VA Acquisition Regulation: Electronic Submission of Payment Requests, 23204-23208 [2012-9269]

Download as PDF 23204 Federal Register / Vol. 77, No. 75 / Wednesday, April 18, 2012 / Proposed Rules DEPARTMENT OF VETERANS AFFAIRS 48 CFR Parts 832 and 852 RIN 2900–AN97 VA Acquisition Regulation: Electronic Submission of Payment Requests Department of Veterans Affairs. Proposed rule. AGENCY: ACTION: The Department of Veterans Affairs (VA) proposes to amend its acquisition regulations to require contractors to submit payment requests in electronic form in order to enhance customer service, departmental productivity, and adoption of innovative information technology, including the appropriate use of commercial best practices. DATES: Comments must be received by VA on or before June 18, 2012. ADDRESSES: Written comments may be submitted through www.Regulations.gov; by mail or handdelivery to Director, Regulations Management (02REG), Department of Veterans Affairs, 810 Vermont Ave. NW., Room 1068, Washington, DC 20420; or by fax to (202) 273–9026. Comments should indicate they are submitted in response to ‘‘RIN 2900– AN97—VA Acquisition Regulation: Electronic Submission of Payment Requests.’’ Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays). Please call (202) 461–4902 for an appointment. (This is not a toll free number.) In addition, during the comment period, comments are available online through the Federal Docket Management System (FDMS) at www.Regulations.gov. FOR FURTHER INFORMATION CONTACT: Tanya Reid, Procurement Policy Service (003A2A), Department of Veterans Affairs, 810 Vermont Ave. NW., Washington, DC 20420, (202) 461–7178. (This is not a toll free number.) SUPPLEMENTARY INFORMATION: On July 7, 2009, VA published a notice, in the Federal Register at 74 FR 32223, of a class deviation to Federal Acquisition Regulation (FAR) 32.905 (48 CFR 32.905), which added an interim electronic invoicing clause in the VA Acquisition Regulation (VAAR). The interim clause strongly encourages contractors to voluntarily submit invoices electronically, which VA determined would improve the accuracy and efficiency of payment processing. Under this interim clause, contractors mstockstill on DSK4VPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 16:22 Apr 17, 2012 Jkt 226001 who choose to use electronic invoicing have three options to submit payment requests in electronic form: (1) Electronic Invoice Presentment and Payment System; (2) American National Standards Institute (ANSI) X12 electronic data interchange (EDI) formats; or (3) another electronic form as prescribed by the contract administration office and the designated agency office. VA’s notice regarding interim, optional electronic invoicing noted VA intended to initiate noticeand-comment rulemaking to amend the VAAR to make electronic invoicing mandatory. Mandatory electronic invoice submission is necessary to enhance compliance and/or consistency with a long history of rules and regulations governing the accuracy, timeliness, and cost-effectiveness of the Federal Government’s payment process. In 1982, Congress enacted the Prompt Payment Act (‘‘Act’’), Public Law 97– 177, to require Federal agencies to pay their bills on a timely basis, to pay interest penalties when payments are made late, and to take discounts only when payments are made by the discount date. The Act, as amended, is found at 31 U.S.C. Chapter 39. To implement the Act, the Office of Management and Budget (OMB) issued Circular A–125 (‘‘Prompt Payment ’’) in August 1982 (47 FR 37321). In response to changes to the Act that Congress made in the Prompt Payment Act Amendments of 1988, Public Law 100– 496, OMB revised Circular A–125 in December 1989 (54 FR 52700). On June 17, 1998, OMB requested public comments on proposed revisions to Circular A–125 (63 FR 33000). The Circular was updated to reflect the increased use of electronic commerce in the Federal Government and in the private sector, including electronic financial systems and electronic funds transfer. OMB responded to the comments that were received on the proposed revisions, issued final revisions to its Prompt Payment Circular, and codified these revisions in new part 1315 of 5 CFR (64 FR 52580). With the incorporation of the Prompt Payment rules into 5 CFR part 1315, OMB rescinded Circular A–125. The prompt payment rules at 5 CFR part 1315 address the increased use of electronic commercial financial systems and promote the use of government credit cards and accelerated payment methods. This proposed rule enhances compliance with 5 CFR part 1315 by requiring the use of electronic commerce. Electronic invoice submission replaces payment delays from traditional postal delivery with PO 00000 Frm 00044 Fmt 4702 Sfmt 4702 immediate electronic transmission of data. As a result, VA’s ability to make timely payments, reduce interest penalties on late payments, and increase the dollar amount of discounts realized from prompt payment is improved. FAR subpart 32.9 (48 CFR part 32.9) prescribes policies, procedures, and clauses for implementing the prompt payment regulations at 5 CFR part 1315. In relevant part, FAR 32.903 requires federal agencies to establish policies and procedures necessary to implement FAR subpart 32.9, and provides the agencies the latitude to prescribe additional standards for establishing invoice payment due dates necessary to support agency programs and foster prompt payment to contractors as well as the latitude to adopt different payment procedures in order to accommodate unique circumstances, provided that such procedures are consistent with the policies in OMB’s prompt payment regulations. This proposed rule enhances compliance with FAR 32.903 by requiring electronic invoice submission. Electronic invoice submission replaces payment delays from traditional postal delivery with immediate electronic transmission of data. By eliminating delays associated with traditional processing, electronic submission fosters the prompt payment of invoices to contractors. FAR 32.905(b)(1) defines the specific data elements that must be included on a proper invoice. Electronic invoice submission ensures invoice validity by employing automated data validation. Automated data validation enforces data element accuracy and completeness. Invalid invoices are immediately returned to the contractor for correction without the delays associated with traditional postal delivery. VA’s proposed requirement for contractors to use electronic invoicing when submitting payment requests supports several of the principal purposes stated in section 2 of the E-Government Act of 2002, Public Law 107–347, including promoting the use of the Internet and other information technologies to provide increased opportunities for citizen participation in Government, improving the ability of the Government to achieve agency missions and program performance goals, reducing costs and burdens for businesses and other Government entities, and transforming agency operations by utilizing, where appropriate, best practices from public and private sector organizations. Further, section 202(b)(3) of the EGovernment Act of 2002 requires Federal agencies to develop performance measures that demonstrate E:\FR\FM\18APP1.SGM 18APP1 mstockstill on DSK4VPTVN1PROD with PROPOSALS Federal Register / Vol. 77, No. 75 / Wednesday, April 18, 2012 / Proposed Rules how electronic government enables progress towards agency objectives, strategic goals, and statutory mandates, and specifically directs agencies to consider: (1) Customer service; (2) agency productivity; and (3) the adoption of innovative information technology, including the appropriate use of commercial best practices. VA anticipates that this rulemaking requiring contractors to use electronic invoicing to submit payment requests would reflect positively when rated against the aforementioned performance measures given that it would ensure superior customer service, increase agency productivity, and be consistent with the longstanding best practice of electronic invoicing and direct deposit in the commercial marketplace. The Improper Payments Information Act of 2002, Public Law 107–300, enacted on Nov. 26, 2002, as amended by the Improper Payments Elimination and Recovery Act of 2010 (IPERA), Public Law 111–204, enacted on July 22, 2010, requires Federal agencies to annually review the programs it oversees and determine if those programs and activities may be susceptible to significant erroneous payments. Section 2(h)(4) of IPERA requires the head of each agency to conduct a financial management improvement program, consistent with rules prescribed by the Director of OMB. In conducting the program, the head of the agency shall, as the first priority of the program, address problems that contribute directly to agency improper payments and may seek to reduce errors and waste in other agency programs and operations. Executive Order 13520 of November 20, 2009 (‘‘Reducing Improper Payments’’) directed the Federal Government to make every effort to confirm that the right recipient is receiving the right payment for the right reason at the right time. This proposed rule would address problems that contribute to improper payments such as data entry errors, manual processing errors, incorrect vendor selection, duplicate payments, and payment delays while eliminating the waste associated with traditional payment processing. Other Federal Government departments and agencies have implemented similar electronic invoice submission requirements. In January 2004, the Department of Defense updated the Defense Federal Acquisition Regulation Supplement (DFARS) to reflect the new electronic invoicing mandate. DFARS 252.232– 7003 (48 CFR 252.232–7003) outlines the electronic invoice submission VerDate Mar<15>2010 16:22 Apr 17, 2012 Jkt 226001 process for contractor payments. In 2006, the U.S. Government Accountability Office issued a report to Congressional Committees entitled ‘‘DoD Payments to Small Businesses: Implementation and Effective Utilization of Electronic Invoicing Could Further Reduce Late Payments’’ (GAO–06–358). The report confirmed the effectiveness of electronic invoicing in eliminating paper and redundant data entry; improving data accuracy; reducing the number of lost or misplaced documents; and ultimately, improving timely payments to contractors. The U.S. Department of the Interior issued a special notice mandating electronic submittal of invoices and exchange of payment information to its suppliers of goods and services beginning in May 2011. The U.S. Department of the Treasury mandated electronic invoicing for its commercial vendors by the end of fiscal year 2012. VA proposes to amend the VAAR by adding subpart 832.10 and clause 852.273–76 to implement mandatory electronic invoicing as part of its strategic plan to improve the commercial vendor payment process. The automated data validation, digital transmission, and expedited payment and processing would reduce the errors inherent in a manual invoice processing system, thereby reducing improper payments. Expedited payment processes would allow VA to take advantage of prompt payment discounts offered by its vendors thereby reducing the cost of goods and services furnished VA while simultaneously reducing the cost to contractors of manual invoice processing. As a result, VA would achieve compliance and consistency with all applicable laws governing the invoice payment process and use of information technologies. This proposed amendment to the VAAR is anticipated to reduce the errors in the processing of contractor payments by including automated invoice data validation checks. VA’s electronic invoicing system would check the contractor-submitted invoice data against contract invoice requirements and automatically refer improper or erroneous invoices back to the contractor for immediate correction. This would facilitate timely correction of administrative errors and timely payment of contractors when coupled with the existing Electronic Funds Transfer procedure (bank direct deposit) in use by VA. Automated invoice data validation checks would reduce the manual processing burden and consequent errors for both government and contractor personnel and reduce the PO 00000 Frm 00045 Fmt 4702 Sfmt 4702 23205 risk of improper payment. These same data validation processes would ensure payment requests comply with applicable laws. In addition, electronic invoicing would expedite the payment process, and thereby, permit VA to take greater advantage of discounts afforded by contractors for early payment. The proposed benefits of electronic invoice submission to the contractor community would include speedier payments of balances due, as well as reduced costs due to the elimination of postage fees, and related material and supply expenses. Currently, approximately 25 percent of the vendor community submits electronic payment requests to the VA Financial Services Center using one of two data transmission methods. Some contractors use VA’s Electronic Invoice Presentment and Payment System. Other contractors use systems that rely on the standard EDI transaction sets. These methods of data transmission are discussed in more detail below. Under proposed VAAR 832.1003–1 and VAAR 852.273–76(c), electronic invoices would be submitted by the Internet using either: (1) VA’s Electronic Invoice Presentation and Payment System, or (2) any system that conforms to the X12 EDI formats established by the Accredited Standards Center (ASC) and chartered by ANSI. These are the same methods that many VA contractors are voluntarily using under VA’s current interim electronic invoicing clause. See 74 FR 32223. VA’s Electronic Invoice Presentation and Payment System allows invoice submission through two methods. The first method is an internet-based webform template that expands the ability of smaller contractors to utilize electronic invoicing and allows a contractor to directly upload invoice data that automatically populates VA payment systems. The second method directly interfaces with the contractor’s billing system and transmits invoice data to VA payment systems. The U.S. ANSI X12 is the predominant set of standards defining the structure, format, and content of business transactions conducted through EDI. ANSI X12, chartered more than 30 years ago, develops and maintains EDI standards. Access to VA’s Electronic Invoice Presentation and Payment System would be provided to contractors at no cost. As an alternative to using the VA Electronic Invoice Presentation and Payment System, proposed VAAR 832.1003–1(b) and VAAR 852.273– 76(c)(2) would also permit contractors to submit electronic invoices using any system that conforms to X12 EDI E:\FR\FM\18APP1.SGM 18APP1 mstockstill on DSK4VPTVN1PROD with PROPOSALS 23206 Federal Register / Vol. 77, No. 75 / Wednesday, April 18, 2012 / Proposed Rules formats established by ASC and chartered by ANSI. This would allow contractors some flexibility in deciding how they want to communicate with VA. For example, some contractors may already have a system established that is compatible with above-mentioned EDI requirements in order to communicate with other federal agencies. Those contractors would be able to use that same system to submit electronic invoices to VA. Additionally, purchases paid with a Government-wide commercial purchase card are considered to be an electronic transaction for purposes of this rule, and therefore no additional electronic invoice submission is required. In proposed VAAR 832.1003(b) and VAAR 852.273–76(e), VA proposes to include five exceptions to the mandatory use of electronic invoicing by contractors. VA proposes to allow contracting officers to require contractors to submit payment requests by mail, through the United States Postal Service, in the following circumstances. First, contracting officers may direct that contractors submit invoicing by mail for awards that are made to foreign vendors for work performed outside the United States because foreign vendors may lack Internet access, familiarity with, or ability to process an electronic invoice with the standard commercial protocols and methods in the proposed clause. Second, contracting officers may direct that contractors submit invoicing by mail for classified contracts or purchases when electronic submission and processing of payment requests could compromise the safeguarding of classified or privacy information. In such cases, the potential damage far outweighs any efficiencies or benefits to be gained by electronic processing. Third, contracting officers may direct that contractors submit invoicing by mail for contracts awarded by contracting officers in the conduct of emergency operations, such as responses to national emergencies because such contracts may be performed in areas and under circumstances where Internet availability and electronic invoicing are not practical. Fourth, contracting officers may direct that contractors submit invoicing by mail for contracts awarded by contracting officers for solicitations or contracts in which the designated agency office (DAO) is a VA entity other than the VA Financial Services Center in Austin, Texas. Fifth, contracting officers may direct that contractors submit invoicing by mail for solicitations or contracts awarded by VerDate Mar<15>2010 16:22 Apr 17, 2012 Jkt 226001 contracting officers in cases where the DAO does not have electronic invoicing capability as described above. Proposed VAAR 832.1003–2 would require a contracting officer to insert the proposed contract clause, VAAR 852.273–76, Electronic Submission of Payment Requests, in all solicitations and contracts. The proposed VAAR 852.273–76 would require the electronic submission of invoices for contracts unless the contracting officer determines that one or more of the exceptions at VAAR 832.1003(b) applies. In cases where an exception would apply, the contracting officer would provide invoice mailing instructions to the contractor. The VA Financial Services Center would serve as the DAO for commercial goods and services purchased by VA, and would be the only entity which operates the electronic invoicing capabilities as described above. Accordingly, VAAR 832.1003(b)(4) allows an exception to the electronic invoice requirement for solicitations or contracts in which the DAO is a VA entity other than the VA Financial Services Center in Austin, Texas. Public Comments VA welcomes public comments on all aspects of the proposed rule, however, the Department is specifically interested in feedback on the following areas: (1) While VA’s voluntary compliance program has been in effect for 3 years, the VA is soliciting comment on whether a final rule should include an appropriate phase-in period for electronic reporting requirements; (2) The Department is seeking input on whether the proposal would create any significant burdens or transition costs for contractors; if so what types of costs or burdens might be imposed?; (3) While VA generally believes that the rapid pace of technological change has eliminated many challenges to full electronic commerce and internet access for contractors e.g. both current and potential federal government registrants are already required to register in the Centralized Contractor Registry (CCR), the VA is interested in comments on whether an exemption process should be included in the final rule; and, (4) Finally, VA is seeking comment on whether the elimination of the ‘‘other electronic means’’ option previously available under VA’s voluntary program would create any undue burdens for contractors. Executive Orders 12866 and 13563 Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory PO 00000 Frm 00046 Fmt 4702 Sfmt 4702 alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a ‘‘significant regulatory action,’’ which requires review by OMB, as ‘‘any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive Order.’’ The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined and it has been determined not to be a significant regulatory action under Executive Order 12866. Regulatory Flexibility Act The Secretary hereby certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601–612. The Secretary acknowledges that this proposed rule could affect some small entities; however, the economic impact is not anticipated to be significant and is expected to be outweighed by the positive economic impact of the proposed rule. Small entities should realize a positive economic impact as a result of electronic invoice submission due to the avoidance of traditional invoicing costs such as postage and mailing supplies. VA’s proposed data transmission methods for electronic invoice submission would accommodate all existing accounts receivable/billing systems that contractors are currently using to submit electronic invoices to VA. As a result, E:\FR\FM\18APP1.SGM 18APP1 Federal Register / Vol. 77, No. 75 / Wednesday, April 18, 2012 / Proposed Rules no additional hardware or software purchases by contractors are necessary to submit electronic invoices. Additionally, the VA electronic invoice payment and presentment system is provided to all contractors free of charge. No negative economic impact has been reported by small entities voluntarily using electronic invoice submission in accordance with the existing interim electronic invoicing clause in the VAAR. In 2006, the U.S. Government Accountability Office issued a report to Congressional Committees entitled ‘‘DoD Payments to Small Businesses: Implementation and Effective Utilization of Electronic Invoicing Could Further Reduce Late Payments’’ (GAO–06–358). The report confirmed the effectiveness of electronic invoicing in eliminating paper and redundant data entry; improving data accuracy; reducing the number of lost or misplaced documents; and ultimately, improving timely payments to small businesses. Therefore, pursuant to 5 U.S.C. 605(b), this proposed rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604. Paperwork Reduction Act This proposed rule does not impose any additional information collection requirements requiring approval of OMB under the Paperwork Reduction Act, 44 U.S.C. 3501, et seq. Collections of information referenced in VAAR Parts 832 and 852 have previously been approved in accordance with OMB prompt payment regulations at 5 CFR Part 1315. See 64 FR 52580–01. Collections relating to the submission and payment of invoices are approved under OMB Control Numbers 9000– 0070 and 0102, which govern the submission of adequate documentation to support contractor requests for payment. mstockstill on DSK4VPTVN1PROD with PROPOSALS Unfunded Mandates The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in an expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This proposed rule would have no such effect on State, local, and tribal governments, or on the private sector. Catalog of Federal Domestic Assistance Program There is no Catalog of Federal Domestic Assistance program number VerDate Mar<15>2010 16:22 Apr 17, 2012 Jkt 226001 and title for the program in this proposal. 23207 Signing Authority The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. John R. Gingrich, Chief of Staff, Department of Veterans Affairs, approved this document on February 24, 2012, for publication. (c) Electronic form means an automated system transmitting information electronically according to the accepted electronic data transmission methods identified in VAAR 832.1003–1. Facsimile, email, and scanned documents are not acceptable electronic forms for submission of payment requests. (d) Invoice payment has the meaning given in FAR 32.001. (e) Payment request means any request for contract financing payment or invoice payment submitted by a contractor under a contract. List of Subjects 832.1003 48 CFR Part 832 Government procurement. (a) The contractor shall submit payment requests in electronic form unless directed by the contracting officer to submit payment requests by mail. Purchases paid with a Government-wide commercial purchase card are considered to be an electronic transaction for purposes of this rule, and therefore no additional electronic invoice submission is required. (b) The contracting officer may direct the contractor to submit payment requests by mail, through the United States Postal Service, to the designated agency office for: (1) Awards made to foreign vendors for work performed outside the United States; (2) Classified contracts or purchases when electronic submission and processing of payment requests could compromise the safeguarding of classified or privacy information; (3) Contracts awarded by contracting officers in the conduct of emergency operations, such as responses to national emergencies; (4) Solicitations or contracts in which the designated agency office is a VA entity other than the VA Financial Services Center in Austin, Texas; or (5) Solicitations or contracts in which the VA designated agency office does not have electronic invoicing capability as described above. 48 CFR Part 852 Government procurement; Reporting and recordkeeping requirements. Dated: April 12, 2012. Robert C. McFetridge, Director of Regulation Policy and Management, Office of the General Counsel, Department of Veterans Affairs. For the reasons set forth in the preamble, the Department of Veterans Affairs proposes to amend 48 CFR chapter 8 as follows: CHAPTER 8—DEPARTMENT OF VETERANS AFFAIRS Subchapter E—General Contracting Requirements PART 832—CONTRACT FINANCING 1. The authority citation for part 832 continues to read as follows: Authority: 40 U.S.C. 121(c) and 48 CFR 1.301–1.304. 2. Add subpart 832.10 to read as follows: Subpart 832.10—Electronic Invoicing Requirements 832.1001 General. 832.1002 Definitions. 832.1003 Electronic Payment Requests. 832.1003–1 Data Transmission. 832.1003–2 Contract Clause. Subpart 832.10—Electronic Invoicing Requirements 832.1001 General. This subpart prescribes requirements and procedures for submitting and processing payment requests in electronic form. 832.1002 Definitions. As used in this subpart: (a) Contract financing payment has the meaning given in FAR 32.001. (b) Designated agency office has the meaning given in 5 CFR 1315.2(m). PO 00000 Frm 00047 Fmt 4702 Sfmt 4702 Electronic Payment Requests. 832.1003–1 Data Transmission. The contractor shall submit electronic payment requests through: (a) VA’s Electronic Invoice Presentment and Payment System (See Web site at https://www.fsc.va.gov/ einvoice.asp.); or, (b) A system that conforms to the X12 electronic data interchange (EDI) formats established by the Accredited Standards Center (ASC) chartered by the American National Standards Institute (ANSI). The X12 EDI Web site (https:// www.x12.org) includes additional information on EDI 810 and 811 formats. E:\FR\FM\18APP1.SGM 18APP1 23208 832.1003–2 Federal Register / Vol. 77, No. 75 / Wednesday, April 18, 2012 / Proposed Rules Contract Clause. The contracting officer shall insert the clause at 852.273–76, Electronic Submission of Payment Requests, in all solicitations and contracts. Subchapter H—Clauses and Forms PART 852—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 3. The authority citation for part 852 continues to read as follows: Authority: 38 U.S.C. 501, 8127, 8128, and 8151–8153; 40 U.S.C. 121(c) and 48 CFR 1.301–1.304. Subpart 852.2—Texts of Provisions and Clauses 4. Add 852.273–76 to subpart 852.2 to read as follows: 852.273–76 Electronic Submission of Payment Requests. mstockstill on DSK4VPTVN1PROD with PROPOSALS As prescribed in 832.1003–2, insert the following clause: (End of clause) Electronic Submission of Payment Requests (XXX 2012) (a) Definitions. As used in this clause— (1) Contract financing payment has the meaning given in FAR 32.001. (2) Designated agency office has the meaning given in 5 CFR 1315.2(m). (3) Electronic form means an automated system transmitting information electronically according to the accepted electronic data transmission methods and formats identified in paragraph (c) of this clause. Facsimile, email, and scanned documents are not acceptable electronic forms for submission of payment requests. (4) Invoice payment has the meaning given in FAR 32.001. (5) Payment request means any request for contract financing payment or invoice payment submitted by the contractor under this contract. (b) Electronic Payment Requests. Except as provided in paragraph (e) of this clause, the contractor shall submit payment requests in electronic form. Purchases paid with a Government-wide commercial purchase card are considered to be an electronic transaction for purposes of this rule, and therefore no additional electronic invoice submission is required. (c) Data Transmission. A contractor must ensure that the data transmission method and format are through one of the following: (1) VA’s Electronic Invoice Presentment and Payment System. (See Web site at http: //www.fsc.va.gov/einvoice.asp.) (2) Any system that conforms to the X12 electronic data interchange (EDI) formats established by the Accredited Standards Center (ASC) and chartered by the American National Standards Institute (ANSI). The X12 EDI Web site (https://www.x12.org) includes additional information on EDI 810 and 811 formats. (d) Invoice requirements. Invoices shall comply with FAR 32.905. VerDate Mar<15>2010 16:22 Apr 17, 2012 Jkt 226001 (e) Exceptions. If, based on one of the circumstances below, the contracting officer directs that payment requests be made by mail, the contractor shall submit payment requests by mail through the United States Postal Service to the designated agency office. Submission of payment requests by mail may be required for: (1) Awards made to foreign vendors for work performed outside the United States; (2) Classified contracts or purchases when electronic submission and processing of payment requests could compromise the safeguarding of classified or privacy information; (3) Contracts awarded by contracting officers in the conduct of emergency operations, such as responses to national emergencies; (4) Solicitations or contracts in which the designated agency office is a VA entity other than the VA Financial Services Center in Austin, Texas; or (5) Solicitations or contracts in which the VA designated agency office does not have electronic invoicing capability as described above. [FR Doc. 2012–9269 Filed 4–17–12; 8:45 am] BILLING CODE 8320–01–P DEPARTMENT OF TRANSPORTATION Surface Transportation Board 49 CFR Parts 1108 and 1109 [STB Docket No. EP 699] Assessment of Mediation and Arbitration Procedures Surface Transportation Board. Supplemental Notice of Proposed Rulemaking. AGENCY: ACTION: The Surface Transportation Board has proposed regulations that would require Class I and Class II rail carriers to participate in the Board’s arbitration program, unless they file a prior written notice with the Board on an annual basis opting out of the program. By contrast, Class III rail carriers wishing to participate in the Board’s arbitration program could file a request for arbitration with the Board under this docket at any time, or could voluntarily agree to participate in arbitration on a case-by-case basis. A shipper wishing to participate in the Board’s arbitration program could so inform the Board on a case-by-case basis following the filing of a complaint. Pursuant to the Paperwork Reduction Act and Office of Management and Budget regulations, the Board now seeks comments regarding certain information pertaining to the proposed arbitration rules. SUMMARY: PO 00000 Frm 00048 Fmt 4702 Sfmt 4702 DATES: Comments are due by June 18, 2012. Comments may be submitted either via the Board’s e-filing process or in the traditional paper format. Any person using e-filing should attach a document and otherwise comply with the instructions at the E–FILING link on the Board’s Web site, at https://www.stb.dot.gov. Any person submitting a filing in the traditional paper format should send an original and 10 copies to: Surface Transportation Board, Attn: Docket No. EP 699, 395 E Street SW., Washington, DC 20423– 0001. Copies of written comments received by the Board will be posted to the Board’s Web site at https:// www.stb.dot.gov and will be available for viewing and self-copying in the Board’s Public Docket Room, Suite 131, 395 E Street SW., Washington, DC. Copies of the comments will also be available by contacting the Board’s Chief Records Officer by telephone at (202) 245–0236 or by mail at 395 E Street SW., Washington, DC 20423– 0001. FOR FURTHER INFORMATION CONTACT: Virginia Strasser at (202) 245–0275. (Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1– 800–877–8339.) SUPPLEMENTARY INFORMATION: By Notice of Proposed Rulemaking in Assessment of Mediation and Arbitration Procedures, EP 699 (STB served Mar. 28, 2012),1 the Surface Transportation Board has proposed regulations that would require Class I and Class II rail carriers to participate in the Board’s arbitration program, unless they file a prior written notice with the Board on an annual basis opting out of the program. Pursuant to the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. (PRA), and Office of Management and Budget (OMB) regulations at 5 CFR 1320.8(d)(3), the Board now seeks comments regarding: (1) Whether the particular collection of information described below and in greater detail at 77 FR 19,591 is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility; (2) the accuracy of the Board’s burden estimates; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or ADDRESSES: 1 The Notice of Proposed Rulemaking was published in the Federal Register on April 2, 2012. (77 FR 19,591). E:\FR\FM\18APP1.SGM 18APP1

Agencies

DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 77, Number 75 (Wednesday, April 18, 2012)]
[Proposed Rules]
[Pages 23204-23208]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9269]



[[Page 23204]]

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DEPARTMENT OF VETERANS AFFAIRS

48 CFR Parts 832 and 852

RIN 2900-AN97


VA Acquisition Regulation: Electronic Submission of Payment 
Requests

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
acquisition regulations to require contractors to submit payment 
requests in electronic form in order to enhance customer service, 
departmental productivity, and adoption of innovative information 
technology, including the appropriate use of commercial best practices.

DATES: Comments must be received by VA on or before June 18, 2012.

ADDRESSES: Written comments may be submitted through 
www.Regulations.gov; by mail or hand-delivery to Director, Regulations 
Management (02REG), Department of Veterans Affairs, 810 Vermont Ave. 
NW., Room 1068, Washington, DC 20420; or by fax to (202) 273-9026. 
Comments should indicate they are submitted in response to ``RIN 2900-
AN97--VA Acquisition Regulation: Electronic Submission of Payment 
Requests.'' Copies of comments received will be available for public 
inspection in the Office of Regulation Policy and Management, Room 
1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday 
(except holidays). Please call (202) 461-4902 for an appointment. (This 
is not a toll free number.) In addition, during the comment period, 
comments are available online through the Federal Docket Management 
System (FDMS) at www.Regulations.gov.

FOR FURTHER INFORMATION CONTACT: Tanya Reid, Procurement Policy Service 
(003A2A), Department of Veterans Affairs, 810 Vermont Ave. NW., 
Washington, DC 20420, (202) 461-7178. (This is not a toll free number.)

SUPPLEMENTARY INFORMATION: On July 7, 2009, VA published a notice, in 
the Federal Register at 74 FR 32223, of a class deviation to Federal 
Acquisition Regulation (FAR) 32.905 (48 CFR 32.905), which added an 
interim electronic invoicing clause in the VA Acquisition Regulation 
(VAAR). The interim clause strongly encourages contractors to 
voluntarily submit invoices electronically, which VA determined would 
improve the accuracy and efficiency of payment processing. Under this 
interim clause, contractors who choose to use electronic invoicing have 
three options to submit payment requests in electronic form: (1) 
Electronic Invoice Presentment and Payment System; (2) American 
National Standards Institute (ANSI) X12 electronic data interchange 
(EDI) formats; or (3) another electronic form as prescribed by the 
contract administration office and the designated agency office. VA's 
notice regarding interim, optional electronic invoicing noted VA 
intended to initiate notice-and-comment rulemaking to amend the VAAR to 
make electronic invoicing mandatory.
    Mandatory electronic invoice submission is necessary to enhance 
compliance and/or consistency with a long history of rules and 
regulations governing the accuracy, timeliness, and cost-effectiveness 
of the Federal Government's payment process.
    In 1982, Congress enacted the Prompt Payment Act (``Act''), Public 
Law 97-177, to require Federal agencies to pay their bills on a timely 
basis, to pay interest penalties when payments are made late, and to 
take discounts only when payments are made by the discount date. The 
Act, as amended, is found at 31 U.S.C. Chapter 39. To implement the 
Act, the Office of Management and Budget (OMB) issued Circular A-125 
(``Prompt Payment '') in August 1982 (47 FR 37321). In response to 
changes to the Act that Congress made in the Prompt Payment Act 
Amendments of 1988, Public Law 100-496, OMB revised Circular A-125 in 
December 1989 (54 FR 52700). On June 17, 1998, OMB requested public 
comments on proposed revisions to Circular A-125 (63 FR 33000). The 
Circular was updated to reflect the increased use of electronic 
commerce in the Federal Government and in the private sector, including 
electronic financial systems and electronic funds transfer. OMB 
responded to the comments that were received on the proposed revisions, 
issued final revisions to its Prompt Payment Circular, and codified 
these revisions in new part 1315 of 5 CFR (64 FR 52580). With the 
incorporation of the Prompt Payment rules into 5 CFR part 1315, OMB 
rescinded Circular A-125.
    The prompt payment rules at 5 CFR part 1315 address the increased 
use of electronic commercial financial systems and promote the use of 
government credit cards and accelerated payment methods. This proposed 
rule enhances compliance with 5 CFR part 1315 by requiring the use of 
electronic commerce. Electronic invoice submission replaces payment 
delays from traditional postal delivery with immediate electronic 
transmission of data. As a result, VA's ability to make timely 
payments, reduce interest penalties on late payments, and increase the 
dollar amount of discounts realized from prompt payment is improved.
    FAR subpart 32.9 (48 CFR part 32.9) prescribes policies, 
procedures, and clauses for implementing the prompt payment regulations 
at 5 CFR part 1315. In relevant part, FAR 32.903 requires federal 
agencies to establish policies and procedures necessary to implement 
FAR subpart 32.9, and provides the agencies the latitude to prescribe 
additional standards for establishing invoice payment due dates 
necessary to support agency programs and foster prompt payment to 
contractors as well as the latitude to adopt different payment 
procedures in order to accommodate unique circumstances, provided that 
such procedures are consistent with the policies in OMB's prompt 
payment regulations. This proposed rule enhances compliance with FAR 
32.903 by requiring electronic invoice submission. Electronic invoice 
submission replaces payment delays from traditional postal delivery 
with immediate electronic transmission of data. By eliminating delays 
associated with traditional processing, electronic submission fosters 
the prompt payment of invoices to contractors.
    FAR 32.905(b)(1) defines the specific data elements that must be 
included on a proper invoice. Electronic invoice submission ensures 
invoice validity by employing automated data validation. Automated data 
validation enforces data element accuracy and completeness. Invalid 
invoices are immediately returned to the contractor for correction 
without the delays associated with traditional postal delivery.
    VA's proposed requirement for contractors to use electronic 
invoicing when submitting payment requests supports several of the 
principal purposes stated in section 2 of the E-Government Act of 2002, 
Public Law 107-347, including promoting the use of the Internet and 
other information technologies to provide increased opportunities for 
citizen participation in Government, improving the ability of the 
Government to achieve agency missions and program performance goals, 
reducing costs and burdens for businesses and other Government 
entities, and transforming agency operations by utilizing, where 
appropriate, best practices from public and private sector 
organizations. Further, section 202(b)(3) of the E-Government Act of 
2002 requires Federal agencies to develop performance measures that 
demonstrate

[[Page 23205]]

how electronic government enables progress towards agency objectives, 
strategic goals, and statutory mandates, and specifically directs 
agencies to consider: (1) Customer service; (2) agency productivity; 
and (3) the adoption of innovative information technology, including 
the appropriate use of commercial best practices. VA anticipates that 
this rulemaking requiring contractors to use electronic invoicing to 
submit payment requests would reflect positively when rated against the 
aforementioned performance measures given that it would ensure superior 
customer service, increase agency productivity, and be consistent with 
the longstanding best practice of electronic invoicing and direct 
deposit in the commercial marketplace.
    The Improper Payments Information Act of 2002, Public Law 107-300, 
enacted on Nov. 26, 2002, as amended by the Improper Payments 
Elimination and Recovery Act of 2010 (IPERA), Public Law 111-204, 
enacted on July 22, 2010, requires Federal agencies to annually review 
the programs it oversees and determine if those programs and activities 
may be susceptible to significant erroneous payments. Section 2(h)(4) 
of IPERA requires the head of each agency to conduct a financial 
management improvement program, consistent with rules prescribed by the 
Director of OMB. In conducting the program, the head of the agency 
shall, as the first priority of the program, address problems that 
contribute directly to agency improper payments and may seek to reduce 
errors and waste in other agency programs and operations.
    Executive Order 13520 of November 20, 2009 (``Reducing Improper 
Payments'') directed the Federal Government to make every effort to 
confirm that the right recipient is receiving the right payment for the 
right reason at the right time. This proposed rule would address 
problems that contribute to improper payments such as data entry 
errors, manual processing errors, incorrect vendor selection, duplicate 
payments, and payment delays while eliminating the waste associated 
with traditional payment processing.
    Other Federal Government departments and agencies have implemented 
similar electronic invoice submission requirements. In January 2004, 
the Department of Defense updated the Defense Federal Acquisition 
Regulation Supplement (DFARS) to reflect the new electronic invoicing 
mandate. DFARS 252.232-7003 (48 CFR 252.232-7003) outlines the 
electronic invoice submission process for contractor payments. In 2006, 
the U.S. Government Accountability Office issued a report to 
Congressional Committees entitled ``DoD Payments to Small Businesses: 
Implementation and Effective Utilization of Electronic Invoicing Could 
Further Reduce Late Payments'' (GAO-06-358). The report confirmed the 
effectiveness of electronic invoicing in eliminating paper and 
redundant data entry; improving data accuracy; reducing the number of 
lost or misplaced documents; and ultimately, improving timely payments 
to contractors.
    The U.S. Department of the Interior issued a special notice 
mandating electronic submittal of invoices and exchange of payment 
information to its suppliers of goods and services beginning in May 
2011. The U.S. Department of the Treasury mandated electronic invoicing 
for its commercial vendors by the end of fiscal year 2012.
    VA proposes to amend the VAAR by adding subpart 832.10 and clause 
852.273-76 to implement mandatory electronic invoicing as part of its 
strategic plan to improve the commercial vendor payment process. The 
automated data validation, digital transmission, and expedited payment 
and processing would reduce the errors inherent in a manual invoice 
processing system, thereby reducing improper payments. Expedited 
payment processes would allow VA to take advantage of prompt payment 
discounts offered by its vendors thereby reducing the cost of goods and 
services furnished VA while simultaneously reducing the cost to 
contractors of manual invoice processing. As a result, VA would achieve 
compliance and consistency with all applicable laws governing the 
invoice payment process and use of information technologies.
    This proposed amendment to the VAAR is anticipated to reduce the 
errors in the processing of contractor payments by including automated 
invoice data validation checks. VA's electronic invoicing system would 
check the contractor-submitted invoice data against contract invoice 
requirements and automatically refer improper or erroneous invoices 
back to the contractor for immediate correction. This would facilitate 
timely correction of administrative errors and timely payment of 
contractors when coupled with the existing Electronic Funds Transfer 
procedure (bank direct deposit) in use by VA. Automated invoice data 
validation checks would reduce the manual processing burden and 
consequent errors for both government and contractor personnel and 
reduce the risk of improper payment. These same data validation 
processes would ensure payment requests comply with applicable laws. In 
addition, electronic invoicing would expedite the payment process, and 
thereby, permit VA to take greater advantage of discounts afforded by 
contractors for early payment. The proposed benefits of electronic 
invoice submission to the contractor community would include speedier 
payments of balances due, as well as reduced costs due to the 
elimination of postage fees, and related material and supply expenses.
    Currently, approximately 25 percent of the vendor community submits 
electronic payment requests to the VA Financial Services Center using 
one of two data transmission methods. Some contractors use VA's 
Electronic Invoice Presentment and Payment System. Other contractors 
use systems that rely on the standard EDI transaction sets. These 
methods of data transmission are discussed in more detail below.
    Under proposed VAAR 832.1003-1 and VAAR 852.273-76(c), electronic 
invoices would be submitted by the Internet using either: (1) VA's 
Electronic Invoice Presentation and Payment System, or (2) any system 
that conforms to the X12 EDI formats established by the Accredited 
Standards Center (ASC) and chartered by ANSI. These are the same 
methods that many VA contractors are voluntarily using under VA's 
current interim electronic invoicing clause. See 74 FR 32223. VA's 
Electronic Invoice Presentation and Payment System allows invoice 
submission through two methods. The first method is an internet-based 
webform template that expands the ability of smaller contractors to 
utilize electronic invoicing and allows a contractor to directly upload 
invoice data that automatically populates VA payment systems. The 
second method directly interfaces with the contractor's billing system 
and transmits invoice data to VA payment systems. The U.S. ANSI X12 is 
the predominant set of standards defining the structure, format, and 
content of business transactions conducted through EDI. ANSI X12, 
chartered more than 30 years ago, develops and maintains EDI standards. 
Access to VA's Electronic Invoice Presentation and Payment System would 
be provided to contractors at no cost.
    As an alternative to using the VA Electronic Invoice Presentation 
and Payment System, proposed VAAR 832.1003-1(b) and VAAR 852.273-
76(c)(2) would also permit contractors to submit electronic invoices 
using any system that conforms to X12 EDI

[[Page 23206]]

formats established by ASC and chartered by ANSI. This would allow 
contractors some flexibility in deciding how they want to communicate 
with VA. For example, some contractors may already have a system 
established that is compatible with above-mentioned EDI requirements in 
order to communicate with other federal agencies. Those contractors 
would be able to use that same system to submit electronic invoices to 
VA. Additionally, purchases paid with a Government-wide commercial 
purchase card are considered to be an electronic transaction for 
purposes of this rule, and therefore no additional electronic invoice 
submission is required.
    In proposed VAAR 832.1003(b) and VAAR 852.273-76(e), VA proposes to 
include five exceptions to the mandatory use of electronic invoicing by 
contractors. VA proposes to allow contracting officers to require 
contractors to submit payment requests by mail, through the United 
States Postal Service, in the following circumstances. First, 
contracting officers may direct that contractors submit invoicing by 
mail for awards that are made to foreign vendors for work performed 
outside the United States because foreign vendors may lack Internet 
access, familiarity with, or ability to process an electronic invoice 
with the standard commercial protocols and methods in the proposed 
clause. Second, contracting officers may direct that contractors submit 
invoicing by mail for classified contracts or purchases when electronic 
submission and processing of payment requests could compromise the 
safeguarding of classified or privacy information. In such cases, the 
potential damage far outweighs any efficiencies or benefits to be 
gained by electronic processing. Third, contracting officers may direct 
that contractors submit invoicing by mail for contracts awarded by 
contracting officers in the conduct of emergency operations, such as 
responses to national emergencies because such contracts may be 
performed in areas and under circumstances where Internet availability 
and electronic invoicing are not practical. Fourth, contracting 
officers may direct that contractors submit invoicing by mail for 
contracts awarded by contracting officers for solicitations or 
contracts in which the designated agency office (DAO) is a VA entity 
other than the VA Financial Services Center in Austin, Texas. Fifth, 
contracting officers may direct that contractors submit invoicing by 
mail for solicitations or contracts awarded by contracting officers in 
cases where the DAO does not have electronic invoicing capability as 
described above.
    Proposed VAAR 832.1003-2 would require a contracting officer to 
insert the proposed contract clause, VAAR 852.273-76, Electronic 
Submission of Payment Requests, in all solicitations and contracts. The 
proposed VAAR 852.273-76 would require the electronic submission of 
invoices for contracts unless the contracting officer determines that 
one or more of the exceptions at VAAR 832.1003(b) applies. In cases 
where an exception would apply, the contracting officer would provide 
invoice mailing instructions to the contractor. The VA Financial 
Services Center would serve as the DAO for commercial goods and 
services purchased by VA, and would be the only entity which operates 
the electronic invoicing capabilities as described above. Accordingly, 
VAAR 832.1003(b)(4) allows an exception to the electronic invoice 
requirement for solicitations or contracts in which the DAO is a VA 
entity other than the VA Financial Services Center in Austin, Texas.

Public Comments

    VA welcomes public comments on all aspects of the proposed rule, 
however, the Department is specifically interested in feedback on the 
following areas: (1) While VA's voluntary compliance program has been 
in effect for 3 years, the VA is soliciting comment on whether a final 
rule should include an appropriate phase-in period for electronic 
reporting requirements; (2) The Department is seeking input on whether 
the proposal would create any significant burdens or transition costs 
for contractors; if so what types of costs or burdens might be 
imposed?; (3) While VA generally believes that the rapid pace of 
technological change has eliminated many challenges to full electronic 
commerce and internet access for contractors e.g. both current and 
potential federal government registrants are already required to 
register in the Centralized Contractor Registry (CCR), the VA is 
interested in comments on whether an exemption process should be 
included in the final rule; and, (4) Finally, VA is seeking comment on 
whether the elimination of the ``other electronic means'' option 
previously available under VA's voluntary program would create any 
undue burdens for contractors.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires review by OMB, as 
``any regulatory action that is likely to result in a rule that may: 
(1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) Create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) Materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
Raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in this Executive 
Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 
601-612. The Secretary acknowledges that this proposed rule could 
affect some small entities; however, the economic impact is not 
anticipated to be significant and is expected to be outweighed by the 
positive economic impact of the proposed rule. Small entities should 
realize a positive economic impact as a result of electronic invoice 
submission due to the avoidance of traditional invoicing costs such as 
postage and mailing supplies. VA's proposed data transmission methods 
for electronic invoice submission would accommodate all existing 
accounts receivable/billing systems that contractors are currently 
using to submit electronic invoices to VA. As a result,

[[Page 23207]]

no additional hardware or software purchases by contractors are 
necessary to submit electronic invoices. Additionally, the VA 
electronic invoice payment and presentment system is provided to all 
contractors free of charge. No negative economic impact has been 
reported by small entities voluntarily using electronic invoice 
submission in accordance with the existing interim electronic invoicing 
clause in the VAAR. In 2006, the U.S. Government Accountability Office 
issued a report to Congressional Committees entitled ``DoD Payments to 
Small Businesses: Implementation and Effective Utilization of 
Electronic Invoicing Could Further Reduce Late Payments'' (GAO-06-358). 
The report confirmed the effectiveness of electronic invoicing in 
eliminating paper and redundant data entry; improving data accuracy; 
reducing the number of lost or misplaced documents; and ultimately, 
improving timely payments to small businesses. Therefore, pursuant to 5 
U.S.C. 605(b), this proposed rule is exempt from the initial and final 
regulatory flexibility analysis requirements of sections 603 and 604.

Paperwork Reduction Act

    This proposed rule does not impose any additional information 
collection requirements requiring approval of OMB under the Paperwork 
Reduction Act, 44 U.S.C. 3501, et seq. Collections of information 
referenced in VAAR Parts 832 and 852 have previously been approved in 
accordance with OMB prompt payment regulations at 5 CFR Part 1315. See 
64 FR 52580-01. Collections relating to the submission and payment of 
invoices are approved under OMB Control Numbers 9000-0070 and 0102, 
which govern the submission of adequate documentation to support 
contractor requests for payment.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
issuing any rule that may result in an expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. This 
proposed rule would have no such effect on State, local, and tribal 
governments, or on the private sector.

Catalog of Federal Domestic Assistance Program

    There is no Catalog of Federal Domestic Assistance program number 
and title for the program in this proposal.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. John R. 
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this 
document on February 24, 2012, for publication.

List of Subjects

48 CFR Part 832

    Government procurement.

48 CFR Part 852

    Government procurement; Reporting and recordkeeping requirements.

    Dated: April 12, 2012.
Robert C. McFetridge,
Director of Regulation Policy and Management, Office of the General 
Counsel, Department of Veterans Affairs.

    For the reasons set forth in the preamble, the Department of 
Veterans Affairs proposes to amend 48 CFR chapter 8 as follows:

CHAPTER 8--DEPARTMENT OF VETERANS AFFAIRS

Subchapter E--General Contracting Requirements

PART 832--CONTRACT FINANCING

    1. The authority citation for part 832 continues to read as 
follows:

    Authority:  40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    2. Add subpart 832.10 to read as follows:
Subpart 832.10--Electronic Invoicing Requirements
832.1001 General.
832.1002 Definitions.
832.1003 Electronic Payment Requests.
832.1003-1 Data Transmission.
832.1003-2 Contract Clause.

Subpart 832.10--Electronic Invoicing Requirements


832.1001  General.

    This subpart prescribes requirements and procedures for submitting 
and processing payment requests in electronic form.


832.1002  Definitions.

    As used in this subpart:
    (a) Contract financing payment has the meaning given in FAR 32.001.
    (b) Designated agency office has the meaning given in 5 CFR 
1315.2(m).
    (c) Electronic form means an automated system transmitting 
information electronically according to the accepted electronic data 
transmission methods identified in VAAR 832.1003-1. Facsimile, email, 
and scanned documents are not acceptable electronic forms for 
submission of payment requests.
    (d) Invoice payment has the meaning given in FAR 32.001.
    (e) Payment request means any request for contract financing 
payment or invoice payment submitted by a contractor under a contract.


832.1003  Electronic Payment Requests.

    (a) The contractor shall submit payment requests in electronic form 
unless directed by the contracting officer to submit payment requests 
by mail. Purchases paid with a Government-wide commercial purchase card 
are considered to be an electronic transaction for purposes of this 
rule, and therefore no additional electronic invoice submission is 
required.
    (b) The contracting officer may direct the contractor to submit 
payment requests by mail, through the United States Postal Service, to 
the designated agency office for:
    (1) Awards made to foreign vendors for work performed outside the 
United States;
    (2) Classified contracts or purchases when electronic submission 
and processing of payment requests could compromise the safeguarding of 
classified or privacy information;
    (3) Contracts awarded by contracting officers in the conduct of 
emergency operations, such as responses to national emergencies;
    (4) Solicitations or contracts in which the designated agency 
office is a VA entity other than the VA Financial Services Center in 
Austin, Texas; or
    (5) Solicitations or contracts in which the VA designated agency 
office does not have electronic invoicing capability as described 
above.


832.1003-1  Data Transmission.

    The contractor shall submit electronic payment requests through:
    (a) VA's Electronic Invoice Presentment and Payment System (See Web 
site at https://www.fsc.va.gov/einvoice.asp.); or,
    (b) A system that conforms to the X12 electronic data interchange 
(EDI) formats established by the Accredited Standards Center (ASC) 
chartered by the American National Standards Institute (ANSI). The X12 
EDI Web site (https://www.x12.org) includes additional information on 
EDI 810 and 811 formats.

[[Page 23208]]

832.1003-2  Contract Clause.

    The contracting officer shall insert the clause at 852.273-76, 
Electronic Submission of Payment Requests, in all solicitations and 
contracts.

Subchapter H--Clauses and Forms

PART 852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    3. The authority citation for part 852 continues to read as 
follows:

    Authority:  38 U.S.C. 501, 8127, 8128, and 8151-8153; 40 U.S.C. 
121(c) and 48 CFR 1.301-1.304.

Subpart 852.2--Texts of Provisions and Clauses

    4. Add 852.273-76 to subpart 852.2 to read as follows:


852.273-76  Electronic Submission of Payment Requests.

    As prescribed in 832.1003-2, insert the following clause:

Electronic Submission of Payment Requests (XXX 2012)

    (a) Definitions. As used in this clause--
    (1) Contract financing payment has the meaning given in FAR 
32.001.
    (2) Designated agency office has the meaning given in 5 CFR 
1315.2(m).
    (3) Electronic form means an automated system transmitting 
information electronically according to the accepted electronic data 
transmission methods and formats identified in paragraph (c) of this 
clause. Facsimile, email, and scanned documents are not acceptable 
electronic forms for submission of payment requests.
    (4) Invoice payment has the meaning given in FAR 32.001.
    (5) Payment request means any request for contract financing 
payment or invoice payment submitted by the contractor under this 
contract.
    (b) Electronic Payment Requests. Except as provided in paragraph 
(e) of this clause, the contractor shall submit payment requests in 
electronic form. Purchases paid with a Government-wide commercial 
purchase card are considered to be an electronic transaction for 
purposes of this rule, and therefore no additional electronic 
invoice submission is required.
    (c) Data Transmission. A contractor must ensure that the data 
transmission method and format are through one of the following:
    (1) VA's Electronic Invoice Presentment and Payment System. (See 
Web site at https://www.fsc.va.gov/einvoice.asp.)
    (2) Any system that conforms to the X12 electronic data 
interchange (EDI) formats established by the Accredited Standards 
Center (ASC) and chartered by the American National Standards 
Institute (ANSI). The X12 EDI Web site (https://www.x12.org) includes 
additional information on EDI 810 and 811 formats.
    (d) Invoice requirements. Invoices shall comply with FAR 32.905.
    (e) Exceptions. If, based on one of the circumstances below, the 
contracting officer directs that payment requests be made by mail, 
the contractor shall submit payment requests by mail through the 
United States Postal Service to the designated agency office. 
Submission of payment requests by mail may be required for:
    (1) Awards made to foreign vendors for work performed outside 
the United States;
    (2) Classified contracts or purchases when electronic submission 
and processing of payment requests could compromise the safeguarding 
of classified or privacy information;
    (3) Contracts awarded by contracting officers in the conduct of 
emergency operations, such as responses to national emergencies;
    (4) Solicitations or contracts in which the designated agency 
office is a VA entity other than the VA Financial Services Center in 
Austin, Texas; or
    (5) Solicitations or contracts in which the VA designated agency 
office does not have electronic invoicing capability as described 
above.

    (End of clause)

[FR Doc. 2012-9269 Filed 4-17-12; 8:45 am]
BILLING CODE 8320-01-P

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