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    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?


    The proper form required is a SF 30. No dollar threshold was found.

    Excess funds - those that relate to line items or deliverables that were not
    [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.
    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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