Withholding or withdrawing approval
Contractors must maintain compliant purchasing systems and promptly address deficiencies to avoid withdrawal or withholding of system approval, which can impact contract performance.
Overview
FAR 44.305-3 outlines the procedures and requirements for withholding or withdrawing approval of a contractor’s purchasing system by the Administrative Contracting Officer (ACO). Approval must be withheld or withdrawn if there are major weaknesses, insufficient information, or recurring noncompliance with key requirements such as certified cost or pricing data, cost accounting standards, advance notifications, or small business subcontracting. The ACO can also withdraw approval at any time if the system deteriorates or to protect the Government’s interests. When approval is withheld or withdrawn, the ACO must notify the contractor in writing within 10 days of the in-plant review, specify deficiencies, and request a corrective action plan within 15 days. If the plan is accepted, a follow-up review is conducted once corrections are reported.
Key Rules
- Withholding or Withdrawing Approval
- The ACO must withhold or withdraw approval for major weaknesses, insufficient information, or recurring noncompliance.
- Notification and Corrective Action
- The ACO must notify the contractor in writing, specify deficiencies, and request a corrective action plan within set timeframes.
Responsibilities
- Contracting Officers: Assess purchasing systems, withhold/withdraw approval as needed, notify contractors, and oversee corrective actions.
- Contractors: Address deficiencies, submit corrective action plans within 15 days, and implement required changes.
- Agencies: Ensure oversight and compliance with purchasing system requirements.
Practical Implications
- This section ensures that only compliant purchasing systems are approved, protecting government interests and ensuring regulatory adherence. Contractors must maintain robust systems and respond promptly to deficiencies to avoid disruptions in approval status. Common pitfalls include failing to provide required data, not adhering to cost accounting standards, or neglecting small business subcontracting requirements.