The CPSR is how the government evaluates your spending of government funds to determine if you have been efficient, effective, and compliant with regulations, particularly when it comes to subcontracting. The Defense Contract Management Agency (DCMA) will assess your policies, procedures, and practices, as well as your purchasing system, to determine if they are adequate according to Federal Acquisition Regulation (FAR) requirements.
If the DCMA decides to do a CPSR, they will send a 60- to 90-day advanced notice along with a pre-review questionnaire. The questionnaire serves as a risk assessment the DCMA uses to determine if a CPSR really should be performed.
The DCMA typically performs a CPSR audit after a contractor has been awarded a contract where sales to the government will exceed $50 million during the next 12 months. A few contract types are excluded from this situation, including competitively awarded firm fixed-price contracts granted with or without an economic price adjustment.
The contracting officer (CO) may also determine if a CPSR is necessary based on factors such as past performance or the complexity, volume, and dollar value of subcontracts.
First, the main factor we tell our clients is to assess how much subcontracting work they do. If your business weighs heavily on issuing a myriad of subcontracts or large procurements in support of your prime contract awards, then you have checked the first box to “needing” a CPSR compliance plan, as you’re more likely to encounter CPSRs in the operation of your GovCon. The remaining boxes are comprehensive.
Second, if a majority of your work is with the DoD, you may want to consider checking out DFARS 252. 252.244-7001, the regulatory birth of what a CPSR-compliant system looks like. Finally, if your contract says you have to be CPSR compliant – we hope you already have systems in place to pass an audit before signing the dotted line.
There appears to be a trend in government evaluations looking for CPSR-compliant contractors. CPSR compliance was an extra 500 points for the recent OASIS bid. When you are CPSR approved, your business can stand out in the crowded GovCon market.
Passing a CPSR shows that your business is reliable and a good steward of the government’s funds. The CPSR is also a critical step in proving your organization complies with government requirements. As you develop robust purchasing policies and procedures, your company can better comply with government regulations and win more contracts.
Most organizations do not like or want a compliance plan for CPSRs because of the heavy administrative burden it places on corporate processes. That’s where we come in. The expert team at BOOST can tailor a CPSR compliance plan to fit your organization and ease your stress throughout your contract’s life cycle. We can help you generate thorough documentation and point out areas that need improvement so that you can rest easy knowing you are prepared for a possible CPSR audit.
Many of our competitors will happily sell you a CPSR package without blinking at the cost or whether you actually need it. We only sell this service if it appears to be necessary for your GovCon. We exist to add value, so you can trust us to do more than simply open a canned manual and serve it to you on a platter. Our team can provide a customized CPSR plan that ensures your purchasing system and policies are in line with government regulations.
Prepare for the CPSR and other government audits with help from BOOST. Contact us today to learn more about our specially designed consulting services for government contractors and how we can streamline your processes, ensure your compliance, and promote your peace of mind.
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