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Here’s How to Get Free Construction Leads

by Sarah LorekConstruction, Cosential, Uncategorized

Jun 18, 2021

Comprehensive guide for finding free construction leads… Getting construction leads can be a challenge. AEC Business development and sales professionals know that paying for leads or cold calling are options, but strategies for finding free construction leads shouldn’t be ignored. There are tons of free tactics, resources, and tricks that firms can leverage right now to find qualified, industry-specific prospects. The best part is that Business Developers, AEC Marketers, and Sales teams can focus on platforms and tools that prospects are already using daily.   In this article, you’ll learn how to get 100% free construction leads today, using tools that are easy and familiar to both you and potential prospects.  Read on to learn how to get free construction leads for your AEC firm.  Join LinkedIn Groups to Access the Right Audience for Free Construction Leads LinkedIn is a great resource for networking with like-minded peers and companies. But there are also groups that can be joined which include members of your exact target audience and potentially, customers. I have been using LinkedIn groups for years to learn the latest trends in AEC and to find people who might be interested in thought leadership articles, blogs, or eBooks. The same can be achieved for finding potential customers who could be interested in your product or service offering. Below are a few LinkedIn groups to join if you are looking to connect with more like-minded AEC professionals who could be interested in using your firm for work. LinkedIn Groups Specifically for Construction  Design and Construction Network – This group boasts more than 80,000 members (about the seating capacity of the Los Angeles Memorial Coliseum). It’s a great resource for connecting with construction professionals who mostly fall under the design-build category.  Construction Marketing Association – With more than 4,600 members, this group focuses on exactly how to market your construction firm to win more work. Online Expo’s & Virtual Trade Shows- Construction Who’s Who – This 3,000-person LinkedIn group is great for finding virtual conferences and local events to connect with construction professionals and find potential leads.  Top Construction Jobs – If you look at the posts in this massive 25,000-person group, you’ll notice that some firms and owners are looking to hire. Furthermore, you can find some posts looking for RFPs for construction work as well.  CIM | The Chartered Institute of Marketing – Construction Industry Group – CIMCIG – This 3,500-person group focuses on marketing your construction firm.   AGC Business Development Forum – This group by the Associated General Contractors of America is focused specifically on GC business developers. It’s a great resource to see how others are finding quality leads.    LinkedIn Groups Specifically for Architecture  TEKLA Structures Users – Users of Tekla, a software for architecture professionals, could find this group helpful for finding leads. A lot of posts are related to individuals in architecture that are trying to fill vacancies on their team or find qualified individuals or firms to fill in where their team is lacking.    LinkedIn Groups Specifically for Engineering & CEC  Quantity Surveyors, Commercial Managers, Cost Managers/Engineers and Estimators Forum – More geared towards estimators and cost engineers, this group includes posts from a plethora of users dedicated to sharing ideas and concepts.  Civil Engineering Jobs – This group boasts over 160,000 members and includes information about jobs related to CE.  Civil/Structural Engineering Network – With over 115,800 members, this network is great for sharing ideas, project pursuits, and information about how your firm is running the business.  Civil Engineering & Construction – This 68,800-person group shares best practice knowledge in CEC. Here, you’ll find people looking for but also be able to use business development knowledge to ensure you’re always staying ahead of the competition.    LinkedIn Groups for Overall AEC   Engineering News-Record – ENR is one of the top news sources for the AEC industry. Their group is full of information from firms across the entire architecture, engineering, and construction spectrum.  BIM (Building Information Modeling) Experts – Posts from this BIM (Building Information Modeling) experts group come from professionals across the AEC spectrum. Many of the 97,600 members are owners or operators looking for workers or jobs.  BIM (Building Information Modeling) and Architecture, Engineering, & Construction Projects and Jobs – This 91,000-person group is chocked-full of companies looking for subcontractors or individuals that can fill in where their team is lacking. It’s also a great resource to see what types of projects certain firms are working on. Just by connecting with others in this group, you should be able to find quality projects.    LinkedIn Groups for AEC Business Development  Bd4aec – Business Development for Architecture, Engineering, and Construction Markets – With a little over 300 members, this group has a specific audience. According to the page owner, the goal of this group is “to bring together the best-of-the best ideas, concepts, strategies and tactics and put them in front of you to make a difference in your business. If you’re a principal of an AEC firm and want to get more business, or you’re a business developer wanting to improve your game, or you’re an estimator or a project manager wanting to improve your skills, or just someone who wants to move into the business development field, then this group is for you.”    Attend Local Meetups for Qualified Construction Leads You can find local meetups for architecture, engineering, and construction on It’s free to join, and they even have online events for those who are concerned about social distancing during in-person events. This is a fantastic way to learn more about businesses in your area that could be looking to partner with a firm like yours. Just search for the topic you’re interested in meeting up about and you’ll find a list of events in your area.       You can also create your own events and invite others who might be interested in attending. Creating a thought leadership event and inviting potential prospects can help build credibility as an individual and build trust for your firm.  There are even events specifically for Business Developers to connect and network about clients looking for jobs across industries. The event in the screenshot below offers networking opportunities for BDs and sales professionals to “build better business by referral.”         Attend In-Person and Virtual AE and Construction Industry Conferences for Lead Opportunities Although several in-person conferences were canceled for 2020, many popular AEC events have gone virtual. Event hosts across the country are using creative ways to make the conference experience feel as immersive and real as possible— think virtual booths, live Q&A sessions, interactive content, and online “happy-hours” to network with like-minded AEC professionals. These events are a gold mine for networking with people who could refer your firm to quality construction leads. Some of the events are user conferences for customers of a particular product, while other conferences invite anyone in the AEC industry to attend. Below are a few conferences to check out this year.    Champions Conference 2021: Built2Win  June 15–16, 2021 – This virtual user conference, hosted by Unanet and Cosential, focuses on best practice techniques for users of Unanet’s ERP and Cosential’s CRM (Customer Relationship Management) products. Learn how to use the family of Unanet products to their fullest capabilities, network with like-minded individuals or business developers who can help grow your client base, and attend online presentations with live Q&A.  Current Unanet and Cosential customers can Register here.  Not a Cosential CRM customer but want to be? Request a demo.  Not a customer of Unanet but want to be? Contact the team.    ENR Future Tech  June 9–11, 2021 – Hosted virtually this year, ENR future tech is “the go-to source for business and IT leaders in architecture, engineering, and construction to explore emerging technologies that can enhance construction productivity, profits, and safety.” Connect with business leaders, meet others who are facing similar business development and sales challenges, and brainstorm with other professionals in your area of expertise.  Register here    PSMJ’s THRIVE Conference  September 22-24, 2021 – A/E/C THRIVE Conference will be hosted in-person in Scottsdale, Arizona this year. The conference will focus on growth, profit, and success for AEC firm leaders across the nation. You’ll learn what the most successful firms are doing today to drive more revenue, increase business performance, and truly scale their firms for the future. This is a great opportunity to network and meet potential partners who can help refer you and your firm for future projects. Register here    2021 Elevate AEC Conference & ElevateHER Symposium      September 13-October 8, 2021—This event hosted by Zweig Group will be virtual this year. Offered at only $49 per person, this event is one of the AEC industry’s top networking and learning events. You can even enter your firm to win an award across Zeig group’s selection of award entries. To celebrate great projects and teams across the AEC industry, the awards will be presented at the conference in front of all the attendees. This is an excellent strategy to promote your firm and to celebrate a job well done.   Register here    There are so many more conferences to check out for 2021! Take a look at this full list of upcoming AEC conferences from Construction Dive.    Request Ratings, Reviews, and Referrals to Encourage Free Construction Leads Are you currently requesting reviews and referrals from past or existing clients? Any time your clients have a positive experience while working with your firm throughout the project lifecycle—from conception to completion—you should request a review.   The most common way for potential prospects to see reviews for your firm is via Google reviews, as shown in the screenshot below. The more five-star reviews you have, the higher you’ll appear in search results anytime someone searches for something like “Top rated construction/architecture/engineering firms near me” or “Best commercial construction firms in (state).”       Google isn’t the only place to request reviews, however. There are many other ways for prospects to find you based on your high rating. On Glassdoor, you can ask your own employees to give your company a five-star review. When potential prospects are searching for firms to handle their next big project or when they’re reviewing RFPs, they’ll read your company reviews from current and past employees. The best part about Glassdoor reviews is that you don’t have to reach out to past customers. Simply send an email to your employees asking them to add their review, and you’ll be well on your way to showing up as a five-star firm in search results. Look at the full list below for instructions on how to get reviews on Google, Glassdoor, and a few other platforms.  Google Reviews  Glassdoor Reviews Clearly Rated Reviews  Facebook Reviews  Trustpilot Reviews   For strategies on exactly how to request reviews from customers, check out this article from Forbes.    Check Job Postings and Investor Websites for Free Construction Leads One way to find out which companies are planning big projects is to check out job postings across Glassdoor, LinkedIn jobs, Indeed, and other hiring websites. This is a great way to understand companies that might be planning their next big project. Companies are constantly using Glassdoor to hire subcontractors, architects, engineers, and to outsource work that they might not have the resources to complete with their current team.   Also, browse investor forums to see who is willing to front some cash for the right project. AngelList, the world’s largest startup community, offers an extensive list of construction angel investors that you can follow or reach out to for free.    Monitor Community Forums and List Your Business in Their Directories  NextDoor is an online community where residents can post about happenings in their town, request recommendations, or discuss issues affecting their area. Although most of the posts related to construction serve the residential community, any local businesses can add their details to NextDoor and will appear when anyone searches for your services. Expanding your brand locally is a fantastic way to connect with the local community and potentially find new leads.   Another tactic for your firm to find leads (and for leads to find you) locally is through Facebook. Over the years, Facebook has become more than a social networking tool. It now has a marketplace to sell and buy products, groups to join that are specific to interest and industry, “looking for recommendations” posts, job listings, town hall discussions, business pages, events, and even an “Offers” page. If your firm has a Facebook business page, you can post offers or updates, and anyone searching for services you offer will see it in their feed, as shown in the screenshot below.      So, what happens next?  If your business development, sales, or marketing budget is tight, we hope you found a few of these strategies helpful. Before long, you’ll find qualified architecture, engineering, or construction leads and, more importantly, they will find you.  Here’s what you could expect after successfully applying any of these construction lead tactics for your firm:  Your contact list will grow exponentially.  Business development activities will increase significantly.  Your time will become more valuable.  You’ll need to assess pursuits as go/no-go to quickly decide which projects are worth your time and effort.  Your boss will love you even more than he/she did before. If you’re your own boss, go ahead and pat yourself on the back.   Finally, once you have all these free construction leads, you’ll need a way to manage them. CRM (Customer Relationship Management) is a solution that helps businesses manage sales opportunities, log activities and customer interactions, store internal and external contacts, track leads, and grow their business—but not all CRMs are alike. Some AEC firms have tested well-known CRM tools, like Salesforce, to manage their customer relationship activities. What they found is that these CRM tools don’t have the specific capabilities that the uniqueness of the AEC industry requires. These “one-size-fits-all” CRM tools aren’t built for the AEC industry, and thus aren’t tracking some of the most important aspects of the AEC sales lifecycle. Many firms discovered that they needed more specific tracking for business development and sales activities that these “one-size-fits-all” solutions weren’t designed to address.     Want to win more work with a CRM built specifically for architecture, engineering, and construction? Access this free guide.    Unanet CRM by Cosential is the only CRM built specifically for architecture, engineering, and construction. The company has spent the last 20+ years tailoring its platform’s robust CRM and proposal generation features to the AEC industry, enabling business developers, marketers, executives, and project teams to win better projects and grow more revenue.   If you’ve applied any of the tactics listed in this blog and want to learn more about how to win better business, make better decisions, and grow revenue, be sure to request a demo of Unanet CRM by Cosential today. 


Why We Chose Unanet: Sierra7

by Kim KosterGovCon, News and Announcements

Jun 07, 2021

Part of our ongoing blog series detailing the reasoning behind a firm’s selection of Unanet’s ERP solution over other options. The firm: Sierra7 ( is a healthcare services and IT consulting firm that works with a variety of major federal and state government agencies including the Department of Veteran’s Affairs, Department of Defense and federal civilian agencies. Under its new agreement with Unanet, Sierra7 will implement Unanet’s purpose-built ERP platform to help it operate more efficiently and to give the consulting firm greater insights into project management. Prior to Unanet, Sierra7 managed their business management processes in other systems. Part of their challenges had arisen when they merged two companies and were then managing them both between Sage and QuickBooks. Closing the books for their 50+ projects every month was difficult, typically taking weeks and putting project managers behind with little ability to plan ahead. They knew they needed a better long-term solution to consolidate disparate information and streamline business processes: an ERP solution. When searching for the right ERP, Sierra7 had their need for real-time information and best-in-class customer support top of mind. Early on, Unanet stood out with its advanced functionality and flexibility during both the sales and implementation processes. “We were impressed with Unanet right off the bat. Their sales team brought in subject matter experts to have the right conversations with us at the right time. Unanet’s implementation process is incredibly flexible, and the team was dedicated to listening to and understanding our unique needs,” said Frank Rendon, chief financial officer, Sierra7. “When we were assessing ERP solutions, support was a key part of our grading criteria, and Unanet’s superior support offerings exceeded those expectations. Unanet’s next-level functionality, product roadmap, training options through Unanet University and support are all why chose the Unanet solution.” Sierra7 recently went live with Unanet. The Unanet team worked with them to create a custom implementation plan that will accelerate the roll-out of certain features to meet their unique needs while still keeping their planned go-live date. With Unanet, the Sierra7 team expects to gain time savings and real-time information that will allow them to drive their business forward. They will be able to provide PMs with more robust project and financial tracking, enabling their stakeholders to confidently make strategic decisions.


The Importance of Data for Project-Based Businesses

by Carrie MahonBusiness Development & Growth

Jun 03, 2021

Project-based organizations are built on and driven by data. Profit, cost, customer churn, pipeline, percent complete, win-loss rates—all of these and countless others are a vital part of the day-to-day. In order to make the important decisions that guide the business into the future, modern organizations need to harness and utilize data. It’s not enough to simply track this data, however; honing in on what metrics and KPIs are most valuable to your organization is what makes the difference between data overload and receiving actionable insights. As discussed in Unanet CEO Craig Halliday’s Inc. Magazine article “How to Find Metrics That Matter to Your Business,” organizations should learn how to strategically leverage the right data to drive the business forward: “Data should inform and galvanize, not confuse and paralyze. To get more of the former and less of the latter, my advice is to focus on a handful of high-level metrics that are simple, measurable and relevant to organizational objectives. Tune out the stuff that could be impactful but isn’t actionable, as well as the stuff that’s actionable but not impactful.” In the article, Halliday listed 5 of the big metrics SAAS businesses should keep an eye on: Customer experience metrics Employee engagement and experience metrics Annual recurring revenue Operating cash flow Community involvement Further, the metrics that organizations focus on must be informed by real-time data. If the data isn’t real-time, executives are left guessing on if they can trust the numbers in front of them. This makes it much harder to make the right strategic decisions. Only with real-time analytics can government contracting, architecture & engineering, and construction organizations turn information into insight, drive operational efficiencies, and connect and empower their people. To learn more about how real-time data can unlock insights and growth for your business, download our ebook, “The Business of Projects for Dummies.”


What Is CRM for Architecture?

by Lucas HaydenA/E, CRM

Jun 01, 2021

As an architecture firm, customers and opportunities are always top of mind for your teams. With projects being the lifeblood of your firm, properly managing your customers and opportunities can make or break your success. This is where CRM comes in. Customer Relationship Management (CRM) is simply the practice of managing how you interact with both current and potential customers. In this blog, we will review the importance of CRM for architecture firms, how a project-based CRM solution can automate the process, and what architects should look for when choosing a CRM solution. Why is CRM so Important? Architecture firms are in the business of projects. Because they sell projects and service rather than products, documenting client names, contacts, contact information and history is vital. Firms have long relied on repeat work from customers with whom they’ve had long standing relationships. As the competitive landscape has changed slightly, this is no longer the case. Firms can’t always count on the buddy system to guarantee work; they have to compete, which is where a CRM keeps them on their relational A-game. To do this successfully requires streamlined processes and clarity into all opportunities and customers. Some architecture firms are trying to achieve this level of insight with an endless array of emails, spreadsheets, Rolodex cards, and attachments that require constant consolidation and reconciliation. The more people keep separate siloes of data, the greater chance there is of crucial opportunity and customer data being incorrect or missing. There’s a better way. The Benefits of a Project-Based CRM Solution While the beloved Rolodex served the CRM needs of businesses before the days of software, modern architecture firms require modern solutions. Project-based CRM software provides a single source of truth for contact information, lead and opportunity pipeline management, and streamlines marketing efforts such as accessing historical project records for proposals and/or easily organizing email campaigns to clients, partners and prospects. Having a CRM that’s specifically built for projects is crucial because every project is unique. The details of the project, the team involved in executing the project, the relationships with Engineering and Construction firms—all of this and more needs to be tracked and it’s different with every project. A project-based CRM can do this. Let’s dive a little deeper into the main benefits of CRM for architecture firms can deliver several benefits. See Customer & Pipeline Information in Context of Projects Architecture firms are project-based, and their CRM solution should be, too. A project-based CRM solution allows firms to place the customer journey in context of a project, tracking it at every phase of the lifecycle. Projects don’t happen in a vacuum. Before starting a new project, project teams must assess required resources, the expected schedule, and where it fits into the existing list of projects. CRM software allows Project Managers and project teams to see the bird’s eye view of all current and future commitments and drill down into any opportunity as needed, allowing them to adjust their strategy. Take a look at this free guide, “The Business of Projects for Dummies,” to learn more. Gain Greater Insight & Decision-Making Capabilities A CRM for architecture houses accounts, contacts, telephone numbers, email addresses, and notes—the crucial data some firms are managing across multiple spreadsheets and bookmarked email threads—in one single solution for anyone to access. In just a few clicks, your business development and customer teams have a comprehensive view of contact history and information. No more pulling a contact name from an outdated spreadsheet only to later find that the contact left the company years ago. No more guessing the last time someone followed up with the prospect and what was discussed. Having real-time data places much-needed information at executives’ fingertips. The ability to know exactly where each deal stands and see the forecasted opportunities coming down the pipe is invaluable. Without this data, leaders are left to make important strategic decisions without the full picture. It’s much easier to steer the business into the future with a clear picture of the pipeline. Understand Customer Needs & Improve Relationships Project-based CRM goes beyond enabling better decision-making and increasing profit—though that is certainly one of the biggest benefits. A CRM solution can pave the way to teams improving their relationships with the customers and prospects they manage. It’s in the name, after all. Having the full set of meeting notes and emails for an account available anytime and anywhere makes it easier for Customer Success Managers to understand the full account history. They can see how the customer’s needs have shifted over time and make sure those needs are continuously being met—or course correct if they’re not. Architects know too well that truly understanding clients can mean the difference between retention or churn. Customer teams can compare accounts, notice that the pain points expressed by one customer are consistent across multiple customers, and introduce new opportunities to executives and business developers. What to Look for in a CRM for Architecture Firms Architecture firms are complex and unique, so finding a CRM tailored for them is crucial. So, what should architects be looking for in a solution? A Single Source of Truth Managing opportunities and existing contacts touches every aspect of the firm, and vice versa. The CRM solution should seamlessly integrate marketing, project management, business development and financial data into one location. The solution should meet project managers and executives where they are and be accessible from the devices—and tools like Outlook—that they already know and love. At any moment, executives should be able to keep a pulse on the entire organization and leverage the information they find to make smarter strategic decisions. Configurability & Scalability Firms must be able to trust that the CRM solution they choose will serve their unique business needs through crucial growth periods and beyond. The CRM system should be flexible and configurable enough for teams to have everything they need in the provided built-in tools. The firm should trust that the solution will grow with them instead of needing to migrate to and learn new systems each they make changes to their business model. Ideally, the CRM should also be able to integrate with financial solutions and other software. An integration enables project-specific marketing and financial data to quickly and securely sync and provide everything in one single source of truth. Proposal Management Ask any business development manager what one of their key priorities is, and they’ll likely say proposal creation and management. If proposals are a key part of a business, they must be a key part of the CRM tool the business uses. The CRM solution should provide the accurate data needed to consistently accelerate the proposal process, improve proposal data accuracy, and accurately track all certifications to include in proposals. Security It goes without saying just how crucial and sensitive prospect, customer, revenue, and pipeline information is. Customer contact information and profit figures that are kept in simple spreadsheets—or worse, scrawled on sticky notes—are at greater risk of being accidentally deleted or accessed by hackers who managed to guess a computer password. The CRM solution a firm chooses must have security top of mind. The best CRM solutions keep data secure and backed up. Administrators can set permissions and only allow the right people to access sensitive information. Responsive Support Firms shouldn’t just be handed a software and sent on their way—they need a support team backing the software. The CRM vendor should be a dedicated partner in the firm’s success, not someone who will restrict the value the firm gets out of the solution. The vendor should have several support options to meet the unique needs of the business. The best CRM for architecture firms in the world can’t provide value if it’s not supported. Check out the CRM by Cosential blog to learn even more about how to choose the right solution. Or, to learn more about how a project-based ERP solution can guide architecture and engineering firms into the future, download the Change Agent Playbook for A/E Firms.


Project Financial Management Best Practices to Follow

by Lucas HaydenA/E

Jun 01, 2021

Because architecture and engineering firms are in the business of projects, the financial health of their projects translates to the financial health of their business. Project financial management in a project-based business includes more than tracking assets, revenues and expenses; all this must be aligned to projects and customers. Let’s start with a quick definition of project financial management. Project financial management—in short—is the practice of tracking the financials of a project, which includes monitoring project profitability, revenue, costs, budget management, forecasting, and more. How do A/E firms do this? In this blog, we will explore 4 project financial management best practices. Establish and Measure KPIs “If you can’t measure it, you can’t improve it!” —Peter Drucker. This is certainly true with project financial management. While measuring every aspect of financials is important, establishing Key Performance Indicators (KPIs) and really focusing on a few metrics allows project managers to align on corporate and strategic goals, be more proactive instead of reactive, and better understand what defines true project success for the firm. Before A/E firms jump in and decide to establish some KPIs, it’s important to note that firms should prioritize the metrics that are the most meaningful and important. For example, it won’t be much use to the organization if project managers are only focused on burn rate. Yes, how much money a project is losing is one metric to keep an eye on. However, it may be more productive to track and set goals around earned value and project gross profit margin to give stakeholders a bigger picture of project performance. The most valuable metrics and where project teams should focus their KPIs might look a little different per firm, but the idea is the same. KPIs provide A/E firms strategic direction and the insight they need to course-correct as needed. Read more tips for choosing KPIs in our blog post. Standardize Project Financial Management Across the Organization All the employees and teams managing the firm’s project financials must follow the same practices and procedures to ensure not only consistency but accuracy in the numbers they’re working with. If one project manager is focused on different metrics than the rest of the team, or is managing their financial data in a silo, this causes a major disconnect in the information that is being communicated to stakeholders. If this is the case, executives might be trying to make strategic decisions and guide the firm into the future on different—and possibly contradicting—sets of financial data. Project management staff, executives, and other relevant stakeholders must be speaking the same financial language- reading from the same sheet of music. Anyone should be able to look at a budget report and be confident that this data is accurate and up-to-date. Speaking of reviewing the data, let’s discuss the importance of reporting for project financial management. Monitor Financials with Real-Time Reporting One excellent way to manage project financials? Reporting & Analytics. Creating reports and dashboards provides a bird’s-eye-view of the financial health of projects and prevents project managers and executives from operating in the dark. Reports and dashboards enable project managers to keep track of all the KPIs and other metrics that matter most, including profitability, earned value, project costs, and more. Plus, interactive analytic dashboards leave a data trail and allow project managers to pick up on patterns and look back to past projects for guidance on future ones. However—not all reporting systems are created equally. Firms keeping track of financial data in spreadsheets are missing out on the big picture. It’s easy for spreadsheets to quickly become outdated—or accidentally deleted. Not to mention the difficulty of trying to understand someone else’s spreadsheet and find the needed information. Even firms using financial software may find their system is not centered on projects and is not purpose-built specifically for A/E firms, therefore lacking in crucial functionality and insight they need. Modern A/E firms need modern reporting solutions. A project-based ERP that is purpose-built for A/E firms is essential for effective project financial management. It streamlines the project financial management process, allowing project teams to all get on the same page. All the information is automated and provided in real time. Anyone can pull up the dashboard and know exactly where any project stands at any given moment. Communicate with Stakeholders What good are financial reports if stakeholders aren’t using them? Once project teams have determined KPIs and used a robust ERP solution to track them, they must train and communicate with stakeholders on using the reports, too. Most modern ERP solutions are user-friendly, which contributes to higher stakeholder adoption. No more requests to pull data manually. Stakeholders can log in to the project-based ERP themselves and have all the information they need at their fingertips. Want to learn more about how real-time data in a modern ERP solution helps A/E firms keep a pulse on the finances of their projects? Download our eBook, “The Change Agent Playbook for A/E firms.”


What You Need to Know About the Contractor Purchasing System Review

by Kim KosterGovCon, Government Compliance

May 26, 2021

What is a CPSR? A contractor purchasing system review (CPSR) is performed by the Defense Contract Management Agency (DCMA) to evaluate the efficiency and effectiveness with which a contractor spends government funds and complies with government policy when subcontracting. In short, a CPSR is a review of a contractor purchasing system. Before we learn a little more about the review itself, let’s back up and level-set on what exactly a purchasing system is. What is an Approved Purchasing System? “System” is not interchangeable with “software” or “technology”—it’s not something you purchase off the shelf and install. A contractor’s purchasing system is an amalgamation of people, processes, and tools that must work together to achieve the goal of spending taxpayer dollars wisely. So, an approved purchasing system is one that has passed a CPSR, meaning it is designed to ensure that purchases are made at fair and reasonable prices and in compliance with the applicable contract terms, regulations, and public laws. const t="undefined"!=typeof HTMLImageElement&&"loading"in HTMLImageElement.prototype;if(t){const t=document.querySelectorAll("img[data-main-image]");for(let e of t){e.dataset.src&&(e.setAttribute("src",e.dataset.src),e.removeAttribute("data-src")),e.dataset.srcset&&(e.setAttribute("srcset",e.dataset.srcset),e.removeAttribute("data-srcset"));const t=e.parentNode.querySelectorAll("source[data-srcset]");for(let e of t)e.setAttribute("srcset",e.dataset.srcset),e.removeAttribute("data-srcset");e.complete&&(}}{"image":{"layout":"constrained","backgroundColor":"#f8f8f8","images":{"fallback":{"src":"/static/32602975e3af3fd8966730d94e1e8379/1b38b/puzzle-graphic-cpsr-white-paper-1.png","srcSet":"/static/32602975e3af3fd8966730d94e1e8379/f7c2d/puzzle-graphic-cpsr-white-paper-1.png 102w,\n/static/32602975e3af3fd8966730d94e1e8379/4d706/puzzle-graphic-cpsr-white-paper-1.png 205w,\n/static/32602975e3af3fd8966730d94e1e8379/1b38b/puzzle-graphic-cpsr-white-paper-1.png 409w","sizes":"(min-width: 409px) 409px, 100vw"},"sources":[{"srcSet":"/static/32602975e3af3fd8966730d94e1e8379/f15b3/puzzle-graphic-cpsr-white-paper-1.webp 102w,\n/static/32602975e3af3fd8966730d94e1e8379/28245/puzzle-graphic-cpsr-white-paper-1.webp 205w,\n/static/32602975e3af3fd8966730d94e1e8379/ca55b/puzzle-graphic-cpsr-white-paper-1.webp 409w","type":"image/webp","sizes":"(min-width: 409px) 409px, 100vw"}]},"width":409,"height":395},"alt":"Image showing how all the pieces of a purchasing system fit together","className":"wp-image-27220 aligncenter inline-gatsby-image-wrapper","data-wp-inline-image":"1"} When and Why is a CPSR Performed? As stated above, the goal of a CPSR is to ensure that a contractor purchasing system is operated in such a manner as to assure that the contractor spends government funds in accordance with the FAR. The review gives the Administrative Contracting Officer (ACO) a basis for granting, withholding, or withdrawing approval of the contractor’s purchasing system. Contractors cannot initiate a CPSR on their own. Rather, once a contractor’s sales to the government—excluding competitively awarded firm-fixed-price and fixed-price with economic price adjustment contracts and sales of commercial items pursuant to FAR Part 12—are expected to exceed $50 million in the next 12 months, the ACO is required by regulation to conduct a risk assessment. The ACO will review the contractor’s past performance and the volume, dollar value, and complexity of their purchasing to determine if the risk of ineffective or inefficient purchasing justifies the costs and effort required to perform a CPSR. Though the ACO is solely responsible for initiating a CPSR, it is possible other government organizations can determine the risk justifies the effort and ask the ACO to schedule a CPSR. For DOD contractors, a CPSR, as contemplated by FAR Subpart 44.3 and DFARS Subpart 244.3, will be conducted by the Defense Contract Management Agency (DCMA) in accordance with its CPSR Guidebook. Civilian agencies might request that DCMA conduct a CPSR on their behalf or contract with an independent audit form for the review. A few civilian agencies even have in-house teams that can conduct a CPSR. All CPSRs, except a follow-up review, are predicated on a risk assessment. Take the time to understand what the reviewers will be looking for in your purchasing system. Even if the CPSR is to be conducted by an organization other than DCMA, it is worthwhile to carefully review the DCMA CPSR Policies and Procedure Checklist. There are 24 DFARS criteria to be addressed and at least 65 items on the DCMA checklist. The DCMA materials are quite comprehensive and a good resource even if another organization will conduct your review. CPSR References: DFARS 252.244-7001, Contractor Purchasing System Administration DCMA CPSR Policies and Procedures Checklist DCMA CPSR Guidebook Advantages of Having an Approved Purchasing System Maintaining an approved purchasing system (i.e. one that has passed a CPSR) benefits the contractor for many reasons, including: It may fulfill a contractual requirement. All Department of Defense cost reimbursable or time and material (T&M) contracts will contain a clause (252.244.7001) that requires the contractor to maintain a compliant purchasing system. If the contractor is subject to the Cost Accounting Standards, the clause allows the government to withhold up to 5% of payments under the contract if the contractor fails to maintain an adequate purchasing system. These regulations apply even if the contractor’s system has not been formally reviewed. Some solicitations require the bidders to have an approved purchasing system. Others, such as the recent General Services Administration (GSA) Governmentwide Acquisition Contract (GWAC) solicitations, offer bonus evaluation points for contractors that have an approved purchasing system. Providing advance notification and obtaining the contracting officer’s consent to subcontract is generally not required when the contractor has an approved purchasing system. Not only does this eliminate some bureaucratic paperwork, it also significantly reduces a contractor’s risk. If the contractor was required to provide advance notification and obtain consent for a subcontract and did not––or cannot prove that they did––auditors will often question all costs associated with that subcontract. Risk Assessment Form Now that you know why a CPSR is performed, let’s talk about the risk assessment. The ACO will conduct the risk assessment utilizing the CPSR risk assessment form. Some of the information that will be requested is company information, last CPSR date and recommendations, sales data, contract type mix, sales to the government as a percent of total sales, number of POs/subcontracts by dollar values for the most recent year, type of business, and if you have been suspended from doing business in the past three years. The ACO will use your completed risk assessment form to determine if a CPSR is warranted and should be scheduled. If you have reached or are about to reach the $50 million threshold, it is time for you to make sure your purchasing system is operating in a manner that can pass a CPSR. Policies and Procedures are a Big Part of the CPSR Having and adhering to policies and procedures is the largest part of this review. So, making sure your documentation is in order, up-to-date, followed, and monitored is critical. TIP: Establish a self-audit program and document the results. Reviewers will see this as a very favorable activity. Below are some basic, overarching guidelines for your CPSR policies and procedures: Establish clear lines of authority and responsibility Ensure that all purchases are based on authorized requisitions and include documented support for vendor selected, price paid, and files, which are subject to government review Implement internal audits or reviews, training, and policies for the purchasing department to ensure the integrity of the system Include a system description detailing policies, procedures, and purchasing practices that comply with the requirements of the FAR and DFARS Install a sound organizational and administrative structure to ensure effective and efficient procurement of requirements at the best value from responsible and reliable sources Establish a role-based training program for all who participate in the purchasing process const t="undefined"!=typeof HTMLImageElement&&"loading"in HTMLImageElement.prototype;if(t){const t=document.querySelectorAll("img[data-main-image]");for(let e of t){e.dataset.src&&(e.setAttribute("src",e.dataset.src),e.removeAttribute("data-src")),e.dataset.srcset&&(e.setAttribute("srcset",e.dataset.srcset),e.removeAttribute("data-srcset"));const t=e.parentNode.querySelectorAll("source[data-srcset]");for(let e of t)e.setAttribute("srcset",e.dataset.srcset),e.removeAttribute("data-srcset");e.complete&&(}}{"image":{"layout":"constrained","backgroundColor":"#385878","images":{"fallback":{"src":"/static/25ca466fa7f422a595ce28b324b2e847/e4652/cpsr-cta.png","srcSet":"/static/25ca466fa7f422a595ce28b324b2e847/f9684/cpsr-cta.png 153w,\n/static/25ca466fa7f422a595ce28b324b2e847/98ec2/cpsr-cta.png 306w,\n/static/25ca466fa7f422a595ce28b324b2e847/e4652/cpsr-cta.png 612w","sizes":"(min-width: 612px) 612px, 100vw"},"sources":[{"srcSet":"/static/25ca466fa7f422a595ce28b324b2e847/3a90d/cpsr-cta.webp 153w,\n/static/25ca466fa7f422a595ce28b324b2e847/a5e12/cpsr-cta.webp 306w,\n/static/25ca466fa7f422a595ce28b324b2e847/51525/cpsr-cta.webp 612w","type":"image/webp","sizes":"(min-width: 612px) 612px, 100vw"}]},"width":612,"height":205},"alt":"","className":"alignnone wp-image-36979 inline-gatsby-image-wrapper","data-wp-inline-image":"2"} CPSR Requirements and DFARS 252.244.7001(a) DOD’s Business Systems Rule sets forth 24 system criteria that must be present in all contractor purchasing systems for a purchasing system to be “acceptable.” The criteria are outlined in DFAR 252.244-7001(a). In this blog, we will review these requirements. Below, the DFARS criteria are grouped into summary activities with the applicable criterion. Procurement Planning/Market Research (2 Criteria) Apply a consistent make-or-buy policy that is in the best interest of the government Ensure proper type of contract selection and prohibit issuance of cost plus a percentage of cost subcontracts Conflict of Interest/Misconduct (1 Criterion) Enforce adequate policies on conflict of interest, gifts, and gratuities, including the requirements of the Anti-Kickback Act Competition (2 Criteria) Use competitive sourcing to the maximum extent practicable, and ensure debarred or suspended contractors are properly excluded from contract award Require management level justification and adequate cost or price analysis, as applicable, for any sole or single source award Negotiated Procurement (1 Criterion) Document negotiations in accordance with the FAR requirements for negotiation Memoranda Cost of Pricing Data and Price Reasonableness (5 Criteria) Evaluate price, quality, delivery, and technical, and financial capabilities of competing vendors to ensure fair and reasonable prices Perform cost or price analysis and technical evaluation for each proposal or quote to ensure fair and reasonable subcontract prices Document negotiations in accordance with FAR 15.406-3 Take discounts, including cash discounts, trade discounts, quantity discounts, rebates, freight allowances, and company-wide volume discounts Establish and maintain procedures to ensure performance of adequate price or cost analysis on purchasing actions Source Selection (3 Criteria) Use competitive sourcing to the maximum extent practicable, and ensure debarred or suspended contractors are properly excluded from contract award Evaluate price, quality, delivery, technical capabilities, and financial capabilities of competing vendors to ensure fair and reasonable prices Establish and maintain selection processes to ensure the most responsive and responsible sources and to promote competitive sourcing so that purchases are reasonably priced and from sources that meet quality requirements Contract Formation and Content (3 Criteria) Ensure purchase orders and subcontracts contain all flow-down clauses, including terms and conditions, and any other clauses needed to carry out the requirements of the prime contract Notify the government of the award of all subcontracts that contain flow-down clauses that allow for government audit of subcontracts, and ensure the performance of audits of those subcontracts Ensure purchase orders and subcontracts contain mandatory and applicable flow-down clauses, as required by the FAR and DFARS Foreign Purchasing and Performance (3 Criteria) Ensure compliance with all relevant domestic preference requirements Ensure compliance with export control regulations Ensure agreements are not executed with prohibited parties Procurement Administration (4 Criteria) Maintain subcontract surveillance to ensure timely delivery and procedures to notify the government of potential subcontract problems that may impact delivery, quantity, or price Document and justify reasons for subcontract changes that affect cost or price Ensure that proper types of subcontracts are selected, and that there are controls over subcontracting, including oversight and surveillance of subcontracted effort Establish and maintain procedures to timely notify the contracting officer, in writing, of excessive pass-through concerns Tips for a Successful CPSR The process kicks off with the risk assessment and a series of detailed data questionnaires. Make sure your data is correct and that YOU understand what the information means so you can easily answer the reviewer’s questions. Answer clearly and timely so that the reviewer can understand the answer. Contractors that don’t have CPSR experience in-house may find it beneficial to engage a consultant to help prepare for the CPSR. Review the below tips for a successful CPSR: Prepare a strategic plan for compliance Prepare yourself with policies, procedures, and tools Self-audit plan executed and documented Understand the purpose of the purchasing review Study the guidebook and all references that DCMA provides Have at least one member of the executive team and ALL other participants at the entrance meeting Choose a point of contact to be a liaison with the CPSR team Keep a copy of all questions and answer documented At the exit meeting, make sure that you have all the stakeholders and understand issues brought up by the team The CPSR report will state recommendations that the CO/ACO will use to make the final determination of approving or disapproving the purchasing system. Common Issues Some common review issues can be easily corrected by taking the time upfront to put together a comprehensive plan. Planning the system is very important, so don’t rush through it. Make sure you are thorough. After the system is planned and documented, it must be executed and maintained to avoid issues. Below are a few common issues, but this list is by no means exhaustive: Policies and procedures don’t address the requirements The actual practice doesn’t match the policies and procedures Lack of competition – too many sole-source with inadequate justifications Inadequate FAR/DFAR flow-downs Inadequate price analysis Inadequate documentation Having a Successful CPSR Requires an Integrated ERP Tool Unanet purchasing software delivers powerful functionality to manage and simplify your buying process, designed to address the specific needs of professional services firms. With Unanet’s one system, purchasing integrates directly with timekeeping, expense, financials, and billing, saving time and money, and increasing accuracy. Our web-based system makes the process easy and visible from purchase requisition (PR), to issuance of the purchase orders (PO), through to customer invoice. Through Unanet’s workflow and approval process, all purchasing transactions can be tracked efficiently and integrated into the project forecasts. You can trust the accuracy of the data you are providing to the CPSR team as well as provide reports with all the needed traceability. To learn more, download the Aronson and Unanet white paper, The Contractor Purchasing System Review (CPSR) – What You Should Know.