FAR 44.101—Definitions.
Plain-English Summary
FAR 44.101 provides the core definitions used throughout FAR Part 44, which governs subcontracting policies and contractor purchasing system reviews. This section defines what counts as an approved purchasing system, who is considered the contractor for purposes of the part, what a contractor purchasing system review (CPSR) is, and how the terms subcontract and subcontractor are used. These definitions matter because they determine when a contractor’s purchasing practices may be reviewed by the Government, what transactions are treated as subcontracts, and which organizational entities are covered when a company has multiple divisions, affiliates, plants, or other separate purchasing operations. In practice, the definitions shape compliance expectations for prime contractors, flowdown and oversight of lower-tier suppliers, and the scope of Government review of purchasing controls and subcontract management. They also help distinguish ordinary vendor relationships from subcontracting relationships that carry FAR and contract-administration consequences.
Key Rules
Approved purchasing system
An approved purchasing system is a contractor purchasing system that has been reviewed and approved under FAR Part 44. The approval status matters because it signals that the Government has determined the contractor’s purchasing controls are acceptable for managing subcontracting and related procurement activity.
Contractor may mean a business unit
For this part, 'contractor' can mean the entire contractor organization or a separate entity within it, such as an affiliate, division, or plant, if that entity performs its own purchasing. This means the relevant purchasing system may be evaluated at the organizational level where buying actually occurs, not just at the corporate parent level.
CPSR is a full lifecycle review
A contractor purchasing system review is a complete evaluation of the contractor’s purchasing of material and services, subcontracting, and subcontract management from requirement development through completion of subcontract performance. The definition makes clear that the review is not limited to award actions; it covers the full process and the controls used throughout performance.
Subcontract is broadly defined
A subcontract includes any contract, as defined in FAR Subpart 2.1, entered into by a subcontractor to furnish supplies or services for performance of a prime contract or another subcontract. The definition expressly includes purchase orders, as well as changes and modifications to purchase orders, so these instruments can be treated as subcontracts when they support contract performance.
Subcontractor includes suppliers and vendors
A subcontractor is any supplier, distributor, vendor, or firm that furnishes supplies or services to or for a prime contractor or another subcontractor. This broad definition means lower-tier suppliers may be treated as subcontractors even if they are not labeled that way in company practice.
Responsibilities
Contracting Officer
Use these definitions to determine whether a contractor’s purchasing organization is subject to review, whether a CPSR is appropriate, and whether a transaction should be treated as a subcontract for oversight and administration purposes. The contracting officer must apply the definitions consistently when assessing purchasing system adequacy and subcontracting risk.
Contractor
Identify which organizational entities perform their own purchasing and ensure those entities comply with the requirements applicable to the contractor purchasing system. The contractor must understand that purchase orders, modifications, and lower-tier buying actions may be treated as subcontracts and managed accordingly.
Purchasing System Owner or Procurement Organization
Maintain purchasing controls, records, and procedures that can withstand a CPSR covering the full lifecycle of subcontracting activity. This includes requirement development, supplier selection, award, administration, and closeout of subcontract performance.
Subcontractor
Recognize that supplies or services furnished to a prime contractor or another subcontractor may place the firm within the subcontracting chain covered by this part. The subcontractor must comply with applicable subcontract terms and any required flowdown obligations.
Agency
Apply the Part 44 definitions when planning, conducting, or relying on contractor purchasing system reviews and when evaluating whether a contractor’s purchasing system should be approved. The agency must ensure its oversight aligns with the scope of the defined terms.
Practical Implications
A company’s purchasing system may be reviewed at the division, plant, or affiliate level if that entity does its own buying, so corporate structure does not automatically shield a unit from CPSR scrutiny.
Purchase orders are not automatically outside subcontract rules; if they support performance of a prime contract or another subcontract, they may be treated as subcontracts and require appropriate controls and documentation.
Because CPSR covers the entire process from requirement development through completion of performance, weak planning, poor competition practices, missing price analysis, or inadequate closeout can all become review findings.
The broad definition of subcontractor means firms that think of themselves as simple vendors may still be part of the subcontracting chain and subject to flowdowns, oversight, and performance expectations.
Contractors should align internal terminology with FAR definitions; using different labels internally can create compliance gaps, especially in supplier management, approval authority, and audit readiness.
Official Regulatory Text
As used in this part- Approved purchasing system means a contractor’s purchasing system that has been reviewed and approved in accordance with this part. Contractor means the total contractor organization or a separate entity of it, such as an affiliate, division, or plant, that performs its own purchasing. Contractor purchasing system review (CPSR) means the complete evaluation of a contractor’s purchasing of material and services, subcontracting, and subcontract management from development of the requirement through completion of subcontract performance. Subcontract means any contract as defined in subpart 2.1 entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract. It includes but is not limited to purchase orders, and changes and modifications to purchase orders. Subcontractor means any supplier, distributor, vendor, or firm that furnishes supplies or services to or for a prime contractor or another subcontractor.