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Contract Closeout – Project Closure (#2 in the series How to Close Out a Project)
By Michael D. Taylor

This series discloses important aspects of closing out a project by describing the following aspects:

In addition to scope verification, efforts to closeout a contract between the buyer and the seller will take place. These are typically formal reviews which will culminate the business arrangement.

The Seller’s Role

During this review the seller (subcontractor) will ensure that all open issues and discrepancies are identified and resolved with the buyer (customer). Any proprietary documents loaned to the seller must be returned or destroyed at the buyer’s direction. For proprietary information to fall into the hands of a buyer’s competitor would not only be disastrous but could lead to litigations.

The primary objective of the contract closeout is to obtain the buyer’s full acceptance of the subcontracted product, and to end in such a way that pleases the customer so that they will feel strongly inclined to work with the seller again in the future. Remember, under promise and over deliver! When this has been completed all final fees can be obtained.

The Buyer’s Role

It will be the buyer’s responsibility to conduct an audit of all completed contract scope usually at the seller’s facility. In some cases the buyer may wish to conduct an audit of all subcontractor costs to ensure that all are allowed. Any proprietary information loaned by the seller to the buyer must be returned or destroyed at the seller’s direction. The seriousness of handling and controlling proprietary information is the same as described above for the seller.

When the buyer is fully satisfied with the completion of all contract scope, any final payments to the seller will be made.

MICHAEL D. TAYLOR, M.S. in systems management, B.S. in electrical engineering, has more than 30 years of project, outsourcing, and engineering experience. He is principal of Systems Management Services, and has conducted project management training at the University of California, Santa Cruz Extension in their PPM Certificate program for over 13 years, and at companies such as Sun Microsystems, GTE, Siemens, TRW, Loral, Santa Clara Valley Water District, and Inprise. He also taught courses in the UCSC Extension Leadership and Management Program (LAMP), and was a guest speaker at the 2001 Santa Cruz Technology Symposium. His website is www.projectmgt.com.

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