Requirements
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.