[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR95.611]

[Page 463-465]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 95--GENERAL ADMINISTRATION--GRANT PROGRAMS (PUBLIC ASSISTANCE, MEDICAL ASSISTANCE AND STATE CHILDREN'S HEALTH INSURANCE PROGRAMS)--Table of Contents
 
Subpart F--Automatic Data Processing Equipment and Services--Conditions 
                for Federal Financial Participation (FFP)
 
Sec. 95.611  Prior approval conditions.

    (a) General acquisition requirements. (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 ADP 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.

[[Page 464]]

    (2) A State shall obtain prior written approval from the Department 
as specified in paragraph (b) of this section, when the State plans to 
acquire ADP 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 ADP 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 State 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 Systems Policy 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.
    (5) States shall submit requests for approval which involve solely 
Title XIX funding (i.e., State Medicaid Systems), to CMS for action.
    (6) The Department will not approve any Planning or Implementation 
APD that does not include all information required as defined in 
Sec. 95.605.
    (b) Specific prior approval requirements. The State agency shall 
obtain written approval of the Department prior to the initiation of 
project activity.
    (1) For regular FFP requests.
    (i) For the Planning APD subject to the dollar thresholds specified 
in paragraph (a) of this section.
    (ii) For the Implementation APD subject to the dollar thresholds 
specified in paragraph (a) of this section.
    (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.
    (2) For enhanced FFP requests.
    (i) For the Planning APD.
    (ii) For the Implementation APD.
    (iii) For the Request for Proposal and contract, unless specifically 
exempted by the Department, prior to release of the RFP or prior to 
execution of the contract when the contract is anticipated to or will 
exceed $100,000.
    (iv) For contract amendments, unless specifically exempted by the 
Department, prior to execution of the contract amendment, involving 
contract cost increases exceeding $100,000 or contract time extensions 
of more than 60 days.
    (3) Failure to submit any of the above to the satisfaction of the 
Department may result in disapproval or suspension of project funding.
    (c) Specific approval requirements. The State agency shall obtain 
written approval from the Department:
    (1) For regular FFP requests.
    (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.

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    (B) A schedule extension of more than 60 days for major milestones;
    (C) A significant change in procurement approach, and/or scope of 
procurement activities beyond that approved in the APD;
    (D) A change in system concept, or a change to the scope of the 
project;
    (E) A change to the approved cost allocation methodology.

The State shall submit the ``As Needed APDU'' to the Department, no 
later than 60 days after the occurrence of the project changes to be 
reported in the ``As Needed APDU''.
    (2) For enhanced FFP requests.
    (i) For an Annual APDU.
    (ii) For an ``As needed'' APDU when changes cause any of the 
following:
    (A) A projected cost increase of $100,000 or 10 percent of the 
project cost, whichever is less;
    (B) A schedule extension of more than 60 days for major milestones. 
For Aid to Families with Dependent Children (AFDC) Family Assistance 
Management Information System (FAMIS)-type projects, in accordance with 
section 402(e)(2)(C) of the Social Security Act, any schedule change 
which affects the State's implementation date as specified in the 
approved APD requires that the Department recover 40 percent of the 
amount expended. The Secretary may extend the implementation date, if 
the implementation date is not met because of circumstances beyond the 
State's control. Examples of circumstances beyond the State's control 
are:
    (1) Equipment failure due to physical damage or destruction; or,
    (2) Change imposed by Federal judicial decisions, or by Federal 
legislation or regulations;
    (C) A significant change in procurement approach, and/or a scope of 
procurement activities beyond that approved in the APD;
    (D) A change in system concept or scope of the project;
    (E) A change to the approved cost methodology;
    (F) A change of more than 10% of estimated cost benefits.

The State shall submit the ``As Needed APDU'' to the Department, no 
later than 60 days after the occurrence of the project changes to be 
reported in the ``As Needed APDU''.

    (3) Failure to submit any of the above to the satisfaction of the 
Department may result in disapproval or suspension of project funding.
    (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.

[51 FR 45326, Dec. 18, 1986, as amended at 55 FR 4377, Feb. 7, 1990; 56 
FR 12356, Mar. 25, 1991; 59 FR 30708, June 15, 1994; 61 FR 39897, July 
31, 1996]