Contract Closure and Administrative Closure

Contract Closure

Contract Closure is the process of accomplishing all tasks in the mentioned deliverables and on the initial recruiting of the contract. For the contract to be closed, the seller is required to complete each and every component of the deliverables. The products and services must be attained in a specific way and delivered on time. From here, buyers must have accepted the deliverables and settled that they were delivered as undertook in the contract. Also, the buyers are required to complete all the financial obligations on his end. For instance, final deliverable payments must be received by the seller prior to the contract is officially closed.

A contract is closed when reached the concluding phase or when the contract is ended before the work is completed. For example, the work is no longer required or the work performed is not up to the mark. For such cases, the seller is still required to compensate for the work completed as governed by the clauses in the contract. In multi-phase projects, contract closure closes the appropriate contract(s) for the subsequent phases of the project. This process might repeat multiple times in a project. Unsettled claims may be subject to a lawsuit after close procurements are completed. A comprehensive set of indexed contract documentation including the closed contract is organized for the final project files.

This is done as part of the Control Procurement under the Project Procurement Management in Monitoring and Closing Process Group

Administrative Closure

Administrative Closure refers to the ultimate completion and closure of the project. This is an important part of the Integration Management Knowledge area that is achieved when all the work is verified, delivered, and accepted by the customer. All disputes are raised, finalized and come to a closure. The contracting parties including both buyer and seller decide that the seller has completed the work as specified in the contract, and the buyer has acknowledged it. Administrative closure has long been an undisputed management tool that allows for completion of relevant proceedings and influences the outcome of the individual’s removal proceedings.

This is done as part of the Close Project under the Project Integration Management in Closing Process Group

Key Differences:

Contract Closure is prepared before the project is closed completely. It might be performed multiple times (once for every contract) during the lifespan of a project.

On the other hand, Administrative Closure is only completed one time with each phase or for the whole project. Also, project closure is not completed without procurement closing. Product recognition is typically carried out using the close project or phase process.

Contract closure and Administrative closure both are conducted during the Closing process group. Contract Closure should come first and then administrative Closure 

Further Readings

1. Closing Process Group
2. Project Procurement Management
3. Project Integration Management
4. PMP Exam Content Online

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