Let’s face it. We’d all rather be out selling and growing our businesses than having to deal with paperwork and audits, right? So when you hear that you have a Contractor Purchasing System Review (CPSR) coming up, it may cause a little anxiety and leave you wondering if it is really time well spent.
Now the government will tell you that the purpose of a CPSR is to evaluate the efficiency and effectiveness of the way a contractor spends federal funds and complies with federal policy. It provides the Administrative Contracting Officer (ACO) a basis for granting, withholding, or withdrawing approval of the contractor’s purchasing system.
So what does that really mean to you? Here are the Top 5 reasons that having an approved contractor purchasing system is important:
- Advance Notification and Consent: The first reason that usually comes to mind is the FAR Part 44 requirement for advance notification and consent to subcontract. If the purchasing system hasn’t been approved or the approval has been withdrawn, then the ACO will be required to perform consent reviews under flexibly price contracts and unpriced contractual actions to insure the Government’s interests are protected. The down side of that is these reviews take time, and while the ACO is performing the review, the subcontract award is delayed. In other words, nobody is happy about it! The client’s program manager and the company program manager want the award made to meet schedule, but the ACO has other things to do and may not put your subcontract award at the top of the list. The result is that you (the buyer/subcontract administrator) are under pressure to somehow make it happen and tensions can rise on all sides.
Take the Next Step
If you’d like to dive more in depth to the details of CPSR, learn best practices, and set yourself up for successful CPSR audits, then join us for our upcoming course on March 28-29 at our national training center in Tysons, VA.
About the Author
Jack Hott is an Instructor for Centre Law & Consulting. He has more than two decades of experience as a contracts professional in Government and the private sector. A retired Air Force officer, he served multiple acquisition related assignments where he managed administration, pricing, CAS and overhead approvals, supplier quality, and subcontract management.
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