--- title: What is the Purpose of a Contractor Purchasing System Review (CPSR)? description: Is your purchasing system ready for a DCMA Contractor Purchasing System Review? Time to dust off those policies and procedures and ensure your employees are trained on FAR and DFARS requirements. image: https://info.redstonegci.com/hubfs/RGCI%20-%20What%20is%20the%20Purpose%20of%20a%20Contractor%20Purchasing%20System%20Review%20%28CPSR%29.png --- [ PAY INVOICE](https://redstonegci.com/invoice-payment/) [Call Us Today 256-704-9800](tel:2567049800) [info@redstonegci.com](Mailto:info@redstonegci.com) [![Redstone_Logo](https://info.redstonegci.com/hubfs/redstone%20logo%20version%201%20-%20rgb-1.png)](https://www.redstonegci.com/) # What is the Purpose of a Contractor Purchasing System Review (CPSR)? [Posted by Mary Beth Jackson on Mon, Apr 10, 2023 @ 09:04 AM](https://info.redstonegci.com/blog/author/mary-beth-jackson) - [Tweet](https://twitter.com/share) ![RGCI - What is the Purpose of a Contractor Purchasing System Review (CPSR)](https://info.redstonegci.com/hs-fs/hubfs/RGCI%20-%20What%20is%20the%20Purpose%20of%20a%20Contractor%20Purchasing%20System%20Review%20(CPSR).png?width=1000&name=RGCI%20-%20What%20is%20the%20Purpose%20of%20a%20Contractor%20Purchasing%20System%20Review%20(CPSR).png) The purpose of a CPSR is to determine if a contractor’s purchasing system and related internal controls comply with applicable laws and regulations, are effective over compliance with applicable laws and regulations, and are adequate and operating effectively. Contractors should evaluate their purchasing system by using the following regulations and DCMA guidance: - [DFARS 252.244-7001 – Contractor Purchasing System Administration](https://www.acquisition.gov/dfars/252.244-7001-contractor-purchasing-system-administration.) - [FAR Subpart 44.3 – Contractor Purchasing System Reviews](https://www.acquisition.gov/far/subpart-44.3) - [DCMA Instruction 109 – Contractor Purchasing System Reviews](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjgqKuTnO_6AhUulWoFHf6RBwEQFnoECC4QAQ&url=https%3A%2F%2Fwww.dcma.mil%2FPortals%2F31%2FDocuments%2FPolicy%2FDCMA-INST-109.pdf&usg=AOvVaw3YBupnNjkKCswVtLb-9hD7) (sets forth 24 system criteria) - [DCMA Policies and Procedures Checklist](https://info.redstonegci.com/blog/the-updated-dcma-contractor-purchasing-system-review-cpsr-handbook-has-arrived) - [DCMA CPSR Guidebook](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjcxv-3nO_6AhUrkWoFHSPNC5AQFnoECB8QAQ&url=https%3A%2F%2Fwww.dcma.mil%2FPortals%2F31%2FDocuments%2FCPSR%2FCPSR_Guidebook_091021.pdf&usg=AOvVaw3gpdZQCSc8rxAjhw5Bp0-W) ## What Elements of the Contractor Purchasing System Review (CPSR) Criteria You Need to Know?  | **CPSR Report Elements** | **DFARS Criteria** | | --- | --- | | Policy and Procedure Manual | (c)(1), (17), (19), (22), and (24) | | Truthful Cost or Pricing Data (TINA) (Public Law 87-653 | (c)(10), (16), and (22) | | Cost Accounting Standards (CAS) (Public Law 100-679) | (c)(2) and (19) | | Prior Consent and Advance Notification (10 U.S.C. 2306 (e)) | (c)(1) | | Small Business Subcontracting Plans (Public Law 95-507) | (c)(2) and (19) | | Protecting the Government’s Interest When Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment (FAR 52.209-6) | (c)(7) | | Limitation on Use of Appropriated Funds to Influence Certain Federal Contracting and Financial Transactions (Public Law 101-121 (Anti-Lobbying)) | (c)(2) and (19) | | Defense Priorities and Allocation System (DPAS) Rating (15 CFR 700) | (c)(1) | | Federal Funding Accounting and Transparency Act (FFATA) of 2006 | (c)(2) and (19) | | Counterfeit Parts Mitigation and Surveillance | (c)(19) and (21) | | Price Analysis | (c)(8), (9), (10), (16), and (22) | | Source Selection | (c)(4), (5), (7), (8), (9), (10), (20, and (21) | | Negotiations | (c) (11) and (12) | | Make-or-Buy Program | (c) (6) | | Limitations on Pass-through Charges | (c) (24) | | Documentation | (c)(4), (5), and (15) | | Training | (c)(17) and (18) | | Internal Review/Self-Audit | (c)(17) and (18) | | Mandatory FAR/DFARS Flow Down Requirements/Terms and Conditions | (c)(2), (16), and (19) | | Purchase Requisition Process | (c)(4) | | Buyer Lead-Time | (c)(5) | | Subcontract Types | (c)(13), and (23) | | Procurement Authority | (c)(3)and (20) | | Supply Chain Management Process | (12), (14), (21) and (21) | | Restrictions on the Acquisition of Specialty Metals/Articles containing Specialty Metals (10 U.S.C. 2533a) | (c)(19) | | Subcontractor/Vendor Closeout Process | (c)(4) | | Long-Term Purchasing Arrangements | (c)(23) | | Handling Change Orders and Modifications | (c)(15) | | Intra/Inter-Company, Affiliate, or Subsidiary Transactions | (c)(5) |   ## Recommendations for a Successful Contractor Purchasing System Review (CPSR) Review - Make sure policies and procedures are up to date and adhere to the [requirements of FARS and DFARS](https://info.redstonegci.com/blog/the-updated-dcma-contractor-purchasing-system-review-cpsr-handbook-has-arrived). - Establish forms and techniques to document the procurement. - Ensure appropriate flow-down clauses.   - Ensure terms and conditions are current and protect both your company and government’s interests. - Use a checklist to ensure required documentation is included in procurement files. - Make sure files are organized and consistent. - Train buyers and other employees that are involved in the [procurement process on FAR and DFARS requirements, adequate documentation, price analysis and negotiation techniques](https://info.redstonegci.com/blog/are-you-ready-for-contractor-system-purchasing-review-cpsr). - Consider independent compliance assessments to confirm that policies, procedures, and practices are compliant or to identify and remediate gaps. ## Negative Impact of Failing a Contractor Purchasing System Review (CPSR) Failure to pass a Contractor Purchasing System Review can result in a withholding or withdrawal of your company’s purchasing/subcontracting system. This would result in your company’s inability to issue a subcontract without first seeking written approval (Advanced Notification and Consent) from the ACO. This can cause: - Delays in deliveries and increase in overhead expenses. - Substandard prime contract performance and increased government oversight. - Loss of Revenue and delayed billings/collections. - Disqualification on competitive request for proposals. - Impact to the “bottom-line” Redstone GCI is available to [assist contractors in assessing their current purchasing system policies and practices](https://redstonegci.com/consulting/dfars-business-systems/purchasing-system/) to ensure they meet the DFARS requirements. Redstone GCI assists contractors throughout the U.S. and internationally with understanding the Government’s expectations in applying FAR requirements. [![Learn More About Our Contractor Purchasing System Review (CPSR) Services](https://no-cache.hubspot.com/cta/default/203971/interactive-168867383058.png) ](https://info.redstonegci.com/hs/cta/wi/redirect?encryptedPayload=AVxigLLS44ZlV%2F%2FnOvgT69R9NLtQNaFCoOjqWyW14g0X2F3imZvXXJKq4YJNO12g0VH0I1HARlvdH6ZKZhc%2BPohZWEWQ9SLonxK%2BRftbSkEEpzVLKeVAHfNqMZSJSbyl8GVKkAtzwQpp1JaU8J%2F%2F4LiMBaE8CYUfHSnFeO61jgwBrlGV6chqDdGX8fOv38l9H86VP9pRyRpcvXku19wiTokKI%2BhmRn%2Bn4iREW1sAcnBoVkk%3D&webInteractiveContentId=168867383058&portalId=203971) ### Written by [Mary Beth Jackson](https://info.redstonegci.com/blog/author/mary-beth-jackson) ![Mary Beth Jackson](https://info.redstonegci.com/hubfs/images/Staff_/Mary-Beth-Jackson-RGCI-1.png) Mary Beth Jackson is a Director with Redstone GCI and brings over 30-years of experience and subject matter expertise to our team. She is an experienced industry veteran with a combination of direct experience working for the government, extensive industry experience in large accounting, IT and compliance organizations, as well as experience providing consulting services for many of the largest government contractors. Her combination of experience in senior-level accounting, compliance and IT roles provides for a wealth of background experience and knowledge in regulation (FAR, CAS, DFARS, and other agency supplements), Sarbanes-Oxley, NIST IT and Information Security and many other areas. She frequently assists our clients with strategic initiatives within the accounting, finance, IT and compliance areas include assessment of internal control design and effectiveness, evaluation of DFARS Business Systems, M&A support and post-acquisition integration, and other projects uniquely suited to her background and experience. Professional Experience Mary Beth began her career working with DCAA in 1988 and spent nine years with the agency working on incurred cost audits, forward pricing proposals and rate audits, accounting, estimating, and material management and accounting system audits, cost accounting standards, and disclosure statement reviews. Following her tenure at DCAA, Mary Beth migrated to a large Fortune 500 company where she served in various roles including Compliance Manager for the Defense and Aerospace Division, IT Financial Systems Integration Manager, and Director of IT Governance. In her role as Compliance Manager, Mary Beth spearheaded process improvements to eliminate deficiencies noted by DCAA in the areas of material management and accounting system, estimating system, general accounting system, and cost accounting standard compliance. As IT Financial Integration Manager, Mary Beth designed and implemented global financial applications to enhance the overall financial posture of the company. In 2005, Mary Beth was promoted to Director of IT Governance where she managed the control activities for the IT organization to comply with the Sarbanes Oxley Act. She managed the control framework, which was comprised of IT general controls, application control, security, change management, logical access, and software quality assurance. Most recently, prior to joining Redstone GCI, Mary Beth was the Enterprise Controller for a major aerospace and defense contractor. Mary Beth was responsible for overseeing the implementation of accounting policies and procedures, producing accurate financial statements, establishing and maintaining the internal control environment while ensuring compliance with US GAAP, applicable standards, and statutory requirements. Her role included maintaining of oversight of complex indirect rate structure, establishment and monitoring of the internal controls framework, and subject matter expert in FAR/CAS. Her diverse range of experience in working for DCAA and in the industry at various levels of management provides a unique perspective for our clients and affords her the ability to objectively view unique challenges of our clients and provide practical advice. Education Mary Beth earned Bachelor of Science Degree in Accounting from The University of Alabama in Huntsville. Affiliations Information Systems Audit and Control Association (CISA) ## About Redstone GCI Redstone GCI is a consulting firm focused on fulfilling the needs of government contractors in all areas of compliance. With a singular mission to help contractors through the multiple layers of “red tape,” we allow contractors to focus on what they do best – support their mission with the U.S. Government. We are home to a group of consultants made up of GovCon industry professionals, CPAs, attorneys, and retired government audit and acquisition professionals. Our focus and knowledge of audit and compliance functions administered by DCAA and DCMA will always be at the heart of what we do. However, for the past decade, we’ve strategically grown to support other areas of the government contractor back-office with that same level of focus and expertise. We’ve added expertise in contracts management, subcontract administration, proposal pricing, various software systems, HR and employment law, property administration, manufacturing, data analytics/reporting, Grant specialists, M&A, and many other areas. When we see a trend in the needs of contractors, we act to ensure we can provide the best expertise in the market to fulfill those needs. One thing our clients can be certain of is that with the Redstone GCI Team in your corner, there is no problem too big and no issue too technical for our team to tackle. 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