Compliance does not have to be complicated. For many in the government contracting world, the thought of a Contractor Purchasing System Review (CPSR) is a bit overwhelming. By taking proactive steps to prepare for such a review, you can alleviate a lot of undue stress for your contracts team, as well as the rest of the organization.
What is a Government Approved Purchasing System?
A purchasing system involves all the activities required by FAR Subpart 44 that relate to a prime contractor’s purchasing of goods and services. It is considered approved when it has “passed” a CPSR performed by a federal regulatory agency, typically the Defense Contract Management Agency (DCMA).
When are You Eligible?
The current $25M threshold referenced in FAR 44.302(a) has been in effect since 1996. DCMA more recently issued a Class Deviation Memo raising the threshold to $50M based on an analysis of inflation and acceptable risk. A FAR case has been opened to raise the threshold to $50M.
Benefits of an Approved Purchasing System
- Reduced government transactional oversight
- Limited notification or consent requirements
- Reduced cycle time
- Increased contract opportunities in future evaluated procurements
Key Indicators of a Compliant System
- Competition is maximized
- Documented standardized business processes
- Effectiveness of negotiation
- Subcontractor performance is maximized and compliance is monitored
- Satisfactory small business program
A Contractor Purchasing System Review is just that, a “Review” — it is NOT an audit. You will most likely receive deficiencies, but you can keep them to a minimum by being prepared. Download our whitepaper for four ways to prepare for a Contractor Purchasing System Review (CPSR).