Contracting Purchasing System Reviews: What are They and What’s New?

More About | Government Contracting

As the requirement and interest in approved purchasing systems rises, contractors are looking for insight and guidance with purchasing system approval. While purchasing system guidance has been around for decades, the Defense Contract Management Agency (DCMA) issued updated guidance for its personnel evaluating contractor purchasing systems and preparing Contracting Purchasing System Review (CPSR) reports.

CPSR analyzes how contractors spend government funds, as well as their compliance with government policy when subcontracting. FAR clause 52.244-2 requires government consent before awarding any subcontract that exceeds the simplified acquisition threshold (SAT) or five percent of a cost-reimbursable, time and materials contract or unpriced orders under fixed price contracts. The CPSR provides the basis for the DCMA to evaluate the adequacy of a contractor’s purchasing system and make recommendations for improvements, if necessary.

The process provides the administrative contracting officer (ACO) justification for providing or denying approval of the contractor’s purchasing system. While the DCMA now has sole responsibility for CPSRs, the Defense Contract Audit Agency (DCAA) may assist at the request of the DCMA. Additionally, as the threshold for purchasing systems increased from $25M to $50M in qualified purchasing volume on federal contracts, the DCMA released new evaluation criteria that most contractors may find advantageous for preapproval on RFPs.

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Mike Mardesich
Senior Manager, DHG Government Contract Advisory Group

Bill Walter
Managing Director, DHG Government Contract Advisory Group

Jeff White
CEO and Founder of J.A. White & Associates, Inc.