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  • Question

    I can't find any real guidance in the FAR that says we have to leave each appropriation year under an Early Closeout Agreement. Do have any guidance or FAR references that I can look into?


    Answer

    Early closeout is a method used to close task orders prior to the settlement of indirect cost rates.  The only contracts which early closeout applies are IDIQ time and materials or labor hour contracts which contain the clause FAR 52.232-7FAR 52.232-7 (a)(7) allows for the contracting officer to issue a unilateral modification requiring the contractor to withhold an amount of money from its billings until a reserve is set aside.  The contracting officer can require the contractor to withhold 5% of the task order amount, but the total withheld amount for the entire contract cannot be any more than $50,000.  The withheld amount will be retained by the contractor until the release of claims is signed.  Once the final indirect rates are settled, the contractor will prepare the final voucher using the settled rates and the withheld amount will be reconciled in this final voucher.  This information is contained in the Acquisition Institute Contract Closeout Guidebook dated October 2007 and the MOCAS Contract Closeout Guide dated December 2005.


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