Can a contract be closed out if there is an existing claim pending?
No. The Federal Acquisition Regulation (FAR) specifies at:
“4.804-1 -- Closeout by the Office Administering the Contract.
(c) A contract file shall not be closed if --
(1) The contract is in litigation or under appeal; or
(2) In the case of a termination, all termination actions have not been completed.”
Open full Question Details
You indicate that the claim is still pending. Therefore, it represents an open item that may lead to litigation if the claim is denied by the contracting officer and the contractor files an appeal to that decision. A final voucher cannot be obtained until the claim is settled one way or another. I recommend using the DD Form 1597, Contract Closeout Check-List to ensure all necessary closeout actions have been completed and a DD Form 1594, Contract Completion Statement can be completed and signed.