FAR 44.305—Granting, withholding, or withdrawing approval.

Responsibilities.

FAR 44.305-1 assigns the cognizant Administrative Contracting Officer (ACO) the core responsibility for deciding whether a contractor’s purchasing system is approved, withheld, or withdrawn. It explains both the decision authority and the standard the ACO must apply before approving a system: the contractor’s purchasing policies and practices must be efficient and must adequately protect the Government’s interests. The section also requires the ACO to notify the contractor in writing of the decision, whether approval is granted, withheld, or later withdrawn. In practice, this provision is the control point for government oversight of subcontracting and purchasing processes on contracts where purchasing system approval matters, because it ties the contractor’s internal procurement controls to the Government’s risk management and oversight expectations. It matters to both parties because an approved system can support smoother administration, while withholding or withdrawing approval can trigger corrective action, increased scrutiny, and potential impacts on contract performance and compliance.

Notification.

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 It also addresses the limits of that approval, including the fact that approval can be withdrawn at the Administrative Contracting Officer’s discretion and that, in exceptional circumstances, certain subcontracts or classes of subcontracts may still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.

Withholding or withdrawing approval.

FAR 44.305-3 explains when the Administrative Contracting Officer (ACO) must withhold or withdraw approval of a contractor’s purchasing system, and what happens procedurally when that occurs. It covers the grounds for action, including major weaknesses, inability to provide enough information for an affirmative determination, deterioration of the system, protection of the Government’s interest, and recurring noncompliance with specific requirements such as certified cost or pricing data, cost accounting standards, advance notification requirements, and small business subcontracting. It also sets out the post-review notification process: written notice to the contractor, identification of deficiencies, and a request for a corrective action plan within 15 days. If the contractor’s plan is accepted, the ACO must conduct a follow-up review once the contractor says the deficiencies have been corrected. In practice, this section is about preserving Government oversight and ensuring the contractor’s purchasing system is reliable enough to support subcontracting, pricing, accounting, and socioeconomic compliance obligations.