Food Safety Modernization Act Voluntary Qualified Importer Program User Fee Rate for Fiscal Year 2024, 48893-48896 [2023-15920]
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Federal Register / Vol. 88, No. 144 / Friday, July 28, 2023 / Notices
TABLE 4—ESTIMATED FEE RATES FOR OTHER FEE CATEGORIES UNDER THE FSMA THIRD-PARTY CERTIFICATION
PROGRAM
Estimated fee rates
for FY 2024
Fee category
Renewal application fee for directly accredited certification body ......................................................................................
Annual fee for certification body directly accredited by 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 invoice
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
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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 24, 2023.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2023–15921 Filed 7–27–23; 8:45 am]
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DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2023–N–2898]
Food Safety Modernization Act
Voluntary Qualified Importer Program
User Fee Rate for Fiscal Year 2024
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice.
The Food and Drug
Administration (FDA) is announcing the
fiscal year (FY) 2024 annual fee rate for
importers approved to participate in the
Voluntary Qualified Importer Program
(VQIP) that is authorized by the Federal
Food, Drug, and Cosmetic Act (FD&C
Act), as amended by the FDA Food
Safety Modernization Act (FSMA). This
fee is effective on August 1, 2023 and
will remain in effect through September
30, 2024.
FOR FURTHER INFORMATION CONTACT:
Olufunmilayo Ariyo, FSMA Fee Staff,
Office of Food Policy and Response,
Food and Drug Administration, 10903
New Hampshire Ave., Silver Spring, MD
20993, 240–402–4989, FSMAFeeStaff@
fda.hhs.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
Section 302 of FSMA, VQIP, amended
the FD&C Act to create a new provision,
section 806, under the same name.
Section 806 of the FD&C Act (21 U.S.C.
384b) directs FDA to establish a
program to provide for the expedited
review and importation of food offered
for importation by importers who have
voluntarily agreed to participate in such
program, and a process, consistent with
section 808 of the FD&C Act (21 U.S.C.
384d), for the issuance of a facility
certification to accompany a food
offered for importation by importers
participating in VQIP.
Section 743 of the FD&C Act (21
U.S.C. 379j–31) authorizes FDA to
assess and collect fees from each
importer participating in VQIP to cover
FDA’s costs of administering the
program. Each fiscal year, fees are to be
established based on an estimate of 100
percent of the costs for the year. The fee
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rates must be published in a Federal
Register notice not later than 60 days
before the start of each fiscal year
(section 743(b)(1) of the FD&C Act).
After FDA approves a VQIP application,
the user fee must be paid before October
1, the start of the VQIP fiscal year, to
begin receiving benefits for that VQIP
fiscal year.
The FY 2024 VQIP user fee will
support benefits from October 1, 2023,
through September 30, 2024.
II. Estimating the Average Cost of a
Supported Direct FDA Work Hour for
FY 2024
FDA is required to estimate 100
percent of its costs for each activity in
order to establish fee rates for FY 2024.
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 (IT), and
other operating costs.
A. Estimating the Full Cost per Direct
Work Hour in FY 2024
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.
We have used an average of past year
cost elements to predict the FY 2024
cost. The FY 2024 FDA-wide average
cost for payroll (salaries and benefits) is
$192,848; non-payroll—including
equipment, supplies, IT, general and
administrative overhead—is $99,316
and rent, including cost allocation
analysis and adjustments for other rent
and rent-related costs, is $23,239 per
paid staff year, excluding travel costs.
Summing the average cost of an FTE
for payroll, non-payroll, and rent, brings
the FY 2024 average fully supported
cost to $315,403 1 per FTE, excluding
travel costs. FDA will use this base unit
fee in determining the hourly fee rate for
VQIP fees for FY 2024 prior to including
domestic or foreign travel costs as
applicable for the activity.
To calculate an hourly rate, FDA must
divide the FY 2024 average fully
supported cost of $315,403 per FTE by
the average number of supported direct
FDA work hours in FY 2022—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 2022
Total number of hours in a paid staff year ..........................................................................................................................................
Less:
11 paid holidays ...........................................................................................................................................................................
20 days of annual leave ...............................................................................................................................................................
10 days of sick leave ....................................................................................................................................................................
12.5 days of training .....................................................................................................................................................................
22 days of general administration ................................................................................................................................................
26.5 days of travel ........................................................................................................................................................................
2 hours of meetings per week ......................................................................................................................................................
Net Supported Direct FDA Work Hours Available for Assignments ............................................................................................
Dividing the average fully supported
FTE cost in FY 2024 ($315,403) by the
total number of supported direct work
hours available for assignment in FY
2022 (1,160) results in an average fully
supported cost of $272 (rounded to the
nearest dollar), excluding inspection
travel costs, per supported direct work
hour in FY 2024.
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B. Adjusting FY 2022 Travel Costs for
Inflation To Estimate FY 2024 Travel
Costs
To adjust the hourly rate for FY 2024,
FDA must estimate the cost of inflation
in each year for FYs 2023 and 2024.
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 2023 inflation rate to
be 1.6404 percent; this rate was
1 Total
published in the FY 2023 PDUFA user
fee rates notice in the Federal Register
(October 7, 2022, 87 FR 61063).
Utilizing the method set forth in section
736(c)(1) of the FD&C Act, FDA has
calculated an inflation rate of 1.6404
percent for FY 2023 and 3.8896 percent
for FY 2024, and FDA intends to use
these inflation rates to make inflation
adjustments for FY 2024; the derivation
of this rate will be published in the
Federal Register in the FY 2024 notice
for the PDUFA user fee rates. The
compounded inflation rate for FYs 2023
and 2024, therefore, is 1.055938 (or
5.5938 percent) (calculated as 1 plus
1.6404 percent times 1 plus 3.8896
percent).
The average fully supported cost per
supported direct FDA work hour,
excluding travel costs, of $272 already
takes into account inflation as the
calculation above is based on FY 2024
predicted costs. FDA will use this base
unit fee in determining the hourly fee
rate for VQIP fees for FY 2024 prior to
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¥88
¥160
¥80
¥100
¥176
¥212
¥104
1,160
including domestic or foreign travel
costs as applicable for the activity.
In FY 2022, FDA’s Office of
Regulatory Affairs (ORA) spent a total of
$6,566,835 for domestic regulatory
inspection travel costs and General
Services Administration Vehicle costs
related to FDA’s Center for Food Safety
and Applied Nutrition (CFSAN) and
Center for Veterinary Medicine (CVM)
field activities programs. The total ORA
domestic travel costs spent is then
divided by the 7,930 CFSAN and CVM
domestic inspections, which averages a
total of $828 per inspection. These
inspections average 46.29 hours per
inspection. Dividing $828 per
inspection by 46.29 hours per
inspection results in a total and an
additional cost of $18 (rounded to the
nearest dollar) per hour spent for
domestic inspection travel costs in FY
2022. To adjust for the $18 per hour
additional domestic cost inflation
increases for FY 2023 and FY 2024, FDA
must multiply the FY 2023 PDUFA
includes rounding.
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the work FDA performs in reviewing
and evaluating a VQIP importer. At this
time, FDA is not offering an adjusted fee
for small businesses. As required by
section 743(b)(2)(B)(iii) of the FD&C Act,
FDA previously published a set of
guidelines in consideration of the
burden of the VQIP fee on small
businesses and provided for a period of
public comment on the guidelines (80
FR 32136, June 5, 2015). While we did
receive some comments in response,
they did not address the questions
posed, i.e., how a small business fee
reduction should be structured, what
percentage of fee reduction would be
appropriate, or what alternative
structures FDA might consider to
indirectly reduce fees for small
businesses by charging different fee
amounts to different VQIP participants.
We plan on monitoring costs and
collecting data to determine if, in future
fiscal years, we will provide for a small
business fee reduction. Consistent with
section 743(b)(2)(B)(iii) of the FD&C Act,
we will adjust the fee schedule for small
businesses only through notice and
comment rulemaking.
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
TABLE 2—FSMA FEE SCHEDULE FOR the estimated hours. We estimate that it
would take, on average, 39 person-hours
FY 2024
to review a new VQIP application
(including communication provided
Fee rates
Fee category
through the VQIP Importer’s Help Desk),
for FY 2024
28 person-hours to review a returning
Hourly rate without travel .....
$272 VQIP application (including
Hourly rate if domestic travel
communication provided through the
is required .........................
291 VQIP Importer’s Help Desk), 16 personHourly rate if foreign travel is
hours for an onsite performance
required .............................
312 evaluation of a domestic VQIP importer
(including travel and other steps
III. Fees for Importers Approved To
necessary for a fully supported FTE to
Participate in the Voluntary Qualified
complete and document an onsite
Importer Program Under Section 743 of assessment), and 34 person-hours for an
the FD&C Act
onsite performance evaluation of a
foreign VQIP importer (including travel
FDA assesses fees for VQIP annually.
Table 3 provides an overview of the fees and other steps necessary for a fully
supported FTE to complete and
for FY 2024.
document an onsite assessment).
Additional costs include maintenance
TABLE 3—FSMA VQIP USER FEE
and support costs of information
SCHEDULE FOR FY 2024
technology of administering benefits of
the program. These costs are estimated
Fee
rates
Fee category
to be $4,359 per VQIP importer.
for FY 2024
Based on updated data, FDA
VQIP User Fee .....................
$14,975
anticipates that there may be up to six
returning VQIP applicants and up to
Section 743 of the FD&C Act requires
two new applicants this fiscal year. FDA
that each importer participating in VQIP employees are likely to review new
pay a fee to cover FDA’s costs of
VQIP applications from their worksites,
administering the program. This fee
so we use the fully supported FTE
represents the estimated average cost of
hourly rate excluding travel, $272/hour,
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inflation rate adjustor (1.016404) by the
FY 2024 PDUFA inflation rate adjustor
(1.038896) times the $18 additional
domestic cost, which results in an
estimated cost of $19 (rounded to the
nearest dollar) per paid hour in addition
to $272 for a total of $291 per paid hour
($272 plus $19) for each direct hour of
work requiring domestic inspection
travel. FDA will use these rates in
charging fees in FY 2024 when domestic
travel is required.
In FY 2022, ORA spent a total of
$802,057 on 175 foreign inspection trips
related to FDA’s CFSAN and CVM field
activities programs, which averaged a
total of $4,583 per foreign inspection
trip. These trips averaged 3 weeks (or
120 paid hours) per trip. Dividing
$4,583 per trip by 120 hours per trip
results in a total and an additional cost
of $38 (rounded to the nearest dollar)
per paid hour spent for foreign
inspection travel costs in FY 2022. To
adjust $38 for inflationary increases in
FY 2023 and FY 2024, FDA must
multiply it by the same inflation factors
mentioned previously in this document
(1.016404 and 1.038896), which results
in an estimated cost of $40 (rounded to
the nearest dollar) for each direct hour
of work requiring foreign inspection
travel. FDA will use these rates in
charging fees in FY 2024 when foreign
travel is required.
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to calculate the portion of the user fee
attributable to those activities: $272/
hour × (39 hours) = $10,608. FDA
employees are likely to review returning
VQIP applications from their worksites,
so we use the fully supported FTE
hourly rate excluding travel, $272/hour,
to calculate the portion of the user fee
attributable to those activities: $272/
hour × (28 hours) = $7,616.
FDA employees will conduct a VQIP
inspection to verify the eligibility
criteria and full implementation of the
food safety and food defense systems
established in the Quality Assurance
Program. A VQIP importer may be
located inside or outside of the United
States. However, this fiscal year, all
VQIP importers will be located inside
the United States. Four VQIP applicants
may have an associated VQIP
inspection.
FDA employees are likely to prepare
for and report on the performance
evaluation of a domestic VQIP importer
at an FTE’s worksite, so we use the fully
supported FTE hourly rate excluding
travel, $272/hour, to calculate the
portion of the user fee attributable to
those activities: $272/hour × (8 hours) =
$2,176. For the portion of the fee
covering onsite evaluation of a domestic
VQIP importer, we use the fully
supported FTE hourly rate for work
requiring domestic travel, $291/hour, to
calculate the portion of the user fee
attributable to those activities: $291/
hour × 8 hours (i.e., one fully supported
FTE × (1 day onsite × 8 hours)) = $2,328.
Therefore, the total cost of conducting
the domestic performance evaluation of
a VQIP importer is determined to be
$2,176 + $2,328 = $4,504.
Coordination of the onsite
performance evaluation of a foreign
VQIP importer is estimated to take place
at an FTE’s worksite, so we use the fully
supported FTE hourly rate excluding
travel, $272/hour, to calculate the
portion of the user fee attributable to
those activities: $272/hour × (10 hours)
= $2,720. For the portion of the fee
covering onsite evaluation of a foreign
VQIP importer, we use the fully
supported FTE hourly rate for work
requiring foreign travel, $312/hour, to
calculate the portion of the user fee
attributable to those activities: $312/
hour × 24 hours (i.e., one fully
supported FTE × ((2 travel days × 8
hours) + (1 day onsite × 8 hours))) =
$7,488. Therefore, the total cost of
conducting the foreign performance
evaluation of a VQIP importer is
determined to be $2,720 + $7,488 =
$10,208.
Therefore, the estimated average cost
of the work FDA performs in total for
approving an application for a VQIP
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importer in FY 2024 based on these
figures would be $4,359 + ($10,608 × 1⁄4)
+ ($7,616 × 3⁄4) + ($4,504 × 1⁄2) =
$14,975.
IV. How must the fee be paid?
An invoice will be sent to VQIP
importers approved to participate in the
program. Payment must be made prior
to October 1, 2023, to be eligible for
VQIP participation for the benefit year
beginning October 1, 2023. FDA will not
refund the VQIP user fee for any reason.
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 in the check stub.
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.
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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.)
V. What are the consequences of not
paying this fee?
The consequences of not paying these
fees are outlined in Section J of ‘‘FDA’s
Voluntary Qualified Importer Program;
Guidance for Industry’’ document
(available at https://www.fda.gov/
media/92196/download). If the user fee
is not paid before October 1, a VQIP
importer will not be eligible to
participate in VQIP. For the first year a
VQIP application is approved, if the
user fee is not paid before October 1,
2023, you are not eligible to participate
in VQIP. If you subsequently pay the
user fee, FDA will begin your benefits
after we receive the full payment. The
user fee may not be paid after December
31, 2023. For a subsequent year, if you
do not pay the user fee before October
1, FDA will send a Notice of Intent to
Revoke your participation in VQIP. If
you do not pay the user fee within 30
days of the date of the Notice of Intent
to Revoke, we will revoke your
participation in VQIP.
Dated: July 24, 2023.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2023–15920 Filed 7–27–23; 8:45 am]
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HUMAN SERVICES
Indian Health Service
Request for Public Comment: 30-Day
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Indian Health Service, HHS.
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Collection: This collection of
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]]>Agencies
[Federal Register Volume 88, Number 144 (Friday, July 28, 2023)]
[Notices]
[Pages 48893-48896]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15920]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2023-N-2898]
Food Safety Modernization Act Voluntary Qualified Importer
Program User Fee Rate for Fiscal Year 2024
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) 2024 annual fee rate for importers approved to
participate in the Voluntary Qualified Importer Program (VQIP) that is
authorized by the Federal Food, Drug, and Cosmetic Act (FD&C Act), as
amended by the FDA Food Safety Modernization Act (FSMA). This fee is
effective on August 1, 2023 and will remain in effect through September
30, 2024.
FOR FURTHER INFORMATION CONTACT: Olufunmilayo Ariyo, FSMA Fee Staff,
Office of Food Policy and Response, Food and Drug Administration, 10903
New Hampshire Ave., Silver Spring, MD 20993, 240-402-4989,
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Section 302 of FSMA, VQIP, amended the FD&C Act to create a new
provision, section 806, under the same name. Section 806 of the FD&C
Act (21 U.S.C. 384b) directs FDA to establish a program to provide for
the expedited review and importation of food offered for importation by
importers who have voluntarily agreed to participate in such program,
and a process, consistent with section 808 of the FD&C Act (21 U.S.C.
384d), for the issuance of a facility certification to accompany a food
offered for importation by importers participating in VQIP.
Section 743 of the FD&C Act (21 U.S.C. 379j-31) authorizes FDA to
assess and collect fees from each importer participating in VQIP to
cover FDA's costs of administering the program. Each fiscal year, fees
are to be established based on an estimate of 100 percent of the costs
for the year. The fee
[[Page 48894]]
rates must be published in a Federal Register notice not later than 60
days before the start of each fiscal year (section 743(b)(1) of the
FD&C Act). After FDA approves a VQIP application, the user fee must be
paid before October 1, the start of the VQIP fiscal year, to begin
receiving benefits for that VQIP fiscal year.
The FY 2024 VQIP user fee will support benefits from October 1,
2023, through September 30, 2024.
II. Estimating the Average Cost of a Supported Direct FDA Work Hour for
FY 2024
FDA is required to estimate 100 percent of its costs for each
activity in order to establish fee rates for FY 2024. 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 (IT), and other operating
costs.
A. Estimating the Full Cost per Direct Work Hour in FY 2024
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.
We have used an average of past year cost elements to predict the
FY 2024 cost. The FY 2024 FDA-wide average cost for payroll (salaries
and benefits) is $192,848; non-payroll--including equipment, supplies,
IT, general and administrative overhead--is $99,316 and rent, including
cost allocation analysis and adjustments for other rent and rent-
related costs, is $23,239 per paid staff year, excluding travel costs.
Summing the average cost of an FTE for payroll, non-payroll, and
rent, brings the FY 2024 average fully supported cost to $315,403 \1\
per FTE, excluding travel costs. FDA will use this base unit fee in
determining the hourly fee rate for VQIP fees for FY 2024 prior to
including domestic or foreign travel costs as applicable for the
activity.
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\1\ Total includes rounding.
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To calculate an hourly rate, FDA must divide the FY 2024 average
fully supported cost of $315,403 per FTE by the average number of
supported direct FDA work hours in FY 2022--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 2022
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Total number of hours in a paid staff year.............. 2,080
Less:
11 paid holidays.................................... -88
20 days of annual leave............................. -160
10 days of sick leave............................... -80
12.5 days of training............................... -100
22 days of general administration................... -176
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 2024 ($315,403)
by the total number of supported direct work hours available for
assignment in FY 2022 (1,160) results in an average fully supported
cost of $272 (rounded to the nearest dollar), excluding inspection
travel costs, per supported direct work hour in FY 2024.
B. Adjusting FY 2022 Travel Costs for Inflation To Estimate FY 2024
Travel Costs
To adjust the hourly rate for FY 2024, FDA must estimate the cost
of inflation in each year for FYs 2023 and 2024. 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 2023 inflation rate to be 1.6404 percent; this rate
was published in the FY 2023 PDUFA user fee rates notice in the Federal
Register (October 7, 2022, 87 FR 61063). Utilizing the method set forth
in section 736(c)(1) of the FD&C Act, FDA has calculated an inflation
rate of 1.6404 percent for FY 2023 and 3.8896 percent for FY 2024, and
FDA intends to use these inflation rates to make inflation adjustments
for FY 2024; the derivation of this rate will be published in the
Federal Register in the FY 2024 notice for the PDUFA user fee rates.
The compounded inflation rate for FYs 2023 and 2024, therefore, is
1.055938 (or 5.5938 percent) (calculated as 1 plus 1.6404 percent times
1 plus 3.8896 percent).
The average fully supported cost per supported direct FDA work
hour, excluding travel costs, of $272 already takes into account
inflation as the calculation above is based on FY 2024 predicted costs.
FDA will use this base unit fee in determining the hourly fee rate for
VQIP fees for FY 2024 prior to including domestic or foreign travel
costs as applicable for the activity.
In FY 2022, FDA's Office of Regulatory Affairs (ORA) spent a total
of $6,566,835 for domestic regulatory inspection travel costs and
General Services Administration Vehicle costs related to FDA's Center
for Food Safety and Applied Nutrition (CFSAN) and Center for Veterinary
Medicine (CVM) field activities programs. The total ORA domestic travel
costs spent is then divided by the 7,930 CFSAN and CVM domestic
inspections, which averages a total of $828 per inspection. These
inspections average 46.29 hours per inspection. Dividing $828 per
inspection by 46.29 hours per inspection results in a total and an
additional cost of $18 (rounded to the nearest dollar) per hour spent
for domestic inspection travel costs in FY 2022. To adjust for the $18
per hour additional domestic cost inflation increases for FY 2023 and
FY 2024, FDA must multiply the FY 2023 PDUFA
[[Page 48895]]
inflation rate adjustor (1.016404) by the FY 2024 PDUFA inflation rate
adjustor (1.038896) times the $18 additional domestic cost, which
results in an estimated cost of $19 (rounded to the nearest dollar) per
paid hour in addition to $272 for a total of $291 per paid hour ($272
plus $19) for each direct hour of work requiring domestic inspection
travel. FDA will use these rates in charging fees in FY 2024 when
domestic travel is required.
In FY 2022, ORA spent a total of $802,057 on 175 foreign inspection
trips related to FDA's CFSAN and CVM field activities programs, which
averaged a total of $4,583 per foreign inspection trip. These trips
averaged 3 weeks (or 120 paid hours) per trip. Dividing $4,583 per trip
by 120 hours per trip results in a total and an additional cost of $38
(rounded to the nearest dollar) per paid hour spent for foreign
inspection travel costs in FY 2022. To adjust $38 for inflationary
increases in FY 2023 and FY 2024, FDA must multiply it by the same
inflation factors mentioned previously in this document (1.016404 and
1.038896), which results in an estimated cost of $40 (rounded to the
nearest dollar) for each direct hour of work requiring foreign
inspection travel. FDA will use these rates in charging fees in FY 2024
when foreign travel is required.
Table 2--FSMA Fee Schedule for FY 2024
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Fee rates for
Fee category FY 2024
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Hourly rate without travel.............................. $272
Hourly rate if domestic travel is required.............. 291
Hourly rate if foreign travel is required............... 312
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III. Fees for Importers Approved To Participate in the Voluntary
Qualified Importer Program Under Section 743 of the FD&C Act
FDA assesses fees for VQIP annually. Table 3 provides an overview
of the fees for FY 2024.
Table 3--FSMA VQIP User Fee Schedule for FY 2024
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Fee rates for
Fee category FY 2024
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VQIP User Fee.......................................... $14,975
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Section 743 of the FD&C Act requires that each importer
participating in VQIP pay a fee to cover FDA's costs of administering
the program. This fee represents the estimated average cost of the work
FDA performs in reviewing and evaluating a VQIP importer. At this time,
FDA is not offering an adjusted fee for small businesses. As required
by section 743(b)(2)(B)(iii) of the FD&C Act, FDA previously published
a set of guidelines in consideration of the burden of the VQIP fee on
small businesses and provided for a period of public comment on the
guidelines (80 FR 32136, June 5, 2015). While we did receive some
comments in response, they did not address the questions posed, i.e.,
how a small business fee reduction should be structured, what
percentage of fee reduction would be appropriate, or what alternative
structures FDA might consider to indirectly reduce fees for small
businesses by charging different fee amounts to different VQIP
participants. We plan on monitoring costs and collecting data to
determine if, in future fiscal years, we will provide for a small
business fee reduction. Consistent with section 743(b)(2)(B)(iii) of
the FD&C Act, we will adjust the fee schedule for small businesses only
through notice and comment rulemaking.
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, 39 person-hours to review a
new VQIP application (including communication provided through the VQIP
Importer's Help Desk), 28 person-hours to review a returning VQIP
application (including communication provided through the VQIP
Importer's Help Desk), 16 person-hours for an onsite performance
evaluation of a domestic VQIP importer (including travel and other
steps necessary for a fully supported FTE to complete and document an
onsite assessment), and 34 person-hours for an onsite performance
evaluation of a foreign VQIP importer (including travel and other steps
necessary for a fully supported FTE to complete and document an onsite
assessment). Additional costs include maintenance and support costs of
information technology of administering benefits of the program. These
costs are estimated to be $4,359 per VQIP importer.
Based on updated data, FDA anticipates that there may be up to six
returning VQIP applicants and up to two new applicants this fiscal
year. FDA employees are likely to review new VQIP applications from
their worksites, so we use the fully supported FTE hourly rate
excluding travel, $272/hour, to calculate the portion of the user fee
attributable to those activities: $272/hour x (39 hours) = $10,608. FDA
employees are likely to review returning VQIP applications from their
worksites, so we use the fully supported FTE hourly rate excluding
travel, $272/hour, to calculate the portion of the user fee
attributable to those activities: $272/hour x (28 hours) = $7,616.
FDA employees will conduct a VQIP inspection to verify the
eligibility criteria and full implementation of the food safety and
food defense systems established in the Quality Assurance Program. A
VQIP importer may be located inside or outside of the United States.
However, this fiscal year, all VQIP importers will be located inside
the United States. Four VQIP applicants may have an associated VQIP
inspection.
FDA employees are likely to prepare for and report on the
performance evaluation of a domestic VQIP importer at an FTE's
worksite, so we use the fully supported FTE hourly rate excluding
travel, $272/hour, to calculate the portion of the user fee
attributable to those activities: $272/hour x (8 hours) = $2,176. For
the portion of the fee covering onsite evaluation of a domestic VQIP
importer, we use the fully supported FTE hourly rate for work requiring
domestic travel, $291/hour, to calculate the portion of the user fee
attributable to those activities: $291/hour x 8 hours (i.e., one fully
supported FTE x (1 day onsite x 8 hours)) = $2,328. Therefore, the
total cost of conducting the domestic performance evaluation of a VQIP
importer is determined to be $2,176 + $2,328 = $4,504.
Coordination of the onsite performance evaluation of a foreign VQIP
importer is estimated to take place at an FTE's worksite, so we use the
fully supported FTE hourly rate excluding travel, $272/hour, to
calculate the portion of the user fee attributable to those activities:
$272/hour x (10 hours) = $2,720. For the portion of the fee covering
onsite evaluation of a foreign VQIP importer, we use the fully
supported FTE hourly rate for work requiring foreign travel, $312/hour,
to calculate the portion of the user fee attributable to those
activities: $312/hour x 24 hours (i.e., one fully supported FTE x ((2
travel days x 8 hours) + (1 day onsite x 8 hours))) = $7,488.
Therefore, the total cost of conducting the foreign performance
evaluation of a VQIP importer is determined to be $2,720 + $7,488 =
$10,208.
Therefore, the estimated average cost of the work FDA performs in
total for approving an application for a VQIP
[[Page 48896]]
importer in FY 2024 based on these figures would be $4,359 + ($10,608 x
\1/4\) + ($7,616 x \3/4\) + ($4,504 x \1/2\) = $14,975.
IV. How must the fee be paid?
An invoice will be sent to VQIP importers approved to participate
in the program. Payment must be made prior to October 1, 2023, to be
eligible for VQIP participation for the benefit year beginning October
1, 2023. FDA will not refund the VQIP user fee for any reason.
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 in the check stub. 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.)
V. What are the consequences of not paying this fee?
The consequences of not paying these fees are outlined in Section J
of ``FDA's Voluntary Qualified Importer Program; Guidance for
Industry'' document (available at https://www.fda.gov/media/92196/download). If the user fee is not paid before October 1, a VQIP
importer will not be eligible to participate in VQIP. For the first
year a VQIP application is approved, if the user fee is not paid before
October 1, 2023, you are not eligible to participate in VQIP. If you
subsequently pay the user fee, FDA will begin your benefits after we
receive the full payment. The user fee may not be paid after December
31, 2023. For a subsequent year, if you do not pay the user fee before
October 1, FDA will send a Notice of Intent to Revoke your
participation in VQIP. If you do not pay the user fee within 30 days of
the date of the Notice of Intent to Revoke, we will revoke your
participation in VQIP.
Dated: July 24, 2023.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2023-15920 Filed 7-27-23; 8:45 am]
BILLING CODE 4164-01-P
