42 U.S.C. § 247d–6b — Strategic National Stockpile and security countermeasure procurements

(a) Strategic National Stockpile (1) In general. The Secretary of Health and Human Services, working with the Assistant Secretary for Preparedness and Response and the CDC Director, and coordinating with the Secretary of Homeland Security, must keep a stockpile of drugs, vaccines, other biological products, medical devices, and supplies like personal protective equipment. The Secretary decides the numbers, types, and amounts needed, using section 300hh–10, to protect the nation's emergency health security — including for children and other vulnerable people — during a bioterrorist attack or public health emergency. The Secretary updates the stockpile's contents based on the yearly review described below. (2) Threat-based review. (A) Each year the Secretary must review the stockpile's contents, including non-drug supplies, taking at-risk people into account. The Secretary works with the Public Health Emergency Medical Countermeasure Enterprise to check whether the stockpile matches that group's recommendations. The Secretary sent this review to four congressional committees on June 15, 2019, and must send it every March 15 after that, without revealing anything that would hurt national security. (B) For every new or changed purchase or resupply, the review must explain: how much of the item was bought or is under contract; whether manufacturers can make enough (without giving away trade secrets), including how the purchase affects the wider health care supply, plus an assessment of the supply chain's weak points and domestic manufacturing capacity; whether a commercial market for the item exists; which health-security threat the purchase addresses and whether it truly meets that threat; whether the stockpile's resources could be used better to prepare for that threat; whether the item replaces an expired product, is a different product replacing one, or is brand new; how the purchase fits earlier countermeasure budget plans, including lifetime costs, resupply dates, and the manufacturing capacity needed; and the deployment, distribution, and dispensing plans at the state and local level. The review must also confirm — though not necessarily before the purchase — that the Secretary completed this full review for every item bought or restocked, in advance of that purchase or restocking. (3) Procedures. In running the stockpile, the Secretary must: (A) consult the working group under section 247d–6(a) and the Public Health Emergency Medical Countermeasures Enterprise; (B) keep updated procedures for counting inventory and physically securing the stockpile; (C) consider, with federal, state, local, and tribal officials, the timing and location of major events when deciding availability, deployment, dispensing, and administration; (D) regularly review and update the stockpile's contents to catch emerging threats and new technology, spot and fix potential shortages through resupply, and keep items in working or usable condition and ready to deploy — including maintenance and disposing of items no longer usable; (E) plan for efficient supply-chain management with the CDC Director, the preparedness office, the Transportation, Homeland Security, and Veterans Affairs Secretaries, other federal agencies, state, local, tribal and territorial agencies, and public and private health care providers, factoring in manufacturing capacity and alternative supply sources; (F) deploy the stockpile at the Secretary's discretion, in consultation with or at the request of the Homeland Security Secretary, to respond to an actual or potential emergency; (G) also deploy it at the Secretary's discretion for any actual or potential public health emergency or situation where deployment is needed to protect public health or safety; (H) keep the stockpile physically secure; (I) give every countermeasure under consideration equal consideration regardless of whether it received funding under section 247d–7e, focusing on which one best meets the country's emergency health security needs; (J) give states, localities, and tribes technical and other assistance to maintain and improve their ability to distribute and dispense stockpile items; and (K) meet at least once a year with state, local, and tribal health officials, industry, other federal agencies, and other stakeholders — without compromising national security — to share information on maintaining and using the stockpile, future countermeasure needs, and manufacturing and procurement consistent with the Buy American Act (chapter 83 of title 41). (4) Utilization guidelines. The Secretary must ensure timely, accurate recommended-use guidelines for qualified countermeasures, qualified pandemic and epidemic products, and security countermeasures (as defined in subsection (c)), including for items already in the stockpile. (5) Vendor-managed inventory and warm-base surge capacity. (A) To maintain the stockpile, the Secretary may contract with vendors — including manufacturers or distributors — for medical products meant to become federal property. These contracts can set terms for buying, storing, and delivering products (which may account for shipping and handling costs) in line with inventory-management best practices, or for keeping domestic manufacturing capacity in reserve so products can be rapidly made, bought, stored, and delivered as the Secretary requires to prepare for or respond to an existing or potential public health emergency. (B) Starting two years after December 29, 2022, and every year after, the Secretary must report to the relevant Senate and House committees on these contracts and cooperative agreements, including the amount of each award, who received it, which products it covers, and how the Secretary works with each recipient on situational awareness of manufacturing capacity or inventory and on coordinating distribution and deployment. (6) GAO report. (A) Starting three years after June 24, 2019, and every five years after, the Comptroller General must review any changes to the stockpile's contents or management since January 1, 2015. This review must include: an assessment of whether each annual threat-based review fully described every newly procured or replenished countermeasure and whether the Secretary did the required internal review before buying or restocking; an assessment of whether the Secretary gave health-security and science-based justifications for stockpile additions or modifications, and a description of those justifications, including whether the review happened before the purchase; an assessment of the Secretary's deployment, distribution, and dispensing plans, including whether they were made before the purchase; an accounting of which items received advanced research and development funding from the Biomedical Advanced Research and Development Authority; an analysis of how well the purchases advanced the emergency health security needs tied to the identified threats; a description of resources spent on procurement and how that relates to the stockpile's ability to meet emergency health security needs; an assessment of whether the changes align with earlier relevant reports or reviews; if the stockpile's federal management structure changed, an assessment comparing how that change affected planning, procurement decisions, use of stockpiled items, and use of resources; an assessment of whether the Secretary's processes ensure every countermeasure gets equal consideration regardless of past funding under section 247d–7e; and, for reports issued in 2027 or later, a review of selected contracts or cooperative agreements made under paragraph (5). (B) Within six months of finishing a classified version of the review, the Comptroller General must send Congress an unclassified version. (7) Reimbursement for certain supplies. (A) The Secretary may sell excess stockpile contents to other federal agencies or to state, local, or tribal governments, but only if the contents are truly more than the stockpile needs, keeping them isn't a worthwhile use of money, and the sale won't compromise national security and is in the national interest. (B) The Secretary may charge for these contents an amount reflecting what it cost to acquire, maintain, and deliver them, and the money collected goes back to the account or fund that paid the original costs, staying available until spent for that account's purposes. (C) This provision doesn't stop the Secretary from transferring stockpile contents under other legal authority. (D) Starting two years after December 29, 2022, and every year after, the Secretary must report to Congress on how this reimbursement authority was used, including details of each action, which account the money went to, and how it was used. (E) This reimbursement authority ends on September 30, 2028. (b) Smallpox vaccine development (1) In general. The Secretary must award contracts, enter cooperative agreements, or take other reasonably needed steps to make sure the stockpile holds enough smallpox vaccine to meet the country's health security needs. (2) Rule of construction. Nothing here stops private companies from distributing, buying, or selling smallpox vaccine from sources outside the stockpile. (c) Additional authority regarding procurement of certain countermeasures; availability of special reserve fund (1) In general. (A) A "security countermeasure" may be bought using money from the special reserve fund defined in subsection (h). (B) A security countermeasure is a drug, biological product, or device that either: (i) the Secretary decides is a priority to diagnose, prevent, treat, or lessen harm from a chemical, biological, radiological, or nuclear agent identified as a material threat, or from a condition caused by using a drug, biologic, or device against such an agent — and the Secretary also decides, under paragraph (2)(B), that it's a necessary countermeasure — and it is either already FDA-approved, cleared, or licensed, or the Secretary determines, based on sufficient and satisfactory clinical or research data, that it will likely qualify for approval or licensing within 10 years; or (ii) it already has emergency-use authorization under FDA law. (2) Determination of material threats. (A) The Homeland Security Secretary, consulting the Secretary and other agencies as needed, continually assesses current and emerging chemical, biological, radiological, and nuclear threats and decides which pose a material threat to national security. (B) The Secretary continually assesses the possible public-health harm from those threats and decides which need countermeasures. (C) Both Secretaries must send Congress all current material-threat determinations by March 15 each year, and must promptly tell the relevant Senate and House committees whenever a new determination is made under (A) or (B). (D) In making these assessments, the Homeland Security Secretary must use all relevant threat information available under section 122 of title 6, including classified information about current and emerging chemical, biological, radiological, and nuclear threats. (3) Assessment of availability and appropriateness of countermeasures. (A) The Secretary, with the Homeland Security Secretary, continually assesses whether specific countermeasures are available and suitable for the identified threats. (B) The Secretary must set up a process to make these assessment results public, while withholding information that would reveal public health vulnerabilities or that federal open-records law (5 U.S.C. § 552) exempts from disclosure. (4) Call for development of countermeasures; commitment for recommendation for procurement. (A) If, after an assessment, the two Secretaries jointly decide a countermeasure would be useful but isn't yet developed, isn't available for purchase as a security countermeasure, or is approved only for a different use, they may jointly ask the President to approve issuing a public call for its development and committing that, once such a countermeasure is first developed and meets the paragraph (5) purchase conditions, they will use the special reserve fund — subject to available appropriations — to buy it. (B) As far as practical, that proposal should state: the estimated quantity needed, in doses or effective treatment courses; the necessary minimum safety and effectiveness standards; the estimated price per dose or course; and any other information needed to encourage and guide development. (C) If the President approves, the Secretaries must publicize the call, the specifications, and the purchase commitment to people who might respond. (5) Secretary's determination of countermeasures appropriate for funding from special reserve fund. (A) The Secretary, consulting the Homeland Security Secretary, identifies specific security countermeasures suitable for the stockpile that will be bought with the special reserve fund. (B) In deciding, the Secretary must determine and weigh: how much of the product the stockpile will need; whether enough can feasibly be produced and delivered within 10 years; and whether there is little or no significant commercial market for the product apart from its use as a security countermeasure. (6) Recommendations for procurement. (A) The Secretary must notify the relevant Senate and House appropriations, health, and commerce committees of every decision to use the special reserve fund for a security countermeasure, including, where available, information about potential suppliers and whether other potential suppliers were considered and rejected, and why. (B) Buying one security countermeasure for a given purpose doesn't stop the Secretary from later buying a different one for the same purpose, as long as the Secretary has found it appropriate under paragraph (5)(A) and determines it offers better safety or effectiveness, or otherwise strengthens preparedness — a determination left entirely to the Secretary's discretion. (7) Procurement. (A) The special reserve fund pays vendors for security countermeasures bought under this paragraph's rules. (B) Procurement. (i) The Secretary is responsible for arranging procurement — negotiating quantity, production schedule, and price, and signing contracts and cooperative agreements — and for other reasonably needed activities, including advanced research and development, and for issuing whatever regulations are needed to carry this out. (ii) A contract under this subsection must, or in some cases may, include specific terms. Payment generally can't happen until an acceptable portion of the contracted units is delivered, though the Secretary may, at his discretion, pay up to 10% of the contract amount in advance if needed for a project's success — repayable if the vendor fails to perform — plus optional advance payments of 5% each for hitting specified milestones, capped at 50% of the total contract and not repayable once the milestones are met; none of this affects a vendor's normal rights if the contract is terminated for the government's convenience. The contract may offer a discounted per-unit price for a product not yet licensed, cleared, or approved, with an additional per-unit payment if it becomes approved before the contract expires (including for units delivered before approval). Contracts generally run up to five years, though the first award may run up to 10 years if the Secretary finds the project's complexity justifies it; contracts are renewable in increments of up to five years, and the Secretary must notify the vendor within 90 days of a decision to renew, extend, or terminate. The contract may have the vendor store government-owned product, with the fund covering shipping, handling, storage, and related costs. The contract must require the vendor to seek FDA approval, clearance, or licensing on a set timetable, though the Secretary may waive that term at the vendor's request or on his own initiative. The contract must require the vendor to follow all applicable export controls. The contract may make the vendor the government's exclusive supplier for a set period (a valid basis for a sole-source contract), and the vendor can't assign that exclusivity to someone else without the Secretary's approval. The contract may have the vendor build spare domestic manufacturing capacity for rapid future production, with a fee for maintaining that extra capacity, and the cost of maintaining it counts as an allowable, billable contract cost. The Secretary may specify dosing and administration requirements, the funding committed to research and procurement, and the specifications a countermeasure must meet — and every such contract must clearly limit its purpose to security-countermeasure uses. (iii) If the Secretary finds a pressing need for a specific purchase, that purchase is treated as below the dollar threshold in section 134 of title 41, exempting it from certain competitive-proposal and cost-data laws (41 U.S.C. §§ 3305(a)(1) and 3101(b)(1)(B)) — but laws on contract work hours and safety standards, examining contractor records, contractor bonding, banning contingent fees to middlemen, one additional cross-referenced provision, and veterans-employment-reporting requirements for federal contracts still apply in full. The Secretary must set up internal controls, including documentation justifying use of this shortcut, for each such purchase, and generally may not use it to avoid full and open competition unless doing so would seriously impair the BioShield Program's mission. (iv) When using sole-source procurement authority, "available from only one responsible source" is read to also mean "available from only a limited number of responsible sources" — an addition to, not a replacement for, other sole-source authority — implemented under the government-wide regulations for that kind of procurement, including requirements to solicit offers as widely as practical, publish required notices, and consider all offers submitted. (v) If the Secretary contracts with more than one vendor for the same countermeasure, each contract may identify a share of the total quantity needed and promise a premium payment based on how quickly that vendor produces and delivers that share — and the Secretary's determination of the total quantity needed, and any change to it, is final and not subject to court review. (vi) A Secretary's decision to extend a bid-submission deadline for one of these procurements is also final and not subject to court review. (vii) The Secretary may exclude a vendor who didn't respond to a request for information, as long as that request warned the vendor could be excluded for not responding. (viii) The Secretary has broad flexibility to make contracts and agreements that best serve the government's interest in meeting security-countermeasure needs, including reimbursing reasonable research and development costs as an allowable contract cost. (8) Interagency cooperation. (A) The Homeland Security Secretary and the Secretary may make interagency agreements letting other federal agencies order qualified and security countermeasures under the Secretary's existing contracts, with funds transferred between agencies as reimbursement, processed under 31 U.S.C. § 1535 but following this subsection's procurement terms. (B) Such an agreement can't let another agency use the powers this section gives only to the Homeland Security Secretary or the Secretary. (d) Disclosures. No federal agency may disclose, under federal open-records law, where stockpile materials are stored, or any other information about the stockpile's contents or ability to deploy that could compromise national security. (e) Definition. For subsection (a), "stockpile" means either a physical accumulation, at one or more locations, of the supplies described in subsection (a), or a contract under which a vendor agrees to supply those items to the Secretary on request. (f) Authorization of appropriations. (1) For the Strategic National Stockpile, Congress may appropriate $610,000,000 for each of fiscal years 2019 through 2021 and $750,000,000 for each of fiscal years 2022 and 2023, available until spent — on top of money in the special reserve fund. (2) For smallpox vaccine development, Congress may appropriate $509,000,000 for fiscal year 2002 and whatever sums are necessary for fiscal years 2003 through 2006. (g) Special reserve fund. (1) In addition to money already appropriated to the fund before March 13, 2013, Congress may appropriate $7,100,000,000 for fiscal years 2019 through 2028, available until spent, to buy security countermeasures under subsection (c) and to run the Biomedical Advanced Research and Development Authority (BARDA) under section 247d–7e. (2) The Secretary may use up to 50% of that money for BARDA's advanced research and development work — on top of BARDA's other authorized funding. (3) The fund may only pay for BARDA advanced development costs or for buying a security countermeasure under subsection (c)(7) — nothing else. (4) By March 1 of any year in which the Secretary determines the fund has less than $1,500,000,000 available for buying security countermeasures, the Secretary must report to the relevant Senate and House committees on how much funding is available and how that will affect meeting identified security-countermeasure needs and the annual Public Health Emergency Medical Countermeasures Enterprise and Strategy Implementation Plan. (5) The Secretary, acting through BARDA's Director, runs the programs the fund pays for — including signing procurement contracts, grants, and cooperative agreements under this section and section 247d–7e. (h) Definitions. (1) "Advanced research and development" has the meaning given in section 247d–7e(a). (2) "Special reserve fund" means the "Biodefense Countermeasures" appropriations account, plus any money made available under 6 U.S.C. § 321j(a) and under subsection (g)(1). (i) Pilot program to support State medical stockpiles. (1) In general. The Secretary must award grants or cooperative agreements to at least five states, or groups of states, spread across the country's geographic regions where possible, to establish, expand, or maintain their own stockpiles of drugs, vaccines, devices, and other medical supplies the state decides it needs for a governor- or Secretary-declared public health emergency, or a presidentially declared major disaster or emergency. This supports certain preparedness goals listed in section 300hh–1(b). A recipient can't use the money to stockpile security countermeasures (as defined in subsection (c)(1)) unless it justifies keeping them and the Secretary agrees the justification is appropriate. (2) Requirements. (A) To apply, an entity must work with relevant health officials and submit an application including: a stockpile plan describing its activities, an assurance the money will be used consistent with the Buy American Act (chapter 83 of title 41), and a proposed expense outline; plus a description of how it will coordinate with entities getting awards under sections 247d–3a or 247d–3b, including aligning its stockpile plan with those entities' plans. (B) The Secretary generally can't make an award unless the applicant agrees to contribute non-federal matching funds — at least $1 for every $20 of federal funds for fiscal years 2023 and 2024, rising to at least $1 for every $10 of federal funds from fiscal year 2025 onward — though the Secretary may waive this requirement, in whole or in part, for a single fiscal year, if extraordinary economic conditions in the state justify it. (C) No more than 10% of the award may go to administrative expenses. (3) Lead entity. A grantee may designate a public or private lead entity to manage the stockpile on the state's or state group's behalf. (4) Use of funds. A grantee must use its award to: purchase, store, and maintain a stockpile of needed drugs, vaccines, devices, and supplies consistent with its stockpile plan; deploy the stockpile as needed during an emergency; replenish and modify its contents, including addressing potential shortages; consider availability, deployment, dispensing, and administration needs together with federal, state, and local officials; follow inventory-management, accounting, and physical-security procedures; regularly review and update the stockpile's contents for new technology and products; run exercises, drills, and training for deploying, dispensing, and administering products and for testing the stockpile's ability to handle emergencies of different types and sizes (which may follow the same training requirements as awards under sections 247d–3a or 247d–3b); and carry out other activities the entity finds appropriate to support state preparedness and response. (5) Supplement not supplant. These state grants must add to, not replace, the Secretary's own maintenance and use of the Strategic National Stockpile under subsection (a). (6) Guidance for States. Within 180 days after December 29, 2022, the Secretary, consulting states and health officials, must issue guidance for states — and update it as needed — on maintaining and replenishing a medical stockpile, which may cover: which products are critical for public health emergencies and suitable for a state stockpile, considering threats needing large-scale simultaneous deployment (including the Secretary's own stockpile) and long-term response needs; proper management of stockpile contents, including vendor-managed reserves and disposing of excess products; and procuring products consistent with the Buy American Act. (7) Technical assistance. The Secretary must give states assistance, including technical assistance, in establishing, maintaining, improving, and using a medical stockpile, including inventory management and disposal. (8) Reporting. (A) Each grantee must update its plan as needed and send the Secretary an annual report on how it's carrying out the plan, including any changes to its stockpile's contents; the Secretary uses this information to help manage the federal Strategic National Stockpile. (B) Starting one year after the first awards, and every year after for as long as the program runs, the Secretary must report to the relevant Senate and House committees on the program, including federal and state spending, activities under paragraph (4), and any other relevant state information. (9) Authorization of appropriations. Congress may appropriate $3,500,000,000 for each of fiscal years 2023 and 2024 to carry out this subsection, available until spent.