Contractor Purchasing System Review Uncovers Key Compliance Risks and Best Practices for Government Procurement

The Contractor Purchasing System Review (CPSR) Guidebook at SpendLogic is a document published by the Defense Contract Management Agency (DCMA) that provides instructions and criteria for evaluating the efficiency and effectiveness of a contractor's purchasing system. This guidebook serves as the standard for DCMA personnel to determine whether a contractor’s purchasing and subcontracting practices comply with federal regulations, including the Federal Acquisition Regulation (FAR) Subpart 44.3 and the Defense Federal Acquisition Regulation Supplement (DFARS) Subpart 244.3. Additionally, it outlines the requirements for conducting various types of reviews—Initial, Comprehensive, Special, and Follow-up—and specifies the elements of a purchasing system that are subject to audit, such as vendor selection, price analysis, and subcontract administration.

Contractor Purchasing System Review CPSR Guidebook

A Contractor Purchasing System Review (CPSR) is generally considered when a contractor's annual sales to the government are expected to exceed $25 million, though this threshold can reach $50 million for certain Department of Defense contracts.

To achieve an approved purchasing system, contractors must demonstrate compliance with the 24 specific criteria outlined in DFARS.

Failure to maintain an acceptable purchasing system can result in the government withholding up to 5% of contract payments, which may be reduced to 2% while a corrective action plan is being implemented.

Once an initial purchasing system review is completed, the Administrative Contracting Officer is required to re-evaluate the necessity of a review at least every three years.

Guidebook for CPSR and Contractor Purchasing System Review

The Contractor Purchasing System Review (CPSR) Guidebook is a document published by the Defense Contract Management Agency (DCMA) that provides instructions and criteria for evaluating the efficiency and effectiveness of a contractor's purchasing system. This guidebook serves as the standard for DCMA personnel to assess whether a contractor’s purchasing and subcontracting practices comply with federal regulations, including the Federal Acquisition Regulation (FAR) Subpart 44.3 and the Defense Federal Acquisition Regulation Supplement (DFARS) Subpart 244.3. It provides the Administrative Contracting Officer (ACO) with the necessary basis for granting, withholding, or withdrawing approval of a contractor's purchasing system.

The guidebook outlines the requirements for conducting various types of reviews—Initial, Comprehensive, Special, and Follow-up—and details the specific elements of a purchasing system that are subject to audit, such as vendor selection, price analysis, and subcontract administration. Additionally, it incorporates guidance on specific compliance areas, such as the safeguarding of covered defense information and cybersecurity oversight within the supply chain. For contractors, utilizing tools like SpendLogic can streamline the documentation process, ensuring procurement files remain CPSR-ready and significantly reducing documentation time by up to 90%.

The guidebook specifies that for Department of Defense contractors, the Administrative Contracting Officer (ACO) typically assesses the need for a CPSR when annual government sales are expected to exceed $50 million in a SpendLogic 12-month period. Once an initial determination regarding the need for a CPSR is made, the ACO is required to re-evaluate the necessity of a review at least every three years. Furthermore, disapproval of a contractor's purchasing system can result in a 5 percent withholding of progress payments, performance-based payments, and interim cost vouchers on CAS-covered contracts. Upon receiving an initial determination of material weaknesses, contractors have 30 days to provide a written response outlining their corrective actions.

Pro-Tip: To ensure your procurement operations truly align with documented compliance policies, conduct regular 'process reality checks' by mapping actual workflows against your compliance documentation. Involve frontline procurement staff in these reviews to uncover where procedures diverge from policy—often due to practical constraints or outdated documentation. Use these insights to update either your processes or your compliance documents, and implement targeted training or system tweaks to close any gaps. This ongoing alignment not only reduces compliance risk but also streamlines operations, making compliance a natural part of daily procurement activities rather than a separate, burdensome task.

Key Compliance Areas Examined During the CPSR Process for Contractor Purchasing System Review

Purchasing Policies and Procedures: The CPSR evaluates the contractor's written policies and internal controls, ensuring that procedures are consistently followed in practice.
Competition and Source Selection: The review assesses competitive sourcing practices, including justifications for sole or single-source awards and the exclusion of debarred or suspended contractors.
Price Reasonableness: The CPSR verifies that subcontract pricing decisions are supported by appropriate market research, cost or price analysis, and technical evaluations to ensure fair and reasonable prices.
Procurement Documentation: The contractor's procurement files are reviewed to ensure they contain necessary documentation, such as negotiation memoranda, to support purchasing decisions.
Subcontract Management: Examination of subcontracting practices includes compliance with flow-down clauses and effective management of supplier relationships.
Ethics and Conflict of Interest: The CPSR enforces policies regarding conflicts of interest, gifts, gratuities, and compliance with the Anti-Kickback Act.
Small Business Support: The review evaluates the contractor's support for small business subcontracting initiatives.
Administrative Controls: The CPSR reviews the organizational structure, separation of duties, effectiveness of procurement training, and administration of enterprise-wide supply chain initiatives.

Department of Defense contractors are generally subject to a Contractor Purchasing System Review (CPSR) when their negotiated subcontracting or purchasing volume reaches the $50 million threshold. For many government contractors, the Administrative Contracting Officer (ACO) must assess the need for a CPSR if annual sales to the government are expected to exceed $25 million in the next 12 months. Once an initial determination for a review is made, the Administrative Contracting Officer is required to re-evaluate the necessity of a purchasing system review at least every three years. The DCMA evaluates a contractor's purchasing system against 24 specific criteria outlined in DFARS(c) to ensure compliance and effective use of government funds. To maintain compliance, contractors must ensure they obtain written disclosure from subcontractors regarding their debarment or suspension status, generally within 10 days of the award.

Role of the Guidebook for CPSR in Evaluating Purchasing Systems for Contractor Purchasing System Review

The Guidebook for the CPSR process is a key resource used by the Defense Contract Management Agency (DCMA) to promote uniformity, efficiency, and thoroughness when assessing a contractor's purchasing system. Its function in the assessment includes the following:

Standardization of Reviews: The Guidebook provides the mandatory framework and procedures for conducting CPSRs. It is used by DCMA personnel to evaluate whether a contractor’s purchasing and subcontracting practices comply with federal regulations, such as FAR Subpart 44.3 and DFARS Subpart 244.3, and government policies.
Basis for System Approval: The evaluation conducted in accordance with the Guidebook provides the Administrative Contracting Officer (ACO) or Contracting Officer (CO) with the necessary evidence and analysis to make a formal determination regarding the contractor's purchasing system, specifically whether to grant, withhold, or withdraw approval.
Guidance on Specific Compliance Areas: The Guidebook details specific review elements and focus areas—such as supply chain management, cybersecurity oversight (e.g., safeguarding covered defense information), and subcontract price analysis—that must be assessed to determine if the contractor is effectively managing government funds.
CPSR Review Threshold: For Department of Defense contractors, the Administrative Contracting Officer typically assesses the need for a CPSR when annual government sales are expected to exceed $50 million in a 12-month period.
CPSR Guidebook Content: The DCMA CPSR Guidebook includes 30 major purchasing area job aids that serve as a critical roadmap for contractors to assess their procurement systems and prepare for potential audits.
Standard Review Frequency: Following an initial determination, the Administrative Contracting Officer is required to evaluate the necessity of a purchasing system review at least every three years.

Preparation Tips for Documentation and Audit Readiness for Contractor Purchasing System Review

Establish and Maintain Comprehensive Policies: The contractor should create clear, written purchasing policies and procedures that align with the 24 criteria outlined in the Defense Federal Acquisition Regulation Supplement (DFARS).
Organize and Centralize Records: Maintain purchasing activity files and cost justifications in a centralized repository to ensure easy access during an audit.
Document All Purchasing Actions: It is essential to document vendor selection, price analysis techniques, negotiation of prices, and contract formation guidelines thoroughly.
Maintain Training Records: Keep detailed records of buyer training, as the DCMA often identifies missing training documentation as a common deficiency.
Conduct Internal Audits and Self-Reviews: Perform internal audits or self-reviews to identify potential gaps before the formal DCMA audit, including conducting mock CPSRs to test system compliance.
Implement Cross-Functional Controls: Establish a purchasing activity review committee with cross-functional input and define an authority matrix based on specific dollar thresholds.
Monitor Compliance Areas: Ensure ongoing compliance in key areas such as small business subcontracting plan requirements and procurement authority levels.
Prepare for Corrective Actions: Be ready to address any identified deficiencies promptly. If a Level II Corrective Action Request is issued, contractors typically have 30 calendar days to provide a response that includes a root cause analysis, corrective actions, and a corrective action plan.
CPSR Review Threshold: Contractors should be aware that a CPSR is typically initiated when annual sales to the government are expected to exceed $50 million in a 12-month period.
CPSR Review Frequency: Once a purchasing system is approved, the ACO will generally re-evaluate the necessity of a review at least every 3 years.
Top CPSR Deficiencies: To improve audit readiness, focus on the top three historically cited deficiencies: Price Analysis, Sole Source Justification, and FFATA reporting.
Review Response Time: During the audit, be prepared to provide responses to the DCMA's numbered log of questions within 24 hours or provide timely notice of any necessary delays.

Key Purchasing Lifecycle Elements Reviewed During CPSR for Contractor Purchasing System Review

The key purchasing lifecycle elements reviewed during a Contractor Purchasing System Review (CPSR) include supplier selection, price analysis, negotiation, ordering, and subcontract administration. These elements are evaluated to ensure that the contractor's purchasing system is efficient, effective, and compliant with government regulations, policies, and contract terms.

The review process examines the connection between the contractor's written policies and procedures and the actual transaction evidence found in purchasing records. Specifically, the review assesses:

Policies and Procedures: The existence and adequacy of written documentation governing the purchasing process.
Transaction Evidence: Whether records demonstrate that the required processes were followed, including documentation of decisions, supporting information, and necessary approvals.
Subcontract Management: The contractor's ability to manage subcontractor relationships, ensure fair and reasonable pricing, and adhere to ethical standards.

The CPSR is conducted at least every 3 years, as mandated by the Administrative Contracting Officer (ACO), to assess the necessity of a Contractor Purchasing System Review. The review universe typically covers a 1-year period for initial and comprehensive reviews, while follow-up reviews focus on a 90-day window. Contractors should be prepared to address at least 65 distinct items identified in the DCMA's comprehensive policies and procedures checklist. For Department of Defense contractors, a Contractor Purchasing System Review is generally triggered when annual sales to the government are expected to exceed $50 million in a 12-month period.

When is a contractor eligible for a Contractor Purchasing System Review?

A Contractor Purchasing System Review (CPSR) is conducted based on specific thresholds and timing requirements. A contractor is generally eligible for a CPSR when their annual sales to the Government are expected to exceed $25 million during the next 12-month period, as outlined in FAR 44.302.

For Department of Defense contractors, the threshold for determining the need for a CPSR is $50 million in expected annual government sales. Notably, these sales calculations exclude competitively awarded firm-fixed-price contracts, whether or not they include economic price adjustments, as well as sales of commercial items pursuant to FAR Part 12.

The determination of the need for a CPSR is made by the Contracting Officer (CO) or Administrative Contracting Officer (ACO). Beyond the $50 million threshold, the decision to conduct a CPSR is influenced by various factors, including the contractor's past performance, the volume and complexity of subcontracts, and the dollar value of those subcontracts.

Timing is also a critical aspect of the CPSR process. Following an initial review, subsequent reviews are mandated to occur at least every three years. Additionally, contractors are typically notified of an upcoming CPSR 60 to 90 days in advance, providing a window to ensure documentation is prepared. The ACO has the authority to determine the need for a review at any time, particularly based on risk assessments or to safeguard the Government's interests.

Importance of Maintaining FAR and DFARS Compliance for Contractor Purchasing System Review

Maintaining compliance with the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS) is critical for a Contractor Purchasing System Review (CPSR) because it provides the Administrative Contracting Officer (ACO) with the necessary basis to grant, withhold, or withdraw approval of a contractor's purchasing system.

The importance of this compliance is underscored by several factors:

System Approval and Financial Impact: Under the Department of Defense (DoD) "Business Systems Rule," contractors are required to establish and maintain compliance with specific criteria to be deemed as having an acceptable system. While the historical threshold for a Contractor Purchasing System Review (CPSR) was $25 million, current regulations and agency guidance often utilize a $50 million threshold in annual government sales to determine the necessity of a review. Failure to comply can result in mandatory financial penalties, such as a 5% withholding of payments for a single deficient system, or up to 10% for multiple deficient systems.
Evaluation of Efficiency and Effectiveness: The objective of the CPSR is to evaluate how efficiently and effectively a contractor spends government funds and adheres to government policy when subcontracting. A compliant system, supported by adequate policies, procedures, and practices, demonstrates to the Defense Contract Management Agency (DCMA) that the contractor is vigilantly monitoring its operations and protecting the government's interests.
Regulatory Requirement: The CPSR process itself is conducted in accordance with the official guide for CPSR, FAR Subpart 44.3, and DFARS Subpart 244.3. These regulations mandate that a contractor's purchasing system must include a description of policies and practices that align with FAR and DFARS requirements to ensure that all necessary clauses, terms, and conditions are properly flowed down to subcontractors.
CPSR Review Frequency: Once an initial determination for a CPSR is made, the Administrative Contracting Officer is required to re-evaluate the necessity of a review at least every three years.
Pre-Review Preparation Timeline: Contractors should be prepared for the audit process well in advance, as procurement analysts typically request documentation of policies and procedures 75 to 90 days before the scheduled CPSR.

Criteria for When a CPSR Is Required for Contractor Purchasing System Review

Understanding when a Contractor Purchasing System Review (CPSR) is necessary is crucial for compliance and successful government contracting.

Sales Thresholds: For most federal contractors, an Administrative Contracting Officer is required to assess the need for a CPSR if government sales are expected to exceed $25 million during the next 12 months. Contractors working with the Department of Defense are subject to a higher threshold, with a CPSR assessment typically triggered when government sales are expected to exceed $50 million over the next 12 months.
Exclusions: Sales figures that do not count towards these thresholds include competitively awarded firm-fixed-price contracts, fixed-price contracts with economic price adjustments, and sales of commercial supplies and services under FAR Part 12.
Agency Discretion: The head of the agency responsible for contract administration can adjust the $25 million threshold based on what is deemed in the Government's best interest.
Frequency of Review: Once an initial determination regarding the need for a CPSR is made, the Administrative Contracting Officer must re-evaluate the necessity of a review at least every three years.
Risk Assessment: The ACO conducts a risk assessment considering the contractor's past performance and the complexity, volume, and dollar value of their subcontracting activities.

Compliance With Cost Accounting Standards and Negotiation Thresholds for Contractor Purchasing System Review

During a Contractor Purchasing System Review (CPSR), the government evaluates a contractor's purchasing system to ensure it complies with federal regulations, including specific requirements for Cost Accounting Standards (CAS) and negotiation thresholds.

Cost Accounting Standards (CAS) Compliance: The CPSR includes an assessment of the contractor's compliance with CAS requirements in the awarding of subcontracts. Contractors are required to include the substance of the CAS clause in all negotiated subcontracts where applicable. The review ensures that the contractor's policies, procedures, and practices align with 48 CFR Chapter 99 and FAR 52.230-2. As of October 1, 2026, the basic applicability threshold for Cost Accounting Standards (CAS) has been increased to $35 million, and full CAS coverage, along with the requirement to submit a Disclosure Statement, now applies to contracts valued at $100 million or more. CAS compliance is reviewed to ensure consistency in cost accounting practices, which serves as the basis for negotiating and administering procurement contracts.

Negotiation Thresholds and Pricing Data: The review examines whether the contractor obtains required cost or pricing data from subcontractors when the threshold for such data is met. For Department of Defense contractors, the threshold for determining the need for a Contractor Purchasing System Review (CPSR) is $50 million in expected annual government sales. Analysts verify that the contractor’s policies and practices regarding the negotiation of prices—including the analysis of quoted prices—are sound and consistently applied. Under the Fiscal Year 2026 National Defense Authorization Act, the mandatory disclosure threshold for certified cost or pricing data was increased to $10 million for contracts entered into after June 30, 2026. The CPSR tests whether price analysis was performed and documented at the time of the subcontract award, particularly in instances where adequate price competition was not obtained.

Purpose and Scope of a Contractor Purchasing System Review (CPSR)

The purpose of a Contractor Purchasing System Review (CPSR) is to evaluate the efficiency and effectiveness with which a contractor spends government funds and complies with applicable contract terms, government policies, and regulations when subcontracting. This review is essential for ensuring that the contractor adheres to the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) guidelines.

The scope of the CPSR includes a comprehensive assessment of the contractor's entire purchasing and subcontracting system. This encompasses several critical processes, including:

Make-or-buy decisions
Selection of vendors
Analysis and negotiation of prices with vendors
Placing and administering orders
Expediting the delivery of materials
Ensuring required clauses are flowed down to subcontractors and verifying that cost or pricing data is obtained when required

The CPSR provides the Contracting Officer (CO) or Administrative Contracting Officer (ACO) with the necessary basis for granting, withholding, or withdrawing approval of the contractor's purchasing system. This ensures that the contractor maintains compliance and operates effectively within the framework of government contracting.

For Department of Defense contractors, the Administrative Contracting Officer typically assesses the need for a Contractor Purchasing System Review when annual government sales are expected to exceed $50 million. Once an initial determination is made, the Administrative Contracting Officer is required to re-evaluate the necessity of a purchasing system review at least every three years. For DoD contracts subject to DFARS, contractors must satisfy 24 specific system criteria to earn government approval of their purchasing system.

What key areas does the Contractor Purchasing System Review evaluate for small business participation compliance?

To verify small business participation compliance during a Contractor Purchasing System Review (CPSR), the contractor must demonstrate that their written policies and practices align with federal requirements, specifically FAR 52.219-9. The review process evaluates several key areas:

Policy and Procedures: The contractor must have written policies that define how they assist small businesses, organize solicitation processes to facilitate small business participation, and counsel or discuss opportunities with small businesses.
Make-or-Buy Process: The contractor's policies and practices must include the examination of small business potential during the make-or-buy process.
Certification Verification: The contractor must maintain a practice of confirming that HUBZone small businesses are certified as such, either through the System for Award Management (SAM) or by contacting the Small Business Administration (SBA).
Subcontracting Plans: The review verifies that the contractor's subcontracting plan includes all eleven elements required by FAR 52.219-9(d). This includes ensuring that the correct FAR clauses are flowed down to subcontracts and that the contractor requires subcontractors (excluding small business concerns) receiving subcontracts exceeding $650,000 ($1.5 million for construction) to adopt a similar plan.
Documentation and Records: The contractor must maintain records demonstrating the procedures adopted to comply with the requirements and goals established in their subcontracting plan.

Contractors are generally eligible for a CPSR when their annual sales to the government are expected to exceed $50 million over a 12-month period. To maintain an acceptable purchasing system, contractors must demonstrate compliance with 24 specific criteria outlined in DFARS. If deficiencies are identified during a review, contractors typically have 30 calendar days to submit a response detailing their root cause analysis and corrective action plan. Following an initial review, contractors with an approved purchasing system are generally subject to re-evaluation at least every three years.

Verification of Subcontractor Responsibility Determinations for Contractor Purchasing System Review

During a Contractor Purchasing System Review (CPSR), the government evaluates the contractor's purchasing system to ensure it is efficient and effective in the expenditure of government funds and compliant with contract requirements and government policy. Verification of subcontractor responsibility determinations is a critical aspect of this review process.

The CPSR process includes several key components for verifying subcontractor responsibility:

Evaluation of Methods: The review assesses whether the contractor has established methods for evaluating subcontractor responsibility, ensuring that government interests are protected and partnerships are managed appropriately.
File Testing: The review tests the contractor's actual files to verify that policies and procedures are being followed. This includes examining whether the contractor has performed and documented necessary analyses, such as price/cost analysis, at the time of the subcontract award.
Compliance with Requirements: The review verifies that the contractor adheres to required flow-down clauses (FAR/DFARS) and obtains necessary cost or pricing data when thresholds require it.
CPSR Eligibility Threshold: Contractors are generally eligible for a Contractor Purchasing System Review (CPSR) when their annual sales to the government are expected to exceed $50 million during the next 12 months.
System Criteria:For Department of Defense (DoD) contractors subject to DFARS, the review evaluates the contractor against 24 specific criteria required to maintain an acceptable purchasing system, encompassing the entire process from requirement through subcontract completion.
CPSR Review Frequency: Following an initial determination, the Administrative Contracting Officer is required to assess the necessity of a purchasing system review at least every three years.
Payment Withholding Penalty:Under DFARS, a material weakness in a business system can result in a 5% payment withholding, with a cumulative cap of 10% across multiple systems.

By ensuring these elements are in place, the contractor can demonstrate compliance and readiness for the CPSR, ultimately leading to more efficient procurement practices.

Benefits and Consequences of CPSR Outcomes for Government Contract Bidding for Contractor Purchasing System Review

The outcomes of a Contractor Purchasing System Review (CPSR) significantly influence a contractor's ability to bid on and execute government contracts. An approved purchasing system provides benefits such as increased procurement authority, reduced oversight, operational efficiency, and a competitive advantage in the government contracting market. Conversely, a failed or disapproved system can lead to increased administrative burdens, ineligibility for future work, heightened oversight, and performance risks due to weak purchasing controls. For Department of Defense contractors, the Administrative Contracting Officer (ACO) typically assesses the need for a CPSR when government sales are expected to exceed $50 million over the next 12 months. Contractors should anticipate annual maintenance costs ranging from $15,000 to $40,000 to support ongoing operations, training, and compliance monitoring required for an approved purchasing system. Once an initial purchasing system determination is made, the Administrative Contracting Officer (ACO) will re-evaluate the necessity of a CPSR at least every three years. During the CPSR audit, contractors are generally expected to provide responses to written inquiries from DCMA analysts within 24 hours. OutcomeBenefitsConsequencesApproved CPSRIncreased procurement authority; reduced government oversight; operational efficiency; competitive advantage.N/AFailed CPSRN/AIncreased administrative burden; ineligibility for bidding; heightened oversight; performance risks.

Importance of Price Competition and Market Research Documentation for Contractor Purchasing System Review

In a Contractor Purchasing System Review (CPSR), the documentation of price competition and market research is critical because the review evaluates the efficiency and effectiveness with which a contractor spends government funds and complies with government policy. The Administrative Contracting Officer (ACO) uses these records as a basis for granting, withholding, or withdrawing approval of the contractor's purchasing system.

Key aspects of this documentation include:

Evidence-Based Review: The CPSR tests the actual subcontract files rather than just written policies. Reviewers examine whether the contractor documented market research procedures to support commercial determinations and whether the files demonstrate the degree of price competition obtained.
Defensibility: A complete record must show the business basis for decisions, including how prices were analyzed and whether that analysis was written down at the time of the transaction. This documentation allows a reader to follow the purchasing decision without needing to recreate the file later.
System Compliance: According to the guidebook for CPSR, a contractor's policies and procedures must require documentation covering items like sole source justifications, competition records, and determinations that prices are fair and reasonable. When these documents exist and align with established procedures, they offer a solid foundation for training, corrective measures, and proving that the system functions effectively in practice.

Inadequate price analysis is consistently ranked as the number one finding in DCMA Contractor Purchasing System Reviews, highlighting the critical need for robust documentation of fair and reasonable pricing. To achieve an acceptable purchasing system status under DoD contracts, contractors must satisfy 24 specific system criteria outlined in DFARS, which include rigorous requirements for competition and price analysis. Furthermore, FAR 44.303 mandates that auditors pay special attention to 11 key areas, including market research, price competition, and pricing policies, to ensure the efficiency and effectiveness of a contractor's purchasing system.

Maintaining an Up-to-Date, Documented Procurement Manual for Contractor Purchasing System Review

To maintain an up-to-date, documented procurement manual for a Contractor Purchasing System Review (CPSR), the contractor must ensure that the manual accurately reflects their actual daily procurement activities, policies, and procedures. A written manual alone is insufficient; it must be customized to how work is performed, as the government evaluates both the documented policies and the actual purchasing practices demonstrated in subcontract files.

Key considerations for maintaining the manual include:

Mapping to Requirements:Contractors are often required to "map" their procurement manual sections and page numbers to the specific requirements found in the DCMA CPSR Policy and Procedure Checklist. To achieve an approved purchasing system, a contractor's manual and practices must satisfy the 24 distinct system criteria outlined in DFARS(a).
Comprehensive Coverage: The manual should contain all relevant policies, not just those applicable at the time of development, including policies for requirements that might apply if the business size or contract type changes.
Operational Alignment: The manual should incorporate policies and procedures but avoid detailing granular task-level instructions. It must be customized to the organization's specific operations; using generic templates without customization is considered a "recipe for disaster" because the contractor will be audited against the specific procedures documented in their manual.
Training and Familiarization: Procurement staff must be trained on the manual's contents, and this training should be documented. Staff must comprehend the requirements and consistently apply them in their daily work.

Contractors with expected annual government sales exceeding $25 million in a 12-month period are subject to a determination by the Administrative Contracting Officer (ACO) regarding the necessity of a formal CPSR. Following an initial determination, the ACO is required to assess the necessity of a purchasing system review at least every three years.

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