2023 NCMA World Congress: Top Takeaways

SpendLogic recently attended NCMA’s 2023 World Congress and sat in on the DCMA CPSR Group’s presentation “A Proactive Approach to Contractor Purchasing System Reviews: A Tale of Two Contractors.”  If your company has federal government contracts, you might find these highlights from John Foley, CPSR Group Director, and Randy Shelby, CPSR Supervisory Procurement Analyst, of particular interest:

• The “CPSR Light” Process for Emerging Contractors
• What Federal Acquisition Regulation (FAR)/Defense Federal Acquisition Regulations Supplement (DFARS) review elements are of particular focus for the CPSR Group
• CPSR Guidebook Update Status
• DFARS Case 2017-D021, Revisions to Review of Contractor Business Systems

CPSR Light

The CPSR Group is taking a proactive approach with contractors who do not have an approved purchasing system and who are under the threshold.  The CPSR Group referred to these contractors as “emerging.”  It is important for these “emerging” contractors to understand that when their prime contract contains FAR 52.244-2, they are, in many cases, required to submit a consent package to the Contracting Officer before making an award to a supplier/subcontractor.  The Administrative Contracting Officer (ACO) is responsible for consent to subcontract, with exceptions.  DCMA’s CPSR Group has a Consent to Subcontract desk staffed with dedicated analysts who support requests from ACOs to analyze consent to subcontract packages.   The typical turnaround time by the analysts is between 7–10 days with recent reviews taking as few as 3-5 days.  While it is not a requirement for the ACO/PCO to send consent packages to the CPSR Group, it is advantageous to all stakeholders, since the CPSR Group will ensure all requirements are met and will work with the contractor on what is required.

The CPSR Group acknowledged they are not seeing the number of consent packages come through for review as they should be.  They are trying to determine whether the cause is due to an internal issue or if contractors are not adhering to the requirement under FAR 52.244-2.

The CPSR Group recommended that if you are an emerging Prime contractor without an approved purchasing system and cost contracts, don’t be caught “flat-footed” and take a proactive approach and do the following:

• Review your prime contracts for FAR 52.244-2;
• For any subawards (subcontracts or purchase orders) that require consent, coordinate with your ACO on the consent process;
• If necessary, update company policies and procedures based on any feedback from the ACO and/or CPSR Group.

During this “CPSR light” process, contractors benefit from feedback received from the CPSR Group on processes and procedures.  This feedback will help steer the contractor in the right direction toward developing a compliant purchasing system.  The CPSR Group stated they are delaying formal CPSR reviews of new and emerging contractors about a year to afford those companies time to get policies, procedures, and processes together.  Early engagement during the consent to subcontract review process combined with the additional time prior to a formal CPSR, removes the shock and awe effect when that scheduled audit letter is received. 

The FY24 CPSR Review Schedule currently identifies 23 contractors for review.  If you’re an emerging contractor, you could be one prime contract award away from a review.  Be proactive and start preparing now. 

Review Elements of Particular Focus for the CPSR Group

DFARS 252.244-7001, Contracting Purchasing System Administration, contains thirty (30) review elements.  During a CPSR, analysts are reviewing a contractor’s purchasing “system.”  However, of particular focus to the CPSR Group are Price Analysis and Source Justification.  Mr. Shelby jokingly stated that if an analyst does not find an issue with a contractor’s price analysis during a CPSR, did they really conduct a review?  Price Analysis remains one of, if not the top finding.  The reason for such focus – it affects YOU, the taxpayer.

Source Justifications are also an area of focus for the CPSR Group.  The Source Justification is not to explain why you chose a particular contractor or supplier but why you could not compete the work.  This requires a contractor to conduct market research and document whether there is competition in the market.  If your files are single/sole source heavy, you can count on a higher level of scrutiny on those justifications.

I unapologetically promote SpendLogic, particularly in these areas.  Price analysis and source justifications are just two (2) of SpendLogic bailiwicks.   SpendLogic will have your team creating these documents at a fraction of the time it takes them today.  Additionally, our clients’ 100% CPSR pass rate is a testament to its effectiveness.

CPSR Guidebook Updates

The CPSR Group appoints analysts (“champions”) for each CPSR review element and train quarterly.  These analysts are responsible for keeping the CPSR Group apprised of any and all federal acquisition regulation requirement updates and changes.  These analysts are currently working on updates to the CPSR Guidebook with a primary focus on Job Aides.   The goal is to have an updated Guidebook published and posted on DCMA’s public facing website by the end of fiscal year 2023.   DCMA’s CPSR Group encourages using the CPSR Guidebook to guide a contractor in the right direction with respect to government procurement requirements.  The guidebook is not designed to tell a contractor how to run their business.  When the updated CPSR Guidebook is published by DCMA, SpendLogic will post a link on our website.  Be sure to check back with us.

Revisions to Requirement for Review of Contractor Business Systems

The CPSR Group was asked to streamline the review process.  Part of that review included aligning the 30 review elements found in the CPSR Guidebook with the 24 elements identified in DFARS 252.244-7001(c).   DFARS Case 2017-D021, which emanated from Section 893 of the National Defense Authorization Act (NDAA) for FY 2017, authorizes third-party auditor reviews of contractor business systems eliminating the need further review of business systems by the Department of Defense (DoD).  The proposed rule would apply to contractors with covered contracts with the Government that make up more than 1% of its total gross revenue, excepting those exempt from CAS.  John Foley called out this DFARS case as potentially having an impact on DFARS 252.244-7001(c) and strongly encouraged industry to provide public comment on the proposed rule when published in the Federal Register.   SpendLogic will post a copy of the Notice of Proposed Rulemaking, as well as a link to the Federal Register, so be sure to check back.

Whether you are an emerging contractor or an existing contractor with an approved purchasing system needing to make process improvements and create consistency and efficiencies within your procurement department, SpendLogic’s affordable solutions can help to automate, streamline, and mitigate those top CPSR findings.  See how we can help you and your company.  Schedule a quick, no-pressure demonstration at a date and time convenient to you.