If you’re like most of today’s U.S. government contractors, you either have subcontractors, you’re one yourself, or you’re both. In either case, automating the subcontracting process has historically been challenging, costly and inefficient. The need exists for a software system that integrates and supports subcontract budgeting, subcontract creation, approvals, document management, billing and payment controls, change management, and notification and reporting processes.
Further compounding these process inefficiencies, government contractors are subject to numerous public laws, regulations and contract clauses that govern the subcontracting process, including, without limitation, those as described in FAR 44.303 and DFARS 252.244-7001, Contractor Purchasing System Administration. Contractors subject to FAR 52.244-2/DFARS 252.244-7001 are subject to contractor purchasing system reviews (CPSR), which can lead to system disapproval by the Administrative Contracting Officer and withholding of payments, among other implications. For many contractors, the lack of having an effective subcontracting system and the associated cost of compliance is a recurring drain on the bottom line and impacts their competitive position in the federal marketplace.
This paper examines the key ERP system processes and capabilities that government contractors should look for when deciding to improve the subcontractor budgeting, vendor selection, subcontract creation, subcontract approval, document management, billing and payment, change management, and notification and reporting processes and reduce the cost of compliance.
To read more on improving subcontract management efficiency and reducing the cost of compliance review our white paper here.