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    When de-obligating funds for a CPFF contract after I decrease the obligation amount what do I do if anything to the total cost amount? and the total contract amount (ceiling)?


    Answer

    Below you will find a very in depth explanation about contract closeout procedures for DCMA in a previously asked and answered question at https://dap.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=3&cgiQuestionID=108341.  Also it would be prudent to make sure that all costs incurred and fees associated with the contract have been paid prior to deobligating the funds. Then check with your fiscal/financial office to see if they require anything different from what is provided below. As you know processes do change from time to time.

    As for the Total Cost and the Contract Ceiling...they shouldn't require any further action. The Deobligation of Funds is the action that takes the funding off of the contract and sends this funding back to the U.S. Treasury for use where there is a need.
    The bottom line is always work closely with your financial office to make sure that you are following the most current process for closing out a contract.
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    Title - Deobligating excess funds on contracts for closeout.
     
    Question - What is the proper way or "form" required to deobligate funds on a contract prior to closeout? Does it need a SF30 - modification or can it be closed-out without a modification and just showing excess funding on the DD Form1594? If a modification form is required, is there a $ threashold for creating one?
     
    Scenario - We are closing out many of our old files and finding that funding is still remaining on them. How should we deobligate the funds properly?
     
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    Answer - The proper form required is a SF 30. No dollar threshold was found.
     
    Definitions:
     
    Excess funds - those that relate to line items or deliverables that were not
    performed. 
     
    [Excess funds must be de-obligated by the ACO via modification (SF30)
    prior to closure and are returned to the Accounting Station.]
     
    Remaining funds - usually due to variation in quantity (VIQ) when
    contractually authorized price fluctuations or price rounding - but all
    deliverables and/or services are complete and paid in full.
     
    [DCMA contract closeout policy allows these to be closed; however, a remark must be entered to MOCAS stating the amount remaining and the fact that they are "remaining"
    funds.  Remaining funds cleared after the closing action are returned to the US Treasury.] 
     
    Ans: Many times the ACO will send an email to the PCO in place of the DD Form 1594 (Contract Completion Statement) which is a notification to the PCO or Buying Activity from the DCMA Contract Management Office to agree/concur on the excess funds remaining on the contract.  This request is supported with documentation (final acceptance, reconciliations, etc.).
     
    Once the PCO/Buying Activity agrees/concur with the Contract Management Office, the Administrative Contracting Officer (ACO) issues a modification (SF30) to deobligate excess funds.
     
    DFAS does not utilize the DD1594 to remove excess funds from a contract.
     
    References:
     
    FAR 4.804-5 covers excess funds.
     
    Financial DoD Management Regulation Volume 10, Chapter 20 May 2009- Contract Reconciliations.
     
    DCMA Contract Closeout Guide Book (June 2004) - page 28 - Excess vs. Remaining Funds.
     
    Most importantly, the CAO/CMO needs to verify if the funds are remaining or excess.


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