck, trying to get this process closed out, and that’s not where you want to be. You want to be in a much better situation. You want to have a clean, organized process, and I think that’s going to make your company look a lot better on the end of the day as well, so…
Brendan Kelly: If you go to the next slide for me.
Brendan Kelly: I’m gonna talk about some of the contract types and the closeout process. So…
Brendan Kelly: All contracts have a closeout process. They differ based on the type of themselves. So, it’s really important that you don’t treat every contract the same as you go through your closeout process, because they are drastically different, and the approaches and the completion process are drastically different.
Brendan Kelly: So, keep in mind that these times are now. This is your current timeframe.
Brendan Kelly: These are always open to change, but currently, from the far, these are your contract timeframes that we’re looking at. So, firm fixed price, which a lot of our companies here in Huntsville do a lot of FFP pricing, 6 months after that physical completion trigger is when the closeout process is expected to be completed.
Brendan Kelly: I say expected to be completed, because a lot of times we don’t reach that time frame. But again, if we have a great process and procedure in place, that’s going to be an easy hit for you and your company.
Brendan Kelly: all… well, go ahead and skip to the third… I should have done the third one second, but, anything with a cost plus, fixed fee, anything along those lines, you’re gonna have 36 months after the evidence of physical completion. So once your trigger hits, 36 months is when that contract is expected to be closed out. And the reason that’s extended down, or extended out in the process.
Brendan Kelly: is, like we talked about earlier, some of those indirect rates with the DCA audits are time-consuming, and getting those final rates, getting your subs, final invoices with their indirect rates, that’s a timely process, and so we and the government completely understand that.
Brendan Kelly: And that process is going to be extended, so you have more time on your Cost Plus contracts to really finalize everything.
Brendan Kelly: But all other contract types, currently, would be a 20 month after trigger. So, I’d say trigger, that’s your physical completion. 20 months is your time frame there.
Brendan Kelly: And then, with this… sorry, I saw a question in the chat at Squirrel. So 20 months after the physical completion for all their contract types. Again, this is when it’s expected to be done.
Brendan Kelly: In my experience, in my line of work, I usually get closeout requests well past these dates, because the companies I’m working with don’t have a great process or procedure in place.
Brendan Kelly: And now they’re literally getting emails and calls daily from DCMA asking when this is going to be closed out. They utilize somebody like me to come in and try to clear up that process a little more quickly.
Brendan Kelly: But it’s really, again, important that you know the contract types you have, and I highly recommend having
Brendan Kelly: a checklist per contract type as well. So, in your policies and procedures, getting a checklist for FFP, for CPFF, having it ready to go, so when that trigger happens, we can go check one, check two, check 3. Do we have everything in place? So…
Brendan Kelly: If you go to the next slide…
Brendan Kelly: Awesome. I’m gonna send this one back over to Megan for our biggest traps.
Meaghan Clark: Alright, so we’re going to talk about the trouble is usually not one big problem, it’s a collection of small, unresolved items. If you don’t do your due diligence, and you don’t do a good job up front.
Meaghan Clark: all the things that we’ve said thus far, clean documentation, staying on top of things, you know, as things are delivered and signed off on, you know, there’s going to be some traps, right? So, next slide.
Meaghan Clark: So these are the most five common Closeout traps. Again, one, time. Waiting till the end. If you leave, closeouts to the end, and you’re not actually keeping up with your contract folders, you’re… you’re staying on top of all your deliverables, then that’s gonna be…
Meaghan Clark: time’s gonna run out, and then DCMA is gonna come, and they’re gonna want their money back, and you’re gonna be scrambling. So, you know, waiting till the end, and not keeping good files, you know, you have people leaving.
Meaghan Clark: I can’t tell you what I ate last week, so you have memories fade, and the supports get harder, right? So you’re trying to… who… Jim Bob, right, is not… not in your division anymore, so you’re having to track down who can sign off for that division, who, you know, if you kept good
Meaghan Clark: active documentation, then, that wouldn’t be a problem. So waiting to the end is not the answer. It starts at the time of the contract award.
Meaghan Clark: Number two is unresolved final invoices. Payments and funding cannot be reconciled cleanly if you wait, but at the same time, you might have to wait, but this could be just something that, you know, takes
Meaghan Clark: more time for your closeouts. If you do have a cost-reimbursable type contract, and you’re… you have an approved accounting system, you can put your G&A on travel, right? You can put your G&A or M&H on… on subcontractors, so…
Meaghan Clark: until you have your ICE submission and approved audited rates from the government, that might prolong you submitting your final invoice. But that is, to me, that’s the… one of the longest
Meaghan Clark: I would say number two, I’m gonna… I’m not gonna jump too far down, but there’s… there’s two that are really time-consuming, that are traps that I’ve seen in my career in closeouts, but it’s… it’s the invoicing, right? Can I… can I invoice for that extra? Some of your contracts, right, withhold 10 or 15% of your fee.
Meaghan Clark: Well, once you have that… once you submit, and you, you know, deliver your final deliverable, and you can bill the rest of that 10% or 15% fee, well, that’s… you’ve got to do that, right? Well, then now you have your indirect rates you have to look at. So, there’s a lot of things that go into the final invoice, and what does that look like? But those can be the traps that kind of prolong your closeout process. There’s a lot of moving pieces in the fees. If you have an award fee.
Meaghan Clark: You know, it’s based on your… your…
Meaghan Clark: performance. If you have a, just a fixed fee, but they’re withholding some of it until you, you provide your full deliverable.
Meaghan Clark: Indirects.
Meaghan Clark: Right? So that… that’s huge. Unresolved final invoices, but there’s reasons for that. That’s gonna prolong. That’s a trap.
Meaghan Clark: Number 3 is missing acceptance evidence. You know, Brendan’s really heavy on that, because it’s… it’s important. If I have a… if I have an award fee, or I have a fixed fee that I’m having to withhold some of that fee until I show you that I did the work.
Meaghan Clark: you’ve signed off on it, whatever that looks like per your contract is different. If you’re literally making helicopters and you’re having to deliver that, did they actually receive that helicopter? If you’re doing software, can you show the license key that it was delivered, time-stamped, and all that? That’s evidence. Without that evidence.
Meaghan Clark: you’re gonna, you know, it’s gonna prolong and make this… this closeout process a lot painful for you. So,
Meaghan Clark: evidence is so important, and the evidence is the contract documents, making sure they’re organized and clean. I don’t… I cannot say that enough. Number four, property security and IP left open. You know, we keep honing in on this, because I feel like there’s just… these are the main things that
Meaghan Clark: we’re not thinking about, because we’re in the life of the contract, we’re just trying to make sure we hit our monthly deliverables. We have cleared employees on that we can bill and get paid for. We’re providing the actual work. But some of this stuff
Meaghan Clark: okay, it’s over, and we just… we move on. Well, it’s not over. There, you know, the property has to be transferred, the security, you know, if you have a CAD card,
Meaghan Clark: that card is associated with that contract. When that contract’s closed now, you have to transition that over to the new contract. There’s just so many steps in the closeout process,
Meaghan Clark: But number 5, number 5 is the one, it gets its own slide next, is the sub closeout being complete. As you, you know, you might be a small business, and you might not have a lot of subs, but when you do become more of a prime, and you have subs.
Meaghan Clark: That is the number one. So you can’t reconcile your own invoicing and close that out without reconciling theirs first. They’re gonna go to the next slide, because, like I said, it gets its own slide.
Meaghan Clark: Because this was the main, pain point for me, is closing out
Meaghan Clark: a subcontract. If you… you have to do that first. You have to do that first.
Meaghan Clark: Because if you award your subcontractor a cost plus fixed fee, or a cost-reimbursable type contract, and they have an approved accounting system, and they’re charging you their G&A or M&H on top of their cost, then they have to do the same thing that you have to do. You have to give them, you know, you have to give them enough time to re…
Meaghan Clark: re-evaluate their indirect rates, and then invoice you their final invoice. And then, so you have to get all their paperwork done.
Meaghan Clark: And it’s really important that as you do get bigger and you are doing a prime, more of a prime contract, that you have a closeout package, so that way when… if it closes on… if it closes on July 31st, August 1st, you know, you probably should be starting that closeout process, making sure you send all the documentation and let them know, hey, we have so many days to get this closed out, here’s the documents so far. It’s just really important to have that closeout package as a
Meaghan Clark: prime to give to your subs, because when the government, the DCMA, comes to you to close out your contract, you’re not going to be able to do that until your subs are closed out first. This is the most… I feel like this is the
Meaghan Clark: the step that gets missed the most, and then you close out to the government, and you’re like, oh yeah, you know, we’re good. We’ve only billed this, we agree, we’re closing out. Well, then you have your sub ABC coming along, and they’re like, hey, I got my indirect rates. You know, yeah, it’s been a…
Meaghan Clark: 8 months later, but that’s how long sometimes it takes, and we’re gonna now bill you. Well, you didn’t do your due diligence of closing out their subcontract first, and now they have that right, legally, to bill you the difference. So, if they’ve been charging you a 10% G&A, and it’s a 12%, well, guess what?
Meaghan Clark: they are gonna get… they get that 2 extra percent, right? So they’re gonna want that money, that’s what… and now you’ve already closed out your… your contract, and you can’t get that money from your government. So, whatever you do first.
Meaghan Clark: in the actual closeout process. I know it starts at the time of the award, but once the peer performance is over, and you’re actually starting the closeout documentation, do not do anything until you talk to your subs.
Meaghan Clark: That’s a, like, on our contract closeout checklist, the first question is, are there subs? Yes or no? If yes, then you gotta do that first before you even think about anything on your side, because your invoicing is not gonna matter until they… your subs invoice you. That’s gonna change your invoicing, right? So, I think this is,
Meaghan Clark: a huge…
Meaghan Clark: factor that you just gotta remember as you get bigger, as you have subs, close them out first before you think about anything else, because you had to make sure that you’ve… you’ve collected their government property, that you’ve transitioned off of their CAD cards, that you’ve done their patent. They… they don’t want to claim any patents on your subcontract, so then you don’t have to flow that to the government. So, this is the most… this is… this is something that, like, for 2 years, I worked in closeouts. This is…
Meaghan Clark: this was a long process, and I can tell you it’s a long process, because back in the day, we had a folder, like, we did the red… we had red and blue folders. Red folders were prime, blue folders were subcontractors, and, let me tell you, that was fun, trying to close out a subcontractor. We would send certified mail.
Meaghan Clark: And we would stick these little certified mail stickies on that, and we’d give you 3 chances, because we have a deadline to DCMA, and so we’d give you 3 chances to… to answer our closeout package. And if you didn’t, we would send you an official letter saying, you know, we have
Meaghan Clark: requested this information from you 3 times, here’s all the dates, here’s where you received our certified mail, because once you open it, you have to sign off on it, and then we get that back.
Meaghan Clark: So, we know that you’ve received it, you just haven’t returned it, so we have to close it out as is. This is what we’re showing, and this is what you’re going to get paid, and then we can move on, because again, it’s a long process, but it has to be done before you can truly close out your prime contract, unless you’re willing to take that risk on for your company, and eat the cost that might happen when they get their audited rate. So.
Meaghan Clark: Very important.
Meaghan Clark: I start here when you do your closeout. Next slide.
Meaghan Clark: So, these are some of the hard stops, like, when do you not want to close out? You know, contract files should not be closed if the contract is in litigations, and appeals, or termination. They’re just some things that are, you know, if they’re still unresolved, you want to make sure you get those things resolved. You know, past life, I was going through litigation with a prime that just didn’t pay us, and they were…
Meaghan Clark: tens of dollars, we finally had to stop work, and we had to sue them, and so we were in litigation. Like, there’s no way I’m going to close out my contract, because there is no final invoice, there’s no documentation, because we’re invoicing you, but we have not been paid for this. And so that’s also part of the whole closeout process, is we invoiced
Meaghan Clark: $100,000, we were paid $100,000. Cool. Yep, we’re gonna find that release of claims. So if you’re going through a litigation, whether it be because you’re not being paid, or, there’s a patent, you know, if you’re… you took your software and you’re integrating it into something with the government, and the government’s trying to steal it from you, and you’re having to stop work, like, that’s…
Meaghan Clark: Can’t close out a contract. So these are some of the hard stops that,
Meaghan Clark: that could stop you from a closeout, but I don’t think a closeout will be initiated if any of these are coming,
Meaghan Clark: Or an issue. But if you’re going through a termination, you know.
Meaghan Clark: per your contract, you have your own closeout clauses and closeout process, but if you’re going through a termination for whether that’s convenience or default, that kicks in its own closeout, process. So just make sure that you’re aware of what your contract says, and if you do get terminated for whatever reason, Doge terminated a lot of contracts last year, right? It was for convenience, so there was… you had so many
Meaghan Clark: to submit your final invoice and do all these things, produce XYZ, and that changes completely. It provides a different process for termination versus just a regular closeout process.
Meaghan Clark: So when in doubt, document and sign an owner, rather than letting the file drift. You want to make sure that you just stay ahead of the game. If you are going through any of the… just document, document, document, you know, that process, if it’s different than what the contract says because of these reasons.
Meaghan Clark: Next slide.
Meaghan Clark: Okay, so this is quick closeouts. So we talked about, you know, the type of, you know, there’s closeouts, depending on your contracts, your contract types, firm fixed price are a lot quicker, T&M, and it depends on if you have cost reimbursable cleanse that you put G&A and stuff on, but…
Meaghan Clark: cost plus fixed fee are going to be your longer closeouts. But there’s this thing called quick Closeout, and per the FAR, it authorizes this method that allows the government to close out certain physically completed, y’all learned about that earlier, physically completed cost reimbursement contracts before final indirect cost rates.
Meaghan Clark: are established for the contractor’s physical year. So, this just, you know, why quick Closeout exists? If you have a contract that falls in some of these
Meaghan Clark: bullets, negotiate that into your subcontract. If you know that you don’t have an approved accounting system, and you’re not gonna try to…
Meaghan Clark: go back and change, you know, with your indirect rates and change and get fee and all that, make… try to negotiate quick closeouts in there. I mean, it’s there for a reason, and I think, as a closeout person, I love that there’s a quick closeout process in there. Instead of having to wait, you know, you… you go agree. So, why quick closeouts? Normally, a cost type contract cannot be fully
Meaghan Clark: closed until there’s a final indirect rate, the contractor submits a final voucher, and so this process can take years, right? I mean, when I started, it…
Meaghan Clark: it… I was closing out contracts 6 and 8 years prior to that, and so with the quick closeout procedures being in your subcontractor and in your prime contract, then, that helped.
Meaghan Clark: that helped get that… those documentation closed and moved on. And then once it’s done, it’s shelved, you don’t want to think about that anymore. What I hated the most is, man, this has been done for 3 years, and now I have to go back and remember what we did and why we did it, and, you know, these people aren’t here. So, Quick Closeout is a great option. You know, look at… when can… okay, so when can quick closeouts be used? So, it’s under FAR 42.708.
Meaghan Clark: The contract is physically complete, the amount of unsettled indirect cost is considered relatively insignificant. So, if it’s, like, a year that’s 11 and…
Meaghan Clark: 11.5%, and you get your audited rates in 11.75, like, are you really going to go back and get that .725? So you can quick close out and just kind of eat the difference, and you can make that decision, right? The contracting officer determines that the… using estimated indirect rates are appropriate versus final audited rates.
Meaghan Clark: And, the contracting officer has the discretion to decide whether quick Closeout is suitable for the type of contract.
Meaghan Clark: So…
Meaghan Clark: you can… if you can negotiate it in there, I think it… it’s a great opportunity and option, definitely for smaller-type contracts that don’t have a whole bunch of patents and all the legal ease to it. So, a little fun fact about quick closeouts, if you didn’t know about it. So, next slide.
Meaghan Clark: I’m gonna send it back to Brendan on this one.
Brendan Kelly: Not sure who Jim Bob is, but it seems like Jim Bob’s not a great employee. So, Meghan, I’m sorry you had to deal with Jim Bob in your past life.
Meaghan Clark: I didn’t… I actually didn’t have a Jim Bob in my past life. I did have a cheerleading coach, and his name was Jim Bob, so…
Brendan Kelly: Oh, man, there’s you.
Meaghan Clark: Yeah, there you go.
Brendan Kelly: That’s your criteria.
Brendan Kelly: Right, so we’ve talked about what closeouts are, we’ve talked about some pitfalls, we’ve talked about some…
Brendan Kelly: some ideas, like, when do you begin your process for closeout? So, what are some best practices on how to make this discipline a part of your everyday, your work life, your work experience? How do you get these policies and procedures
Brendan Kelly: I have people call me, ask me for setting up policies and procedures, not even to do the work itself, just what’s a normal process look like, how can I implement this in my work system? So, if you could go to the next slide.
Brendan Kelly: Here’s my Closeout playbook.
Brendan Kelly: I talked about it a little bit earlier, I highly recommend a checklist by contract type.
Brendan Kelly: And if you do get a specialized contract with a clause set that’s not normal or familiar, make a checklist for that one, too. As soon as the award comes through, you’re ready to go, you know what’s going to happen in that 90 to 120 days before the trigger, right? So having the checklist is a great way for you to document close step 1, step 2, step 3, step 4.
Brendan Kelly: On top of that, talked a little bit about as well, with the documentation and the file structure and how we store documents, keeping a rolling closeout file during the performance of the contract.
Brendan Kelly: does all the work for you when the contract ends. So instead of starting the process when it ends, you’re halfway done when the trigger happens, and now you’re in a really great place to focus efforts elsewhere, while some of those, you know, out-of-the-hand situations, like clearances and indirect rates, happen on the back end.
Brendan Kelly: I like to set monthly aging reviews for our contracts.
Brendan Kelly: So, if you don’t have a great idea of where or how many contracts you have, and when there might be ending, you’re going to be caught by surprise in a lot of these areas. So, again, if we’re following this nice playbook, you’re going to know exactly when your contracts are set to physically term… or physically, and trigger’s going to happen, and you do a monthly process for reviewing your entire portfolio.
Brendan Kelly: you know that, hey, next month, X contract is going to be…
Brendan Kelly: physically complete, where are we at? Or two, three months down the road? Again, 90 to 120 days is the ideal, but if we’re not looking at it on a regular basis, we’re not going to be prepared when that happens.
Brendan Kelly: Again, resolving your mods, your claims, and your invoices prior to the final payment. That’s the ideal situation. Being really involved in that process, knowing where your information, your money, your funding is, and where the process is, or where it’s at in the process, back with the government,
Brendan Kelly: a lot of these incrementally funded contracts, they will fund you month to month, and so if you’re within 90 days, you’re gonna get potentially 3 more mods to fund out the rest of that contract, right? So knowing what that process looks like, having clear, open lines of communication with, with your operating officers, that’s gonna be really important to set yourself up for success.
Brendan Kelly: If applicable, use the quick Closeout. I think it’s a wonderful tool. I think it saves companies a lot of time and a lot of money. If it’s an option for you and your contract with your officer when you discuss those options.
Brendan Kelly: If there aren’t going to be any large risks to you or your business, I just don’t see why we wouldn’t use the quick closeout. It helps you move on, helps you move through and continue your growth as a company.
Brendan Kelly: And then I think this one’s super important throughout the process of your contract. You gotta document every non-applicable situation. So, if you’re needing a… or if the Closeout has a typical form, and your contract type, for whatever reason, doesn’t apply.
Brendan Kelly: Why? Where’s your documentation for it? Where’s the communication back and forth that says, hey, this is why this is not needed, here’s the close, here’s the signed document that says we’re good to go. And that just keeps everything from having, again, at the end of the contract, reach out and do these processes. A playbook is important. Again, you can’t tell by looking at my car, but in my work life, it’s very structured, and I think a lot of contract people feel the same way.
Brendan Kelly: But, I have seen some SharePoint folders and systems that absolutely give me nightmares, and
Brendan Kelly: Some of the, you know, like, somebody sees a clean… a dirty house, they start cleaning, even if it’s not their house. I feel the same way with… with file structure.
Brendan Kelly: And, it’s one of the things that eats at me internally. And so I’m a big fan of policy and procedure. I think your best set for success, however you decide to do the process, even if it’s not this playbook here, having a structure in place is so important.
Brendan Kelly: Don’t wait. Don’t try to do it afterwards, don’t try to play it by ear. Have a policy and procedure in place for each contract type. Do your business a favor, and set yourself up for success. So, if you go to the next slide.
Meaghan Clark: Well, and the good news about all this is, when I started in closeouts, literally, I mentioned it, 6 to 8 years.
Meaghan Clark: I was closing out contracts that close, like, peer performance is closed at 6 to 8 years. So the good news is the government is not taking as long as they used to to get your final indirect rate, so that you can, close out your contracts quicker. I think it was painful
Meaghan Clark: 15 years ago, but it’s so much… I feel like the… with the ICE process and, submitting those on time, it gets the government so many months to… to review those, so we’re not talking 6 and 8 years behind anymore, so that’s the good news.
Meaghan Clark: It’s still… it’s still a nightmare sometimes, just because,
Meaghan Clark: You don’t know what you don’t know, and if you’re not doing your contract.
Meaghan Clark: organization on, you know, filing things away. Again, I think I mentioned my blue and red folders. That was an… we literally had to print off every email that we thought
Meaghan Clark: just for some reason, someone think that was important and put it in these folders. You know, they’re not doing that anymore, right? We moved to SharePoint and electronic records, and now we’re moving to AI. There’s, you know, every year, every couple years, I feel like contracts is
Meaghan Clark: documentation stuff is changing, but it is moving faster, so that is good. But it’s still… it’s still a little behind. So, just help… help the government close this out by your keeping good records and staying on top of it. And you can even re… you know, it doesn’t…
Meaghan Clark: Brendan mentioned that the contracting officer is the one that actually initiates the official documentation of the closeout. That doesn Does not mean that you, as the contractor.
Meaghan Clark: can’t reach out and say, hey, this is closed, you know, we’ve submitted all of our invoicing, there’s no outstanding travel, there’s no outstanding material, you know, we’ve delivered all this on this day, you know, how can we go ahead and get this closed out quicker? You can obviously ask that. I mean, having that clear line of communication and relationship with your contracting officer is really important, because you can help that.
Meaghan Clark: I just thought this was funny. It was just…
Meaghan Clark: when I think about 2026 and versus 2020…
Meaghan Clark: 2010, it was just closeouts were completely different, and I just think it’s good news. So, the lesson, though, is simple. The longer the contract stays open, the greater the risk of losing documentation, that knowledge, right? Jim Bob, my little guy, he might be gone, and so that’s gonna take the efficiency of closeout process away. So, good contract administration throughout the performance makes
Meaghan Clark: For a smoother closeout process.
Meaghan Clark: Next slide.
Meaghan Clark: All right, Brendan, I’ll let you take these over real quick. I know we’re kind of running out of time.
Brendan Kelly: Yeah.
Meaghan Clark: go through quickly.
Brendan Kelly: Sorry, I wish we could spend 6 hours talking about closeouts, because we can get really.
Meaghan Clark: We geek out on this, huh?
Brendan Kelly: Yeah, I do. Narrowing this down to high level was difficult. But it’s… it’s a risk pro… it’s risk control, right? Everybody talks about risk assessment within the business, talk about risk control.
Brendan Kelly: How do you control the risk that your company puts itself in? It’s not an afterthought, and I think a lot of companies stick around and wait until the end. I know peers in my profession that have been doing this for 5 to 10 years, and they’ve never done a closeout because
Brendan Kelly: they’re contract admins that jump ship, right? So they go company to company to company, and they never complete the process, so they’re… so having someone informed, having somebody who knows the process, and having that risk control is super important.
Brendan Kelly: Physical… we talked about this a lot. It starts the clock, that that’s your trigger, but that’s not when you start your closeout process. I can’t stress that enough. I really believe in cradle-to-grave closeout support.
Brendan Kelly: We start at the beginning, and when we get to the end, now it’s no longer a stress process, now it’s just an easy click one, click two, here’s everything where it needs to be.
Brendan Kelly: Megan talked on this earlier, balancing your checkbook.
Brendan Kelly: That’s what… that’s what the… that’s what we’re doing at this point in time. We’re balancing our funds. So, you don’t want to be in a situation where you have to true up versus Diab, because that gets to a different situation where you’re sending money back to the government. And sure, it might only be $30 or $200 for that line, but if it’s a $220 million contract with 20…
Brendan Kelly: or 202 funding lines, that $300 per line adds up significantly over the course of the contract. So you could be looking at thousands and thousands of dollars that you have to pay back to true up. So, balancing that checkbook day in, day out is super important.
Brendan Kelly: And ensuring that you’re cross-referencing your rates and services with your subs, closing out your subs first before you close out your own, is going to be how you win.
Brendan Kelly: And, like, we’ve… I think we’ve said this enough throughout the process, but the best closeouts are owned, tracked, and started before the team moves on. I could… I should be able to plug and play
Brendan Kelly: an employee into a situation with a great policy. This is how we track, this is how we document, this is where we store, and no matter who’s there, I should be prepared for my closeout, because that’s my policy. Just really clean contract files and system with communication, so…
Brendan Kelly: Go on to the next slide for me, please.
Brendan Kelly: I don’t, is this the questions one?
Meaghan Clark: Yeah.
Brendan Kelly: I think we ran out of time, guys. I’m so sorry with some of that, but do we have time for any questions, John?
Jonathan Hall: I think we’re out.
Jonathan Hall: It’s, it’s one of those things of, I think it’s been great information. I would say submit your questions, here in the Q&A, as you, as we finish up and those kind of things.
Jonathan Hall: And Meghan and Brendan will get back in touch with you via email to get that to you. Guys, I was… I was sitting here writing on your PowerPoints the whole time, taking notes and making notes myself, and I literally sat, you know, about 10 feet from both of you, so I know that probably others want to sit there and talk to you in addition to… about this and all kinds of other things.
Jonathan Hall: If you do have questions, not just about contract closeouts, but anything that’s contract-related, you know, Meghan and Brendan handle contracts credible to grave.
Jonathan Hall: Pricing and proposals, all the way to contract closeouts, and so we’d be happy to help you there. Obviously, you can tell that they both are experts in their field.
Jonathan Hall: And we’d be happy to help you here at BMSS with those contracting needs. So, thank you so much for everyone joining us today. We will continue to have government contract webinars as we go throughout the year.
Jonathan Hall: If you have topics that you would like for us to hit on, please submit that in the Q&A, and we’ll actually try to get to those as soon as we can in order. I know that we’ve had a little bit of scheduling problems just because we have a lot of webinars out there that are already scheduled.
Jonathan Hall: So, get those to us, and we’ll be happy to take, take your suggestions and go from there. So, thank you, everyone, for taking time out, really appreciate it, and we’ll see you, next time.
Meaghan Clark: Thanks, everybody.