44.302 Requirements
Source: FAR 44.302 on acquisition.gov
Contractors with expected Government sales over $25 million in 12 months may be subject to a CPSR, and the ACO must reassess this need at least every three years.
Overview
FAR 44.302 outlines the requirements for determining when a Contractor Purchasing System Review (CPSR) is necessary. The Administrative Contracting Officer (ACO) must assess the need for a CPSR based on factors such as the contractor’s past performance, and the volume, complexity, and dollar value of subcontracts. If a contractor’s sales to the Government (excluding certain competitively awarded and commercial contracts) are expected to exceed $25 million in the next 12 months, the ACO must review whether a CPSR is warranted. The $25 million threshold can be adjusted by the agency head if it serves the Government’s best interest. Once an initial determination is made, the ACO must reassess the need for a CPSR at least every three years, and if necessary, the contract administration office will conduct the review.
Key Rules
- CPSR Determination Criteria
- The ACO evaluates the need for a CPSR based on contractor performance, subcontracting activity, and expected sales volume.
- $25 Million Threshold
- A review is triggered if expected sales to the Government exceed $25 million in the next 12 months, with certain exceptions.
- Review Frequency
- The ACO must reassess the need for a CPSR at least every three years.
- Agency Discretion
- The agency head may adjust the $25 million threshold if it benefits the Government.
Responsibilities
- Contracting Officers: Must determine and document the need for a CPSR, reassess every three years, and initiate reviews as required.
- Contractors: Should be prepared for a CPSR if sales thresholds are met and maintain compliant purchasing systems.
- Agencies: May adjust thresholds and oversee the CPSR process.
Practical Implications
- Ensures oversight of contractor purchasing systems for high-value or high-risk contracts.
- Contractors must monitor their sales and be ready for reviews.
- Failure to comply can result in increased scrutiny or corrective actions.
(a) The ACO shall determine the need for a CPSR based on, but not limited to, the past performance of the contractor, and the volume, complexity and dollar value of subcontracts. If a contractor’s sales to the Government (excluding competitively awarded firm-fixed-price and competitively awarded fixed-price with economic price adjustment contracts and sales of commercial supplies and commercial services pursuant to part 12) are expected to exceed $25 million during the next 12 months, perform a review to determine if a CPSR is needed. Sales include those represented by prime contracts, subcontracts under Government prime contracts, and modifications. Generally, a CPSR is not performed for a specific contract. The head of the agency responsible for contract administration may raise or lower the $25 million review level if it is considered to be in the Government’s best interest.
(b) Once an initial determination has been made under paragraph (a) of this section, at least every three years the ACO shall determine whether a purchasing system review is necessary. If necessary, the cognizant contract administration office will conduct a purchasing system review.