44.303 Extent of review
Source: FAR 44.303 on acquisition.gov
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.
A CPSR requires an evaluation of the contractor’s purchasing system. Unless segregation of subcontracts is impracticable, this evaluation shall not include subcontracts awarded by the contractor exclusively in support of Government contracts that are competitively awarded firm-fixed-price, competitively awarded fixed-price with economic price adjustment, or awarded for commercial supplies and commercial services pursuant to part 12. The considerations listed in 44.202-2 for consent evaluation of particular subcontracts also shall be used to evaluate the contractor’s purchasing system, including the contractor’s policies, procedures, and performance under that system. Special attention shall be given to-
(a) The results of market research accomplished;
(b) The degree of price competition obtained;
(c) Pricing policies and techniques, including methods of obtaining certified cost or pricing data, and data other than certified cost or pricing data;
(d) Methods of evaluating subcontractor responsibility, including the contractor’s use of the System for Award Management Exclusions (see 9.404) and, if the contractor has subcontracts with parties on the Exclusions list, the documentation, systems, and procedures the contractor has established to protect the Government’s interests (see 9.405-2);
(e) Treatment accorded affiliates and other concerns having close working arrangements with the contractor;
(f) Policies and procedures pertaining to small business concerns, including small disadvantaged, women-owned, veteran-owned, HUBZone, and service-disabled veteran-owned small business concerns;
(g) Planning, award, and postaward management of major subcontract programs;
(h) Compliance with Cost Accounting Standards in awarding subcontracts;
(i) Appropriateness of types of contracts used (see 16.103);
(j) Management control systems, including internal audit procedures, to administer progress payments to subcontractors; and
(k) Implementation of higher-level quality standards.