proposed revisions to apd regulations at 45 cfr part 95

1. Proposed revisions to APD regulations at 45 CFR Part 95 A summary of the recommendations, options and issues related to DHHS�s proposed regulation on APD reform

2. the State representative for New York was the then IV-D Director, Margot Bean, who is now the Commissioner of OCSE, which is one of the reasons that child support assumed responsibility to shepherd this proposed regulation through ACF and the Department. the State representative for New York was the then IV-D Director, Margot Bean, who is now the Commissioner of OCSE, which is one of the reasons that child support assumed responsibility to shepherd this proposed regulation through ACF and the Department.

3. Objectives of the Revisions Objectives: Review policies, procedures and regulations in light of advances in technology Recommend Revisions to regulatory language Recommend a streamlined set of documentation required of states Attempt to reach consensus whenever possible Create a balance between Federal oversight and state accountability based on risk;

4. Recommendations Change approach to base submission thresholds on Risk, which is determined by type of IT procured as well as funding requested. Change approach to exempt O&M activities unless requested to submit, as opposed to current approach of submit unless exempted Not just balancing the four different Federal agencies of ACF- multi-programs, Child Welfare, Child Support CMS (Medicaid) but also Food and Nutrition Service Then balance the input from the States, vendor community, and National organizations like APHSA, NASIRE, NACIO, etc.. And balance the interests of the Office of Management and Budget � both sections, one that pushes for paperwork reduction, and the other that pushes for fiscal oversight over the FFP approved. In Child Support we approve about $900 million a year. Which is about 17% of the total child support approved funding. In CMS, the systems funding represents only a fraction of 1% of the total Medicaid expenditures. Not just balancing the four different Federal agencies of ACF- multi-programs, Child Welfare, Child Support CMS (Medicaid) but also Food and Nutrition Service Then balance the input from the States, vendor community, and National organizations like APHSA, NASIRE, NACIO, etc.. And balance the interests of the Office of Management and Budget � both sections, one that pushes for paperwork reduction, and the other that pushes for fiscal oversight over the FFP approved. In Child Support we approve about $900 million a year. Which is about 17% of the total child support approved funding. In CMS, the systems funding represents only a fraction of 1% of the total Medicaid expenditures.

5. Three parts to NPRM Technical changes � APD to ITD, HCFA to CMS, delete AFDC references Conforming changes- references to part 74 Substantive revisions to 45 CFR Part 95 Please comment on the change from APD to IT � the Federal programs are totally split One faction wants to change it because of past confusion with the similar term � ADP � Automated Data Processing. Other faction wants to keep the initials and names. I know it is silly, but if you are commenting, don�t forge this topic. Improved flow. All the APD requirements used to be under Definitions, moved it to separate regulatory section. Please comment on the change from APD to IT � the Federal programs are totally split One faction wants to change it because of past confusion with the similar term � ADP � Automated Data Processing. Other faction wants to keep the initials and names. I know it is silly, but if you are commenting, don�t forge this topic. Improved flow. All the APD requirements used to be under Definitions, moved it to separate regulatory section.

6. Eliminate Federal oversight of low risk projects or acquisitions Reduction in Federal oversight requirements: Acquisition Checklist � Permit states to self-certify compliance with Federal and State procurement rules for competitively procured RFP�s and Invitation for Bid Operations and Maintenance procurements � eliminate prior approval for RFP, contracts and contract amendments if limited to O&M and, new 1-2 page O&M annual IT update Option years, scheduled extensions and no-cost extensions � eliminate prior approval requirement Contract amendments- eliminate prior approval requirements for contract amendments that are within scope that don�t exceed 20% of base contract. Revise annual Cost benefit analysis update to every 3 years. Acquisition checklist was issued as an IM in 2005 as OCSE IM 05-03 Used to be � You needed to provide it unless we exempted you from submitting in writing. Now, burden is on the Federal program staff. You don�t have to submit it unless we request submittal in writing. Examples of when we might request submittal � If your description doesn�t really sound like our definition of maintenance. If you are seeking to sole source your O&M and you didn�t provide a sole source justification, Acquisition checklist was issued as an IM in 2005 as OCSE IM 05-03 Used to be � You needed to provide it unless we exempted you from submitting in writing. Now, burden is on the Federal program staff. You don�t have to submit it unless we request submittal in writing. Examples of when we might request submittal � If your description doesn�t really sound like our definition of maintenance. If you are seeking to sole source your O&M and you didn�t provide a sole source justification,

7. Revise Submission Thresholds Base submission thresholds on Risk as well as dollar threshold (with different thresholds based on lower risk); Operations and Maintenance � very low risk so eliminate prior approval requirements for O&M procurements, reduce ITDU requirements for O&M only to 1-2 pages annually, Hardware and commercial off shelf software upgrades- medium risk so increase threshold from $5 million to $20 million; Software development � Remains a high risk, so retain $5 million threshold for prior approval submission but permit flexibility on 20% of increased funding in contact amendments if increase is within scope of original contract. Retain requirement for prior approval and sole source justification for high-risk sole source procurements over $1 million. Example of base contract and when you need to submit a contract amendment Does include option years, but not amendments. If contract was for $6 million with 3 options years of $2 million each, total base contract is $12 million so don�t have to submit amendments until cumulative cost exceeds $2.4 million or 20%. Note: Must be within the scope of the contract. Example of base contract and when you need to submit a contract amendment Does include option years, but not amendments. If contract was for $6 million with 3 options years of $2 million each, total base contract is $12 million so don�t have to submit amendments until cumulative cost exceeds $2.4 million or 20%. Note: Must be within the scope of the contract.

8. Operations and Maintenance Operations and Maintenance Eliminate prior approval requirements for O&M acquisitions (RFP, IFB, contract and contract amendments) Reduce ITD requirements for state projects in maintenance and operation mode to 1-2 page annual document that covers: Summary of O&M activities (to ensure that not really software enhancements) Summary of annual funding ( to provide approval) Acquisition plan (to ensure full and open competition to maximum extent feasible Maintenance � Definition in OCSE AT -06-03 � totality of activities required to provide cost-effective support to an operational software system Software maintenance means routine support activities that normally include corrective, adaptive, and perfective changes, without introducing additional functional capabilities. Corrective changes are tasks to correct minor errors or deficiencies in software. Adaptive changes are minor revisions to existing software to meet changing requirements. Perfective changes are minor improvements to application software so it will perform in a more efficient, economical, and/or effective manner. Software maintenance can include activities such as revising/creating new reports, making limited data element/data base changes, and making minor alterations to data input and display screen designs. Software maintenance that substantially increases risk or cost or functionality will require an as-needed ITD. Maintenance � Definition in OCSE AT -06-03 � totality of activities required to provide cost-effective support to an operational software system Software maintenance means routine support activities that normally include corrective, adaptive, and perfective changes, without introducing additional functional capabilities. Corrective changes are tasks to correct minor errors or deficiencies in software. Adaptive changes are minor revisions to existing software to meet changing requirements. Perfective changes are minor improvements to application software so it will perform in a more efficient, economical, and/or effective manner. Software maintenance can include activities such as revising/creating new reports, making limited data element/data base changes, and making minor alterations to data input and display screen designs. Software maintenance that substantially increases risk or cost or functionality will require an as-needed ITD.

9. Independent Validation and Verification Require Independent Validation and Verification for high risk projects. Triggers include: Miss statutory deadlines; Fail to meet a critical milestone; Indicate the need for a new project or total system redesign.; Are developing systems under waivers, Development efforts we determine are at risk of failure, significant delay, or significant cost overrun. Not new to child support and many of the other program offices had been requiring for �troubled� projects, but now consistent across programs. Not new to child support and many of the other program offices had been requiring for �troubled� projects, but now consistent across programs.

10. Waiver of any APD requirement Provide for Waiver process for any APD requirement : New to Part 95, but CSE has current regulatory authority Must provide alternative approach that enables it to be in substantial compliance with other requirements. Waiver and alternative approach can be all or portion of APD regulatory provisions Must demonstrate why meeting regulatory provision is unnecessary or inappropriate; Secretary (or designee) will review to assure that all processes provide for effective and efficient program operation. If approved, waiver becomes part of State�s approved APD. If approved, State must have IV&V assessment to determine degree of IV&V needed . Child Support already had this authority, but rarely used except for statewideness, Alternative Systems Configuration Why meeting condition is unnecessary Diminishes the State�s ability to meet program requirements Or more efficient, economical and effective administration of the programs Child Support already had this authority, but rarely used except for statewideness, Alternative Systems Configuration Why meeting condition is unnecessary Diminishes the State�s ability to meet program requirements Or more efficient, economical and effective administration of the programs

11. Disallowance of FFP for failed projects Provide authority to recoup regular rate funding. � current authority is to recoup difference between enhanced and regular rate FFP. We feel we have the authority already. But put in regulations to bolster authority and to help balance. � If easing requirements for low-risk projects, need more tools for high �risk projects. We feel we have the authority already. But put in regulations to bolster authority and to help balance. � If easing requirements for low-risk projects, need more tools for high �risk projects.

12. Non-Regulatory reforms Acquisition Checklist IM 05-03 Guidance on Master Contracts IM 05-02 Guidance on Enterprise Architecture proprietary software IM 05-04 Cost Allocation Methodology Toolkit These are some guidance materials that started at the APD Reform workgroup that we issued before the NPRM. These are some guidance materials that started at the APD Reform workgroup that we issued before the NPRM.

13. New Definitions Acquisition Checklist- self certify compliance of RFP�s to Federal procurement requirements Base contract- option years but not amendments COTS � ready made and available for sale to general public Noncompetitive- use long standing criteria for sole source justification Software maintenance- used version of IEEE standard (pretty broad) Service Orientated Architecture also referred to a Service component based architecture

14. Conforming Amendments Definition of Sole Source- Part 92 Applicability NPRM adds the language in 45 CFR 74.40-48 to Part 95. Subpart F. Plus the 4 criteria for acceptable sole source justification from 74 Appendix S. - Rationale for not accepting DHHS Part 92. Part 92 procurement standards permits states to follow their own State procurement policies and procedures that they use for non-Federal projects. This includes using the State�s definition of acceptable source source justification. Part 95 used to refer to Part 74 for procurement standards, Then Appendix that provided the criteria for sole source was deleted Then all of HHS was moved to Part 92 Issued guidance that IT contracts would continue to follow long-standing procurement policies This codifies that IT procurements will be guided by the language in Part 95, the majority of which is taken verbatim from old part 74. So really no change in long-standing policy, but a reaffirmation that IT procurements are not bound by the more relaxed procurement standards in Part 92. Part 95 used to refer to Part 74 for procurement standards, Then Appendix that provided the criteria for sole source was deleted Then all of HHS was moved to Part 92 Issued guidance that IT contracts would continue to follow long-standing procurement policies This codifies that IT procurements will be guided by the language in Part 95, the majority of which is taken verbatim from old part 74. So really no change in long-standing policy, but a reaffirmation that IT procurements are not bound by the more relaxed procurement standards in Part 92.

15. Technical Amendments Change Advance Planning Document (APD) to Information Technology Planning Document (ITPD) Update HCFA to CMS Delete most AFDC Title IV-A references Correct Automatic to Automated in (ADP)

16. Reconsideration of Denial of FFP due to lack of submission Reconsideration of denial of FFP due to lack of prior approval Codify the interpretation in OSSP-00-01 Original AT had detailed process and criteria, Decision in regulation to permit future flexibility by the Secretary and his/her designee. Regulation doesn�t go into the detail that the Action Transmtital issued in 2000 did. Regulation doesn�t go into the detail that the Action Transmtital issued in 2000 did.

17. Impact on States- ITDU New project � Same Implementation ITD including Feasibility Study, Analysis of Alternatives, Cost Benefit analysis, Cost allocation Enhanced Funded As-Needed ITD Project Updates � raise submission threshold from $100,000 to $300,000 Regular rate ITD Project updates Requirement for annual cost benefit update modified to a close out cost benefit two years after full implementation and at 3 year intervals until cost benefit is achieved. (Most CSE systems break even almost immediately) Instead of annual CBA � now only once every three years and may stop when Federal program office confirms you have broken even. When read in conjunction with O&M ITD- another option to closing APD. Can keep open waiting for next influx of system development funding, but far less Federal submission requirementsInstead of annual CBA � now only once every three years and may stop when Federal program office confirms you have broken even. When read in conjunction with O&M ITD- another option to closing APD. Can keep open waiting for next influx of system development funding, but far less Federal submission requirements

18. Impact on States � Operations and Maintenance ITD New shorter O&M ITD (summary of activities, acquisitions and annual budget) Submit competitive if over threshold ($20 million- hardware, $5 million-software) Non-competitive remains $1 million Don�t need to submit competitive O&M acquisition documents if State has submitted the O&M ITD

19. Impact on States - Procurements RFP competitive- Can self-attest using the Checklist IM 05-03 RFP sole source- If over $1 million Need to provide justification. Same policy, just codified in regulation Contracts Hardware- $20 million Software Development- kept at $5 million Hybrid � use the lower threshold Contract amendments � 20% of base contract

20. How to comment- Hard copy Administration for Children and Families 370 L�Enfant Promenade SW 4th floor Washington DC 20447 Mail Stop: ACF/OCSE/DSTS 4th Floor East Comments due by May 6th. Comments due by May 6th.

21. NPRM in Federal Register March 7, 2008 Vol.73, No. 46 pages 12341-12354

22. How to comment - electronically www.regulations.gov http://regulations.acf.hhs.gov and follow instructions