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Acquisition Policy Memorandum 2011-04, Appropriations Law Compliance Reviews

October 6, 2011

To: Heads of Contracting Activity
From: Angela Billups, Ph.D. /s/
Senior Procurement Executive
Subject: Appropriations Law Compliance Reviews
Effective Date: October 6, 2011

1.  Purpose: This Acquisition Policy Memorandum (APM) establishes guidelines for the prospective appropriations-related review of Department of Health and Human Services’ (HHS) acquisitions by the Office of Grants and Acquisition Policy and Accountability (OGAPA) and the Office of General Counsel (OGC).  These reviews comprise one part of the Department’s overall strategy to ensure that all contracts awarded are properly funded in compliance with laws and regulations.  Accordingly, this APM complements the October 19, 2010 memorandum from the Secretary, which commits the Department to the proper and lawful funding of contracts.  This APM also supplements APM 2011-02; HHS’ Prospective Service Acquisition Reviews (dated June 3, 2011). Please see Attachment 1 for an overview of the relationship between APM 2011-02 and APM 2011-04.

These reviews are an additional safeguard to ensure the planned acquisitions for HHS’ most challenging service requirements – research and development, studies, and data collection with contract performance greater than 12 months – receive the necessary oversight to ensure compliance with appropriation laws and regulations.

2.  Prospective Review of Designated Acquisitions:

Covered Acquisitions: All proposed contract actions that meet or exceed specified dollar thresholds (See Attachment 1, Table 1), under the following three service categories:

(1) Research and development (which is defined as any Product and Service (PSC) Code beginning with the letter “A”);

(2) Studies (which are defined by any PSC Code beginning with the letter “B”); and

(3) Data collection (which is defined as PSC Code “R702”). 

Proposed contract actions to be reviewed include:

(1) Final draft solicitations that will result in the award of contracts or orders with an anticipated period of performance greater than twelve months (including all options); and

(2) Final draft contract modifications (excluding option exercises) that add work or funds to – or extend the performance period of – contracts or orders.

Note:  The dollar thresholds in Attachment 1, Table 1, also apply to: (a) each final draft contract modification (referenced above); and (b) each underlying contract or order if the modification causes the contract or order to meet or exceed the specified thresholds.

Review Requirements and Process: Heads of Contracting Activity (HCAs) or designees shall email the following documents to OGAPA@hhs.gov), for reviews to be conducted by OGAPA and OGC:   

  • Entire requisition package -- including funds certification, citation, type/amount/source/fiscal year of funds, and overall funding approach covering alignment with severable/non-severable requirements  (Note: Any zero dollar requisition must be accompanied by a detailed funding strategy)
  • Acquisition Plan (see FAR part 7 and HHSAR 307.71)
  • Proposed contract actions meeting criteria in paragraph 2 (Note: To provide greater context for our reviews of orders and modifications, please also send OGAPA the umbrella vehicles or basic contracts, as applicable)

OGAPA and OGC plan to respond to the HCAs or designees with combined feedback within ten (10) business days of receiving a complete set of documents.  This feedback may take the form of mandatory corrective actions, discretionary changes/advice, or both.  Any appropriations-related questions OGAPA or OGC may have regarding the proposed acquisitions will be documented and sent to the cognizant HCA or designee.  The HCA or designee shall coordinate with their budget, program, contracting, and finance officials (as appropriate) for resolution.

If your planned acquisition or contract funding approach deviates from any corrective actions mandated by OGAPA and OGC, the HCAs or designees shall submit the revised documents via email to OGAPA@hhs.gov in order to ensure continued compliance with appropriation laws and regulations.

In addition, at your discretion, and prior to the above Departmental reviews, HCAs or designees may wish to invite OGAPA and OGC to participate (in person or by conference call) in your own appropriations-related reviews.  Also, OGC remains available (resources permitting) to opine on any appropriations-related issues (or other matters) raised during earlier stages of the acquisition lifecycle (e.g., budgetary, program, and acquisition planning).

The reviews required by this APM are limited to compliance with appropriation laws and regulations, unless a legal sufficiency review – encompassing compliance with procurement laws and regulations – is specifically requested by the HCAs or designees.

3.  HCA Responsibilities: HCAs or designees are required to: (a) update their Service Acquisition Initiative prospective review procedures (See APM 2011-02) to implement these specialized appropriations-related reviews; and (b) resolve any issues raised by OGAPA or OGC during the appropriations-related reviews.

4.  Next Steps: If needed to foster compliance with appropriation laws and regulations, OGAPA and OGC will coordinate with HCAs or designees to prepare any:

(a) documents to ensure consistent tracking, treatment, and documentation of these reviews across the Department (e.g., review checklist, reporting template); and

(b) additional regulatory coverage (e.g., severability/non-severability Determinations & Findings).

__________________________________________________________________________________

Attachment 1

Relationship between APM 2011-02 and APM 2011-04

Table 1 -- APM 2011-04, Appropriations Law Compliance Reviews.  Acquisition reviews required by APM 2011-04 must provide added assurances of compliance with appropriation-related guidance.  Under APM 2011-04, different levels of review are required for acquisitions meeting certain dollar thresholds for specific types of requirements, as follows:

Review Threshold

Appropriations Law Compliance

Type of Requirements Reviewed

Level of Review Required

ASPR, CMS, FDA, CDC, NIH, SAMHSA -- Exceeding $10MR&D, Studies, and Data Collection*HCAs or designees, OGAPA, and OGC
AHRQ, HRSA, IHS, PSC -- Exceeding $5MR&D, Studies, and Data Collection*HCAs or designees, OGAPA, and OGC

* R&D is defined by any Product and Service Code (PSC) beginning in the letter “A.”

   Studies are defined by any PSC Code beginning in the letter “B.”

   Data Collection is defined by PSC Code R702.

 

Table 2 -- APM 2011-02, HHS’ Prospective Service Acquisition Reviews Acquisition reviews required by APM 2011-02 must address service acquisition-related issues, including those pertaining to general appropriations-related contract matters.  Under APM 2011-02, different levels of review are required for acquisitions meeting certain dollar thresholds for specific types of requirements, as follows: 

Review Threshold

Service Acquisition

Type of Requirements Reviewed

Level of Review Required

All OPDIVs/STAFFDIVs -- At or Below $5MImportant to ManagementHCAs or designees; and OGC (as needed)
All OPDIVs/STAFFDIVs -- Exceeding $5MOMB-Targeted Management Support Services (MSS)* & HHS-Specific Special Interest Functions**HCAs or designees; and OGC (as needed)
All OPDIVs/STAFFDIVs -- Exceeding $20MOMB-Targeted Management Support Services* & HHS-Specific Special Interest Functions**HCAs or designees; OGAPA; and OGC (as needed)

* OMB-targeted MSS are defined by 12 specific PSC Codes that have been identified for a 15% spending reduction by FY 2012 (using FY 2010 as the baseline) due to their heightened risk.  These PSC Codes are: D302, D307, D310, D314, R408, R413, R414, R421, R423, R425, R497, and R707. 

** HHS-specific special interest functions are defined by 12 additional PSC Codes for certain Advisory and Assistance Services (A&AS) that have been identified for increased scrutiny due to their heightened risk.  These PSC Codes are: B506, B513, B547, B550, B552, B553, B554, B599, R418, R701, R702, and R708.