I agree with Bonnie. I once worked on a software development project that had many phases and specific deliverables for each phase. But, we had one overall contract for the project and that was not closed until we received the final deliverable and reached the overall project objectives.

Mark

I'm going to say definitely Do Not close the Contract. The Contract was probably drawn up to provide both phases. So the first phase is completed, deliverable verified, you can close the phase and start the next iteration. When the 2nd phase is completed you verify that deliverable, and close the phase. Then you enter Close Procurement.
Just my opinion. What say the experts?

a buyer has a contract with a seller to provide a product/service to the buyer project. the contract shall cover two phases of the project life cycle, now the first phase of the project is come to an end .....administrative closure should be carried out according to PMBOK guidance... what about the contract?