Closing Out – Lessons Learnt from the US Mission in Iraq

As the United States mission in Iraq wound down, the Office of the Inspector General for the United States State Department undertook a review of the contract closeout process for contracts supporting the mission.

To put the effort into context, the report notes:

Since March 2003, the Department of State (Department) has contracted for goods and services to support the U.S. Mission in Iraq. According to USASpending.gov, the Department’s contracting activity for Iraq increased from 50 contract actions, totalling approximately $311 million in FY 2004, to 1,604 contract actions, totaling approximately $1.3 billion in FY 2012.

As to why contract closeout is important it notes that it

is the final phase in a contract’s life cycle, (and) is a key step in ensuring that the Department has received the appropriate goods and services at the agreed-upon price. 

115 Iraq-related contracts were included within the scope of the review.  The OIG found that the contract close out teams and the relevant contract officers had not consistently met Federal and Department contract closeout requirements.  Specifically it noted:

  • contract files for 33 of the 115 task orders could not be located,
  • contract files for five of the 115 task orders did not include the data needed to determine physical completion,
  • evidence for initial funds review was missing for 43 of the 53 physically completed task orders,
  • contract closeout timelines were not met for 25 of the 53 physically completed task orders, and
  • contract files for all 30 of the closed task orders were missing required closeout data.

Interestingly – and nor should it have – the OIG did not seek to use the challenging security environment within Iraq as an excuse for the poor compliance.  Instead it suggested:

These issues occurred because the Department had not established comprehensive procedural guidance for contract closeout or ensured that existing guidance was accurate.

In addition, the Department did not have a system in place for tracking the contract and task order periods of performance so that the Contracting Officers could identify and monitor contracts and task orders nearing physical completion.

The report contains a basic – yet very useful – contract closeout checklist that, had it been followed as it relates to the Mission to Iraq many of the issues identified in the OIG report would have never materialised.

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