44.305-3 Withholding or withdrawing approval
Source: FAR 44.305-3 on acquisition.gov
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 Approval must be withheld or withdrawn if there are major weaknesses, insufficient information, or recurring noncompliance with key requirements such as certified cost or pricing data, cost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 When approval is withheld or withdrawn, the ACO must notify the contractor in writing within 10 days of the in-plant review, specify deficiencies, and request a corrective action plan within 15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.
(a) The ACO shall withhold or withdraw approval of a contractor’s purchasing system when there are major weaknesses or when the contractor is unable to provide sufficient information upon which to make an affirmative determination. The ACO may withdraw approval at any time on the basis of a determination that there has been a deterioration of the contractor’s purchasing system or to protect the Government’s interest. Approval shall be withheld or withdrawn when there is a recurring noncompliance with requirements, including but not limited to-
(1) Certified cost or pricing data (see 15.403);
(2) Implementation of cost accounting standards (see 48 CFR chapter 99);
(3) Advance notification as required by the clauses prescribed in 44.204; or
(4) Small business subcontracting (see subpart 19.7).
(b) When approval of the contractor’s purchasing system is withheld or withdrawn, the ACO shall within 10 days after completing the in-plant review (1) inform the contractor in writing, (2) specify the deficiencies that must be corrected to qualify the system for approval, and (3) request the contractor to furnish within 15 days a plan for accomplishing the necessary actions. If the plan is accepted, the ACO shall make a follow-up review as soon as the contractor notifies the ACO that the deficiencies have been corrected.