(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(iv) May be withdrawn at any time at the ACO’s discretion.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.