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    Is ACO consent a requirement for quick closeout between a prime & its sub? Or is it just an agreement between a prime & its sub to accept the rates as billed & ACO consent is not required? Are there written procedures for quick closeout between a prime & its sub?


    Answer

    Your question consists of three parts or three separate questions. Reference the first part of your question, is ACO consent a requirement for quick closeout between a prime & its sub? There is nothing in FAR 42.708 (Quick Closeout Procedures) which would indicate that ACO consent is needed for quick closeout between a prime & its sub. This is probably due to the fact that the Government does not have privity of contract with the sub so any consent, direction, etc. would need to come from the prime to the sub. 

    Reference the second part of your question, is it just an agreement between a prime & its sub to accept the rates as billed & ACO consent is not required?
    FAR 42.703-1 states that final indirect cost rates shall be used for contract closeout for a business unit, unless the quick-closeout procedure in 42.708 is used. Under FAR parts 42.705 and 42.708, the contracting officer (CO) shall negotiate the settlement of direct and indirect costs for a specific contract, task order, or delivery order to be closed, in advance of the determination of final indirect rates. However, in order to do this the contract needs to be physically completed, the amount of the unsettled cost are determined to be insignificant, a risk assessment by the CO must be performed to determine if quick contract closeout is appropriate, and parties can agree on a reasonable estimate of allocable dollars.

    FAR Clause 52.216-7
    is also pertinent and states that the determinations of final indirect costs under the quick-closeout procedure shall be final for the contract it covers and no adjustment shall be made to other contracts for over- or under-recoveries of costs allocated or allocable to the contract covered by the agreement.

    Reference the last part of your question, are there written procedures for quick closeout between a prime & its sub? Other than
    DFARS forms 1594 (Contract Completion Statement) and 1597 (Contract Closeout Check List) there are no written procedures at the FAR and DFARS levels.

    However, each agency may have additional written guidance regarding quick closeout procedures so it is recommended that you check with the appropriate agency POC regarding this matter.  As we do not have all of the facts particular to your contract, program, and situation, we highly recommend that you consult with your contracting officer and Legal Office for guidance.

     

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