Step 13: Project close-out

The Project Close-out Phase is the last phase in the project lifecycle.

Closeout begins when the government accepts the project deliverables and concludes that the project has met the goals and requirements established in the your company contract. The major focus of project closeout is:

  • Contract close-out
  • Subcontract close-out
  • Finance close-out
  • Deliverable close-out
  • Project records close-out
  • Staff close-out
  • Lessons learned documentation
  • Security close-out

This checklist summarizes the information presented in this section.

Project Close-out Checklist (PDF)

Project Close-out Checklist (Word version)

1. Contract close-out

Contract closure is a typical but very important part of project management. It is a simple process, but close attention should be paid so that no room is left for liability. In order to close a contract it is important to collect all of the pertinent documentation for review and archive. This will include all of the original contracts and supporting documentation such as schedules, contract changes, and performance reports. This documentation needs to be reviewed thoroughly to ensure there are no unrealized contract issues that could result in contractual liability. Your Contracts Administrator can explain the required contracts archive procedures.

A thorough review of the procurement and contracting documents must include contract milestones, services provided or deliverables and documentation delivered. Standard verbiage for acceptance and closure is usually found in the original contract itself.

The Contracts Administrator will execute final contracts documents and return them to the client.

The Federal Acquisition Regulations specify contract closeout requirements. In addition, the Department of Defense has specific project closeout requirements that may include a DD Form 1594 (Contract Completion Statement) and a DD Form 1507 or 1597 (Contract Close-out Checklist). More recently, electronic closeout processes are being done in Procurement Defense Desktop (PD2). These closeout requirements should be identified in your contract.

2. Subcontract close-out

An integral component of subcontract monitoring is close out of the subcontract at the end of the project period. This is the point at which final determination is made by the PM and Subcontracts Administrator that the subcontractor has fulfilled all of its responsibilities under the subcontract. The Federal Acquisition Regulations specify overall subcontract closeout requirements.

Initial responsibility for close out of subcontract resides with the PM. You should review the subcontract to determine that all deliverables have been submitted. The primary sources for this information are the SOW, as stipulated in the subcontract, and the submitted reports.

All subcontracts require the subcontractor to label its final invoices as “FINAL” and to submit the final invoice within a reasonable period of the project end date. This allows for timely closeout of the subcontract and is especially important as many subcontracts are scheduled to end on the same day as the prime award. However, the final invoice should not be paid until the subcontractor has met all subcontract requirements.

Make sure that all your company property has been returned and the proper forms filled out.

When you have determined that the subcontractor has met all subcontract requirements (i.e., all reports, invoices and property have been received), submit a Subcontract Close-Out Checklist and Certification Form or Memo to the subcontract administrator. This provides assurance that all subcontracted work has been satisfactorily completed, and provides a checklist for the administrator to help ensure that all closeout actions have been completed.

Your last responsibility is to submit a subcontractor performance report to the Subcontracts Administrator who will archive it for future reference.

3. Finance close-out

Financial closure is the process of completing and terminating the financial and budgetary aspects of the project. Financial closure includes both (external) contract closure and (internal) project account closure.

You will need to obtain cost information from the finance and accounting departments. All expenditures must be accounted for and reconciled with the project account. When financial closure is completed, all expenditures made during the project will have been paid as agreed to in purchase orders, contracts, or inter-agency agreements.

You will next need to conduct an inventory of any capital equipment and return it to the information technology or facilities department.

All activity IDs in your company’s financial accounting system for the contract or specific task order should also be closed.

4. Deliverable close-out

The basic steps to closing out contract deliverables are:

  • Validate actual cost, schedule, risk, engineering, and quality metrics to determine the final status of the project.
  • Determine whether all project deliverables are complete, accurate and have been delivered.
  • Obtain agreement from the customer, corporate management, and your team that the project is complete.
  • Assign staff to complete any remaining action items.
  • Verify that action items are completed correctly.

5. Project records close-out

Verify that all project records are complete and have been provided to your Contracts Administrator for archiving. Some of the records that should be archived are:

  • Project deliverables including all CRDLs
  • Technical data package
  • Project files
  • Project concept document
  • Project Charter
  • PM Plan
  • Project management and oversight review records
  • Correspondence
  • Meeting notes
  • Status reports
  • Contracts and subcontracts file
  • Technical documents, files, tools, etc.

Make sure to coordinate with Security for the return/storage/destruction of classified data and artifacts in accordance with requirements specified in the contract and the your company security policy manual.

6. Staff close-out

If personnel have been committed to the project full-time, it is important for you to get these people back into the available resource pool as quickly as possible and before these individuals look outside the company for jobs. This will ensure that the staff stays busy and that other projects within the organization do not fall short of resources.

In some cases, employee performance reports or other documentation must be prepared for personnel assigned to the PM. In matrix situations, the PM should communicate to the functional manager information about the performance of the employee. The PM should also make recommendations for recognition of performance as the case may warrant.

Before any employee is officially transferred, the PM or his representative must ensure that all project materials and property are turned over by the employee. The PM must also ensure that each employee’s project hours have been accounted for and correctly charged to the project.

7. Security Close-out

Often the security aspects of a project closeout are ignored or overlooked.  Depending on the nature of the contract, security is often required to support the contract until final closeout by DCAA.

As the contract comes to a close you need to work with security to determine the final disposition of all classified media and IT systems, clearance status of all personnel, and secure facilities. Customers and contracts may have different close out requirements. The following are items in general we need to address so you can certify to the customer that you have satisfied all security requirements:

  • All personnel debriefed from their clearances or accesses. Clearances and accesses are tied to a specific contract.  When an employee is removed from a contract and no longer have a need to have access to classified material, they will be removed from access and debriefed. Clearances and/or accesses may or may not be transferrable to other contracts or customers.
  • All classified information is the property of the U.S. Government and must be returned to the U.S. Government upon request.  Classified information is not the property of your Company.
  • All classified media (defined as documents, CDs/DVDs, hard drives, other storage media, etc.) must be accounted for and either destroyed or returned to customer.  Seek guidance from your security team as each agency has provisions to allow us to retain classified data for specific periods of time. Most media will either be destroyed or returned to the customer. The company with customer approval may retain some media.  Some examples could be company proprietary or IRAD information that is also classified, classified proposals, or information required for follow-on contract.
  • Classified computer networks supporting the contract will be decertified, sanitized and disposed of as required by the approved IT security plan and customer guidance.  In some instances the network may be reassigned to support another contract.
  • Facilities used for classified activities will be closed or the security cognizance transferred to another contract.

It is imperative you accomplish these tasks at every close out to keep your classified holdings to a minimum and comply with contractual security requirements.

8. Lessons learned documentation

A very important project closeout PM responsibility is to conduct a lessons learned session and document the results. Capture the best practices, lessons learned, and the project environment for use by your company on other similar projects.

In addition to communicating the closure of a project in writing, it is also advisable to have a mechanism for group review. Lessons learned sessions are valuable closure and release mechanisms for team members, regardless of the project’s success. The lessons learned session is typically a meeting or a series of meetings that may include the following:

  • Project team
  • Stakeholder representation—including external project oversight
  • Executive management
  • Maintenance and operation staff

For a lessons learned session to be successful, the problems encountered by the Project Team must be openly presented. It is important, however, that the problem discussions do not merely point a finger at some target other than the Project Team; responsibility and ownership for problem areas are critical to developing useful recommendations for future processes.

Problems that were encountered should be prioritized with focus on the top five to ten problems. It is not necessary to document every small thing that happened. However, all legitimate problems and issues should be discussed.

– Mike Lisagor


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