44.305-2 Notification
Source: FAR 44.305-2 on acquisition.gov
System approval notifications clarify when subcontract consent and notification requirements are waived, but contractors must comply with any exceptions and respond promptly to improvement recommendations.
Overview
FAR 44.305-2 outlines the requirements for notifying contractors when their purchasing system has been granted approval by the Administrative Contracting Officer (ACO). The notification must specify the plant(s) covered, the effective date, and the scope and limitations of the approval. It clarifies that system approval generally waives advance notification and consent requirements for subcontracts under fixed-price contracts, but not for cost-reimbursement contracts or subcontracts under special surveillance. The ACO retains the right to withdraw approval at any time. In cases where weaknesses are identified, the notification may require consent for specific classes of subcontracts. Contractors must respond within 15 days to any recommendations for system improvements.
Key Rules
- System Approval Notification Content
- Must identify covered plants, effective date, and specify the scope and limitations of approval.
- Waivers and Exceptions
- Approval waives advance notification and consent for subcontracts in fixed-price contracts, except for those under special surveillance or in cost-reimbursement contracts.
- Special Surveillance
- Consent may still be required for certain subcontracts if weaknesses are found, and these must be identified in the notification.
- Contractor Response to Recommendations
- Contractors must reply within 15 days to recommendations for system improvements.
Responsibilities
- Contracting Officers: Issue detailed approval notifications, identify exceptions, and monitor compliance.
- Contractors: Adhere to notification requirements, comply with any exceptions, and respond promptly to improvement recommendations.
- Agencies: Oversee the approval process and ensure ongoing surveillance where needed.
Practical Implications
- Ensures clarity on when subcontract consent and notification requirements are waived.
- Helps contractors understand the boundaries of their purchasing system approval.
- Failure to respond to recommendations or comply with exceptions can jeopardize system approval.
(a) The notification granting system approval shall include-
(1) Identification of the plant or plants covered by the approval;
(2) The effective date of approval; and
(3) A statement that system approval-
(i) Applies to all Federal Government contracts at that plant to the extent that cross-servicing arrangements exist;
(ii) Waives the contractual requirement for advance notification in fixed-price contracts, but not for cost-reimbursement contracts;
(iii) Waives the contractual requirement for consent to subcontracts in fixed-price contracts and for specified subcontracts in cost-reimbursement contracts but not for those subcontracts, if any, selected for special surveillance and identified in the contract Schedule; and
(iv) May be withdrawn at any time at the ACO’s discretion.
(b) In exceptional circumstances, consent to certain subcontracts or classes of subcontracts may be required even though the contractor’s purchasing system has been approved. The system approval notification shall identify the class or classes of subcontracts requiring consent. Reasons for selecting the subcontracts include the fact that a CPSR or continuing surveillance has revealed sufficient weaknesses in a particular area of subcontracting to warrant special attention by the ACO.
(c) When recommendations are made for improvement of an approved system, the contractor shall be requested to reply within 15 days with a position regarding the recommendations.