[Code of Federal Regulations]

[Title 45, Volume 1]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 45CFR95.605]



[Page 487-492]

 

                        TITLE 45--PUBLIC WELFARE

 

                    SUBTITLE A--DEPARTMENT OF HEALTH

                           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.  95.605  Definitions.



    As used in this part, the term:

    Acceptance documents means written evidence of satisfactory 

completion of an approved phase of work or contract, and acceptance 

thereof by the State agency.

    Acquisition means acquiring ADP equipment or services from 

commercial sources or from State or local government resources.



[[Page 488]]



    Advance Planning Document (APD), Initial advance automatic data 

processing planning document or Initial APD means a written plan of 

action to request funding approval for a project which will require the 

use of ADP services or equipment. The term APD refers to a Planning APD, 

or to a planning and/or, development and implementation action document, 

i.e., Implementation APD, or to an Advance Planning Document Update.

    (1) Planning APD means a written plan of action which requests FFP 

to determine the need for, feasibility, and cost factors of an APD 

equipment or services acquisition and to perform one or more of the 

following: Prepare a Functional Requirements Specification; assess other 

States' systems for transfer, to the maximum extent possible, of an 

existing system; prepare an Implementation APD; prepare a request for 

proposal (RFP) or develop a General Systems Design (GSD).

    A separate planning effort and Planning APD is generally applicable 

to large enhanced funded Statewide system developments and/or major 

hardware acquisitions. States with large, independent Counties 

requesting funding at the regular match rate for County systems are 

strongly encouraged to do better planning and to submit a Planning APD 

to allow for time and to provide funding for its planning activities. 

Therefore, states must consider the scope and complexity of a project to 

determine whether to submit a Planning APD as a separate document to HHS 

or whether to combine the two phases of planning and implementation into 

one APD covering both the Planning APD and the Implementation APD 

requirements.

    The Planning APD is a relatively brief document, usually not more 

than 6-10 pages, which must contain:

    (i) A statement of the problem/need in terms of deficiencies in 

existing capabilities, new or changed program requirements or 

opportunities for economies and efficiencies;

    (ii) A project management plan which addresses the planning project 

organization, planning activities/deliverables, State and contractor 

resource needs, planning project procurement activities and schedule;

    (iii) A specific budget for the planning of the project;

    (iv) An estimated total project cost and a prospective State and 

Federal cost distribution, including planning and implementation;

    (v) A commitment to conduct/prepare the needs assessment, 

feasibility study, alternatives analysis, cost benefit analysis, and to 

develop a Functional Requirements Specification and/or a General Systems 

Design (GSD); and,

    (vi) A commitment to define the State's functional requirements for 

the purpose of evaluating the transfer of an existing system, including 

the transfer of another State's General System Design, which the State 

may adapt to meet State specific requirements.



Additional Planning APD content requirements, for enhanced funding 

projects are contained in 45 CFR 205.37(a)(1)-(8) and CFR 307.15.

    (2) Implementation APD means a written plan of action to acquire the 

proposed APD services or equipment.

    The Implementation APD shall include:

    (i) The results of the activities conducted under a Planning APD, if 

any;

    (ii) A statement of needs and objectives;

    (iii) A requirements analysis, feasibility study and a statement of 

alternative considerations including, where appropriate, a transfer of 

an existing system and an explanation of why such a transfer is not 

feasible if another alternative is identified;

    (iv) A cost benefit analysis;

    (v) A personnel resource statement indicating availability of 

qualified and adequate staff, including a project director to accomplish 

the project objectives;

    (vi) A detailed description of the nature and scope of the 

activities to be undertaken and the methods to be used to accomplish the 

project;

    (vii) The proposed activity schedule for the project;

    (viii) A proposed budget (including a consideration of all possible 

Implementation APD activity costs, e.g., system conversion, computer 

capacity planning, supplies, training, and miscellaneous ADP expenses) 

for the project;



[[Page 489]]



    (ix) A statement indicating the period of time the State expects to 

use the equipment or system;

    (x) An estimate of prospective cost distribution to the various 

State and Federal funding sources and the proposed procedures for 

distributing costs; and

    (xi) A statement setting forth the security and interface 

requirements to be employed and the system failure and disaster recovery 

procedures available.



Additional requirements, for acquisitions for which the State is 

requesting enhanced funding, are contained at 45 CFR 205.37(a)(1)-(8), 

45 CFR 307.15 and 42 CFR part 433 subpart C.

    (3) Advance Planning Document Update (APDU) means a document 

submitted annually (Annual APDU) to report project status and/or post 

implementation cost-savings, or on an as needed (As Needed APDU) basis 

to request funding approval for project continuation when significant 

project changes are anticipated; for incremental funding authority and 

project continuation when approval is being granted by phase; or to 

provide detailed information on project and/or budget activities.

    (a) The Annual APDU is due 60 days from the Planning APD or 

Implementation APD approved anniversary and includes:

    (i) A reference to the approved APD and all approved changes;

    (ii) A project activity status which reports the status of the past 

year's major project tasks and milestones, addressing the degree of 

completion and tasks/milestones remaining to be completed and discusses 

past and anticipated problems or delays in meeting target dates in the 

approved APD and approved changes to it;

    (iii) A report of all project deliverables completed in the past 

year and degree of completion for unfinished products;

    (iv) A project activity schedule for the remainder of the project;

    (v) A project expenditures status which consists of a detailed 

accounting of all expenditures for project development over the past 

year and an explanation of the differences between projected expenses in 

the approved APD and actual expenditures for the past year;

    (vi) A report of any approved or anticipated changes to the 

allocation basis in the APD's approved cost methodology;

    (vii) A report which compares the estimated cost-savings from the 

State's approved APD to actual cost-benefits to date (in the development 

phase of a project, this may be reported as non-applicable). The 

proportion of costs to savings must remain as projected in the APD. Once 

the State begins operation, either on a pilot basis or under a phased 

approval, the cost-savings shall be submitted 2-5 years after statewide 

operation until the Department determines projected cost savings have 

been achieved.

    (b) The As Needed APDU is defined as a document which requests 

approval for additional funding and/or authority for project 

continuation when significant changes are anticipated; when the project 

is being funded on a phased implementation basis; to clarify project 

information requested as an approval condition of the Planning APD or 

Implementation APD. The As Needed APDU may be submitted anytime as a 

stand-alone funding or project continuation request, or may be submitted 

with the Annual APDU:

    (i) When the State anticipates incremental project expenditures 

(exceeding specified thresholds);

    (ii) When the State anticipates 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,



[[Page 490]]



    (2) Change imposed by Federal judicial decisions, or by Federal 

legislation or regulations;

    (iii) When the State anticipates major changes in the scope of its 

project, e.g., a change in its procurement plan, procurement activities, 

system concept or development approach;

    (iv) When the State anticipates significant changes to its cost 

distribution methodology or distribution of costs among Federal 

programs; and/or,

    (v) When the State anticipates significant changes to its cost-

benefit projections.



The As needed APDU shall provide supporting documentation to justify the 

need for a change to the approved budget.

    Approving component means an organization within the Department that 

is authorized to approve requests for the acquisition of ADP equipment 

or ADP services. Family Support Administration (FSA) for cash assistance 

for titles I, IV-A, X, XIV, and XVI(AABD); Office of Human Development 

Services (OHDS) for social services for titles IV-B (child welfare 

services) and IV-E (foster care and adoption assistance); Family Support 

Administration (FSA) for title IV-D; and Centers for Medicare & Medicaid 

Services (CMS) for titles XIX and XXI of the Social Security Act.

    Automatic data processing or ADP means data processing performed by 

a system of electronic or electrical machines so interconnected and 

interacting as to minimize the need for human assistance or 

intervention.

    Automatic data processing equipment or ADP equipment or Hardware 

means automatic equipment that accepts and stores data, performs 

calculations and other processing steps, and produces information. This 

includes:

    (a) Electronic digital computers;

    (b) Peripheral or auxiliary equipment used in support of electronic 

computers;

    (c) Data transmission or communications equipment, and

    (d) Data input equipment.

    Automatic Data Processing Services or ADP Services means:

    (a) Services to operate ADP equipment, either by agency, or by State 

or local organizations other than the State agency; and/or

    (b) Services provided by private sources or by employees of the 

State agency or by State and local organizations other than the State 

agency to perform such tasks as feasibility studies, system studies, 

system design efforts, development of system specifications, system 

analysis, programming, system conversion and system implementation and 

include, for example, the following:

    (1) Systems Training,

    (2) Systems Development,

    (3) Site Preparation,

    (4) Data Entry, and

    (5) Personal services related to automated systems development and 

operations that are specifically identified as part of a Planning ADP or 

Implementation ADP. As an example, a personal service would be the 

service of an expert individual to provide advice on the use of ADP 

software or hardware in developing a State automated management 

information system.

    Data processing means the preparation of source media containing 

data or basic elements of information and the use of such source media 

according to precise rules or procedures to accomplish such operations 

as classifying, sorting, calculating, summarizing, recording and 

transmitting.

    Department means the Department of Health and Human Service.

    Design or system design means a combination of narrative and 

diagrams describing the structure of a new or more efficient automatic 

data processing system. This includes the use of hardware to the extent 

necessary for the design phase.

    Development means the definition of system requirements, detailing 

of system and program specifications, programming and testing. This 

includes the use of hardware to the extent necessary for the development 

phase.

    Emergency situation is defined as a situation where:

    (a) A State can demonstrate to the Department an immediate need to 

acquire ADP equipment or services in order to continue the operation of 

one or more of the Social Security Act programs covered by Subpart F, 

and

    (b) The State can clearly document that the need could not have been 

anticipated or planned for and the State



[[Page 491]]



was prevented from following the prior approval requirements of Sec.  

95.611.

    Enhanced matching rate means the higher than regular rate of FFP 

authorized by Title IV-D, IV-E, and XIX of the Social Security Act for 

acquisition of services and equipment that conform to specific 

requirements designed to improve administration of the Child Support 

Enforcement, Foster Care and Adoption Assistance, and Medicaid programs.

    Enhancement means modifications which change the functions of 

software and hardware beyond their original purposes, not just to 

correct errors or deficiencies which may have been present in the 

software or hardware, or to improve the operational performance of the 

software or hardware.

    Feasibility study means a preliminary study to determine whether it 

is sufficiently probable that effective and efficient use of ADP 

equipment or systems can be made to warrant a substantial investment of 

staff, time, and money being requested and whether the plan is capable 

of being accomplished successfully.

    FFP means Federal financial participation.

    Functional Requirements Specification is defined as an initial 

definition of the proposed system, which documents the goals, 

objectives, user or programmatic requirements, management requirements, 

the operating environment, and the proposed design methodology, e.g., 

centralized or distributed. This document details what the new system 

and or hardware should do, not how it is to do it. The Specifications 

document shall be based upon a clear and accurate description of the 

functional requirements for the project, and shall not, in competitive 

procurements, lead to requirements which unduly restrict competition. 

The Specification document is the user's definition of the requirements 

the system must meet.

    General Systems Design means a combination of narrative and graphic 

description of the generic architecture of a system as opposed to the 

detailed architecture of the system. A general systems design would 

include a systems diagram and narrative identifying overall logic flow 

and systems functions; a description of equipment needed (including 

processing data transmission and storage requirements); a description of 

other resource requirements which will be necessary to operate the 

system; a description of system performance requirements; and a 

description of the physical and organizational environment in which the 

system will operate including how the system will function within that 

environment (e.g. how workers will interface with the system).

    Project means an automated systems effort undertaken by the State to 

improve the administration and/or operation of one or more of its public 

assistance programs. For example, a State may undertake a comprehensive, 

integrated initiative in support of its AFDC and Medicaid programs' 

intake, eligibility and case management functions. A project may also be 

a less comprehensive activity such as, office automation, enhancements 

to an existing system or an upgrade of computer hardware.

    Implementation means design, development and installation and does 

not include operation.

    Medicaid Management Information System (MMIS) is a commonly accepted 

term for Mechanized Claim Processing and Information Retrieval System as 

provided by Section 1903(a)(3) and 1903(r) of the Social Security Act 

and at 42 CFR 433.110 et seq.

    Total Acquisition Cost means all anticipated expenditures (including 

State staff costs) for planning and implementation for the project. For 

purposes of this regulation total acquisition cost and project cost are 

synonymous.

    Installation means the integrated testing of programs and 

subsystems, system conversion, and turnover to operation status. This 

includes the use of hardware to the extent necessary for the 

installation phase.

    Operation means the automated processing of data used in the 

administration of State plans for titles I, IV-A, IV-B, IV-D, IV-E, X, 

XIV, XVI(AABD), XIX, and XXI of the Social Security Act. Operation 

includes the use of supplies, software, hardware, and personnel directly 

associated with the functioning of the mechanized system. See 45 CFR 

205.38 and 307.10 for specific requirements for titles IV-A and IV-D,



[[Page 492]]



and 42 CFR 433.112 and 42 CFR 433.113 for specific requirements for 

title XIX.

    Regular matching rate means the normal rate of FFP authorized by 

titles IV-A, IV-B, IV-D, IV-E, X, XIV, XVI(AABD), XIX, and XXI of the 

Social Security Act for State and local agency administration of 

programs authorized by those titles.

    Requirements Analysis means determining and documenting the 

information needs and the functional and technical requirements the 

proposed computerized system must meet.

    Service agreement means the document signed by the State or local 

agency and the State or local Central Data Processing facility whenever 

the latter provides data processing services to the former and:

    (a) Identifies those ADP services the Central Data Processing 

facility will provide;

    (b) Includes, preferably as an amendable attachment, a schedule of 

charges for each identified ADP service, and a certification that these 

charges apply equally to all users;

    (c) Includes a description of the method(s) of accounting for the 

services rendered under the agreement and computing services charges;

    (d) Includes assurances that services provided will be timely and 

satisfactory;

    (e) Includes assurances that information in the computer system as 

well as access, use and disposal of ADP data will be safeguarded in 

accordance with provisions of 45 CFR 205.50 and 303.21;

    (f) Requires the provider to obtain prior approval pursuant to 45 

CFR 95.611(a) from the Department for ADP equipment and ADP services 

that are acquired from commercial sources primarily to support the 

titles covered by this subpart and requires the provider to comply with 

45 CFR Part 74, Subpart P for procurements related to the service 

agreement. ADP equipment and services are considered to be primarily 

acquired to support the titles covered by this subpart when these titles 

may reasonably be expected to either: Be billed for more than 50 percent 

of the total charges made to all users of the ADP equipment and services 

during the time period covered by the service agreement, or directly 

charged for the total cost of the purchase or lease of ADP equipment or 

services;

    (g) Includes the beginning and ending dates of the period of time 

covered by the service agreement; and

    (h) Includes a schedule of expected total charges to the title 

covered by this subpart for the period of the service agreement.

    Software means a set of computer programs, procedures, and 

associated documentation used to operate the hardware.

    State agency means the State agency administering or supervising the 

administration of the State plan under titles I, IV, X, XIV, XVI(AABD), 

XIX or XXI of the Social Security Act.

    System specifications means information about the new ADP system--

such as workload descriptions, input data, information to be maintained 

and processed, data processing techniques, and output data--which is 

required to determine the ADP equipment and software necessary to 

implement the system design.

    System study means the examination of existing information flow and 

operational procedures within an organization. The study essentially 

consists of three basic phases: Data gathering investigation of the 

present system and new information requirements; analysis of the data 

gathered in the investigation; and synthesis, or refitting of the parts 

and relationships uncovered through the analysis into an efficient 

system.



[51 FR 45326, Dec. 18, 1986, as amended at 55 FR 4375, Feb. 7, 1990, 59 

FR 30708, June 15, 1994; 65 FR 33633, May 24, 2000]



                       Specific Conditions for FFP