Feb 25, 2013 12:47 PM
Compare to prior release...
DEPARTMENT OF DEFENSE
Defense Contract Management Agency
INSTRUCTION
Contractor Purchasing System Reviews
Contracts Directorate DCMA-INST 109
OPR: DCMA-AQ November 28, 2012
1. PURPOSE. This Instruction:
a. Cancels DCMA Instruction, “Consent to Subcontract/Contractor Purchasing System Review (CPSR)” (Reference (a)) and establishes Contractor Purchasing System Reviews (CPSR) as a stand-alone Instruction.
b. Is established in compliance with DoD Directive 5105.64 (Reference (b)).
c. Implements Department policy pursuant to references on pages 3 and 4.
d. Establishes policies, assigns responsibilities, and provides procedures for performing contractor purchasing system reviews.
2. APPLICABILITY. This Instruction applies to all DCMA activities unless higher-level regulations, policy, guidance, or agreements take precedence (e.g., International (DCMAI) and Specials Programs (DCMAS) activities).
3. MANAGERS’ INTERNAL CONTROL PROGRAM. This Instruction contains internal management control provisions that are subject to evaluation and testing as required by DCMA Instruction (DCMA-INST) 710, “Managers Internal Control Program” (Reference (c)). The process flowchart is located at Appendix A.
4. RELEASABILITY - UNLIMITED. This Instruction is approved for public release.
5. PLAS CODE. 094 – Consent to Subcontracts/CPSRs
6. POLICY RESOURCE PAGE. https://home.dcma.mil/policy/109r
7. EFFECTIVE DATE. By order of the Director, DCMA, this Instruction is effective immediately.
Timothy P. Callahan
Executive Director
Contracts
P3 - Drill
REFERENCES
(a) DCMA Instruction, “Consent to Subcontract/Contractor Purchasing System Review (CPSR)” hereby canceled
(b) DoD Directive 5105.64, “Defense Contract Management Agency (DCMA),”
September 27, 2000
(c) DCMA-INST 710, “Managers’ Internal Control Program,” September 12, 2011
(d) FAR 44.302(a), “Requirements”
(e) DCMA-INST 131, “Contractor Business Systems,” January 2012
(f) DCMA-INST 134, “Boards of Review,” October 15, 2012
(g) DCMA-INST 126, “Contract Audit Follow-Up,” December 2011
(h) FAR Part 12, “Acquisition of Commercial Items”
(i) FAR 44.302(b), “Requirements”
(j) DCMA Memo #11-454, “Corrective Action Requests (CAR) 1.0,” December 14, 2011
(k) DFARS 244.301, “Objective” (Contractors’ Purchasing Systems Reviews)
(l) DFARS 252.244-7001(c), “System criteria” (Contractor Purchasing System Administration)
(m)FAR 15.406-3, “Documenting the Negotiation”
(n) Chapter 85 of title 41, United States Code
(o) DFARS 244.305-70, “Policy” (Contractors’ Purchasing Systems Reviews)
(p) DFARS 244.305-70(c)(2), “Initial determination” (Contractors’ Purchasing Systems Reviews)
(q) DFARS PGI 244.305-70(c)(2), “Initial determination” (Contractors’ Purchasing Systems Reviews)
(r) FAR 44.305-2(a), “Notification”
(s) DFARS PGI 244.305-70(c)(2)(ii)(C), “Evaluation of contractor’s response” (Contractors’ Purchasing Systems Reviews)
(t) DFARS 244.305-70(c)(3)(i)(B), “Final determination” (Contractors’ Purchasing Systems Reviews)
(u) DFARS 252.244-7001(f), “Withholding Payments” (Contractor Purchasing System
Administration)
(v) DFARS 252.242-7005, “Contractor Business Systems”
(w) DFARS PGI 244.305-70(c)(3)(ii)(B), “Correction of significant deficiencies” (Contractors’
Purchasing Systems Reviews)
(x) DFARS 244.305-70(d) “System approval” (Contractors’ Purchasing Systems Reviews)
(y) FAR 44.304, “Surveillance”
(z) DFARS 244.305-70(e) “Contracting officer notifications” (Contractors’ Purchasing Systems Reviews)
(aa) DCMA-INST 809, “Records Management,” May 2011
(ab) DFARS 244.305-70(f), “Mitigating the risk of purchasing system deficiencies on specific
proposals” (Contractors’ Purchasing Systems Reviews)
(ac) FAR 44.305-2(a)(3)(i),“Notification”
(ad) FAR Subpart 9.4, “Debarment, Suspension, and Ineligibility”
(ae) FAR 16.203, “Fixed Price with Economic Price Adjustment”
(af) FAR 9.104-1(a), “General Standards”
(ag) DFARS 232.072, “Financial responsibility of contractors”
(ah) DCAA Contract Audit Manual, section 14-300
(ai) September 1994, The Army Lawyer, DA PAM 27-50-262, and article,
“Asserting Government Control over Subcontractors”
(aj) FAR 44.305.-3, “Withholding or Withdrawing Approval”
(ak) DFARS 252.244-7001(b), “General” (Contractor Purchasing System Administration)
(al) DFARS 252.244-7001(a), “General” (Contractor Purchasing System Administration)
CHAPTER 1
POLICY
1.1. POLICY. It is DCMA policy that:
1.1.1. An Administrative Contracting Officer (ACO) shall determine if a contractor meets the regulatory requirements identified in FAR 44.302(a) (Reference (d)) for a purchasing system review.
1.1.2. If the requirements of Reference (d) are met, the ACO shall initiate a review of the contractor’s purchasing system.
1.1.3. Upon the completion of a purchasing system review, the ACO shall determine whether the purchasing system has significant deficiencies.
1.1.4. Before disapproving a contractor’s purchasing system, the ACO shall obtain higher level review from the Contractor Business Systems Review Panel in accordance with DXCMA-INST 131, “Contractor Business systems” (Reference (e)).
1.1.5. If an ACO does not agree with a CPSR recommendation from a functional specialist, the matter shall be brought before an appropriate Board of Review.
1.1.6. If a contractor’s purchasing system is determined to have significant deficiencies, the ACO is responsible for issuing a decision to disapprove a contractor’s purchasing system.
1.1.7. The ACO’s decision to disapprove a contractor’s purchasing system, and to implement contract payment withholds, shall be governed by the Federal Acquisition Regulation (FAR), Department of Defense Federal Acquisition Regulation Supplement (DFARS), and DCMA Instructions.
1.1.8. The ACO shall conduct annual surveillance and determine whether another purchasing system review is needed, at least every 3 years, after a contractor’s purchasing system has been reviewed the first time.
1.1.9. The ACO shall evaluate corrective actions reported by a contractor and then issue an appropriate follow-up decision of approval or disapproval of the contractor’s purchasing system in accordance with Reference (e).
1.1.10. The ACO shall follow proper tracking and reporting requirements (as found in Reference (e)) to account for the status and outcomes of contractor purchasing system reviews.
