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, (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 (FAS) 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 Health Care Fi (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, (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 was prevented from following the prior approval requirements of § 95.611. Enhanced matching rate means the higher than regular rate of FFP authorized by Title IV-A, IV-D, and XIX of the Social Security Act for acquisition of services and equipment that conform to specific requirements designed to improve administration of the Aid to Families with Dependent Children, Child Support Enforcement 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 Title I, IV-A, IV-B, IV-D, IV-E, X, XIV, XVI(AABD) of XIX 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 Title IV-A and IV-D, 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) and XIX of the Social Security Act of 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 serv ices 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) or XIX 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 organiza tion. 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] SPECIFIC CONDITIONS FOR FFP § 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 $500,000 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, 45 CFR part 307 or 42 CFR part 433, subpart C, regardless of the acquisition cost, except as specified in paragraph (a)(3) of this section. (3) 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 in support of the operation of the approved State Medicaid System, when it anticipates the total acquisition costs will be $500,000 or more in Federal and State funds and the State plans to claim FFP at the 75 percent rate for the ADP equipment or services to be acquired. (4) A State shall obtain prior written approval from the Department as specified in paragraph (b) of this section, 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 acquisition cost of more than $100,000. (5) Except as provided for in paragraph (a)(6) of this section, the State shall submit requests for Department approval, signed by the appropriate State official, to the Associate Administrator, Family Support Administration, Office of Management and Information Systems. The State shall send to FSA one copy of the request for each HHS component, from which the State is requesting funding, and one for the State Data Systems 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. (6) States shall submit requests for approval which involve solely Title XIX funding (i.e., State Medicaid Systems), to HCFA for action. (7) The Department will not approve any Planning or Implementation ADP 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 $300,000. (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. (2) For enhanced FFP requests. (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 con tract 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 of more than one million dollars, 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 $300,000 or 10 percent of the project cost, whichever is less; (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 cir cumstances 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 or requests for prior approving. The ASMB will promptly send to the approving components the items specified in paragraph (b) of this section. If the Department has not communicated approval or disapproval within 30 days the ASMB or an approving component will notify the State regarding the status of the request. [51 FR 45326, Dec. 18, 1986, as amended at 55 FR 4377, Feb. 7, 1990; 56 FR 12356, Mar. 25, 1991] § 95.612 Disallowance of Federal Financial Participation (FFP). If the Department finds that any ADP acquisition approved or modified under the provisions of § 95.611 fails to comply with the criteria, requirements, and other undertakings described in the approved advance planning document to the detriment of the proper and efficient operation of the affected program, payment of FFP may be disallowed. In the case of a suspension of approval of an APD for enhanced funding, see 45 CFR 205.37(c), 307.40(a) and 307.35(d). [55 FR 4378, Feb. 7, 1990] § 95.613 Procurement standards. (a) Procurements of ADP equipment and services are subject to the procure |