[Federal Register Volume 77, Number 131 (Monday, July 9, 2012)]
[Rules and Regulations]
[Pages 40302-40305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-16407]
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DEPARTMENT OF THE TREASURY
48 CFR Parts 1002, 1032, and 1052
RIN 1505-AC41
Department of the Treasury Acquisition Regulation; Internet
Payment Platform
AGENCY: Office of the Procurement Executive, Treasury.
ACTION: Final rule.
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SUMMARY: The Department of the Treasury is amending the Department of
the Treasury Acquisition Regulation (DTAR) to implement use of the
Internet Payment Platform, a centralized electronic invoicing and
payment information system, and to change the definition of bureau to
reflect the consolidation on July 21, 2011 of the Office of Thrift
Supervision with the Office of the Comptroller of the Currency. This
final rule follows publication of a February 23, 2012, notice of
proposed rulemaking. After careful consideration of the public
comments, the Department is adopting the proposed rulemaking without
change.
DATES: Effective date: August 8, 2012.
FOR FURTHER INFORMATION CONTACT: Ronald Backes, Director, Acquisition
Management, Office of the Procurement Executive, at (202) 622-5930.
SUPPLEMENTARY INFORMATION:
I. Background and Proposed Rule
The Federal Acquisition Regulation (FAR) sets forth the uniform
regulation for the procurement of supplies and services by Federal
departments and agencies (title 48, chapter 1, of the Code of Federal
Regulations (CFR)). The Department of the Treasury Acquisition
Regulations, which supplement the FAR, are codified at 48 CFR chapter
10.
On July 5, 2011, the Department announced that it will implement
the Internet Payment Platform (IPP) no later than the end of fiscal
year 2012; with all new payment requests in FY2013 processed using the
IPP. The Internet Payment Platform (IPP) is a secure Web-based
electronic invoicing and payment system that processes vendor payment
data electronically, either through a Web-based portal or electronic
submission, and automates the routing and approval workflow within an
agency.
The IPP is provided by the Department of the Treasury's Financial
Management Service through its fiscal agent, the Federal Reserve Bank
of Boston at no cost to vendors or government departments and agencies
adopting the platform. The IPP benefits agencies by eliminating the
need to file and store paper payment documentation; reducing the time
of agency personnel researching and answering payment status questions
by providing vendor and department-wide visibility into contract
payments.
IPP benefits vendors by reducing time to payment, creating a
standard set of electronic data to submit payment requests to the
Federal government; reducing costs from having multiple processes and
requirements; reducing paper and postage costs, improving cash
management by eliminating the time delays associated with submitting
and routing paper; and increasing transparency in the payment
processes.
The Department will support vendor transition from paper-based
payment processes to IPP through a series of webinar and video training
on various aspects of the application, including how to view purchase
orders, submit invoices, retrieve payment information, set notification
preferences, and add users to IPP accounts. The IPP application
includes a ``Collector User Guide'' on vendor landing page. Treasury
also operates customer support services email and toll free numbers
during business hours, Monday through Friday 8 a.m.-6:30 p.m. Eastern
Time.
On February 23, 2012 (77 FR 10714) the Department published a
proposed rule that would add a new subpart 1032.70--Electronic
Submission and Processing of Payment Requests to establish the IPP. The
Department published a correction to the proposed rule on March 5, 2012
(77 FR 13069). The proposed rule prescribed policies and procedures for
electronic submission and processing of payment requests. With limited
exceptions, the proposed provisions would establish that after October
1, 2012, Treasury will require and contractors will submit payment
requests electronically. The rule also proposed a waiver of its
provisions and proposed the text of the IPP contract clause.
This proposed rule also included nonsubstantive, technical changes
to update the DTAR definition of ``bureau'' and would add ``IPP'' to
the DTAR list of abbreviations.
II. This Final Rule
In its February 23, 2012, proposed rule, the Department solicited
public comments on all aspects of the proposal. The comment period
closed on April 23, 2012 and eight comments were received. All of the
comments were from private citizens and law school students. This
section sets out significant comments raised by the
[[Page 40303]]
commenters and the Department's responses to these comments. As set
forth below, the Department has considered the comments and is adopting
the proposed rule without change.
Public Comments and Department Response
One commenter suggested that the Department should make electronic
submission of payments optional for a period of one to two years in
order to assess its impact on supplier diversity. The commenter
asserted that this would enable the Department to conduct targeted
outreach and to take remedial steps before mandating electronic
submission, in the event a negative effect on supplier diversity is
observed. Another commenter suggested extending the compliance date of
the rule until 2013.
The potential exists that, for unforeseen reasons, there may be a
small number of entities that may be unable to utilize the IPP upon
implementation. For this reason, the Department included the waiver
provisions, which will provide ample opportunity for impacted
businesses to seek a waiver and if granted, to continue paper-based
invoicing procedures. Therefore, the Department is not adopting this
change.
Another commenter stated that the IPP should support a longer
payment history than 18 months. The commenter noted that the IPP should
maintain payment data for at least two years based on the need for
contractors to retain records for tax purposes.
The payment history feature in IPP is intended to provide a
convenient reference, not to relieve contractors of existing record
keeping requirements. IPP permits contractors to download records for
this purpose. The Department considers an 18 month payment history
sufficient to fulfill the purpose for which the feature is provided,
and therefore is not adopting this change.
One commenter opined that the adoption of the IPP needs to be
accompanied by an increase in funding for and focus on cyber security.
That commenter further stated that the nature of the IPP's format for
data transfer makes the need for proper cyber security to be in place
before the widespread implementation of the IPP even more critical. The
commenter also inquired about the source code for the IPP.
The Department shares the commenter's concerns about cyber security
and affirms that it is committed to making every effort to protect the
integrity of the information in the system. The commenter's
suggestions, however, are outside of the scope of this rulemaking and
cannot be addressed in this final rule.
Another commenter suggested that the Department should further
support its conclusion that the impact on small entities will be
minimal. This commenter stated that the Department should undertake
further analysis about the economic impact on small entities before
proceeding with the rulemaking.
In the February 23, 2012, proposed rule, pursuant to the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.), the Department certified that
the rule, if adopted, would not have a significant economic impact on a
substantial number of small entities and solicited comments on the
impact that the rule would have on small entities. No comments were
received about the impact of the rule on entities of any size.
Notwithstanding the commenter's suggestion that further analysis be
undertaken, the Department continues to believe that the IPP
implementation does not have a significant economic impact on small
entities. As explained in section III of this preamble, the move from
manual, paper-based processing to electronic processing will not
require significant costs. The IPP only requires a computer and
Internet access, which all entities that seek to contract with the
Treasury Department must use in order to learn of contracting
opportunities and obtain solicitations. In addition, the Department
expects that small entities that have been using paper-based processing
will benefit from the speed and efficiency of the IPP. Therefore, in
the absence of any comments that address the impact or demonstrate a
significant economic impact of the rule, the Department is not
conducting further analysis at this time.
One commenter suggested that the rule should specify what
constitutes an ``undue burden'' sufficient to waive its provisions.
Another commenter suggested that the undue burden waiver provides an
amorphous standard that may undermine the objectives of the rule.
The Department considers the implementation of the waiver
provisions, including time to transition to electronic payment and
undue burden, to allow ample opportunity for impacted businesses to
make a case for continuing paper-based invoicing procedures. Indeed,
the Department does not expect that transition to the IPP will impose
an undue burden on any contractor, but has included the waiver
provision to provide for any unforeseen difficulties that might occur.
Because the Department cannot predict what circumstances, if any, might
create the need for waiver, it cannot articulate a more specific waiver
standard. If the Department in fact receives a significant number of
waiver requests, it will determine if additional changes need to be
implemented in the system or in the policy. If appropriate, the
Department may provide further clarification about the circumstances
and criteria for waiver provisions, including time to transition to
electronic payment and undue burden. For these reasons, the Department
is not adopting the suggestions to revise the waiver provision.
One commenter suggested that the rule should provide for the clear
preservation of IPP-generated electronic records, so that they will be
available in the event of a Freedom of Information Act request.
Specifically, the commenter suggested that the rule be amended to
include either: A provision requiring agencies to preserve IPP-
generated electronic records for a set period of time; a provision
requiring agency heads to include IPP-generated electronic records
within their required record management plans under the Federal Records
Act; or a provision requiring the National Archives and Records
Administration to amend 36 CFR part 1236 to clearly require that IPP-
generated documents be preserved under agency record management plans.
The Department appreciates the commenter's interest in preserving
federal records, and notes that the Federal Records Act requires it to
retain IPP records regardless of whether or not they are covered by 36
CFR part 1236. The suggestions, however, are outside the scope of this
rulemaking and are not adopted in this final rule.
Accordingly, the Department is adopting the proposed rule, as
corrected, without further change.
III. Other Matters
Regulatory Planning and Review
This rule is not a significant regulatory action as defined in
section 3(f) of Executive Order 12866. Therefore a regulatory
assessment is not required.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. chapter 6) generally
requires agencies to conduct an initial regulatory flexibility analysis
and a final regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements, unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities.
[[Page 40304]]
It is hereby certified that this rule will not have a significant
economic impact on a substantial number of small entities. The IPP will
benefit vendors by reducing time to payment, creating a standard set of
electronic data to submit payment requests to the federal government;
reducing costs associated with adhering to multiple processes and
requirements for different federal agencies; reducing paper and postage
costs, improving cash management by eliminating the time delays
associates with submitting and routing paper; and increasing
transparency in the payment processes. The rule is intended to support
the implementation of the IPP to streamline the payment processes
associated with government contracts and agreements.
Treasury contracts with more than 4,000 small businesses annually.
This rule is expected to impact all small businesses that contract with
Treasury. While Treasury anticipates that a significant number of small
businesses will be impacted, the economic impact is minimal, and
outweighed by the economic benefits of IPP. An initial cost to small
businesses in terms of changes to manual, paper-based invoicing
processes is expected to be recouped by small businesses within a
short-term through more efficient submission and reporting of invoices
and payments and more timely payments. No additional reporting or
recordkeeping requirements for small businesses result from this rule.
Staff experienced with the submission of paper-based payment requests
will need to learn the process for submitting electronic payment
requests. New compliance and reporting requirements are not
anticipated, as government and vendor staff will be able to access data
and reports directly through the IPP.
This rule is related to, but not in conflict with, following
federal rules:
31 CFR part 208 requires that most federal payments be
made electronically, subject to certain waivers established in the
rule.
The Prompt Payment rule at 5 CFR part 1315 requires
vendors to submit Electronic Funds Transfer (EFT) information and a
Taxpayer Identification Number (TIN) as part of a proper invoice,
unless agency procedures provide otherwise. Late interest penalties do
not apply if the vendor has failed to submit this information.
48 CFR parts 13, 15, 32 and 52, addresses the use of EFT
for federal contract payments and also provides for the collection of
banking information from vendors. In particular, the FAR EFT rule
provides EFT contract clauses that agencies should use in their
contracts with government vendors requiring them to receive payments
electronically.
This rule would be implemented in such a manner to complement these
rules. One comment was received that suggested that further analysis is
necessary, however no comments were received that suggested the
economic impact would be significant (see section II.) Accordingly, the
undersigned hereby certifies that this rule will not have a significant
economic impact on a substantial number of small entities.
Paperwork Reduction Act
The information collections contained in this rule have been
previously approved by the Office of Management and Budget under the
Paperwork Reduction Act (44 U.S.C. 3501, et seq.) and assigned OMB
control numbers 1505-0081; 1505-0080; and 1505-0107. Under the
Paperwork Reduction Act, an agency may not conduct or sponsor and a
person is not required to respond to a collection of information unless
it displays a valid OMB control number.
Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.
1532 (UMRA), requires that the agency prepare a budgetary impact
statement before promulgating any rule likely to result in a federal
mandate that may result in the expenditure by state, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year. If a budgetary impact statement is
required, section 205 of UMRA also requires the agency to identify and
consider a reasonable number of regulatory alternatives before
promulgating the rule. It has been determined that the rule will not
result in expenditures by state, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year.
List of Subjects in 48 CFR Parts 1002, 1032, and 1052
Government procurement.
Accordingly, the Department of the Treasury amends 48 CFR chapter
10 as follows:
PART 1002--DEFINITIONS OF WORDS AND TERMS
0
1. The authority citation for part 1002 continues to read as follows:
Authority: 41 U.S.C. 418b.
0
2. Section 1002.101 is revised to read as follows:
1002.101 Definitions.
Bureau means any one of the following Treasury organizations:
(1) Alcohol and Tobacco Tax and Trade Bureau (TTB);
(2) Bureau of Engraving & Printing (BEP);
(3) Bureau of Public Debt (BPD);
(4) Departmental Offices (DO);
(5) Financial Crimes Enforcement Network (FinCEN);
(6) Financial Management Service (FMS);
(7) Office of the Inspector General (OIG);
(8) Internal Revenue Service (IRS);
(9) Office of the Comptroller of the Currency (OCC);
(10) Special Inspector General for the Troubled Asset Relief
Program (SIGTARP);
(11) Treasury Inspector General for Tax Administration (TIGTA); or
(12) United States Mint.
0
3. Section 1002.70 is amended by adding the abbreviation of IPP in
alphabetical order to read as follows:
1002.70 Abbreviations.
* * * * *
IPP Internet Payment Platform
* * * * *
PART 1032--CONTRACT FINANCING
0
4. The authority citation for part 1032 continues to read as follows:
Authority: 41 U.S.C. 418b.
0
5. Add subpart 1032.70 to read as follows:
Subpart 1032.70--Electronic Submission and Processing of Payment
Requests
Sec.
1032.7000 Scope of subpart.
1032.7001 Definitions.
1032.7002 Policy.
1032.7003 Contract clause.
Subpart 1032.70--Electronic Submission and Processing of Payment
Requests
1032.7000 Scope of subpart.
This subpart prescribes policies and procedures for electronic
submission and processing of payment requests.
1032.7001 Definitions.
``Payment request,'' as used in this subpart, is defined in the
clause at 1052.232-7003, Electronic Submission of Payment Requests.
1032.7002 Policy.
(a) Contracts awarded after October 1, 2012, shall require the
electronic submission of payment requests, except for--
[[Page 40305]]
(1) Purchases paid for with a Government-wide commercial purchase
card;
(2) Classified contracts or purchases when electronic submission
and processing of payment requests could compromise classified
information or national security;
(b) Where a contract otherwise requires the electronic submission
of invoices, the Contracting Officer may authorize alternate procedures
only if the Contracting Officer makes a written determination that:
(1) The Department of the Treasury is unable to receive electronic
payment requests or provide acceptance electronically;
(2) The contractor has demonstrated that electronic submission
would be unduly burdensome; or
(3) The contractor is in the process of transitioning to electronic
submission of payment requests, but needs additional time to complete
such transition. Authorizations granted on this basis must specify a
date by which the contractor will transition to electronic submission.
(c) Except as provided in paragraphs (a) and (b) of this section,
Treasury officials shall process electronic payment submissions through
the Treasury Internet Payment Platform or successor system.
(d) If the requirement for electronic submission of payment
requests is waived under paragraph (a)(2) or paragraph (b) of this
section, the contract or alternate payment authorization, as
applicable, shall specify the form and method of payment request
submission.
1032.7003 Contract clause.
Except as provided in 1032.7002(a), use the clause at 1052.232-
7003, Electronic Submission of Payment Requests--Internet Payment
Platform, in solicitations issued and contracts awarded after October
1, 2012.
PART 1052--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
6. The authority citation for part 1052 continues to read as follows:
Authority: 41 U.S.C. 418b.
0
7. Add section 1052.232-7003 to read as follows:
1052.232-7003 Electronic submission of payment requests.
As prescribed in 1032.7003, use the following clause:
ELECTRONIC SUBMISSION OF PAYMENT REQUESTS (DATE TBD)
(a) Definitions. As used in this clause--
(1) ``Payment request'' means a bill, voucher, invoice, or
request for contract financing payment with associated supporting
documentation. The payment request must comply with the requirements
identified in FAR 32.905(b), ``Payment documentation and process''
and the applicable Payment clause included in this contract.
(2) [Reserved]
(b) Except as provided in paragraph (c) of this clause, the
Contractor shall submit payment requests electronically using the
Internet Payment Platform (IPP). Information regarding IPP is
available on the Internet at www.ipp.gov. Assistance with enrollment
can be obtained by contacting the IPP Production Helpdesk via email
[email protected] or phone (866) 973-3131.
(c) The Contractor may submit payment requests using other than
IPP only when the Contracting Officer authorizes alternate
procedures in writing.
(d) If alternate payment procedures are authorized, the
Contractor shall include a copy of the Contracting Officer's written
authorization with each payment request.
(End of clause)
Dated: June 12, 2012.
Thomas A. Sharpe, Jr.,
Senior Procurement Executive, Office of the Procurement Executive.
[FR Doc. 2012-16407 Filed 7-6-12; 8:45 am]
BILLING CODE 4810-25-P