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    If contractor refuses to include the six month limitation portion should our position be to discontinue closing contracts until this matter is resolved.


    A key element to this discussion is the assumption that clauses 52.216-7 and 52.233-1 are contained in the contract and not altered in any way by the contracting officer, especially since neither are tailorable clauses.  This is an important factor because no matter what a contractor may write or say to the Government, at the end of the day what is contained in the contract will rule the day.  FAR 52.233-1 sets forth the 6 year limitation for submitting a claim under the contract, which is really just reiterated in 52.216-7.  The contracting officer is the only party that can change the contract, therefore a document initiated by the contractor, especially if it's outside the contract, does not change the contract.  Also keep in mind that the contractor signed the original contract and accepted those terms and conditions.  Unless the contracting officer modifies a clause through a contract modification, they remain in full force and effect.
    If a contractor modifies language in a proposed bilateral modification, such as eliminating some of the language in a release statement, unless there is language that specifically directs a change to a specific clause, the clause remains in full force and effect.  Additionally, most contract modifications include language to the effect that "all other terms and conditions remain unchanged" or just utilize the language in block 14 of the SF30  that states "except as provided herein, all terms and conditions of the document ...... remain unchanged and in full force and effect."  Therefore, unless the language in the modification calls out a change to a specific clause, the clause would not be considered altered. 
    I suggest that you put the contractor on notice, via separate letter, that failure to include the specific language from 52.216-7(h)(2)(ii)(b) in their release statement does not alter the contract terms and conditions and that the the six year limitation remains in full effect per 52.233-1 and 52.216-7(h)(2)(ii)(b).  Remind them that a contract modification signed by the Government contracting officer, altering specific contract terms and conditions is the only method to make a change to the contract.  I would not stop your close out actions to resolve the issue because there really is no issue to resolve since it appears that the contracting officer has not modified the contract terms and conditions. 

    We r
    ecommend that you also consult your program attorney to assist in your written communication with the contractor.

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