[Federal Register Volume 85, Number 149 (Monday, August 3, 2020)]
[Notices]
[Pages 46659-46662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16846]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2016-N-4119]
Food Safety Modernization Act Third-Party Certification Program
User Fee Rate for Fiscal Year 2021
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Food and Drug Administration (FDA) is announcing the
fiscal year (FY) 2021 annual fee rate for recognized accreditation
bodies and accredited certification bodies, and the fee rate for
accreditation bodies applying to be recognized in the third-party
certification program that is authorized by the Federal Food, Drug, and
Cosmetic Act (FD&C Act), as amended by the FDA Food Safety
Modernization Act (FSMA). We are also announcing the fee rate for
certification bodies that are applying to be directly accredited by
FDA.
DATES: This fee is effective October 1, 2020.
FOR FURTHER INFORMATION CONTACT: Donald Prater, Office of Food Policy
and Response, Food and Drug Administration, 10903 New Hampshire Ave.,
Bldg. 1, Rm. 3202, Silver Spring, MD 20993, 301-348-3007.
SUPPLEMENTARY INFORMATION:
I. Background
Section 307 of FSMA, Accreditation of Third-Party Auditors, amended
the FD&C Act to create a new provision, section 808, under the same
name. Section 808 of the FD&C Act (21 U.S.C. 384d) directs FDA to
establish a program for accreditation of third-party certification
bodies \1\ conducting food safety audits and issuing food and facility
certifications to eligible foreign entities (including registered
foreign food facilities) that meet our applicable requirements. Under
this provision, we established a system for FDA to recognize
accreditation bodies to accredit certification bodies, except for
limited circumstances in which we may directly accredit certification
bodies to participate in the third-party certification program.
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\1\ For the reasons explained in the third-party certification
final rule (80 FR 74570 at 74578-74579, November 27, 2015), and for
consistency with the implementing regulations for the third-party
certification program in 21 CFR parts 1, 11, and 16, this notice
uses the term ``third-party certification body'' rather than the
term ``third-party auditor'' used in section 808(a)(3) of the FD&C
Act.
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Section 808(c)(8) of the FD&C Act directs FDA to establish a
reimbursement (user fee) program by which we assess fees and require
reimbursement for the work FDA performs to establish and administer the
third-party certification program under section 808 of the FD&C Act.
The user fee program for the third-party certification program was
established by a final rule entitled ``Amendments to Accreditation of
Third-Party Certification Bodies To Conduct Food Safety Audits and To
Issue Certifications To Provide for the User Fee Program'' (81 FR
90186, December 14, 2016).
The FSMA FY 2021 third-party certification program user fee rate
announced in this notice is effective on October 1, 2020, and will
remain in effect through September 30, 2021.
II. Estimating the Average Cost of a Supported Direct FDA Work Hour for
FY 2021
FDA must estimate its costs for each activity in order to establish
fee rates for FY 2021. In each year, the costs of salary (or personnel
compensation) and benefits for FDA employees account for between 50 and
60 percent of the funds available to, and used by, FDA. Almost all of
the remaining funds (operating funds) available to FDA are used to
support FDA employees for paying rent, travel, utility, information
technology, and other operating costs.
A. Estimating the Full Cost per Direct Work Hour in FY 2021
Full-time Equivalent (FTE) reflects the total number of regular
straight-time hours--not including overtime or holiday hours--worked by
employees, divided by the number of compensable hours applicable to
each fiscal year. Annual leave, sick leave, compensatory time off, and
other approved leave categories are considered ``hours worked'' for
purposes of defining FTE employment.
In general, the starting point for estimating the full cost per
direct work hour is to estimate the cost of an FTE or paid staff year.
Calculating an Agency-wide total cost per FTE requires three primary
cost elements: payroll, non-payroll, and rent.
[[Page 46660]]
We have used an average of past year cost elements to predict the
FY 2021 cost. The FY 2021 FDA-wide average cost for payroll (salaries
and benefits) is $164,103; non-payroll--including equipment, supplies,
information technology, general and administrative overhead--is
$94,685; and rent, including cost allocation analysis and adjustments
for other rent and rent-related costs, is $25,386 per paid staff year,
excluding travel costs.
Summing the average cost of an FTE for payroll, non-payroll, and
rent, brings the FY 2021 average fully supported cost to $284,174 per
FTE, excluding travel costs. FDA will use this base unit fee in
determining the hourly fee rate for third-party certification user fees
for FY 2021 prior to including travel costs as applicable for the
activity.
To calculate an hourly rate, FDA must divide the FY 2021 average
fully supported cost of $ 284,174 per FTE by the average number of
supported direct FDA work hours in FY 2019--the last FY for which data
are available. See Table 1.
Table 1--Supported Direct FDA Work Hours in a Paid Staff Year in FY 2019
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Total number of hours in a paid staff year................. 2,080
Less:
10 paid holidays......................................... -80
20 days of annual leave.................................... -160
10 days of sick leave...................................... -80
12.5 days of training...................................... -100
26.5 days of general administration........................ -184
26.5 days of travel........................................ -212
2 hours of meetings per week............................... -104
Net Supported Direct FDA Work Hours Available for 1,160
Assignments...............................................
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Dividing the average fully supported FTE cost in FY 2021 ($284,174)
by the total number of supported direct work hours available for
assignment in FY 2019 (1,160) results in an average fully supported
cost of $245 (rounded to the nearest dollar), excluding travel costs,
per supported direct work hour in FY 2021.
B. Adjusting FY 2019 Travel Costs for Inflation to Estimate FY 2021
Travel Costs
To adjust the hourly rate for FY 2021, FDA must estimate the cost
of inflation in each year for FY 2020 and FY 2021. FDA uses the method
prescribed for estimating inflationary costs under the Prescription
Drug User Fee Act (PDUFA) provisions of the FD&C Act (section 736(c)(1)
(21 U.S.C. 379h(c)(1))), the statutory method for inflation adjustment
in the FD&C Act that FDA has used consistently. FDA previously
determined the FY 2020 inflation rate to be 2.3964 percent; this rate
was published in the FY 2020 PDUFA user fee rates notice in the Federal
Register (August 2, 2019, 84 FR 37882). Utilizing the method set forth
in section 736(c)(1) of the FD&C Act, FDA has calculated an inflation
rate of 2.3964 percent for FY 2020 and 1.3493 percent for FY 2021, and
FDA intends to use this inflation rate to make inflation adjustments
for FY 2021; the derivation of this rate will be published in the
Federal Register in the FY 2021 notice for the PDUFA user fee rates.
The compounded inflation rate for FYs 2020 and 2021, therefore, is
1.037780 (or 3.7780 percent) (calculated as 1 plus 2.3964 percent times
1 plus 1.3493 percent).
The average fully supported cost per supported direct FDA work
hour, excluding travel costs, of $245 already takes into account
inflation as the calculation above is based on FY 2021 predicted costs.
FDA will use this base unit fee in determining the hourly fee rate for
third-party certification program fees for FY 2021 prior to including
travel costs as applicable for the activity. For the purpose of
estimating the fee, we are using the travel cost rate for foreign
travel because we anticipate that the vast majority of onsite
assessments made by FDA under this program will require foreign travel.
In FY 2019, the Office of Regulatory Affairs spent a total of
$3,506,000 on 463 foreign inspection trips related to FDA's Center for
Food Safety and Applied Nutrition and Center for Veterinary Medicine
field activities programs, which averaged a total of $7,572 per foreign
inspection trip. These trips averaged 3 weeks (or 120 paid hours) per
trip. Dividing $7,572 per trip by 120 hours per trip results in a total
and an additional cost of $63 (rounded to the nearest dollar) per paid
hour spent for foreign inspection travel costs in FY 2019. To adjust
$63 for inflationary increases in FY 2020 and FY 2021, FDA must
multiply it by the same inflation factor mentioned previously in this
document (1.037780 or 3.7780 percent), which results in an estimated
cost of $65 (rounded to the nearest dollar) per paid hour in addition
to $245 for a total of $310 per paid hour ($245 plus $65) for each
direct hour of work requiring foreign inspection travel. FDA will use
this rate in charging fees in FY 2021 when travel is required for the
third-party certification program.
Table 2--FSMA Fee Schedule for FY 2021
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Fee rates for
Fee category FY 2021
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Hourly rate without travel.............................. $245
Hourly rate if travel is required....................... 310
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III. Fees for Accreditation Bodies and Certification Bodies in the
Third-Party Certification Program Under Section 808(c)(8) of the FD&C
Act
The third-party certification program assesses application fees and
annual fees. In FY 2021, the only fees that could be collected by FDA
under section 808(c)(8) of the FD&C Act are the initial application fee
for accreditation bodies seeking recognition, the annual fee for
recognized accreditation bodies, the annual fee for certification
bodies accredited by a recognized accreditation body, and the initial
application fee for a certification body seeking direct accreditation
from FDA. Table 3 provides an overview of the fees for FY 2021.
Table 3--FSMA Third-Party Certification Program User Fee Schedule for FY
2021
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Fee rates for
Fee category FY 2021
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Initial Application Fee for Accreditation Body Seeking $42,320
Recognition............................................
Annual Fee for Recognized Accreditation Body............ 1,966
Annual Fee for Accredited Certification Body............ 2,458
Initial Application Fee for a Certification Body Seeking 42,320
Direct Accreditation from FDA..........................
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A. Application Fee for Accreditation Bodies Applying for Recognition in
the Third-Party Certification Program Under Section 808(c)(8) of the
FD&C Act
Section 1.705(a)(1) (21 CFR 1.705(a)(1)) establishes an application
fee for accreditation bodies applying for initial recognition that
represents the estimated average cost of the work FDA performs in
reviewing and evaluating initial applications for recognition of
accreditation bodies.
The fee is based on the fully supported FTE hourly rates and
estimates of the number of hours it would take FDA to perform relevant
activities. These estimates represent FDA's current thinking, and as
the program evolves, FDA will continue to reconsider the estimated
hours. Based on data we have acquired since starting the program, we
estimate that it would take, on average, 80 person-hours to review an
accreditation body's
[[Page 46661]]
submitted application, 48 person-hours for an onsite performance
evaluation of the applicant (including travel and other steps necessary
for a fully supported FTE to complete an onsite assessment), and 32
person-hours to prepare a written report documenting the onsite
assessment.
FDA employees review applications and prepare reports from their
worksites, so we use the fully supported FTE hourly rate excluding
travel, $245/hour, to calculate the portion of the user fee
attributable to those activities: $245/hour x (80 hours (application
review) + 32 hours (written report)) = $27,440. FDA employees will
likely travel to foreign countries for the onsite performance
evaluations because most accreditation bodies are anticipated to be
located in foreign countries. For this portion of the fee we use the
fully supported FTE hourly rate for work requiring travel, $310/hour,
to calculate the portion of the user fee attributable to those
activities: $310/hour x 48 hours (i.e., two fully supported FTEs x ((2
travel days x 8 hours) + (1 day onsite x 8 hours))) = $14,880. The
estimated average cost of the work FDA performs in total for reviewing
an initial application for recognition for an accreditation body based
on these figures would be $27,440 + $14,880 = $42,320. Therefore, the
application fee for accreditation bodies applying for recognition in FY
2021 will be $42,320.
B. Annual Fee for Accreditation Bodies Participating in the Third-Party
Certification Program Under Section 808(c)(8) of the FD&C Act
To calculate the annual fee for each recognized accreditation body,
FDA takes the estimated average cost of work FDA performs to monitor
performance of a single recognized accreditation body and annualizes
that over the average term of recognition. At this time, we assume an
average term of recognition of 5 years. We also assume that FDA will
monitor 10 percent of recognized accreditation bodies onsite. As the
program proceeds, we will adjust the term of recognition as
appropriate. We estimate that for one performance evaluation of a
recognized accreditation body, it would take, on average (taking into
account that not all recognized accreditation bodies would be monitored
onsite), 22 hours for FDA to conduct records review, 8 hours to prepare
a report detailing the records review and onsite performance
evaluation, and 8 hours of onsite performance evaluation. Using the
fully supported FTE hourly rates in Table 2, the estimated average cost
of the work FDA performs to monitor performance of a single recognized
accreditation body would be $7,350 ($245/hour x (22 hours (records
review) + 8 hours (written report))) plus $2,480 ($310/hour x 8 hours
(on-site evaluation)), which is $9,830. Annualizing this amount over 5
years would lead to an annual fee for recognized accreditation bodies
of $1,966 for FY 2021.
C. Annual Fee for Certification Bodies Accredited by a Recognized
Accreditation Body in the Third-Party Certification Program Under
Section 808(c)(8) of the FD&C Act
To calculate the annual fee for a certification body accredited by
a recognized accreditation body, FDA takes the estimated average cost
of work FDA performs to monitor performance of a single certification
body accredited by a recognized accreditation body and annualizes that
over the average term of accreditation. At this time, we assume an
average term of accreditation of 4 years. This fee is based on the
fully supported FTE hourly rates and estimates of the number of hours
it would take FDA to perform relevant activities. We estimate that FDA
would conduct, on average, the same activities, for the same amount of
time to monitor certification bodies accredited by a recognized
accreditation body as we would to monitor an accreditation body
recognized by FDA. Using the fully supported FTE hourly rates in Table
2, the estimated average cost of the work FDA performs to monitor
performance of a single accredited certification body would be $7,350
($245/hour x (22 hours (records review) + 8 hours (written report)))
plus $2,480 ($310/hour x 8 hours (on-site evaluation)), which is
$9,830. Annualizing this amount over 4 years would lead to an annual
fee for accredited certification bodies of $2,458 for FY 2021.
D. Initial Application Fee for Certification Bodies Seeking Direct
Accreditation from FDA in the Third-Party Certification Program Under
Section 808(c)(8) of the FD&C Act
Section 1.705(a)(3) establishes an application fee for
certification bodies applying for direct accreditation from FDA that
represents the estimated average cost of the work FDA performs in
reviewing and evaluating initial applications for direct accreditation
of certification bodies.
The fee is based on the fully supported FTE hourly rates and
estimates of the number of hours it would take FDA to perform relevant
activities. These estimates represent FDA's current thinking, and as
the program evolves, FDA will reconsider the estimated hours. We
estimate that it would take, on average, 80 person-hours to review a
certification body's submitted application, 48 person-hours for an
onsite performance evaluation of the applicant (including travel and
other steps necessary for a fully supported FTE to complete an onsite
assessment), and 32 person-hours to prepare a written report
documenting the onsite assessment.
FDA employees are likely to review applications and prepare reports
from their worksites, so we use the fully supported FTE hourly rate
excluding travel, $245/hour, to calculate the portion of the user fee
attributable to those activities: $245/hour x (80 hours (application
review) + 32 hours (written report)) = $27,440. FDA employees will
likely travel to foreign countries for the onsite performance
evaluations because most certification bodies are anticipated to be
located in foreign countries. For this portion of the fee we use the
fully supported FTE hourly rate for work requiring travel, $310/hour,
to calculate the portion of the user fee attributable to those
activities: $310/hour x 48 hours (i.e., two fully supported FTEs x ((2
travel days x 8 hours) + (1 day onsite x 8 hours))) = $14,880. The
estimated average cost of the work FDA performs in total for reviewing
an initial application for direct accreditation of a certification body
based on these figures would be $27,440 + $14,880 = $42,320. Therefore,
the application fee for certification bodies applying for direct
accreditation from FDA in FY 2021 will be $42,320.
IV. Estimated Fees for Accreditation Bodies and Certification Bodies in
Other Fee Categories for FY 2021
Section 1.705(a) also establishes application fees for recognized
accreditation bodies submitting renewal applications and certification
bodies applying for renewal of direct accreditation. Section 1.705(b)
also establishes annual fees for certification bodies directly
accredited by FDA.
Although we will not be collecting these other fees in FY 2021, for
transparency and planning purposes, we have provided an estimate of
what these fees would be for FY 2021 based on the fully supported FTE
hourly rates for FY 2021 and estimates of the number of hours it would
take FDA to perform relevant activities as outlined in the Final
Regulatory Impact Analysis for the Third-Party Certification
Regulation. Table 4 provides an overview of the estimated fees for
other fee categories.
[[Page 46662]]
Table 4--Estimated Fee Rates for Other Fee Categories Under the FSMA
Third-Party Certification Program
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Estimated fee
Fee category rates for FY
2021
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Renewal application fee for recognized accreditation $25,195
body...................................................
Renewal application fee for directly accredited 25,195
certification body.....................................
Annual fee for certification body directly accredited by 20,240
FDA....................................................
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V. How must the fee be paid?
Accreditation bodies seeking initial recognition must submit the
application fee with the application. For recognized accreditation
bodies and accredited certification bodies, an invoice will be sent
annually. Payment must be made within 30 days of the receipt date. The
payment must be made in U.S. currency from a U.S. bank by one of the
following methods: Wire transfer, electronically, check, bank draft, or
U.S. postal money order made payable to the Food and Drug
Administration. The preferred payment method is online using an
electronic check (Automated Clearing House (ACH), also known as eCheck)
or credit card (Discover, VISA, MasterCard, American Express). Secure
electronic payments can be submitted using the User Fees Payment Portal
at https://userfees.fda.gov/pay. (Note: Only full payments are
accepted. No partial payments can be made online.) Once you have found
your invoice, select ``Pay Now'' to be redirected to Pay.gov.
Electronic payment options are based on the balance due. Payment by
credit card is available only for balances less than $25,000. If the
balance exceeds this amount, only the ACH option is available. Payments
must be made using U.S. bank accounts as well as U.S. credit cards.
When paying by check, bank draft, or U.S. postal money order, please
include the invoice number. Also write the FDA post office box number
(P.O. Box 979108) on the enclosed check, bank draft, or money order.
Mail the payment including the invoice number on the check stub to:
Food and Drug Administration, P.O. Box 979108, St. Louis, MO 63197-
9000. When paying by wire transfer, it is required that the invoice
number is included; without the invoice number the payment may not be
applied. The originating financial institution may charge a wire
transfer fee. If the financial institution charges a wire transfer fee,
it is required to add that amount to the payment to ensure that the
invoice is paid in full. For international wire transfers, please
inquire with the financial institutions prior to submitting the
payment. Use the following account information when sending a wire
transfer: U.S. Department of the Treasury, TREAS NYC, 33 Liberty St.,
New York, NY 10045, Account Name: Food and Drug Administration, Account
No.: 75060099, Routing No.: 021030004, Swift No.: FRNYUS33.
To send a check by a courier such as Federal Express, the courier
must deliver the check to: U.S. Bank, Attn: Government Lockbox 979108,
1005 Convention Plaza, St. Louis, MO 63101. (Note: This address is for
courier delivery only. If you have any questions concerning courier
delivery, contact U.S. Bank at 314-418-4013. This phone number is only
for questions about courier delivery.) The tax identification number of
FDA is 53-0196965. (Note: Invoice copies do not need to be submitted to
FDA with the payments.)
VI. What are the consequences of not paying this fee?
The consequences of not paying these fees are outlined in 21 CFR
1.725. If FDA does not receive an application fee with an application
for recognition, the application will be considered incomplete and FDA
will not review the application. If a recognized accreditation body
fails to submit its annual user fee within 30 days of the due date, we
will suspend its recognition. If the recognized accreditation body
fails to submit its annual user fee within 90 days of the due date, we
will revoke its recognition. If an accredited certification body fails
to pay its annual fee within 30 days of the due date, we will suspend
its accreditation. If the accredited certification body fails to pay
its annual fee within 90 days of the due date, we will withdraw its
accreditation.
Dated: July 29, 2020.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2020-16846 Filed 7-30-20; 11:15 am]
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