[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