Procurement of Certain Essential Medical Supplies To Address the COVID-19 Pandemic
| Published date | 23 October 2020 |
| Citation | 85 FR 67443 |
| Record Number | 2020-16475 |
| Section | Rules and Regulations |
| Court | Agency For International Development |
Federal Register, Volume 85 Issue 206 (Friday, October 23, 2020)
[Federal Register Volume 85, Number 206 (Friday, October 23, 2020)]
[Rules and Regulations]
[Pages 67443-67446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16475]
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AGENCY FOR INTERNATIONAL DEVELOPMENT
22 CFR Part 228
RIN 0412-AB02
Procurement of Certain Essential Medical Supplies To Address the
COVID-19 Pandemic
AGENCY: Agency for International Development.
ACTION: Temporary final rule.
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SUMMARY: The United States Agency for International Development (USAID)
is issuing a Temporary Final Rule (TFR) amending our regulations to
allow USAID to waive ``Source and Nationality'' rules to provide for
increased flexibility, targeting, and speed of procurement of Essential
Medical Supplies (EMS) required to address the COVID-19 pandemic
worldwide.
DATES: Effective date: This rule is effective October 23, 2020 through
April 30, 2021.
ADDRESSES: You may review the docket by searching for Docket ID [AID-
2020-0004], via the Federal eRulemaking Portal: http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Natalie J. Freeman (or designee),
Attorney Advisor, Office of the General Counsel, USAID, 1300
Pennsylvania Ave. NW, Washington, DC 20523, [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
A. The Current COVID-19 Pandemic in the United States
Coronavirus Disease 2019 (COVID-19) is a highly communicable
infectious disease caused by Severe Acute Respiratory Syndrome
Coronavirus 2 (SARS-CoV-2). On January 30, 2020, the Director-General
of the World Health Organization (WHO) declared the outbreak of COVID-
19 a Public Health Emergency of International Concern under the
International Health Regulations. On January 31, 2020, the HHS
Secretary declared COVID-19 a Public Health Emergency under Section 319
of the Public Health Service (PHS) Act. 42 U.S.C. 247d. On March 11,
2020, the WHO declared the COVID-19 outbreak a pandemic. On March 13,
2020, the President issued a declaration of a national emergency under
Sections 201 and 301 of the National Emergencies Act, 50 U.S.C. 1601-
1651, and consistent with Section 1135 of the Social Security Act, 42
U.S.C. 1320b-5. See Proclamation on Declaring a National Emergency
Concerning the Novel Coronavirus Disease (COVID-19) Outbreak.
On March 13, 2020, the President also declared a nationwide
emergency under Section 501(b) of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act, 42 U.S.C. 5121-5207 (the
``Stafford Act''), authorizing FEMA to provide assistance for emergency
protective measures to respond to the COVID-19 pandemic. Under the
Stafford Act, FEMA may direct USAID, through a Mission Assignment, to
use its authorities and resources to meet domestic needs, including
making available any EMS to FEMA.
As of May 21, 2020, there were over 1.5 million confirmed cases of
COVID-19 in the United States, resulting in over 93,000 deaths due to
the disease, with new cases and fatalities being reported daily.
Worldwide, there have been over 5 million confirmed cases, resulting in
over 328,000 deaths. Presently, there is no vaccine that can prevent
infection with COVID-19, nor is there currently any FDA-approved post-
exposure prophylaxis for people who may have been exposed to COVID-19.
Treatment is limited to supportive (or palliative) care for patients
who need it. Clinical management for hospitalized patients with COVID-
19 is focused on supportive care for complications, including
supplemental oxygen and
[[Page 67444]]
advanced organ support for respiratory failure, septic shock, and
multi-organ failure.
B. USAID's Response to COVID-19
USAID is responding to the COVID-19 pandemic with decisive action
at home and abroad. Our priorities in the response are to protect the
safety and health security of our global workforce, ensure that we can
continue our life-saving mission across the world, and support partner
countries in their response to COVID-19.
USAID, together with the Department of State, launched the Strategy
for Supplemental Funding to Prevent, Prepare for, and Respond to
Coronavirus Abroad. Under Pillar 2 of this Strategy, USAID addresses
three components--the emergency health response, strengthening health
security capacities in affected countries, and helping to rebuild
health systems as part of addressing the second order health effects of
the pandemic. As of April 24, the USAID Bureau for Global Health (GH),
in response to the pandemic, obligated $99 million from the Emergency
Reserve Fund for Infectious Disease Outbreaks, and another
approximately $90 million of the total $435 million Global Health
Programs COVID-19 supplemental. GH programming has focused on the
following technical areas: Risk communication and community engagement;
surveillance, rapid response teams, and contact tracing; port of entry;
infection prevention and control; laboratory systems; case management;
and response operations and coordination. The provision of commodities
is critical for the laboratory systems, case management, and infection
prevention and control components. Under Pillar 3 of the Strategy,
USAID will prevent, prepare for, and respond to COVID-19 in existing
complex emergency responses and address potential humanitarian
consequences of the pandemic. Further, under Pillar 4 of the Strategy,
USAID will prepare for, mitigate and address second order economic,
civilian security, stabilization, and governance effects of COVID-19.
The provision of commodities will be components of these activities. In
total, USAID estimates that approximately $137 million may be used for
providing Essential Medical Supplies for overseas use.
C. Authorities
USAID is issuing this temporary final rule as part of its response
to the COVID-19 pandemic. The Administrative Procedure Act (``APA'')
generally requires an agency to publish a notice of proposed rulemaking
in the Federal Register and provide an opportunity for public comment.
This requirement does not apply, however, if the agency ``for good
cause finds . . . that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest.'' 5
U.S.C. 553(b)(3)(B). The APA also generally requires that an agency
publish an adopted rule in the Federal Register at least 30 days before
it becomes effective. This requirement does not apply, however, if the
agency finds good cause for making the rule effective sooner. Section
553(d)(3).
The rates of COVID-19 infections and the number of deaths caused by
COVID-19 are significantly increasing on a daily basis worldwide. The
demand for EMS is increasing worldwide given the rising number of
infections. Second and possibly third waves are expected according to
the medical experts. The courts have recognized that concern for public
safety can constitute good cause to bypass notice and comment
procedures. (See, Jifry v. F.A.A., 370 F.3d 1174, 1179-80 (D.C. Cir.
2004).) The courts have further found that immediate threats to human
life and physical security typically constitute an important enough
interest to justify use of the good cause exception. (See, Hawaii
Helicopter Operators Ass'n v. Federal Aviation Administration, 51 F.3d
212 (9th Cir. 1995).) This rule is intended to help protect the public
from this immediate health threat by providing USAID increased
flexibility, targeting, and speed of procurement of EMS required to
address the COVID-19 pandemic worldwide. Given the temporary nature of
this rule, its narrow application to EMS, and the significant and
immediate threat to public health and safety in the United States and
worldwide, the Agency finds that this emergency is sufficiently
compelling to constitute good cause to forgo notice and comment. It
would be contrary to the interest of public health and contrary to our
national security and foreign policy interests to delay this rule.
The rule is issued accordance with section 604 of the Foreign
Assistance Act (FAA) of 1961, as amended, 22 U.S.C. 2354.
Under the authority of the FAA and the APA, USAID issues this
temporary final rule.
II. Provisions of Temporary Final Rule
USAID is working directly with governments, multilateral
organizations, NGOs, the private sector, and other organizations
responding on the ground to combat this dangerous pathogen. This
includes working with front-line workers to slow the spread, care for
those affected by, and equip local communities with the tools needed to
fight back against COVID-19. Pandemics know no borders, and therefore
international cooperation is vital. We will not successfully defeat
this pandemic threat, and avoid a second or third wave, unless we fight
it around the world. That is why our approach must include the
necessary tools and resources to protect the safety and interests of
Americans and ensure the United States continues to lead on the global
response. The United States industry is uniquely positioned to produce
EMS to support the achievement of COVID-19 domestic and international
objectives. USAID's primary reliance on these sources ensures the
availability of these critical supplies to assist countries affected by
COVID-19. This temporary final rule allows flexibility to ensure those
in need around the world will have access to lifesaving EMS to address
COVID-19 when and where they need it. The measures described in this
rule are being issued on a temporary basis from October 23, 2020
through April 30, 2021.
Current regulations authorize the following:
22 CFR 228.03(a) authorizes purchases from Geographic Code 937,
which is defined as the United States, the cooperating/recipient
country, and developing countries other than advanced developing
countries, and excluding prohibited sources.
It further allows for certain purchases from Geographic Code
935, which is defined as any area or country except prohibited
countries, based on additional statutory authority or otherwise
approved via a waiver in accordance with Subpart D. Section
228.03(b).
For purchases under Support for Economic and Democratic
Development of the Independent States of the Former Soviet Union,
Sec. 228.03(c), the authorized principal geographic codes are Code
937 and Code 110 (New Independent States).
Under the current provisions of 22 CFR part 228, USAID only has the
authority to expand the authorized geographic scope under the waiver
provisions. The temporary final rule allows USAID to prioritize the
purchase of EMS: From the United States only, from the cooperating/
recipient country, from the geographic region to avoid diverting
supplies in short supply in the United States, or from a nearby
country. ``Nearby country'' means any bordering country or any country
that is in the same geographical region as the country receiving
assistance, as defined by the Department of State's regional system
[[Page 67445]]
(i.e., Africa; East Asia and Pacific; Europe and Eurasia; Near East;
South and Central Asia; Western Hemisphere). However, if, as determined
by USAID on a case-by-case basis, EMS is unavailable from the United
States, the cooperating/recipient country, and a nearby country; or is
unavailable in sufficient, reasonable, and available quantities, or
sufficient and reasonable quality that is fit for the intended purpose,
procurement from Code 935 is authorized.
III. Temporary Changes to 22 CFR Part 228
The below changes will remain in effect until October 23, 2020
through April 30, 2021.
22 CFR 228.11 is being amended to require implementing partners to
receive approval from USAID before purchasing EMS. This will allow
USAID to issue a waiver for the purchase of EMS from the United States
only, from the cooperating/recipient country, from specific geographic
region, or from a nearby country.
22 CFR 228.30 is being amended to add subsection (e) which allows
waivers to geographic areas necessary for the purchase of EMS to
address the COVID-19 pandemic. For example, it authorizes purchases
from the United States only, or from nearby countries that may not be
included in Geographic Code 937. It also authorizes purchases from the
cooperating/recipient country or from certain geographic areas when
there are shortages in the United States. The Agency plans to issue a
waiver to prioritize geographic areas for the purchase of EMS to
address the COVID-19 pandemic.
IV. Regulatory Considerations and Determinations
A. Executive Orders 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a
regulation (1) having an annual effect on the economy of $100 million
or more in any one year, or adversely and materially affecting a sector
of the economy, productivity, competition, jobs, the environment,
public health or safety, or State, local, or tribal governments or
communities (also referred to as ``economically significant''); (2)
creating a serious inconsistency or otherwise interfering with an
action taken or planned by another agency; (3) materially altering the
budgetary effects of entitlement grants, user fees, or loan programs or
the rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order.
This rule change narrowly applies to EMS purchased to address the
COVID-19 pandemic. The estimated amount of funding potentially affected
is approximately $137 million. Buying from the United States only would
positively affect the United States economy and help development of our
manufacturing capacity to respond to future crises. USAID's foreign
assistance mandate is unchanged. This rule has been designated a
``significant regulatory action,'' but not ``economically
significant,'' under Section 3(f) of Executive Order 12866. This rule
has been reviewed by the Office of Management and Budget.
B. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a `major rule', as defined by 5 U.S.C. 804(2).
C. Regulatory Flexibility Act
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), 5 U.S.C. 601-612, USAID has considered the economic effect
of the Temporary Final Rule and has certified that its provisions would
not have a significant economic effect on a substantial number of small
entities.
D. Paperwork Reduction Act
There is no reporting or documentation or other information
collection requirements under the Final Rule that require analysis
under the Paperwork Reduction Act. 44 U.S.C. 3501-3583.
List of Subjects in 22 CFR Part 228
Government procurement.
For the reasons discussed in the preamble, USAID amends 22 CFR part
228 as set forth below:
PART 228--RULES FOR PROCUREMENT OF COMMODITIES AND SERVICES
FINANCED BY USAID
0
1. The authority citation for 22 CFR part 228 continues to read as
follows:
Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C.
2381), as amended, E.O. 12163, Sept. 29, 1979, 44 FR 56673: 3 CFR
1979 Comp., p. 435.
0
2. Revise Sec. 228.01 to read as follows:
Sec. 228.01 Definitions.
Essential medical supplies means personal protective equipment,
medical products and equipment, pharmaceuticals, and other medical
countermeasures needed to address the COVID-19 pandemic, which are in
short supply, as identified in the ``Notice of Designation of Scarce
Materials or Threatened Materials Subject to COVID-19 Hoarding
Prevention Measures'' issued by the Department of Health and Human
Services (HHS) on March 25, 2020, as updated. USAID may designate
additional materials as ``emergency medical supplies'' if deemed
necessary and will publish notice of these additional materials in the
Federal Register.
0
3. Revise Sec. 228.11 to read as follows:
Sec. 228.11 Source of commodities.
The source of all commodities financed with Federal program funds
appropriated under the Foreign Assistance Act of 1961, as amended,
shall be Code 937 (unless Code 935 or 110 are designated in the
implementing instrument), except for essential medical supplies
purchased to address the COVID-19 pandemic, the source of which must be
approved by USAID prior to purchase unless otherwise directed by USAID.
Procurements of agricultural commodities, motor vehicles, and
pharmaceuticals must also comply with the special procurement rules in
Sec. 228.19. Recipients and contractors are prohibited from engaging
suppliers of commodities in an authorized country to import commodities
from a country outside of the authorized principal geographic codes for
the purposes of circumventing the requirements of this rule. Any
violation of this prohibition will result in the disallowance by USAID
of the cost of the procurement of the subject commodity.
0
4. Revise Sec. 228.30 to read as follows:
Sec. 228.30 General.
USAID may waive the rules contained in subparts A, B, and C of this
part (except for prohibited sources as defined in Sec. 228.01, and
Sec. Sec. 228.21 and 228.22), in order to accomplish project
[[Page 67446]]
or program objectives. Except for paragraph (e) of this section, for
any waivers authorized, the principal geographic code shall be Code
935, any area or country but excluding prohibited sources. All waivers
must be in writing, and where applicable, are limited to the term
established by the waiver. All waiver decisions will be made solely on
the basis of the following criteria:
(a) Waivers to permit procurement outside of Code 937 or 110 must
be based on a case by case determination that:
(1) The provision of assistance requires commodities or services of
the type that are not produced in and available for purchase in Code
937 or 110;
(2) It is important to permit procurement from a country not
specified in Code 937 or 110 to meet unforeseen circumstance; or
(3) To promote efficiency in the use of United States foreign
assistance resources, including to avoid impairment of foreign
assistance objectives.
(b) Case by case waivers under paragraph (a) of this section may be
made on the basis of a commodity or service type or category, rather
than processing repeat, individual waivers for an identical or
substantially similar commodity or service. Such waivers may be
approved on a regional, country, or program basis. For purposes of
paragraph (a)(1) of this section, ``produced in and available for
purchase in'' shall have the same meaning as the definition of
``available for purchase'' in Sec. 228.01. A waiver under paragraph
(a)(1) of this section may also be based on the fact that a commodity
is not available for purchase in Code 937 or 110 in sufficient,
reasonable, and available quantities or sufficient and reasonable
quality that is fit for the intended purpose.
(c) A waiver to authorize procurement from outside the United
States of agricultural commodities, motor vehicles, and pharmaceuticals
must meet the requirements of Sec. 228.19.
(d) Any individual transaction not exceeding $25,000 (excluding
essential medical supplies purchased to address the COVID-19 pandemic),
excluding those covered by special procurement rules in Sec. 228.19,
and excluding procurements from prohibited sources) does not require a
waiver and is hereby authorized.
(e) For purchases of essential medical supplies to address the
COVID-19 pandemic, waivers shall be authorized to the United States
only, to the cooperating/recipient country, and/or to a nearby country.
Nearby country means any bordering country or any country that is in
the same geographical region as the country receiving assistance, as
defined by the Department of State's regional system. If, as determined
by USAID on a case by case basis, essential medical supplies are
unavailable from the United States, the cooperating/recipient country,
and a nearby country, or are unavailable in sufficient, reasonable, and
available quantities or sufficient and reasonable quality that is fit
for the intended purpose, procurement from Code 935 is authorized.
Suk J. Jin,
Deputy General Counsel, U.S. Agency for International Development.
[FR Doc. 2020-16475 Filed 10-22-20; 8:45 am]
BILLING CODE 6116-02-P
