The following section is no longer applicable for PMBOK v6.
Procurements are closed when a contract is completed OR when a contract is terminated before the work is completed. The Close Procurements is a part of Closing Process Group. All procurements must be closed out, no matter the circumstances under which they stop, are terminated, or are completed.
Work that must be performed during Close Procurement phase:
Product verification: Involves checking to see if all the work is done correctly and satisfactorily.
Negotiated settlement: Final settlement of all claims, invoices and other issues.
Financial closure: Involves making final payments and completing cost records.
Procurement audit: Structured review of only the procurements process.
Updates to records: Making sure all of the records of the project are complete and are accessible in the records management system.
Final contract performance reporting: This is creating a final report.
Lessons learned: Lessons learned from everyone including the seller are documented for the project.
Procurement file: The file includes contract, changes, submittals from the seller, financial information, inspection results, lessons learnt.
Managing the relationship between the buyer and the seller and assuring both parties perform as required by the contract is termed as Administer procurements. The specific actions involved while Administering Procurements are reviewing invoices, completing integrated change control, documenting every record, managing changes, authorizing payments to the seller, interpreting what is and what is not in the contract, resolving disputes, procurement performance reviews, performance reports, monitor cost, schedule and technical performance against the contract, understanding the legal implications of the contract, controlling quality, among others.