Thursday, January 21, 2016

How Long Do You Spend Preparing for a CPSR?

The objective of a contractor purchasing system review (CPSR) is to evaluate the efficiency and effectiveness with which the contractor spends Government funds and complies with Government policy when buying materials and for subcontracting some of the required effort. The review provides the administrative contracting officer a basis for granting, withholding, or withdrawing approval of the contractor's  purchasing system.

DCMA (Defense Contract Management Agency) is the Agency responsible for conducting CPSRs. Among other things, the Agency looks at the adequacy of the system description (e.g. policies, procedures, and operating instructions) and that those policies and procedures are being followed.

These CPSR reviews are far from routine or perfunctory. DCMA's own guidebook for performing CPSRs is 40 pages by itself. The DCMA Instruction adds another 40 pages. DCMA's notification of a pending review also requests that the contractor compile and submit reams of data prior to the initiation of fieldwork. Understandably, a CPSR notification begins a flurry of contractor activity to prepare for the review.

With this background, we were amused at the Government's estimate of the time required by contractors to prepare for and support such a review. The FAR councils estimate that it takes an average of 25 hours of contractor time for "reading information and preparing for a CPSR". That estimate is laughably and significantly understated, perhaps intentionally so. In our own past involvement in CPSR activities, both as team members on the Government side and support for the contractor's side, we know that contractor effort alone will run into the hundreds of hours by the time the review is completed.

When promulgating regulations, it seems to us that the FAR councils consistently underestimate the true cost of compliance. Perhaps if the estimates were more realistic, someone might question the cost/benefit of these regulations.


  1. Your guidebook is outdated -- it was revised 10/13/2015

  2. Thanks for noting. The link now points to the Oct 15 version.