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DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement to implement section 836 of the National Defense Authorization Act for FY 2017 to permit close out of certain contracts or groups of contracts without completing a reconciliation audit or other corrective action.  Section 836 permits contracting officers to close out contracts or groups of contracts through issuance of a modification of each contract action without completing a reconciliation audit or other corrective action, provided the contract:

• Was entered into prior to fiscal year 2000;
• Has no further supplies or services deliverables due under the terms and conditions; and
• Is not otherwise reconcilable, because either contract records have been destroyed or lost or the time, or the effort required to establish the exact amount owed the U.S. Government or to the contractor is disproportionate to the amount at issue.

This rule is not expected to increase costs for contractors and will expedite closeout of the covered contract actions.