Federal Register / Vol. 77, No. 6 / Tuesday, January 10, 2012 / Notices 1491 

1 In particular, the written request for confidential 

treatment that accompanies the comment must 

include the factual and legal basis for the request, 

and must identify the specific portions of the 

comment to be withheld from the public record. See 

FTC Rule 4.9(c), 16 CFR 4.9(c). 

FEDERAL TRADE COMMISSION 

[File No. 101 0080] 

Sigma Corporation; Analysis of 

Proposed Consent Order To Aid Public 

Comment 

AGENCY: Federal Trade Commission. 

ACTION: Proposed consent agreement. 

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

Federal law prohibiting unfair or 

deceptive acts or practices or unfair 

methods of competition. The attached 

Analysis to Aid Public Comment 

describes both the allegations in the 

draft complaint and the terms of the 

consent order—embodied in the consent 

agreement—that would settle these 

allegations. 

DATES: Comments must be received on 

or before February 6, 2012. 

ADDRESSES: Interested parties may file a 

comment online or on paper, by 

following the instructions in the 

Request for Comment part of the 

SUPPLEMENTARY INFORMATION section 

below. Write ‘‘Sigma, File No. 101 

0080’’ on your comment, and file your 

comment online at https:// 

ftcpublic.commentworks.com/ftc/ 

sigmaconsent, by following the 

instructions on the web-based form. If 

you prefer to file your comment on 

paper, mail or deliver your comment to 

the following address: Federal Trade 

Commission, Office of the Secretary, 

Room H–113 (Annex D), 600 

Pennsylvania Avenue NW., Washington, 

DC 20580. 

FOR FURTHER INFORMATION CONTACT: 

Christopher Renner (202) 326–3173), 

FTC, Bureau of Competition, 600 

Pennsylvania Avenue NW., Washington, 

DC 20580. 

SUPPLEMENTARY INFORMATION: Pursuant 

to section 6(f) of the Federal Trade 

Commission Act, 38 Stat. 721, 15 U.S.C. 

46(f), and § 2.34 the Commission Rules 

of Practice, 16 CFR 2.34, notice is 

hereby given that the above-captioned 

consent agreement containing a consent 

order to cease and desist, having been 

filed with and accepted, subject to final 

approval, by the Commission, has been 

placed on the public record for a period 

of thirty (30) days. The following 

Analysis to Aid Public Comment 

describes the terms of the consent 

agreement, and the allegations in the 

complaint. An electronic copy of the 

full text of the consent agreement 

package can be obtained from the FTC 

Home Page (for January 4, 2012), on the 

World Wide Web, at http://www.ftc.gov/ 

os/actions.shtm. A paper copy can be 

obtained from the FTC Public Reference 

Room, Room 130–H, 600 Pennsylvania 

Avenue NW., Washington, DC 20580, 

either in person or by calling (202) 326– 

2222. 

You can file a comment online or on 

paper. For the Commission to consider 

your comment, we must receive it on or 

before February 6, 2012. Write ‘‘Sigma, 

File No. 101 0080’’ on your comment. 

Your comment—including your name 

and your state—will be placed on the 

public record of this proceeding, 

including, to the extent practicable, on 

the public Commission Web site, at 

http://www.ftc.gov/os/ 

publiccomments.shtm. As a matter of 

discretion, the Commission tries to 

remove individuals’ home contact 

information from comments before 

placing them on the Commission Web 

site. 

Because your comment will be made 

public, you are solely responsible for 

making sure that your comment does 

not include any sensitive personal 

information, like anyone’s Social 

Security number, date of birth, driver’s 

license number or other state 

identification number or foreign country 

equivalent, passport number, financial 

account number, or credit or debit card 

number. You are also solely responsible 

for making sure that your comment does 

not include any sensitive health 

information, like medical records or 

other individually identifiable health 

information. In addition, do not include 

any ‘‘[t]rade secret or any commercial or 

financial information which is obtained 

from any person and which is privileged 

or confidential,’’ as provided in Section 

6(f) of the FTC Act, 15 U.S.C. 46(f), and 

FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). 

In particular, do not include 

competitively sensitive information 

such as costs, sales statistics, 

inventories, formulas, patterns, devices, 

manufacturing processes, or customer 

names. 

If you want the Commission to give 

your comment confidential treatment, 

you must file it in paper form, with a 

request for confidential treatment, and 

you have to follow the procedure 

explained in FTC Rule 4.9(c), 16 CFR 

4.9(c).1 Your comment will be kept 

confidential only if the FTC General 

Counsel, in his or her sole discretion, 

grants your request in accordance with 

the law and the public interest. 

Postal mail addressed to the 

Commission is subject to delay due to 

heightened security screening. As a 

result, we encourage you to submit your 

comments online. To make sure that the 

Commission considers your online 

comment, you must file it at https:// 

ftcpublic.commentworks.com/ftc/ 

sigmaconsent by following the 

instructions on the web-based form. If 

this Notice appears at http:// 

www.regulations.gov/#!home, you also 

may file a comment through that Web 

site. 

If you file your comment on paper, 

write ‘‘Sigma, File No. 101 0080’’ on 

your comment and on the envelope, and 

mail or deliver it to the following 

address: Federal Trade Commission, 

Office of the Secretary, Room H–113 

(Annex D), 600 Pennsylvania Avenue 

NW., Washington, DC 20580. If possible, 

submit your paper comment to the 

Commission by courier or overnight 

service. 

Visit the Commission Web site at 

http://www.ftc.gov to read this Notice 

and the news release describing it. The 

FTC Act and other laws that the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives on or 

before February 6, 2012. You can find 

more information, including routine 

uses permitted by the Privacy Act, in 

the Commission’s privacy policy, at 

http://www.ftc.gov/ftc/privacy.htm. 

Analysis of Agreement Containing 

Consent Order To Aid Public Comment 

The Federal Trade Commission has 

accepted, subject to final approval, an 

agreement containing a proposed 

consent order (‘‘Agreement’’) from 

Sigma Corporation (‘‘Sigma’’). The 

Agreement seeks to resolve charges that 

Sigma violated Section 5 of the Federal 

Trade Commission Act, 15 U.S.C. 45, by 

engaging in a variety of collusive and 

exclusionary acts and practices in the 

market for ductile iron pipe fittings 

(‘‘DIPF’’). 

The Commission anticipates that the 

competitive issues described in the 

complaint will be resolved by accepting 

the proposed order, subject to final 

approval, contained in the Agreement. 

The Agreement has been placed on the 

public record for 30 days for receipt of 

comments from interested members of 

the public. Comments received during 

this period will become part of the 

public record. After 30 days, the 

Commission will again review the 

Agreement and any comments received, 

and will decide whether it should 

withdraw from the Agreement or make 

final the proposed order contained in 

the Agreement. 

mstockstill on DSK4VPTVN1PROD with NOTICES

1492 Federal Register / Vol. 77, No. 6 / Tuesday, January 10, 2012 / Notices 

2Federal Trade Commission & United States 

Department of Justice, Antitrust Guidelines for 

Collaboration Among Competitors (‘‘Competitor 

Collaboration Guidelines’’) § 1.2 (2000); In re North 

Texas Specialty Physicians, 140 F.T.C. 715, 729 

(2005) (‘‘We do not believe that the per se 

condemnation of naked restraints has been affected 

by anything said either in California Dental or 

Polygram’’). 

3Because McWane’s communication informed its 

rivals of the terms of price coordination desired by 

McWane without containing any information for 

customers, this communication had no legitimate 

business justification. See In re Petroleum Products 

Antitrust Litig., 906 F.2d 432, 448 (9th Cir. 1990) 

(public communications may form the basis of an 

agreement on price levels when ‘‘the public 

dissemination of such information served little 

purpose other than to facilitate interdependent or 

collusive price coordination’’). 

4The Commission articulated a safe harbor for 

exchanges of price and cost information in 

Statement 6 of the 1996 Health Care Guidelines. See 

Dep’t of Justice & Federal Trade Comm’n, 

Statements of Antitrust Enforcement Policy in 

Health Care, Statement 6: Enforcement Policy on 

Provider Participation in Exchanges of Price and 

Cost Information (1996). The DIFRA information 

exchange failed to qualify for the safety zone of the 

Health Care Guidelines for several reasons. 

Although the DIFRA information exchange was 

managed by a third party, the information 

exchanged was insufficiently historical, the 

participants in the exchange too few, and their 

individual market shares too large to qualify for the 

permissive treatment contemplated by the Health 

Care Guidelines. While failing to qualify for the 

safety zone of the Health Care Guidelines is not in 

itself a violation of Section 5, firms that wish to 

minimize the risk of antitrust scrutiny should 

consider structuring their collaborations in 

accordance with the criteria of the safety zone. 

The purpose of this Analysis to Aid 

Public Comment is to invite and 

facilitate public comment concerning 

the proposed order. It is not intended to 

constitute an official interpretation of 

the Agreement and proposed order or in 

any way to modify its terms. 

The proposed order is for settlement 

purposes only and does not constitute 

an admission by Sigma that it violated 

the law or that the facts alleged in the 

complaint, other than jurisdictional 

facts, are true. 

I. The Complaint 

The following allegations are taken 

from the complaint and publicly 

available information. 

A. Background 

DIPF are used in municipal water 

distribution systems to change pipe 

diameter or pipeline direction. DIPF 

suppliers distribute these products 

through wholesale distributors, known 

as waterworks distributors, which 

specialize in distributing products for 

water infrastructure projects. The end 

users of DIPF are typically municipal 

and regional water authorities. 

Both imported and domestically 

produced DIPF are commercially 

available. Sigma and its largest 

competitors in the DIPF market, 

McWane, Inc. (‘‘McWane’’) and Star 

Pipe Products Ltd. (‘‘Star’’), all sell 

imported DIPF. McWane was the only 

domestic producer of a full line of small 

and medium-sized DIPF until Star’s 

entry into domestic production in 2009. 

There are no widely available 

substitutes for DIPF. Some projects 

require that only domestically produced 

DIPF be used. Domestically produced 

DIPF sold for use in these projects 

typically command higher prices than 

comparable imported DIPF. 

DIPF prices are based off of published 

list prices and discounts, with 

customers negotiating additional 

discounts off of those list prices and 

discounts on a transaction-bytransaction basis. DIPF suppliers also 

offer volume rebates. 

B. Challenged Conduct 

Between January 2008 and January 

2009, Sigma allegedly conspired with 

McWane and Star to increase the prices 

at which imported DIPF were sold in 

the United States. In furtherance of the 

conspiracy, and at the request of 

McWane, Sigma changed its business 

methods to make it easier to coordinate 

price levels, first by limiting the 

discretion of regional sales personnel to 

offer price discounts, and later by 

exchanging information documenting 

the volume of its monthly sales, along 

with McWane and Star, through an 

entity known as the Ductile Iron Fittings 

Research Association (‘‘DIFRA’’). 

After the collapse of the DIFRA 

information exchange in early 2009, 

Sigma attempted to revive the 

conspiracy by convincing McWane and 

Star to raise their prices and to resume 

the exchange of sales data through 

DIFRA. McWane and Star rejected 

Sigma’s invitation to collude. 

The collapse of DIFRA coincided with 

the enactment of The American 

Recovery and Reinvestment Act of 2009 

(‘‘ARRA’’) in February 2009. In the 

ARRA, the United States Congress 

allocated more than $6 billion to water 

infrastructure projects, but included a 

provision requiring the use of 

domestically produced materials in 

those projects (the ‘‘Buy American’’ 

requirement). At the time the ARRA was 

passed, McWane was the sole supplier 

of a full line of domestic DIPF in the 

most commonly used size ranges, and 

possessed monopoly power in that 

market. 

In response to the passage of the 

ARRA and its Buy American provision, 

Sigma, Star and others attempted to 

enter the domestically produced DIPF 

market in competition with McWane. 

Rather than compete with one another 

in the domestic DIPF market, Sigma and 

McWane executed a Master Distributor 

Agreement (‘‘MDA’’), whereby Sigma 

was appointed as a distributor of 

McWane’s domestically produced DIPF. 

Through the MDA, Sigma accepted 

compensation from McWane in 

exchange for abandoning its planned 

entry into the domestic DIPF market. 

Sigma also agreed to adopt exclusive 

dealing policies similar to those adopted 

by McWane, in furtherance of a 

conspiracy with McWane to exclude 

Star and to monopolize the domestic 

DIPF market. 

The complaint alleges that Sigma had 

no legitimate business justification for 

this course of conduct, and that Sigma’s 

collusive and exclusionary conduct has 

caused higher prices for both imported 

and domestically produced DIPF. 

II. Legal Analysis 

We analyze first the various 

agreements allegedly reached by Sigma 

with its competitors to limit 

competition relating to imported DIPF, 

and then address Sigma’s participation, 

along with McWane, in the alleged 

monopolization of the domestic DIPF 

market. 

A. Sigma’s Involvement in the 2008 

Price Fixing Conspiracy 

The January and June 2008 price 

restraints among Sigma, McWane and 

Star alleged in the complaint are the sort 

of naked restraints on competition that 

are per se unlawful.2 The June 2008 

agreement, which was allegedly reached 

after a public invitation to collude by 

McWane, illustrates how price fixing 

agreements may be reached in public. 

Here, McWane’s invitation to collude 

was conveyed in a letter sent to 

waterworks distributors, the common 

customers of McWane, Sigma and Star. 

McWane’s letter contained a section that 

was meaningless to waterworks 

distributors, but was intended to inform 

Sigma and Star of the terms on which 

McWane desired to fix prices.3

The DIFRA information exchange was 

also illegal. The complaint alleges that 

the DIFRA information exchange played 

a critical role in the 2008 price fixing 

conspiracy, first as the quid pro quo for 

a price increase by McWane in June 

2008, and then by enabling Sigma, 

McWane and Star to monitor each 

others’ adherence to the collusive 

arrangement through the second half of 

2008.4

B. Sigma’s 2009 Invitation To Collude 

The complaint includes allegations of 

a stand-alone Section 5 violation, 

namely that Sigma invited McWane and 

Star to collude with Sigma to increase 

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Federal Register / Vol. 77, No. 6 / Tuesday, January 10, 2012 / Notices 1493 

5 In re U-Haul International, Inc., F.T.C. File No. 

081–0157, 2010 FTC LEXIS 61, *6 (July 14, 2010); 

In re Valassis Communications, Inc., F.T.C. File No. 

051–008, 2006 FTC LEXIS 25, *4–7 (April 19, 

2006); In re MacDermid, Inc., F.T.C. File No. 991– 

0167, 1999 FTC LEXIS 191, *10 (Feb. 4, 2000); In 

re Stone Container Corp., 125 F.T.C. 853 (1998); In 

re Precision Moulding Co., 122 F.T.C. 104 (1996); 

In re YKK (USA) Inc., 116 F.T.C. 628 (1993); In re 

A.E. Clevite, Inc., 116 F.T.C. 389 (1993); In re 

Quality Trailer Products Corp., 115 F.T.C. 944 

(1992). In addition, an invitation to collude may 

violate Section 2 of the Sherman Act as an act of 

attempted monopolization, and may also violate 

federal wire and mail fraud statutes. See United 

States v. American Airlines, 743 F.2d 1114 (5th Cir. 

1984); United States v. Ames Sintering Co., 927 

F.2d 232 (6th Cir. 1990). 

6E.g., Palmer v. BRG of Georgia, Inc., 498 U.S. 46, 

49–50 (1990); United States v. Masonite Corp., 316 

U.S. 265, 281 (1942); In re SKF Industries, Inc., 94 

F.T.C. 6, 97–104 (1979). 

7 See Volvo N. Am. Corp. v. Men’s Int’l Prof’l 

Tennis Council, 857 F.2d 55, 74 (2d Cir. 1988). 

DIPF prices in early 2009.5 The term 

‘‘invitation to collude’’ describes an 

improper communication from a firm to 

an actual or potential competitor that 

the firm is ready and willing to 

coordinate on price or output. Such 

invitations to collude impose a 

significant risk of anticompetitive harm 

to consumers, and as such, violate 

Section 5 of the FTC Act absent a 

legitimate business justification. 

C. Sigma’s Involvement in a 2009 

Conspiracy With McWane To Eliminate 

Competition in the Domestic DIPF 

Market 

The complaint alleges that, after the 

passage of the ARRA, Sigma prepared to 

enter the domestic DIPF market in 

competition with McWane. However, 

McWane wanted to avoid this 

competition, so McWane and Sigma 

agreed that Sigma would participate in 

the domestic DIPF market only as a 

distributor of McWane’s product. 

Through this arrangement, McWane 

shared a portion of its monopoly profits 

in the domestic DIPF market with Sigma 

in exchange for Sigma’s commitment to 

abandon its plans to enter that market 

in competition with McWane. Such 

agreements are presumptively 

unlawful.6

D. McWane and Sigma Conspired To 

Monopolize the Domestic DIPF Market 

The elements of a conspiracy to 

monopolize are: (1) The existence of a 

combination or conspiracy; (2) an overt 

act in furtherance of the conspiracy; and 

(3) a specific intent to monopolize.7

Here, the complaint alleges that through 

their MDA arrangement, McWane and 

Sigma agreed to limit competition 

between themselves in the domestic 

DIPF market, and to exclude their rivals 

in that market, including Star, by the 

adoption of duplicate exclusive dealing 

policies, and did so with the common 

and specific intent to maintain and 

share monopoly profits in the domestic 

DIPF market. 

III. The Proposed Order 

The proposed order is designed to 

remedy the unlawful conduct charged 

against Sigma in the complaint and to 

prevent the recurrence of such conduct. 

Paragraph II.A of the proposed order 

prohibits Sigma from participating in or 

maintaining any combination or 

conspiracy between any competitors to 

fix, raise or stabilize the prices at which 

DIPF are sold in the United States, or to 

allocate or divide markets, customers, or 

business opportunities. 

Paragraph II.B of the proposed order 

prohibits Sigma from soliciting or 

inviting any competitor to participate in 

any of the actions prohibited in 

Paragraphs II.A. 

Paragraph II.C of the proposed order 

prohibits Sigma from participating in or 

facilitating any agreement between 

competitors to exchange ‘‘Competitively 

Sensitive Information’’ (‘‘CSI’’), defined 

as certain types of information related to 

the cost, price, output or customers of 

or for DIPF. Paragraph II.D of the 

proposed order prohibits Sigma from 

unilaterally disclosing CSI to a 

competitor, except as part of the 

negotiation of a joint venture, license or 

acquisition, or in certain other specified 

circumstances. Paragraph II.E of the 

proposed order prohibits Sigma from 

attempting to engage in any of the 

activities prohibited by Paragraphs II.A, 

II.B, II.C, or II.D. 

The prohibitions on Sigma’s 

communication of CSI with competitors 

contained in Paragraphs II.C and II.D of 

the proposed order are subject to a 

proviso that permits Sigma to 

communicate CSI to its competitors 

under certain circumstances. Under the 

proposed order, Sigma may participate 

in an information exchange with its 

competitors in the DIPF market 

provided that the information exchange 

is structured in such a way as to 

minimize the risk that it will facilitate 

collusion among the Sigma and its 

competitors. Specifically, the proposed 

order requires any exchange of CSI to 

occur no more than twice yearly, and to 

involve the exchange of aggregated 

information more than six months old. 

In addition, the aggregated information 

that is exchanged must be made 

publicly available, which increases the 

likelihood that an information exchange 

involving Sigma will simultaneously 

benefit consumers. The proposed order 

also prohibits Sigma’s participation in 

an exchange of CSI involving price, cost 

or total unit cost of or for DIPF when the 

individual or collective market shares of 

the competitors seeking to participate in 

an information exchange exceed 

specified thresholds. The rationale for 

this provision is that in a highly 

concentrated market the risk that the 

information exchange may facilitate 

collusion is high. Due to the highly 

concentrated state of the DIPF market as 

currently structured, an information 

exchange involving Sigma and relating 

to price, output or total unit cost of or 

for DIPF is unlikely to reoccur in the 

foreseeable future. 

The proposed order has a term of 20 

years. 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

Statement of Commissioner J. Thomas 

Rosch, Concurring in Part and 

Dissenting in Part 

The Commission has voted separately 

(1) to issue a Part 3 Administrative 

Complaint against Respondents 

McWane, Inc. (‘‘McWane’’) and Star 

Pipe Products, Ltd. (‘‘Star’’), and (2) to 

accept for public comment a Consent 

Agreement settling similar allegations in 

a draft Part 2 Complaint against 

Respondent Sigma Corporation 

(‘‘Sigma’’). While I have voted in favor 

of both actions, I respectfully object to 

the inclusion—in both the Part 3 

Administrative Complaint and in the 

draft Part 2 Complaint—of claims 

against McWane and Sigma, to the 

extent that such claims are based on 

allegations of exclusive dealing, as 

explained in Part I below. I also 

respectfully object to naming Star, a 

competitor of McWane and Sigma, as a 

Respondent in the Part 3 Administrative 

Complaint, which alleges, inter alia, 

that Star engaged in a horizontal 

conspiracy to fix the prices of ductile 

iron pipe fittings (DIPFs) sold in the 

United States, and in a related, 

information exchange, as described in 

Part II below. 

I. 

For reasons similar to those that I 

articulated in a recent dissent in another 

matter, Pool Corp., FTC File No. 101– 

0115, http://www.ftc.gov/os/caselist/ 

1010115/ 

111121poolcorpstatementrosch.pdf, I do 

not think that the Part 3 Administrative 

Complaint against McWane and the 

draft Part 2 Complaint against Sigma 

adequately allege exclusive dealing as a 

matter of law. In particular, there is case 

law in both the Eighth and Ninth 

Circuits blessing the conduct that the 

complaints charge as exclusive dealing. 

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1494 Federal Register / Vol. 77, No. 6 / Tuesday, January 10, 2012 / Notices 

8See McWane/Star Part 3 Administrative Compl. 

§§ 29–38, 64–65; Sigma draft Part 2 Compl. 

§§ 23B33. 

9See Credit Suisse Secs. (USA) LLC v. Billing, 551 

U.S. 264, 281–84 (2007) (questioning the social 

benefits of private antitrust lawsuits filed in 

numerous courts when the enforcement-related 

need is relatively small); Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 557–60 (2007) (expressing concern 

with the burdens and costs of antitrust discovery, 

and the attendant in terrorem effect, associated with 

private antitrust lawsuits). 

10McWane/Star Part 3 Administrative Compl. 

§ 34b; Sigma draft Part 2 Compl. § 29. 

II. 

I also object to the allegations in the 

Part 3 Administrative Complaint and in 

the draft Part 2 Complaint that name 

Star as a co-conspirator in the alleged 

horizontal price-fixing of DIPF sold in 

the United States and the related, 

alleged DIFRA information exchange.8 I 

do not consider naming Star, along with 

McWane and Sigma, as a co-conspirator 

to be in the public interest. There are at 

least three reasons why this is so. First, 

although there may be reason to believe 

Star conspired with McWane and Sigma 

in this oligopolistic industry, Star seems 

much less culpable than the others. 

More specifically, I believe that we must 

be mindful of the consequences of 

public law enforcement in assessing 

whether the public interest favors 

joining Star as a co-conspirator.9

Second, I am concerned that a trier of 

fact may find it hard to believe that Star 

could be both a victim of McWane’s 

alleged ‘‘threats’’ to deal exclusively 

with distributors, and at more or less the 

same time (the ‘‘exclusive dealing’’ 

program began in September 2009), a 

co-conspirator with McWane in a pricefixing conspiracy (June 2008 to February 

2009). (This concern further explains 

why I do not have reason to believe that 

the exclusive dealing theory is a viable 

one.) Third, I am concerned that Star’s 

alleged participation in the price-fixing 

conspiracy and information exchange 

relies, in part, on treating 

communications to distributors as 

actionable signaling on prices or price 

levels.10 See, e.g., Williamson Oil Co., 

Inc. v. Philip Morris USA, 346 F.3d 

1287, 1305–07 (11thCir. 2003). 

[FR Doc. 2012–267 Filed 1–9–12; 8:45 am] 

BILLING CODE 6750–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Administration for Children and 

Families 

Proposed Information Collection 

Activity; Comment Request 

Proposed Projects 

Title: Child Care Development Fund 

(CCDF)—Reporting Improper 

Payments—Instructions for States. 

OMB No.: 0970–0323. 

Description: Section 2 of the Improper 

Payments Act of 2002 provides for 

estimates and reports of improper 

payments by Federal agencies. Subpart 

K of 45 CFR part 98 will require States 

to prepare and submit a report of errors 

occurring in the administration of CCDF 

grant funds once every three years. 

The Office of Child Care (OCC) is 

completing the second 3-year cycle of 

case record reviews to meet the 

requirements for reporting under IPIA. 

The OCC has conducted ongoing 

evaluation of the case record review 

process to determine if ‘‘improper 

authorizations for payment’’ remained a 

suitable proxy for actual ‘‘improper 

payments.’’ It is OCC’s determination 

that in some cases authorizations for 

payment represented the same figure as 

actual payments; in other cases 

authorizations for payment has 

represented a figure as much as 20% 

higher than actual payments. Many 

States reported errors found during the 

desk audit review process that were due 

to missing or insufficient 

documentation or other misapplication 

of policy, but found that families were 

determined to be eligible for services 

and that the actual payment authorized 

was correct. Other States reported 

regulatory barriers in State law which 

prohibits recovery of over-authorization 

or over-payment as the result of agency 

error. As such, this information 

collection will provide a methodology 

revision that will assess errors in 

eligibility determinations that will 

compare the amount authorized for 

payment with the actual payment. 

Respondents: State grantees, the 

District of Columbia, and Puerto Rico. 

ANNUAL BURDEN ESTIMATES

Instrument Number of 

respondents 

Number of 

responses 

per 

respondent 

Average 

burden hours 

per response 

Total burden 

hours 

Sampling Decisions and Fieldwork Preparation Plan ..................................... 17 1 106 1802 

Record Review Worksheet .............................................................................. 17 276 6.33 29,700.36 

State Improper Authorizations for Payment Report ........................................ 17 1 639 10,863 

Corrective Action Plan ..................................................................................... 8 1 156 1248 

Estimated Total Annual Burden 

Hours: 43,613.36. 

In compliance with the requirements 

of Section 506(c)(2)(A) of the Paperwork 

Reduction Act of 1995, the 

Administration for Children and 

Families is soliciting public comment 

on the specific aspects of the 

information collection described above. 

Copies of the proposed collection of 

information can be obtained and 

comments may be forwarded by writing 

to the Administration for Children and 

Families, Office of Planning, Research 

and Evaluation, 370 L’Enfant 

Promenade SW., Washington, DC 20447, 

Attn: ACF Reports Clearance Officer. 

Email address: 

infocollection@acf.hhs.gov. All requests 

should be identified by the title of the 

information collection. 

The Department specifically requests 

comments on: (a) Whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information shall have 

practical utility; (b) the accuracy of the 

agency’s estimate of the burden of the 

proposed collection of information; (c) 

the quality, utility, and clarity of the 

information to be collected; and (d) 

ways to minimize the burden 

information to be collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

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