Domestic PPE procurement pilot program

(a)

In general

Section 319F–2(a) of the Public Health Service Act (42 U.S.C. 247d–6b(a)) is amended by adding at the end the following:

(6)

Domestic procurement pilot program

(A)

In general

(i)

Requirement to purchase domestic end products

For the period of fiscal years 2022 through 2026, subject to clause (ii), the Secretary shall ensure—(I)that not less than 40 percent of amounts made available under this section for purposes of procuring covered testing equipment and personal protective equipment for the stockpile under paragraph (1) are allocated to procurement of such equipment that is a domestic end product (as defined in part 25.003 of the Federal Acquisition Regulations maintained under section 1303(a)(1) of title 41, United States Code (or any successor regulations)) manufactured by an entity or entities that enter into a contract with the Secretary to sell such equipment to the Secretary for such purpose; and(II)that additional amounts made available under this section for the purposes described in subclause (I), up to 100 percent of such amounts, are allocated to procurement of domestic end products as described in subclause (I), provided that, with respect to any such procurement of domestic end products in excess of the amount required under subclause (I), domestic supply exists and the costs of procuring equipment that is a domestic end product are not unreasonably high compared to other equipment that is not a domestic end product. (ii)

Exception

In the event that there is insufficient domestic end product available for procurement to meet the needs for certain covered testing equipment and personal protective equipment for the stockpile under paragraph (1) while satisfying the requirement of clause (i)(I), or that the cost of procuring equipment that is a domestic end product in quantities required under clause (i)(I) would be unreasonably high compared to other equipment that is not a domestic end product, clause (i)(I) shall apply with respect to the applicable equipment only to the extent that such equipment that is a domestic end product is available and to the extent that the cost is not unreasonable, as applicable.(B)

Sale or transfer of PPE

(i)

In general

With respect to any covered testing equipment and personal protective equipment in the stockpile under paragraph (1), the Secretary—(I)shall assess the stock of such equipment on a regular basis, and not less frequently than—(aa)twice per year, other than during periods described in item (bb); or(bb)monthly, during any period in which the Secretary determines it likely that such equipment will be deployed, such as during a public health emergency; (II)shall communicate to manufacturers and suppliers of such equipment to the stockpile under paragraph (1) if an assessment under subclause (I) indicates that there will be an increased need for such equipment; (III)may, at appropriate intervals and with respect to any such equipment in such stockpile—(aa)transfer such equipment to other agencies or operating divisions within the Department of Health and Human Services, or to the Department of Defense, the Department of Homeland Security, the Department of Veterans Affairs, or any other Federal agency or department, in accordance with the needs of such agencies, divisions, or departments; or(bb)sell such equipment to health care facilities at a competitive price, as determined by the Secretary, taking into account the current market pricing for the applicable equipment and the operational budget for the stockpile; and(IV)may enter into a contract or cooperative agreement with an entity that has expertise in supply chain logistics and management to carry out the activities described in this subparagraph. (ii)

Group purchasing organizations and medical product distributors

In making sales under clause (i)(II)(bb), the Secretary may transact with group purchasing organizations and medical product distributors to facilitate timeliness, logistical assistance, and appropriate pricing, and to determine appropriate amounts of covered testing equipment and personal protective equipment for applicable health care facilities. (iii)

Compensation to HHS

(I)

Transfers from other agencies

A Federal agency receiving equipment as described in clause (i)(II)(aa) shall transfer to the Secretary such amounts as the Secretary and head of the applicable agency determine to be fair compensation for such equipment.(II)

Sales of PPE

There shall be transferred from the Treasury to the Secretary each fiscal year, for purposes of procuring covered testing equipment and personal protective equipment for the stockpile under paragraph (1), an amount equal to the sum of the amount received in the previous fiscal year from sales described in clause (i)(II)(bb).(C)

Vendor-managed inventory

For purposes of meeting the goals under subparagraph (A), and to promote efficient and predictable operations of the stockpile while mitigating the risk of product expiration or shortages, the Secretary may enter into arrangements, through a competitive bidding process, with one or more manufacturers of domestic end products to establish and utilize revolving stockpiles of covered testing equipment and personal protective equipment managed and operated by such manufacturer. Under such an arrangement— (i)the manufacturer (or a subcontractor or agent of the manufacturer)—(I)shall—(aa)produce or procure covered testing equipment or personal protective equipment for the stockpile under paragraph (1);(bb)maintain constant supply, possession, and re-stocking capacity of such equipment in such quantities as the Secretary requires for purposes of the stockpile under paragraph (1); and(cc)fulfill or support the deployment, distribution, or dispensing functions of the stockpile at the State and local levels, consistent with paragraph (3); and (II)may sell or transfer such equipment for the purposes of the manufacturer's existing inventory and commercial contracts; and(ii)the Secretary shall—(I)compensate the manufacturer for the covered testing equipment or personal protective equipment; and(II)pay a management fee, as appropriate. (D)

Evaluation and report

(i)

In general

The Secretary shall—(I)conduct an evaluation of the program under this paragraph;(II)not later than 2 years after the date of enactment of this paragraph, submit an interim report to Congress on such program; and(III)not later than 5 years after the date of enactment of this paragraph, complete such evaluation and submit to Congress a final report on the program. (ii)

Considerations

The evaluation and reports under clause (i) shall consider how the program has impacted the continuity of stockpiling and readiness for the stockpile under paragraph (1), implications of the program on the domestic supply chain, cost effectiveness of the program, and access to covered testing equipment and personal protective equipment for the Federal agencies and health care facilities pursuant to subparagraph (B)(i)(II). (E)

Covered testing equipment and personal protective equipment

For purposes of this paragraph, the term covered testing equipment and personal protective equipment means diagnostic supplies (which may include test kits, reagents, and swabs), respirators, masks, gloves, eye and face protection, gowns, and any other appropriate ancillary medical equipment or supplies related to testing or personal protection that meet the Secretary's requirements for inclusion in the stockpile under paragraph (1).