[Federal Register Volume 60, Number 141 (Monday, July 24, 1995)]
[Proposed Rules]
[Pages 37858-37861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18070]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Part 95
RIN 0970-AB46
Reduction of Reporting Requirements for the State Systems Advance
Planning Document (APD) Process
AGENCY: Administration for Children and Families, HHS.
[[Page 37859]]
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: These proposed rules would decrease the reporting burden on
States relative to the State systems advanced planning document (APD)
process by increasing the threshold amounts above which APDs and
related procurement documents need to be submitted for Federal
approval. The APD process is the procedure by which States obtain
approval for Federal financial participation in the cost of acquiring
automatic data processing equipment and services. Additionally, these
proposed rules would eliminate the requirement for State submittal of
biennial security plans for Federal review in order to approve and
ensure timely Departmental action on State funding requests.
DATES: Interested parties are invited to comment on these proposed
rules. Comments must be received on or before September 22, 1995.
FOR FURTHER INFORMATION CONTACT: Bill Davis, State Data Systems Staff,
370 L'Enfant Promenade SW., Washington, DC 20447, telephone (202) 401-
6404.
ADDRESSES: Comments should be submitted in writing to the Assistant
Secretary for Children and Families, Attention: Mr. Mark Ragan, Office
of Information Systems Management, room 300 E, Hubert H. Humphrey
Building, 200 Independence Avenue SW., Washington, DC 20201. Comments
may be inspected between 8 a.m. and 4:30 p.m. during regular business
days by making arrangement with the contact person identified above.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
These proposed rules would reduce current information collection
activities and, therefore, no approvals are necessary under section
3504(h) of the Paperwork Reduction Act of 1980 (Pub. L. 96-511).
We estimate that the paperwork burden associated with advance
planning document reporting requirements would be reduced by 20 percent
and that a further reduction would result from the impact this
regulation would have on Request for Proposals (RFP) and contract
reporting requirements. Additionally, this proposed regulation would
eliminate all reporting burden previously associated with submission of
biennial security reports.
Statutory Authority
These proposed regulations are published under the general
authority of sections 402(a)(5), 452(a)(1), 1902(a)(4), and 1102 of the
Social Security Act (the Act).
Background and Description of Regulatory Provisions
State public assistance agencies acquire automatic data processing
(APD) equipment and services for computer operations which support the
Aid to Families with Dependent Children, Adult Assistance, Child
Support Enforcement, Medicaid, Child Welfare, and Refugee Resettlement
programs. Currently any competitive acquisition over $500,000 or any
sole source acquisition over $100,000 in total State and Federal costs
which will be matched at the regular Federal financial participation
(FFP) rate requires written prior approval of an APD. Project cost
increases of more than $300,000 require the submission of an APD
Update. Also, most procurement documents (Request for Proposals (RFPs)
and contracts) over $300,000, and contract amendments over $100,000
must be approved by the Federal funding agencies.
Experience since these thresholds have been in place shows that the
total costs of all regular match State acquisitions under $5 million
account for a small percentage of the total of all State systems
development and operations costs, but that they account for a
disproportionate share of the documents submitted for Federal review.
In order to reduce the reporting burden on States and to better use
Federal resources, we are proposing to raise the threshold amounts for
regular match acquisitions. We would continue to require written prior
approval for all equipment and services acquired at an enhanced
matching rate.
To further the goal of reduced burden and increased efficiency,
these rules also propose to eliminate the requirement for submitting
biennial security reports to HHS. In the four years that biennial
security reports have been required under this subpart, it has been our
experience that the submission and review of these reports by HHS
components has been of minimal value to assuring that States have
adequate security programs. Ultimately, the adequacy of these programs
rests with the States. For this reason, we are proposing to eliminate
this reporting requirement, but to continue requirements that States
must perform security reviews and be responsible for maintaining review
reports. These reports would then be available for inspection by HHS
staff during on-site reviews where their content could be compared to
actual operations.
We are also proposing to change the rules to provide prompt
Department action on State funding requests. On average the Department
takes 30 to 60 days to respond to State submissions. Delayed responses
to States can cause project delays and increased costs to all parties
including the Department. From its experience, the Department has
determined that response can and should be made within 60 days. In
recognition of that experience and our partnership and commitment to
State projects which support our programs, we are proposing to
establish a provision whereby, if the Department has not provided a
State written approval, disapproval, or a request for information
within 60 days of issuing an acknowledgement of receipt of a State's
request, the request would be deemed to have provisionally met the
prior approval requirements. In this way, States would have a firmer
basis upon which to establish project timeframes, including the need to
obtain HHS approvals, and the incidence of increased project costs due
to delays in Departmental action on State funding requests would be
reduced.
Provisional approval would not absolve a State from meeting all
Federal requirements which pertain to the computer project or
acquisition. Such projects would continue to be subject to Departmental
audit and review, and the determinations made from such audits and
reviews. Even written prior approval by the Department does not
guarantee absolutely that there will be no subsequent determination of
violation of the pertinent Federal statutes and regulations. States
which are confident that their project is in compliance would be able,
however, to proceed after the 60-day period has expired without further
delay awaiting Federal approval.
These proposed rules would revise 45 CFR 95.611(a)(1), which
provides that States must obtain prior written approval for APD
equipment or services anticipated to have total acquisition costs of
$500,000 or more in Federal and State funds, to increase the $500,000
threshold amount to $5 million or more. Similarly, paragraph (a)(4),
which requires prior written approval with respect to State plans to
acquire noncompetitively from a nongovernmental source, APD equipment
and services, with a total acquisition cost of greater than $100,000,
is proposed to be revised to require that a State obtain prior approval
of its justification for a sole source acquisition with total State and
Federal costs of more than $1 million but no more than $5 million and
would
[[Page 37860]]
provide that noncompetitive acquisitions of greater than $5 million
continue to be subject to the requirements of paragraph (b), which
provides specific prior approval requirements.
The Department expects that justifications for sole source
acquisitions of between $1 million and $5 million would address
pertinent Federal and State requirements. For example, the
justification should include a description of the proposed acquisition,
the circumstances identified at 45 CFR part 74, Appendix G under which
a grantee may undertake a noncompetitive acquisition, and assurances
that the sole source acquisition meets the requirements of State laws,
regulations and other relevant guidelines. Contracts which results from
sole source acquisitions of greater than $1 million are subject to
prior approval in accordance with 45 CFR 95.611(b)(1)(iii).
We are also proposing to eliminate paragraph (a)(3), which provides
a separate threshold amount for acquisitions in support of State
Medicaid systems funded at the 75 percent FFP rate. The Health Care
Financing Administration (HCFA) would apply the new thresholds of Title
XIX funded projects and these rules would be described in an upcoming
revision to Part 11 of the State Medicaid Manual. Additionally, we are
proposing to modify paragraph (a)(2) to delete a reference to paragraph
(a)(3) and to redesignate paragraphs (a)(4) through (a)(7) as
paragraphs (a)(3) through (a)(6). We are also proposing to revise
paragraph (a)(4), as redesignated, to change the reference from (a)(6)
to (a)(5).
Paragraph (b)(1)(iii), which provides that unless specifically
exempted by the Department, approval must be received prior to release
of a Request for Proposal (RFP) or execution of a contract where costs
are anticipated to exceed $300,000, is proposed to be revised to
increase the threshold to $5 million with respect to competitive
procurements and $1 million for noncompetitive acquisitions from
nongovernment sources. As proposed, this paragraph would provide that
States may be required to submit RFPs and contracts under the threshold
amounts on an exception basis or if the procurement strategy is not
adequately described and justified.
With respect to contract amendments, we are proposing to revise 45
CFR 95.611(b)(1)(iv) is revised to provide that prior approval is
needed, unless specifically exempted by the Department, prior to
execution of a contract amendment involving cost increases of greater
than $1 million or time extensions of more than 120 days. In addition,
States would be required to submit for approval contract amendments
under these threshold amounts on an exception basis or if the contract
amendment was not adequately described and justified in the APD.
As indicated, with respect to both proposed changes to paragraph
(b), HHS would retain the right to review and approve all RFPs,
contracts, and contract amendments, regardless of dollar amount, on an
exception basis. This could include instances where new program
requirements or technology are involved, as in electronic benefits
transfer, or when adequate description and justification has not been
provided in the APD.
Paragraph (c)(1), which provides specific approval requirements
with respect to regular FFP requests, is also proposed to be revised to
provide increased thresholds. First, under (c)(1)(i), the $1 million
threshold with respect to the need for written approval from the
Department of Annual Advanced Planning Document Updates (APDU) would be
increased to $5 million. In paragraph (c)(1)(ii)(A), the threshold with
respect to the requirement for approval of an ``as needed'' APDU of
projected cost increases would be raised from a lesser of $300,000 or
10 percent of the project cost, to projected cost increases of $1
million or more.
We are also proposing to revise 45 CFR 95.611 to provide prompt
Federal action on State funding requests. Accordingly, paragraph (d)
would be revised to provide that, if the Department has not provided
written approval, disapproval, or a request for information within 60
days of issuing an acknowledgement of receipt of a State's request, the
request would be provisionally deemed to have met the prior approval
requirements.
Finally, we are proposing to amend 45 CFR 95.621(f)(6), which
requires States to submit biennial security reports for Federal review
and approval, to require that such reports be maintained by States for
on-site review by HHS in the future.
Regulatory Impact Analysis
Executive Order 12866 requires that regulations be reviewed to
ensure that they are consistent with the priorities and principles set
forth in the Executive Order. The Department has determined that this
rule is consistent with these priorities and principles. No costs are
associated with this rule as it merely decreases reporting burden on
States.
Regulatory Flexibility Act
Consistent with the Regulatory Flexibility Act (Pub. L. 96-354),
which requires the Federal government to anticipate and reduce the
impact of rules and paperwork requirements on small businesses and
other small entities, the Secretary certifies that this rule has no
significant effect on a substantial number of small entities.
Therefore, a regulatory flexibility analysis is not required.
List of Subjects in 45 CFR Part 95
Claims, Computer technology, Grant programs--health, Grant
programs, Social programs, Social Security.
(Catalog of Federal Domestic Assistance Program Numbers 93.645 Child
Welfare Services-State Grants; 93.658, Foster Care Maintenance;
93.659, Adoption Assistance; 93.563, Child Support Enforcement
Program; 93.174, Medical Assistance Program; 93.570, Assistant
Payments-Maintenance Assistance)
Dated: November 29, 1994.
Mary Jo Bane,
Assistant Secretary for Children and Families.
Approved: March 30, 1995.
Donna E. Shalala,
Secretary.
For the reasons set forth in the preamble, 45 CFR is proposed to be
amended as follows:
PART 95--GENERAL ADMINISTRATION--GRANT PROGRAMS (PUBLIC ASSISTANCE
AND MEDICAL ASSISTANCE)
1. The authority citation for part 95, subpart F continues to read
as follows:
Authority: Secs. 402(a)(5), 452(a)(1), 1102, and 1902(a)(4) of
the Social Security Act, 42 U.S.C. 602(a)(5), 652(a)(1), 1302,
1396a(a)(4); 5 U.S.C. 301 and 8 U.S.C. 1521.
2. Section 95.611 is amended by revising paragraphs (a)(1), (a)(2),
(b)(1)(iii), (b)(1)(iv), (c)(1)(i), (c)(1)(ii) (A) and (d) and by
removing paragraph (a)(3) and redesignating paragraphs (a)(4) through
(a)(7) as (a)(3) through (a)(6) and revising newly redesignated
paragraphs (a)(3) and (a)(4) to read as follows:
Sec. 95.611 Prior approval conditions.
(a) * * * (1) A State shall obtain prior written approval from the
Department as specified in paragraph (b) of this section, when the
State plans to acquire APD equipment or services with proposed FFP at
the regular matching rate that it anticipates will have total
acquisition costs of $5,000,000 or more in Federal and State funds.
(2) A State shall obtain prior written approval from the Department
as specified in paragraph (b) of this
[[Page 37861]]
section, when the State plans to acquire APD equipment or services with
proposed FFP at the enhanced matching rate authorized by 45 CFR 205.35,
45 CFR part 307 or 42 CFR part 433, subpart C, regardless of the
acquisition cost.
(3) A State shall obtain prior written approval from the Department
of its justification for a sole source acquisition, when it plans to
acquire noncompetitively from a nongovernmental source APD equipment or
services, with proposed FFP at the regular matching rate, that has a
total State and Federal acquisition cost of more than $1,000,000 but no
more than $5,000,000. Noncompetitive acquisitions of more than
$5,000,000 are subject to the provisions of paragraph (b) of this
section.
(4) Except as provided for in paragraph (a)(5) of this section, the
State shall submit requests for Department approval, signed by the
appropriate State official, to the Director, Administration for
Children and Families, Office of Information Management Systems. The
State shall send to ACF one copy of the request for each HHS component,
from which the State is requesting funding, and one for the State Data
Systems Staff, the coordinating staff for these requests. The State
must also send one copy of the request directly to each Regional
program component and one copy to the Regional Director.
* * * * *
(b) * * *
(1) * * *
* * * * *
(iii) For the Request for Proposal and Contract, unless
specifically exempted by the Department, prior to release of the RFP or
prior to the execution of the contract when the contract is anticipated
to or will exceed $5,000,000 for competitive procurement and $1,000,000
for noncompetitive acquisitions from nongovernmental sources. States
will be required to submit RFPs and contracts under these threshold
amounts on an exception basis or if the procurement strategy is not
adequately described and justified in an APD.
(iv) For contract amendments, unless specifically exempted by the
Department, prior to execution of the contract amendment involving
contract cost increases exceeding $1,000,000 or contract time
extensions of more than 120 days. States will be required to submit
contract amendments under these threshold amounts on an exception basis
or if the contract amendment is not adequately described and justified
in an APD.
* * * * *
(c) * * *
(1) * * *
(i) For an annual APDU for projects with a total acquisition cost
of more than $5,000,000, when specifically required by the Department.
(ii) For an ``As Needed APDU'' when changes cause any of the
following:
(A) A projected cost increase of $1,000,000 or more.
* * * * *
(d) Prompt action on requests for prior approval. The ACF will
promptly send to the approving components the items specified in
paragraph (b) of this section. If the Department has not provided
written approval, disapproval, or a request for information within 60
days of the date of the Departmental letter acknowledging receipt of a
State's request, the request will automatically be deemed to have
provisionally met the prior approval conditions of paragraph (b) of
this section.
3. Section 95.621 is amended by revising paragraph (f)(6) to read
as follows:
Sec. 95.621 APD reviews.
* * * * *
(f) * * *
(6) The State agency shall maintain reports of their biennial APD
system security reviews, together with pertinent supporting
documentation, for HHS on-site review.
[FR Doc. 95-18070 Filed 7-21-95; 8:45 am]
BILLING CODE 4184-01-M
