Frequently Asked Questions on the use of 1311 funding for Change Orders and Congressional Inquiries

Below are a number of Frequently Asked Questions (FAQs) about the use of 1311 funding for change orders and congressional inquiries. These FAQs are applicable to the amended Funding Opportunity Announcement (FOA) released on November 30, 2012, (“Cooperative Agreement to Support Establishment of Affordable Care Act’s Health Insurance Exchanges1”), and related 1311 funding, which can be found at www.grants.gov, under Catalog of Federal Domestic Assistance number 93.525.

These FAQs are considered general guidance only and are in no way guaranteeing approval of funding requests. All requests for funding are reviewed for allowability, allocability, and reasonableness and other requirements set forth in the funding announcement.

Q: What guidance can CCIIO provide regarding change orders related to IT system development?

A: CCIIO cautions states to be extremely careful when considering and approving change orders requested by IT vendors.  To the extent a grantee plans to fund such change orders with 1311 funds and to the extent any change order constitutes a departure from the grantee’s approved work plan that requires CCIIO’s advance approval, the grantee should obtain CCIIO’s approval of its change request before committing to the change.

CCIIO will consider such change requests on a case-by-case basis pursuant to applicable law, regulation and agency policy.  However, due to large investments in IT, CCIIO generally does not plan to approve changes related to IT activities that were approved as part of a grantee’s initial proposal, but were later deferred or de-scoped by the grantee.

CCIIO will, however, consider change requests for IT development that is new in nature (i.e., not included in the grantee’s approved work plan), made necessary as a result of new agency guidance, new regulations, and/or new legislation, and necessary to produce an IT system capable of carrying out Exchange functions and compliant with relevant statutes, regulations and policy.  For example, where a grantee has programmed its IT system to comply with agency guidance that existed on January 1, 2014, and that guidance is changed on March 1, 2014, CCIIO will consider change requests covering additional programming necessary for the IT system to come into compliance with the March 1, 2014 guidance.

CMS’s OIS team is available to provide technical assistance as states negotiate change orders with vendors in this area.   When requesting additional funding in connection with a change order, the following information must be provided:  

1. What prompted the change order (e.g. new regulations, previously deferred scope, etc.)? Please provide the requirements for the scope in the change order.
2. Did reasonable discussions/negotiations occur with the vendor in an attempt to identify other feasible options prior to executing a change order?
3. Did you have a contingency clause in your contract to address these types of issues/contingencies?
4. How does the change affect functionality?
5. How this change is necessary to get to Blueprint compliance?
6. Why is the work not covered under existing maintenance or option years? Will contract modifications be needed to address functionality not specified in the contract?
7. Will work to be performed be done by the original vendor(s) or will a new vendor be brought in?

Q: Can Grantees use 1311 funds to respond to Congressional inquiries and requests for information?

A: Use of 1311 funds to respond to Congressional inquiries and requests for information is not prohibited.  Therefore, these costs may be covered with 1311 funds so long as the costs are reasonable, allowable and allocable.   Grantees also should keep in mind that 1311 funds cannot be used for lobbying purposes.  All Exchange Establishment Cooperative Agreements are subject to the requirements as set forth in 2 CFR Part 225, Cost Principles for State, Local and Indian Tribal Governments (previously OMB Circular A-87). Any questions regarding reasonableness should be directed to your Project Officer.