FAR 44.305-2—Notification.
Plain-English Summary
FAR 44.305-2 explains what must be included when the Government notifies a contractor that its purchasing system has been approved, and what that approval means in practice. It covers the contents of the approval notice, including identification of the covered plant or plants, the effective date, and the specific statement of effects on advance notification and consent requirements. It also addresses the limits of that approval, including the fact that approval can be withdrawn at the Administrative Contracting Officer’s discretion and that, in exceptional circumstances, certain subcontracts or classes of subcontracts may still require consent. Finally, it requires contractor engagement when the Government recommends improvements to an approved system, including a 15-day response period. In practical terms, this section tells both sides how approved purchasing system status changes subcontract oversight, where exceptions can still apply, and how the Government can continue to manage risk after approval.
Key Rules
Approval notice content
The notification granting system approval must identify the plant or plants covered and state the effective date of approval. This ensures the contractor knows exactly which location(s) are covered and when the approval begins to apply.
Approval effects must be stated
The notice must explain that system approval applies to all Federal Government contracts at that plant to the extent cross-servicing arrangements exist, waives advance notification in fixed-price contracts, and waives consent to subcontracts in fixed-price contracts and specified subcontracts in cost-reimbursement contracts, except for any subcontracts selected for special surveillance and listed in the contract schedule.
Approval remains revocable
System approval is not permanent and may be withdrawn at any time at the ACO’s discretion. Contractors should treat approval as conditional on continued system performance and compliance.
Exceptional subcontract consent may still apply
Even with an approved purchasing system, the Government may require consent to certain subcontracts or classes of subcontracts in exceptional circumstances. The approval notice must identify those classes, typically where CPSR results or continuing surveillance show weaknesses that justify special attention.
Contract type matters
The waiver effects differ by contract type: fixed-price contracts receive broader relief from advance notification and consent requirements, while cost-reimbursement contracts still retain some consent requirements for specified subcontracts. Contractors must read the approval notice together with the contract type and any schedule-listed exceptions.
Contractor response to recommendations
When the Government recommends improvements to an approved system, the contractor must be asked to respond within 15 days with its position on the recommendations. This creates a short, formal feedback cycle for corrective action or disagreement.
Responsibilities
Contracting Officer / ACO
Issue the system approval notification with the required plant identification, effective date, and statement of approval effects. Identify any subcontract classes that still require consent in exceptional circumstances, and may withdraw approval at any time if warranted. Request the contractor’s position within 15 days when recommending improvements to the approved system.
Contractor
Review the approval notice carefully to understand which plants are covered, what waivers apply, and what subcontract exceptions remain. If the Government recommends improvements, provide a position within 15 days and be prepared to implement corrective actions or explain disagreements.
Government surveillance personnel / CPSR reviewers
Monitor the contractor’s purchasing system and identify weaknesses that may justify special consent requirements for certain subcontracts or classes of subcontracts. Provide the basis for continued surveillance or recommendations for improvement to the ACO.
Agency / Federal Government customer
Rely on the approval notice to understand when subcontract consent and advance notification requirements are waived or preserved, and ensure contract administration aligns with any special surveillance or exception requirements.
Practical Implications
Approved purchasing system status can reduce administrative burden, but only within the limits stated in the approval notice and contract schedule. Contractors should not assume all subcontract consent requirements disappear.
The special-surveillance exception is a common pitfall: even with approval, some subcontract classes may still need consent if the Government has identified risk areas. Missing those exceptions can create noncompliance.
Because approval can be withdrawn at the ACO’s discretion, contractors should maintain system performance and documentation as if approval could be revisited at any time.
The 15-day response window for recommendations is short, so contractors need an internal process to route, review, and answer Government findings quickly.
Contract type matters a great deal: fixed-price and cost-reimbursement contracts are treated differently, so contractors must not apply one contract’s approval effects across all contracts without checking the notice and the contract terms.
Official Regulatory Text
(a) The notification granting system approval shall include- (1) Identification of the plant or plants covered by the approval; (2) The effective date of approval; and (3) A statement that system approval- (i) Applies to all Federal Government contracts at that plant to the extent that cross-servicing arrangements exist; (ii) Waives the contractual requirement for advance notification in fixed-price contracts, but not for cost-reimbursement contracts; (iii) Waives the contractual requirement for consent to subcontracts in fixed-price contracts and for specified subcontracts in cost-reimbursement contracts but not for those subcontracts, if any, selected for special surveillance and identified in the contract Schedule; and (iv) May be withdrawn at any time at the ACO’s discretion. (b) In exceptional circumstances, consent to certain subcontracts or classes of subcontracts may be required even though the contractor’s purchasing system has been approved. The system approval notification shall identify the class or classes of subcontracts requiring consent. Reasons for selecting the subcontracts include the fact that a CPSR or continuing surveillance has revealed sufficient weaknesses in a particular area of subcontracting to warrant special attention by the ACO. (c) When recommendations are made for improvement of an approved system, the contractor shall be requested to reply within 15 days with a position regarding the recommendations.