[Federal Register Volume 60, Number 146 (Monday, July 31, 1995)]
[Proposed Rules]
[Pages 38972-38974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18789]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 60, No. 146 / Monday, July 31, 1995 /
Proposed Rules
[[Page 38972]]
DEPARTMENT OF AGRICULTURE
Food and Consumer Service
7 CFR Part 277
[Amendment No. 368]
RIN 0584-AB92
Food Stamp Program: Automated Data Processing Equipment and
Services; Reduction in Reporting Requirements
AGENCY: Food and Consumer Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule proposes to increase the cost thresholds above which
prior written Federal approval of State automated data processing (ADP)
equipment and services acquisitions is required for Federal financial
participation. The effect of the proposed changes would be a reduction
in State reporting requirements.
Additionally, State request would be deemed to have provisionally
met the prior approval requirement if FCS does not approve, disapprove,
or request additional information about the request within 60 days of
the agency's letter to the State acknowledging its receipt. Finally,
this rule proposes to eliminate the requirement that State agencies
submit written information pertaining to the State biennial system
security reviews. States would be required to maintain copies of the
report and pertinent supporting documentation for FCS review.
DATES: Comments must be received on or before September 29, 1995 in
order to be assured of consideration.
ADDRESSES: Comments should be addressed to John H. Knaus, Chief,
Quality Control Branch, Program Accountability Division, Food Stamp
Program, 3101 Park Center Drive, Room 904, Alexandria, Virginia 22302.
All written comments will be open to public inspection during regular
business hours (8:30 a.m. to 5 p.m., Monday through Friday) at that
address.
FOR FURTHER INFORMATION CONTACT: Questions concerning this proposed
rulemaking should be addressed to Mr. Knaus at the above address or by
telephone at (703) 305-2474.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rulemaking has been determined to be significant and was
reviewed by the Office of Management and Budget under Executive Order
12866.
Executive Order 12372
The Food Stamp Program (FSP) is listed in the Catalog of Federal
Domestic Assistance under 10.551 and information on State agency
administrative matching grants for the FSP is listed under 10.561. For
the reasons set forth in the final rule and related notice to 7 CFR
3015, subpart v (48 FR 29115), the FSP is excluded from the scope of
Executive Order 12372 which requires intergovernmental consultation
with State and local officials.
Executive Order 12778
This rulemaking has been reviewed under Executive Order 12778,
Civil Justice Reform. This rule is intended to have preemptive effect
with respect to any State or local laws, regulations or policies which
conflict with its provisions or which would otherwise impede its full
implementation. This rule is not intended to have retroactive effect
unless so specified in the ``Effective Date'' section of this preamble.
Prior to any judicial challenge to the provisions of this rule or the
application of its provisions, all applicable administrative procedures
must be exhausted. In the FSP the administrative procedures are as
follows: (1) For program benefit recipients--State administrative
procedures issued pursuant to 7 U.S.C. 2020(e)(10) and 7 CFR 273.15;
(2) for State agencies--administrative procedures issued pursuant to 7
U.S.C. 2023 set out at 7 CFR 276.7 (for rules related to non-QC
liabilities) or Part 283 (for rules related to QC Liabilities); (3) for
program retailers and wholesalers--administrative procedures issued
pursuant to 7 U.S.C. 2023 set out at 7 CFR 278.8.
Regulatory Flexibility Act
This rulemaking has been reviewed with regard to the requirements
of the Regulatory Flexibility Act of 1980 (Pub. L. 96-354, 94 Stat.
1164, September 19, 1980, 5 U.S.C. 601-612). Ellen Haas, Under
Secretary for Food, Nutrition, and Consumer Services, has certified
that this rule does not have a significant economic impact on a
substantial number of small entities. This rule will affect State
agencies by reducing the reporting requirements applicable to them.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.
3507), information collection requirements relating to automated data
processing and information retrieval systems have been approved by OMB
Approval No. 0584-0083. The provisions of this rule do not contain any
additional reporting and/or recordkeeping requirements subject to OMB
approval.
Background
State agencies acquire ADP equipment and services for computer
operations which support the FSP. For Federal financial participation,
States are required to obtain prior written Federal approval when ADP
acquisitions for total State and Federal costs exceed the thresholds
established in 7 CFR 277.18. Currently, prior approval is required for
competitively bid ADP acquisitions of $500,000 or more; sole source
acquisitions costing more than $100,000; project increases of $300,000
or more; most procurement documents (requests of proposals (RFPs) and
contracts) of $500,000 or more; and contract amendments that cost
$100,000 or more.
ADP equipment and services acquisitions under $5 million account
for a small percentage of the total cost of State systems development.
In the interest of improved efficiency and effectiveness of the ADP
process, the Department proposes to increase thresholds above which
prior approval is required. This change would reduce the reporting
burden on States and provide for better use of Federal resources.
The higher thresholds proposed in this rule would require prior
approval from the U.S. Department of Agriculture (USDA) Food and
Consumer Service
[[Page 38973]]
(FCS) for: (1) advance planning documents (APDs) for ADP equipment and
services acquisitions of $5 million or more in total Federal and State
costs; (2) justifications for noncompetitive ADP acquisitions from
nongovernment sources of more than $1 million but no more than $5
million in total Federal and State costs; (3) requests for proposals
and contracts of more than $5 million in total Federal and State costs
for competitive procurements and more than $1 million for
noncompetitive acquisitions from nongovernmental sources, unless
specifically exempted by FCS; (4) contract amendments for cost
increases exceeding $1 million or time extensions of more than 120
days; (5) annual APD updates for projects with total acquisition costs
of more than $5 million; and (6) as-needed APD updates for cost
increases of $1 million or more (the percentage of cost benchmark is
removed).
Additionally, this rule proposes to add a provision to regulations
which will promote efficient operation of the prior approval
requirement. The prior approval requirement would be deemed to have
been provisionally met if FCS has not approved, denied or requested
additional information on the request within 60 days of the Agency's
written acknowledgement of its receipt. With this change, States would
have a firmer basis upon which to establish project timeframes,
including the need for FCS approvals. The possibility of increased
costs attributable to a delay in FCS action on State funding requests
would also be reduced.
This change would allow States which are confident that their
requests are in compliance of Federal requirements to proceed after the
60-day period has expired without awaiting final FCS approval. However,
the provisional approval would not exempt a State from having to meet
all other Federal requirements which pertain to the acquisition of ADP
equipment and services. Such acquisitions remain subject to Federal
audit and review, and the final determinations of these audits and
reviews.
Currently, State agencies are required to submit to FCS information
pertaining to the biennial security review. As proposed, State agencies
would no longer be required to submit this information; but security
review reports and pertinent supporting documentation would have to be
maintained for Federal onsite review.
This rulemaking reflects concerned efforts on the part of USDA and
DHHS to promote inter-Departmental consistency and standardization. The
Departments are publishing similar regulations in coordination with
each other.
Regulation Changes
Regulations now require prior written approval for acquisition of
ADP equipment and services if total costs are $500,000 or more in
Federal and State funds. If the State plans to acquire the equipment
and services non-competitively from a non-government source, prior
approval is required when the total acquisition costs are greater than
$100,000.
This rulemaking proposes to revise 7 CFR 277.18(c)(1) by raising
the thresholds for approval of competitive acquisitions to those that
will cost $5 million or more in total Federal and State funds. As
proposed, noncompetitive acquisitions of $5 million or more would also
require prior approval. In addition, noncompetitive acquisitions from a
non-governmental source that have total State and Federal acquisition
costs of more than $1 million but no more than $5 million would need
prior approval of the justification for the sole source purchase. No
changes are proposed for the requirements in this paragraph that apply
to Electronic Benefit Transfer (EBT) systems.
Paragraphs (c)(2)(ii) (A) and (B) currently provide that, unless
specifically exempted by FCS, prior written approval must be received
before the release of a Request for Proposal (RFP) or execution of a
contract where costs are anticipated to equal or exceed $500,000. This
rule proposes to increase the threshold for prior approval of
competitive procurements to those costing more than $5 million and, for
noncompetitive procurements from non-government sources, to those
costing more than $1 million. States could be required to submit RFPs
and contracts under the threshold amounts on an exception basis or if
the procurement strategy is not adequately described in the APD.
Changes to thresholds for contract amendments, specified in
paragraph (c)(2)(ii)(C), are also proposed. Regulations now require
that, unless specifically exempted by FCS, prior approval is required
before the State's signing of a contract amendment unless it involves
cost increases of less than $100,000 or time extensions of less than 60
days, and is an integral part of the APD. This rule proposes to change
that requirement to provide that, unless specifically exempted by FCS,
prior Federal approval would be required for contract amendments
involving cost increases greater than $1 million or contract time
extensions of more than 120 days. States would also be required to
submit contract amendments under these thresholds on an exception basis
or if the contract amendment is not adequately justified in the APD.
Proposed changes to paragraphs (c)(2)(ii) (A), (B) and (C), as
discussed above, would retain FCS' right to review and approve all
RFPs, contracts, and contract amendments, regardless of dollar amount
on an exception basis. The exception basis could include instances
where new program requirements or technology are involved, or when
adequate justification in the APD has not been provided. EBT system
requirements in these paragraphs would be unchanged.
States are currently required to submit for approval an annual APD
Update for approved planning and implementation APDs when the total
acquisition costs exceed $1 million. This rule proposes to increase the
threshold for submission of these documents to those costing more than
$5 million.
Paragraph (e)(3)(i) now recommends submission of ``as-needed'' APD
updates whenever there is a significant increase ($300,000 or 10
percent, whichever is less) in total costs for a commitment of Federal
financial participation for the increase. As proposed, the amount of a
significant increase in total project costs would be raised to $1
million or more. There would no longer be a percentage of cost
benchmark.
This rule proposes to add a new paragraph after paragraph (c)(4).
To promote operation of the prior approval requirement, this new
paragraph, (c)(5), would provide for provisional approval of the prior
approval requirement if FCS has not provided written approval,
disapproval, or a request for additional information within 60 days of
issuing an acknowledge of receipt of a State's request.
Finally, this rule proposes to amend paragraph (p)(3), which
requires States agencies to submit information related to the biennial
security review. As proposed, State agencies would be required to
maintain reports of their biennial ADP system reviews and pertinent
supporting documentation for Federal on-site review.
List of Subjects in 7 CFR Part 277
Claims, Computer technology, Grant programs, Social programs.
Accordingly, 7 CFR part 277 is proposed to be amended as follows:
[[Page 38974]]
PART 277--PAYMENTS OF CERTAIN ADMINISTRATIVE COSTS OF STATE
AGENCIES
1. The authority citation for Part 277 continues to read as
follows:
Authority: 7 U.S.C. 2011-2032.
2. In Sec. 277.18,
a. paragraph (c)(1) is revised;
b. the second sentence in paragraph (c)(2)(ii)(A) is removed and
two sentences are added in its place;
c. the second sentence in paragraph (c)(2)(ii)(B) is removed and
two sentences are added in its place;
d. the second sentence in paragraph (c)(2)(ii)(C) is removed and
two sentences are added in its place;
e. paragraph (c)(5) is added;
f. paragraph (e)(1) is amended by removing to words ``$1 million''
and adding in their place the words ``$5 million'';
g. paragraph (e)(3)(i) is amended by removing the words ``($300,000
or 10 percent, whichever is less)'' and adding in their place the words
``($1 million or more)'';
h. the third and fourth sentences of paragraph (p)(3) are removed
and one sentence is added in their place.
The revisions and additions read as follows:
Sec. 277.18 Establishment of an Automated Data Processing (ADP) and
Information Retrieval System.
* * * * *
(c) General acquisition requirements.--(1) Requirement for prior
FCS approval. A State agency shall obtain prior written approval from
FCS as specified in paragraph (c)(2) of this section when it plans to
acquire ADP equipment or services with proposed FFP that it anticipates
will have total acquisition costs of $5 million or more in Federal and
State funds. This applies to both competitively bid and sole source
acquisitions. A State agency shall also obtain prior written approval
from FCS of its justification for a sole source acquisition when it
plans to acquire ADP equipment or services non-competitively from a
non-governmental source which has a total State and Federal acquisition
cost of more than $1 million but no more than $5 million. However, a
State agency shall obtain prior written approval from FCS for the
acquisition of ADP equipment or services to be utilized in and EBT
system regardless of the cost of the acquisition. The State agency
shall request prior FCS approval by submitting the planning APD, the
Implementation APD or the justification for the sole source acquisition
signed by the appropriate State official to the FCS regional office.
(2) Specific prior approval requirements. * * *
(ii) * * *
(A) * * * However, RFPs costing up to $5 million for competitive
procurement and up to $1 million for noncompetitive acquisitions from
non-governmental sources and which are an integral part of the approval
APD need not be submitted to FCS. Stated will be required to submit
RFPs under this threshold amount on an exception basis or if the
procurement strategy is not adequately described in an APD. * * *
(B) * * * However, contracts costing up to $5 million for
competitive procurements and up to $1 million for noncompetitive
acquisitions from nongovernmental sources, and which are an integral
part of the approved APD need not be submitted to FCS. States will be
required to submit contracts under this threshold amount on an
exception basis or if the procurement strategy is not adequately
described in an APD. * * *
(C) * * * However, contract amendments involving cost increases of
up to $1 million or time extensions of up to 120 days, and which are an
integral part of the approved ADP need not be submitted to FCS. States
will be required to submit contract amendments under these threshold
amounts on an exception basis or if the contract amendment is not
adequately justified in an APD. * * *
* * * * *
(5) Prompt action on requests for prior approval. FCS will reply
promptly to State requests for prior approval. If FCS has not provided
written approval, disapproval or a request for additional information
within 60 days of FCS' letter acknowledging receipt of the State's
request, the request will be deemed to have provisionally met the prior
approval requirement in 277.18(c). However, provisional approval will
not exempt a State from having to meet all other Federal requirements
which pertain to the acquisition of ADP equipment and services. Such
requirements remain subject to Federal audit and review.
* * * * *
(p) * * *
(3) * * * State agencies shall maintain reports of their biennial
ADP system security reviews, together with pertinent supporting
documentation, for Federal on-site review.
* * * * *
Dated: July 26, 1995.
Ellen Haas,
Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 95-18789 Filed 7-28-95; 8:45 am]
BILLING CODE 3410-30-M
