construction; government contractor and technology
business advisory
Abstract:
A Contractor Purchasing System Review (CPSR) examines your company's compliance with government subcontracting rules and can be required when your company approaches an annual government sales threshold of $25 million (FAR Part 44.301). If a CPSR is required, it normally would be performed by the cognizant contract administrative office - sometimes in coordination with the Defense Contract Audit Agency.
The CPSR includes an examination of your company's written policies and procedures related to purchasing and subcontracting, as described in FAR Part 44.202-2. Special attention is given to the following areas:
- Price competition
- Evaluation of subcontractor responsibility
- Use of small business concerns
- Treatment of affiliated companies
- Management of major subcontract programs
- Management control systems
When contractors have their purchasing systems approved, they may reduce the level of government contract administrative oversight and improve their chances of qualifying for future awards.
During the examination, a select number of purchase order files and subcontracts will be reviewed for compliance with your established policies and procedures. Documentation is the key to success. You must have written policies, as well as documentation of compliance with those policies. Generally once the CPSR is completed, your Administrative Contracting Officer (ACO) will determine if your purchasing system warrants approval.