WIC MIS EBT Process Memo

When conducting technology projects, WIC state agencies must comply with the Advance Planning Document (APD) requirements consistent with Section 17 of the Child Nutrition Act (PL 89-642, as amended), 7 CFR Part 246, and Federal procurement requirements at 2 CFR Part 200, Part 400, and Part 416.

The purpose of this memorandum is to inform WIC state agencies of:

• Revised dollar thresholds at which WIC technology projects (Management Information System (MIS) and Electronic Benefit Transfer (EBT)) will require FNS approval, including new thresholds for both the Advance Planning Documents (APDs) and procurement documents;
• Reduced planning documentation requirements for FNS approval of an EBT procurement subsequent to the initial state agency-wide implementation of EBT (commonly referred to as “re-procurement”); and
• Other FNS review and approval processes that will and will not be impacted as a result of these two changes.

Revised Thresholds for FNS Review of MIS Projects

The cost thresholds at which state agencies are required to submit project planning documents to FNS have not been raised in over 30 years. This has, over time, resulted in FNS reviewing projects of comparatively low cost, risk, and complexity. Further, technology costs have increased in the years since FNS set the prior dollar thresholds. Therefore, to reduce WIC state agency burden, and to target FNS review more effectively, FNS is instituting higher cost thresholds for MIS project review, where permitted by regulation.

The threshold at which a full APD for an MIS project is required now begins at $1,000,000 rather than the previous $500,000. For projects costing $100,000 to $999,999, only limited project documentation is required.

While it does not represent a change, FNS is also clarifying that the requirement to provide written notification to FNS of any costs between $5,000 and $99,999 applies only to MIS projects, not individual purchases. State agencies need not notify FNS of purchases such as routine hardware replacements, telephonic/call center management software, and other small technology purchases that do not constitute a project, and are not part of a project.

The project cost thresholds are now:

• <$5,000 - No federal review needed for MIS
• $5,000 to $99,999 - Written notification to the RO within 60 days of project initiation
• or contract execution
• $100,000 to $999,999 – Requires FNS approval of limited project documentation:
  • Description of needs
  • Explanation of purchases
  • Budget
  • Cost allocation (if applicable)
  • Procurement documents (Request For Proposals (RFPs) and contracts)
• ≥$1 Million - complete Planning APD (PAPD) and Implementation APD (IAPD)
• review and approval process applies (see FNS Handbook 901)

In addition, FNS is raising the thresholds at which an APD-Update (APDU) “As-Needed” is required. Currently, state agencies are required to submit an APDU “As-Needed” when MIS project costs increase by more than $100,000 or the project schedule changes by more than 90 days. The new thresholds are $250,000 or 10% of the total project cost (whichever is less) or a schedule change of 120 days or more. Note that the requirements for an Annual APDU, which are not based on cost, have not changed.

Note: The State Agency Model (SAM) funding process will remain the same, and is not affected by the revised thresholds. The SAM user groups will continue to use the annual APD process to obtain funding. Please consult with your regional office (RO) if needed to clarify applicable requirements.

Threshold for FNS Review of EBT Projects after Initial Statewide EBT Implementation

A state agency’s plans to procure EBT processor services require the submission of an IAPD, regardless of anticipated cost. This refers to the planned activity, distinct from the cost thresholds for the submission of the procurement documents themselves, discussed further below. The submission of an IAPD enables FNS to confirm that re-procurement will occur in a timely manner, before the current contract expires, that the WIC state agency has planned adequately for the funding to support the new contract, and applicable procurement requirements are met. The number and type of documents required for approval of an EBT IAPD is significantly reduced, compared to a state agency’s initial EBT implementation or an MIS project.

• IAPD – should be submitted prior to any re-procurement activities. The contents of the IAPD for EBT re-procurement are brief – as little as a few pages. The IAPD need only include a transmittal letter, procurement schedule, procurement plan, and anticipated budget. Please see the table in the Attachment for a specific list of required components in an IAPD for EBT in comparison to MIS.
• IAPDU – the Implementation Advance Planning Document Update (IAPDU) should be submitted prior to or with the new negotiated contract for EBT processing, prior to contract execution, allowing anticipated costs and schedule in the original IAPD to be updated with more accurate details.

Revised Thresholds for FNS Review of Technology Procurements

In addition to the revised thresholds at which a technology project plan requires federal review, FNS is also changing the threshold at which procurement documents in WIC, such as RFPs and contracts, require FNS review. Previously the threshold requiring FNS review of procurement documents was $100,000 for MIS and $0 (meaning all documents were subject to review, at any cost) for EBT. Now only RFPs and contracts for services anticipated to exceed $250,000 total, including option years, must be submitted to FNS for review. This threshold conforms to the simplified acquisition threshold specified in the Federal Acquisition Regulation (FAR) Subchapter A, subpart 2.1. Definitions are referenced in Federal Regulations at 2 CFR Part 200, Appendix II, which applies to WIC. This applies to:

• Both MIS and EBT procurements
• All RFP/contract types (i.e., system development, “Transfer and Implementation” (T&I), EBT processing services, MIS or EBT “enhancement” or “modernization,” planning, project management, Quality Assurance (QA), Independent Verification & Validation (IV&V), etc.)
• Both competitive and single-source procurements

Procedures for Re-Procurement of EBT Services or Procurement of MIS Maintenance and Operations (M&O) or Maintenance, Operations and Enhancement (M&O/E) Service Contracts

Some WIC state agencies may incorrectly assume that procuring EBT processor services will take significantly less time than it did for their initial agency-wide implementation. The procurement process for any technology project or service can take up to two years, from drafting an RFP to signing a contract. If selecting a different vendor than the one which currently holds the contract, the state agency also needs to allow for a sufficient period of transition. FNS strongly recommends adherence to the following timeframes:

• 3 years before the current contract expires - state agencies should begin assessing their needs, analyzing gaps in the current contract or where improvements and cost savings can be made, reviewing new WIC program requirements, and begin writing the RFP for the next period of contractor services. (The process of writing the RFP and securing internal state approval can take up to a year.)
• 2.5 years before the current contract expires - The RFP should be submitted to FNS for review. It typically takes a year for the following: allowing sufficient time for FNS review and concurrence, releasing the RFP for bids, allowing at least 90 days for bids, conducting the evaluation and selection process, negotiating the new contract with the selected vendor, and submitting the contract to FNS for review.
• 1 year before the current contract expires - For EBT processor services - the state agency and the newly signed processor should begin the process of transition, testing, data conversion, and other activities necessary to ensure completion before the old EBT contract expires. (The activities and timeframe following contract execution differ if the incumbent vendor is selected.)
• Approximately 6 months before current contract expires – For MIS M&O/E services – the state agency and the newly signed M&O/E service provider, together with the outgoing provider, should begin the process of transition. Even though there is likely no data conversion involved in a transition from one MIS contractor to another, a strong handoff, assuring that the new provider is fully able to support the system, users and WIC clients, takes at least six months, and a sound change-management approach. (An APD is not required for continuing M&O services unless significant changes to platform, functionality, etc. are planned. Discuss the scope of your planned M&O procurement with the FNS regional office (FNS RO) before proceeding without an APD, to ensure there is no risk of disallowed costs.)

Submission and Review Procedures

There is no change to submission and review procedures. State agencies will submit both the APD and procurement documents for review to the appropriate FNS RO staff, and cc: the appropriate SSO analyst, if known. FNS will acknowledge receipt. Any comments or questions will be provided to the state agency within 60 days. The state agency’s IAPD and procurement timelines must take FNS review times into account, including the possibility that an additional review of any revisions may be required. The state agency may not incur any new costs prior to FNS approval.

FNS Procurement Oversight

There is no change to submission and review procedures. State agencies must comply with the minimum federal procurement requirements contained in 2 CFR Part 200.315 (Intangible Property), and Appendix II of 2 CFR 200 (Contract Provisions for Non-Federal Entity Contracts Under Federal Awards). FNS reviews state agency procurement documents (RFPs and contracts) to ensure compliance with these regulations. In addition, FNS’ review will include an assessment of the following to ensure the project or work described in the procurement is consistent with the project or work described in the approved IAPD, and is in compliance with regulations regarding utilizing federal funds:

• Project description
• Scope of work
• Functional requirements
• Deliverables
• Draft project schedule
• Implementation plan
• Project governance/ management approach (who the contractor will be accountable to)

Finally, FNS will provide technical assistance or advice on other aspects of the RFP or contract that may impede competition or may jeopardize the state agency’s ability to successfully negotiate or enforce a contract.

Conclusion

This memorandum provides revised thresholds for submission of APD and procurement documents for FNS review. These thresholds and guidance in this document for approval of a WIC EBT re-procurement supersede FNS Handbook 901, effective immediately. Handbook 901 will be updated to reflect the process guidance provided in this memorandum. The process and requirements in Handbook 901 remain in effect for state agencies which have not yet completed statewide implementation of EBT.

In addition, WIC state agencies are encouraged to continue to reference Handbook 901 on topics such as conducting a fair and open procurement, and writing a strong Request for Proposal (RFP) and contract. These are still relevant to MIS projects and EBT re-procurements.

WIC Policy Memorandum #2007-4, WIC Advanced Planning Document (APD) Policy Changes, will be cancelled given these updates.

Finally, FNS reserves the right to require alternate processes and documentation requirements in order to fast-track key priorities. If a project is subject to alternate requirements, FNS will clearly outline the process state agencies must follow and outline documentation requirements that state agencies must meet.

We hope this information, and the attachment, provide the clarity needed until Handbook 901 is updated. If you have any questions, please contact your FNS RO or SSO analyst.

Karen Painter-Jaquess
Director
State Systems Office

Attachment

• Components required in IAPDs for MIS or for EBT Re-Procurement