Contractor Purchasing System Review (CPSR)

Transcription

1 Contractor Purchasing System Review (CPSR)

2 Presentation References FAR 44.3 and DFARS Contractors Purchasing Systems Reviews Consent to Subcontract FAR

3 What is a CPSR Contractor purchasing system review (CPSR) means the complete evaluation of a contractor s purchasing of material and services, subcontracting, and subcontract management from development of the requirement through completion of subcontract performance.

4 Review Objective The objective of a contractor purchasing system review (CPSR) is to evaluate the efficiency and effectiveness with which the contractor spends Government funds and complies with Government policy when subcontracting. The review provides the administrative contracting officer (ACO) a basis for granting, withholding, or withdrawing approval of the contractor s purchasing system. 4

5 Benefits of CPSR An approved purchasing system allows the contractor more autonomy in subcontracting actions. Without an approved purchasing system, more Government oversight is required and consent to subcontract is required. Subpart Consent to Subcontracts 5

6 When should a CPSR be conducted? The ACO shall determine the need for a CPSR Contractor past performance Volume, complexity and dollar value of the subcontracts If a contractor s sales to the Government (excluding competitively awarded firm-fixed-price and competitively awarded fixed-price with economic price adjustment contracts and sales of commercial items pursuant to Part 12) are expected to exceed $25 million during the next 12 months, perform a review to determine if a CPSR is needed. ACO re-evaluates the need for a CPSR every three years. 6

7 Other triggers for a CPSR Date of most recent review Number of outstanding prior recommendations Volume of purchasing compared to sales Significant changes since last review, e.g., change of ownership, mergers, acquisitions, etc. Lack of contractor internal surveillance Special request from, e.g., ACO, PCO, DCAA 7

8 Classification and Priority of Review Recommendations by DCMA CPSR Division Public Law e.g., TINA, CAS, SB Plan, debarred Policy and Procedure e.g., sole source justification, internal review, vender rating, DPAS rating Price Analysis e.g., price analysis, negotiation, and competition 8

9 Who conducts a CPSR? Conducted by a DCMA Headquarters CPSR team. ACO coordinates CMO and DCAA personnel to assist in the CPSR. ACO collects contractor data as requested by the CPSR team lead 9

10 Risk Assessment The ACO, in consultation with the CPSR team, manages risk associated with contractors purchasing system. First a risk assessment is conducted to determine the need for an on-site CPSR. When a CPSR is required, an additional assessment is conducted to determine the scope of CPSR efforts. What is the Government s risk exposure? 10

11 Key Processes The CPSR specialist will identify the key processes, with supporting rationale that support the completion of a CPSR. Key processes are those which, if not properly controlled, can adversely affect contract performance, cost, or schedule. Contractor Vendor Rating Process Contractor Best Value Process Contractor Make/Buy Process Contractors internal purchasing system audit process 11

12 Special attention shall be given to -- The considerations listed in for consent evaluation of particular Subcontracts also shall be used to evaluate the contractor s purchasing system, including the contractor s policies, procedures, and performance under that system. Subcontractor responsibility Cost Account Standards Make or buy Technically justified Contract type Cost or price analysis Excluded Parties List System Ability One Program Price competition Bottom Line: Does the contractor use sound business judgment? 12

13 Special attention shall be given to -- The degree of price competition obtained; Pricing policies and techniques, including methods of obtaining accurate, complete, and current cost or pricing data and certification as required; Methods of evaluating subcontractor responsibility, including the contractor s use of the Excluded Parties List System (see 9.404) and, if the contractor has subcontracts with parties on the list, the documentation, systems, and procedures the contractor has established to protect the Government s interests (see ); Treatment accorded affiliates and other concerns having close working arrangements with the contractor; 13

14 Special attention shall be given to -- Policies and procedures pertaining to small business concerns, including small disadvantaged, women-owned, veteran-owned, HUBZone, and service-disabled veteran-owned small business concerns; Planning, award, and postaward management of major subcontract programs; Compliance with Cost Accounting Standards in awarding subcontracts; Appropriateness of types of contracts used (see ); and Management control systems, including internal audit procedures, to administer progress payments to subcontractors. 14

15 ACO Surveillance The ACO shall maintain a sufficient level of surveillance to ensure that the contractor is effectively managing its purchasing program. The ACO conducts surveillance IAW a plan covering pertinent phases of a contractor s purchasing system Preaward, postaward, performance, and contract completion Pertinent operations that affect the contractor s purchasing and subcontracting. CAR responsiveness and effectiveness 15

16 Granting, Withholding, or Withdrawing Approval The cognizant ACO is responsible for granting, withholding, or withdrawing approval of a contractor s purchasing system. Approve a purchasing system only after determining that the contractor s purchasing policies and practices are efficient and provide adequate protection of the Government s interests; and Promptly notify the contractor in writing of the granting, withholding, or withdrawal of approval. 16

17 Withholding or Withdrawing Approval 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 withdrawn or withheld when there is recurring noncompliance with requirements. 17

18 Contractor Purchasing Systems Review (CPSR) Questions? Mike Kelly