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Chapter II: Planning APD

A Planning APD is a written plan of action to determine the need for, feasibility of, and projected costs and benefits of an automatic data processing (ADP) equipment or services acquisition.

Planning APDs are used by States that want to be reimbursed for the costs of planning for the implementation of a system, including acquisition of ADP equipment or services. Planning activities eligible for Federal financial participation (FFP) by HHS include:

• Preparing a detailed Project Management Plan
• Determining system needs,
• Assessing project feasibility,
• Evaluating alternatives,
• Conducting cost/benefit analyses,
• Preparing Advance Planning Documents,
• Developing functional requirements,
• Assessing other States' systems for transfer, and
• Preparing procurements.

The Planning APD is a very brief document prepared and submitted prior to initiating Planning Phase activities. It is a plan to plan. The purpose is not to provide needs and plans in detail but to develop a high-level management statement of vision, needs, objectives, plans, and estimated costs. The focus is on describing how planning will be accomplished and demonstrating that the State has established a plan that is reasonable for the level of effort of the project. Planning APDs that meet the standards for approval shown in the box on the preceding page will be approved within 60 days.

The Planning APD has four sections:

• Statement of need,
• Project Management Plan for planning,
• Planning project budget, and
• Estimate of total project cost.

The four sections of the Planning APD are described in the following paragraphs.

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A. Statement of Need

This section of the Planning APD should set forth the State's information and services "vision,"³ including the scope and objectives of the planned information system and its interrelationships with other systems (if known). In addition, the needs statement should define the system requirements in terms of problems and needs which may represent:

• Deficiencies in existing capabilities,
• New or changed program requirements, or
• Opportunities for economies or efficiencies.

For example, the State may identify new requirements based on insufficient system capacity for current or projected caseloads, lengthy case processing times, limited functional automation, or current or projected operating costs. Therefore, deficiencies or needs may be based on functional, programmatic, technical, operational, or resource requirements.

This section should answer the question, "Is the need clear?"

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B. Project Management Plan for Planning

The Project Management Plan summarizes how the State will plan.

The State's planning project organization is briefly described. At this point in the project, all that is required is that the State identify key players in the planning phase, such as the project manager and other key planning staff by name and title. This information can be depicted in an organization chart.

The Project Management Plan for planning describes how and when the activities for the Planning Phase will be conducted and schedules milestones for completion of key events. For example, provisions at 45 CFR 95.605 require a State to commit to:

• Conducting and preparing a needs assessment⁴, feasibility study, alternatives analysis, and cost/benefit analysis; and

• Preparing a functional requirements specification and/or a General Systems Design.⁵

If applicable and if known, this section sets forth how and when contractor services to support planning will be acquired. In some cases, the State may be able to describe an overall strategy - the number of contractors, the products and services they will provide, and their relationships to each other and to the State.⁶ An effective way to present this information is graphically.

This section should answer the questions, "Does the State have a reasonable plan to plan?" and "Has the State committed to preparing a needs assessment, feasibility study, alternatives analysis, and cost/benefit analysis?"

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C. Planning Project Budget and Cost Allocation

This section succinctly describes in narrative form the resource needs for which funding support during the Planning Phase may be requested by the State. These needs may relate to State and contractor staff costs, computer time, hardware and commercially available software, travel, space, supplies, telephones, photocopying, and so forth.

This section of the APD also provides the budget and the cost allocation to be used during the Planning Phase.

1. Budget. Typically, the planning project budget provides estimated expenditures by category, with cost projections summarized annually and totaled for the Planning Phase. In very large or complex projects, budget data may be broken down by task or phase and category. (At times, ACF may require this on an exception basis.) Unless modified by HHS' approval, the total is the ceiling for expenditures during the Planning Phase. The budget format States should use is shown in Exhibit II-1 on the following page.

2. Cost Allocation. Cost allocation should be described in narrative and in an exhibit depicting share and dollars. First, the Planning Phase cost allocation plan is described, including procedures to identify, record, allocate, and report direct and indirect costs, partially and fully attributable to the system project, for funding at regular and enhanced rates. The State also describes how it will fund its portion of the costs. The planning cost allocation is applied to the total planning project budget to calculate budget totals by program. States should follow the format for a cost allocation plan used in the example in Exhibit II-2 on page 7.

This section should answer the questions, "Has the State estimated the costs to plan?"
and "Are the estimated planning costs and cost allocation reasonable for the project?"

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D. Total Project Cost

This section provides a gross estimate of total project costs for the entire system acquisition, including planning and implementation. This information is very preliminary and will be updated in the Implementation APD.

This section should answer the question, "Has the State estimated the project cost?"

Exhibit II-1

* Actual State cost categories may differ back
** If required. back

Exhibit II-2

³ "Vision" means the State planners' view of future program needs and the systems architecture necessary to support those needs. back
⁴ Referred to as a "requirements analysis" in this guide. back
⁵ Note that, in many cases, only the Conceptual System Design will be completed during the planning phase. In that event, the Conceptual System Design may be referenced in the Planning APD with a note that the General System Design will be developed during the implementation phase. back
⁶ Note that Planning Phase contractors must be barred from competing for or participating as a prime contractor or subcontractor on follow-on Implementation Phase activities and/or any resulting procurements. back

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