What is a DCMA Compliant Purchasing System and Why Should I Have One? – CPSR part 1

2017-04716-Unanet-Logo-CMYK-02.png Aronson LLC

What is a DCMA Compliant Purchasing System?

A DCMA compliant purchasing system is one designed to ensure that purchases are made at fair and reasonable prices and in compliance with the applicable contract terms, regulations and public laws. The first thing a contractor needs to understand about contractor purchasing systems is what constitutes a purchasing system. Many contractors think a purchasing system is something that can be purchased off the shelf and installed, like a mechanical system. However, as depicted in the figure below, a purchasing system is an amalgamation of people, processes, and tools that must work together to achieve the goal of spending taxpayer dollars wisely.

DCMA Compliant Purchasing System

In Unanet and Aronson’s five-part CPSR blog series, we will review…

  • The benefits accruing to contractors that maintain compliant purchasing systems
  • When and how the government conducts a contractor purchasing system review (CPSR)
  • Steps contractors can take to prepare for and pass a CPSR

Advantages of a DCMA Compliant 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 plus 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 the payments if the contractor fails to maintain an adequate purchasing system.
  • 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 enter into a 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––the government can disallow all costs for that subcontract.

A DCMA Compliant Purchasing System Requires an Integrated ERP Tool

People, processes, and, yes, tools are needed for a successful business model. In this blog, we touched on what a purchasing system is and the benefits of having one.

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. With Unanet, the overall purchasing requirements for the CPSR will be met. 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.

Want to keep learning? Check out part 2 of our CPSR blog series!

Kim Koster

Kim Koster

Kim is an experienced executive who brings over 30 years of experience in project management, project accounting, EVMS,  government contract and accounting compliance, and communications.

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