PART 9-23 SUBCONTRACTING POLICIES AND PROCEDURES

$9-23.000 Scope of part.

This part sets forth policies and procedures for the evaluation, review, and approval of contractors' procurement systems. Reliance upon a contractor's approved procurement system will usually eliminate the need for reviewing and approving or consenting to most individual subcontracts. However, programmatic and other considerations still will require Government involvement at an early stage in the planning of procurement actions and approval of some subcontracts.

Subpart 9-23.1 Review of Contractors' Procurement Systems $9-23.100 Scope of subpart.

This subpart sets forth the requirements for conducting contractor procurement system reviews (CPSRS).

$9-23.101 Objectives.

The objectives of the reviews are to provide:

(a) A means for evaluating the efficiency and effectiveness with which the contractor manages the procurement function in spending Government funds;

(b) The basis for the Contracting Officer to grant, continue, withhold, or withdraw approval of the contractor's procurement system;

(c) Reliable current information on the contractor's procurement system for use in source selection, determining the appropriate type of contract, estimating contract costs, and establishing profit or fee objectives; and

(d) Current procurement system information for appropriate DOE activities.

$9-23.102 Responsibilities.

(a) DOE Contracting Officers or designee, will conduct CPSRS of DOE cognizant con

tractors.

(b) The Department of Defense normally will conduct CPSRS for other than DOE cogni

zant contractors.

(c) The Senior Procurement Official, Headquarters is responsible for the overall conduct of the DOE-wide CPSR program.

89-23.103 Definitions.

(a) The term "contractor", as used in this part, refers to a "prime contractor” or “subcontractor" and means a separate entity of a contractor, such as an affiliate, division, or plant, which performs its own purchasing.

(b) DOE cognizant contractors are those contractors over which DOE has cognizance as identified in FMC 73-6, or where DOE has the preponderance of Government business. Included are operating contractors and pilot and demonstration plant contractors.

§9-23.104 Review criteria.

(a) A CPSR is an evaluation of a contractor's procurement system and the effectiveness with which procurements are placed in the performance of Government contracts. It is not limited to a specific Government contract.

(b) A CPSR will be initiated when the Contracting Officer determines that the nature or extent of subcontracting warrants. Generally, a CPSR shall be performed if the contractor is expected, within the next 12 months, to have in excess of $5,000,000 subcontracting with Government funds under other than prime contracts awarded on the basis of adequate price competition as defined in FPR 1-3.807-1(b)(1). (For the purpose of this paragraph, contract modifications are not considered to be competitively awarded). Contractor Procurement System Reviews, CPSR, should not ordinarily be performed for subcontractors unless, in addition to the criteria for conducting a CPSR on a prime contractor, the following criteria are also satisfied: (a) The preponderance of the sales of the subcontractor is to the Federal Government, and (b) both the prime contractor and the subcontractor agree to the performance of a CPSR.

(c) The procurement systems of contractors meeting the criteria in (b) above, shall not be reviewed if the Contracting Officer determines, in writing, and the Director, Office of Policy, (attn. PR-20) agrees that the extent or nature of the subcontracting will not justify the cost of the CPSR. In exceptional cases, a contractor not meeting the criteria in (b) above, may be reviewed if the Contracting Officer determines that the facts warrant such action.

(e) CPSRS will be conducted in accordance with the appropriate agency directives and guides.

(f) An outline of the proposed CPSR review, including the time schedule, composition, and assignments of the review team, shall be forwarded to the Director, Office of Policy, (attn. PR-20). Initial and follow-up review teams should include, when available, a DCAS representative and a representative from Procurement and Assistance Management as well as other DOE representatives as may be appropriate.

§9-23.105 Types of review.

§9-23.105-1 Initial reviews.

An initial review shall be conducted when the contractor meets the criteria in §9-23.104. It shall be a complete evaluation as described in §9-23.106.

§9-23.105-2 Subsequent reviews.

If a contractor's procurement system is approved, the Contracting Officer shall determine annually, the need for a subsequent review if it still meets the criteria in §9-23.104. A subsequent review may be limited to specific areas, but shall include sufficient consideration of each of the factors listed in §9-23.106(a) to establish the current adequacy or inadequacy of the entire system. Such review shall generally be conducted in order to:

(a) Examine changes instituted since the previous review;

(b) Ascertain the status of prior recommendations upon which action has not been completed; and,

(c) Determine whether the contractor's procurement system, especially the significant cost impact areas, warrants continued approval. Subsequent reviews shall be performed no less often than every two years.

§9-23.105-3 Special reviews.

After approval of the contractor's procurement system, the Contracting Officer may initiate special reviews in connection with weaknesses revealed as a result of:

(a) The initial or subsequent review;