Extent of review
A CPSR must thoroughly evaluate a contractor’s purchasing system, focusing on key areas like competition, pricing, subcontractor responsibility, and small business participation, while generally excluding certain competitively awarded or commercial subcontracts.
Overview
FAR 44.303 outlines the required scope and depth of a Contractor Purchasing System Review (CPSR). The regulation specifies that the review must evaluate the contractor’s purchasing system, but generally excludes subcontracts awarded solely in support of certain competitively awarded or commercial contracts. The review must consider the contractor’s policies, procedures, and performance, using the same criteria as those for subcontract consent evaluations. Special focus areas include market research, price competition, pricing policies, subcontractor responsibility, treatment of affiliates, small business participation, major subcontract management, Cost Accounting Standards compliance, contract types, management controls, and quality standards.
Key Rules
- Scope of CPSR
- CPSRs evaluate the contractor’s purchasing system, excluding certain subcontracts for competitively awarded or commercial contracts unless segregation is impracticable.
- Evaluation Criteria
- The review uses the same considerations as those for subcontract consent, focusing on policies, procedures, and performance.
- Special Focus Areas
- Market research, price competition, pricing policies, subcontractor responsibility, small business policies, major subcontract management, Cost Accounting Standards, contract types, management controls, and quality standards must be specifically reviewed.
Responsibilities
- Contracting Officers: Ensure CPSRs are conducted per these criteria and focus areas.
- Contractors: Maintain robust purchasing systems and documentation in all specified areas, especially for major subcontracts and small business participation.
- Agencies: Oversee CPSR process and ensure compliance with FAR requirements.
Practical Implications
- This section ensures that contractor purchasing systems are effective, compliant, and protect government interests.
- Contractors must be prepared for detailed reviews of their purchasing practices, especially regarding competition, pricing, subcontractor vetting, and small business engagement.
- Common pitfalls include inadequate documentation, insufficient competition, or lack of controls for excluded parties.