Audit of the Contract Closeout Process for Contracts Supporting the U.S. Mission in Iraq

OIG recommends that the Bureau of Administration update the Foreign Affairs Handbook to include detailed, comprehensive, and all-inclusive guidance for performing an initial funds review and closing contracts, or provide reference to where additional procedural guidance can be found. The guidance should contain best practices as defined by entities such as the Office of Federal Procurement Policy.

OIG recommends that the Bureau of Administration, Office of the Procurement Executive, update the Department of State Acquisition Regulation to include detailed desktop procedures on how to perform an initial funds review.

OIG recommends that the Bureau of Administration, Office of the Procurement Executive, update the Department of State Acquisition Regulation to require that the contracting officer identify the cognizant audit agency at contract award and begin coordinating with that audit agency to help prevent large backlogs of pending or unscheduled incurred cost audits.

OIG recommends that the Bureau of Administration, Office of the Procurement Executive, update the Department of State Acquisition Regulation to require contracting officers to include Federal Acquisition Regulation Clause 52.216.7, "Allowable Cost and Payment," in all cost-reimbursable contracts.

OIG recommends that the Bureau of Administration, Office of the Procurement Executive, revise the Department of State Acquisition Regulation to reflect the interagency agreement between the Department of State and the Defense Contract Audit Agency for conducting incurred cost audits.

OIG recommends that the Bureau of Administration, Office of the Procurement Executive, formally document and implement a process to periodically review contract closeout guidance and tools, such as the Overseas Contract Closeout Checklist, for accuracy and consistency with Federal and Department of State requirements.

OIG recommends that the Bureau of Administration, Office of the Procurement Executive, develop a detailed and consolidated guidebook that contains contract closeout procedures for use by contracting officers located domestically and overseas. The guidebook should have individual chapters addressing specific risks faced by contracting officials based on geographic location.

OIG recommends that the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, develop an automated application to track contract status upon award, to include estimated and actual physical completion dates and Federal Acquisition Regulation (FAR)-mandated timeframes for closeout based on actual physical completion. The application should include functionality to notify responsible officials of key contract dates, to include notifications to responsible officials when physically completed contracts are approaching the FAR's mandated deadline.