CFR > Title 45 - Public Welfare > SUBTITLE A—DEPARTMENT OF HEALTH AND HUMAN SERVICES > SUBCHAPTER A—GENERAL ADMINISTRATION (parts 1 to 100) > PART 95—GENERAL ADMINISTRATION—GRANT PROGRAMS (PUBLIC ASSISTANCE, MEDICAL ASSISTANCE AND STATE CHILDREN'S HEALTH INSURANCE PROGRAMS) > SUBPART F—Automatic Data Processing Equipment and Services—Conditions for Federal Financial Participation (FFP) (§95.601 to §95.641) > 95.611—Prior approval conditions.

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.
(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, 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 § 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.
(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]