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Chapter V: Contracting Documents

HHS reviews four types of contracting documents as part of its APD process:

• Sole source justifications,
• Solicitation documents,
• Contracts, and
• Contract amendments.

As indicated in the decision tables beginning on page 7 (and repeated in this chapter for ease of reference), only large dollar acquisitions (or lower dollar value noncompetitive buys) require review.

It is primarily the responsibility of the State to develop specifications that meet Federal program requirements and to acquire resources using maximum practicable competition. However, on large dollar procurements, HHS staff will review these documents for general conformance with the standards indicated in the box above. The purpose of the review is not to second guess the States, but to ensure broad conformance with the standards.

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A. Sole Source Justifications

In certain situations, States are required to submit the sole source justification even though an APD is not required. As the decision table on the next page indicates, this occurs when the State is seeking FFP at the regular matching rate for a noncompetitive acquisition expected to cost between $1,000,000 and $5,000,000.

Noncompetitive acquisitions equal to or above $5,000,000 at the regular matching rate and all acquisitions at the enhanced matching rate require an APD (rather than just the sole source justification).

[This table is an excerpt of Decision Table 1 in Exhibit I-3 and is repeated here for ease of reference.]

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B. Solicitation Documents

The term "solicitation documents" refers to documents that are used to solicit bids, proposals, and information from contractors. Those that are used to solicit bids or proposals can result in a contract and may be subject to prior written approval if the acquisition exceeds established thresholds. In such cases, the solicitation documents are most frequently Requests for Proposals (RFPs) rather than Invitations for Bids (IFBs).

States are required to obtain prior written approval from HHS for solicitations of products and/or services when the regulatory thresholds set forth in 45 CFR 95.611(b) are exceeded. See the table on the next page.

[This decision table duplicates one in Exhibit I-3 and is provided here for ease of reference.]

Although the form of solicitations varies due to differing State procurement policies and regulations,¹⁶ there are common elements which are important to HHS' review. These include:

• A "specification" (for products) or a "statement of work" (for services) describing what the State intends to buy;

• The authorities and responsibilities of the State and contractor(s) under the contract;

• The rules for contractor evaluation and selection,¹⁷ including an indication of the relative importance of the evaluation factors; and

• "Acceptance criteria" which describe how the State will review and "accept" (as a precursor to final payment) products and services delivered under the contract.

In addition, the solicitation should be clear about what constitutes acceptable performance under the contract.

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C. Contracts and Contract Amendments

States are required to obtain prior written approval from HHS for prospective contracts for products and/or services when the regulatory thresholds set forth in 45 CFR 95.611(b) are exceeded. In addition, certain contract modifications or amendments must also be submitted for prior written approval. These thresholds, described in the table on the following page, apply to single contract amendments or modifications. However, requirements may not be fragmented to avoid submission requirements.

Contracts should not be submitted for HHS' review until the State has determined that the offer meets all the mandatory requirements of the solicitation, conforms with the approved APD, has been selected in accordance with the evaluation and selection criteria, is within projected expenditures or is otherwise justifiable, and is signed by the vendor but not the State.

Contracts are reviewed by HHS to meet the broad standards of review established at the beginning of this chapter.

[This decision table duplicates one in Exhibit I-3 and is provided here for ease of reference.]

¹⁶ State procurements must adhere not only to Federal requirements, but also to State law, procurement regulations, and practices. back
¹⁷ Cost must always be a significant factor in selection. back

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