Contract Closeout

Although Administrative Closeout will occur on every project, Contract Closeout occurs only when a formal contract has been written. For instance, there may be no formal contract if you are doing the project as part of an internal system for an organization. In this case, it is unusual to have a formal contract.

However, if you are a delivering organization outside of the one where the project is being done, then it is likely that you will have a contract with specific terms and specifications. This means that you will have contract documentation that you will need to conform to in order to fulfill the obligations as written in the contract itself.

The PMBOK also mentions procurement audits as a part of Contract Closeout. A procurement audit is "a structured review of the procurement process from procurement planning through contract administration." Procurement audits are prevalent in government contracting, although more and more private businesses use procurement audits on their projects. Usually, procurement audits are not controlled by the project manager but rather are conducted by a separate individual or organization.

Q.	A ________ must be written in order to require Contract Closeout.
		A.	WBS
		B.	Formal contract
		C.	SOW
		D.	Scope Statement

The answer is B. Without a formal contract, there is no real need for Contract Closeout.

Q.	A(n) ________ performs the procurement audit.
		A.	Project manager
		B.	Project team
		C.	Sponsor
		D.	Outside individual/organization

The answer is D. Otherwise the inmates are running the asylum, and we know where that has gotten us with some of the financial misdoings in large companies that have been a major part of the news lately.