National Bioterrorism Hospital Preparedness Program CFDA #93.889

Program Cost Directives

U.S. Department of Health and Human Services (DHHS) Health Resources and Services Administration (HRSA) Healthcare Systems Bureau (HSB) Division of Healthcare Preparedness (DHP) National Bioterrorism Hospital Preparedness Program (NBHPP)

DEPARTMENT OF HEALTH & HUMAN SERVICES

Health Resources and Services Administration Rockville, Maryland 20857

Dear HRSA NBHPP AwardeeThe National Bioterrorism Hospital Preparedness Program (NBHPP) is pleased to present this Program Directive Manual for your use. The genesis for this manual came about from questions posed to HRSA project officers and grants management staff that center on the day-to-day management and operations of the NBHPP Cooperative Agreement. In light of this, we have created this manual to be a living document that will be continuously updated for your use. As new directives become apparent we will issue guidance on them in order to keep the manual up to date. The majority of these directives correlate to the critical benchmarks in the cooperative agreement guidance. We hope this will be a useful tool as we continue the work of the cooperative agreement. A copy of this manual has been shared with all state hospital associations; we encourage you to copy this manual and distribute it to appropriate staff that helps in the management and administration of the HRSA NBHPP cooperative agreement as well as any sub-awardees that would benefit from the information contained within (e.g. hospitals, health centers, EMS, poison control centers or others). HRSA will provide updates to this manual via listserve messages and hard copy mailing. Updates will direct you where to replace old procedures with new ones or where to add new directives being issued. We ask that you disseminate all future updates in the same manner to ensure all partners have access to the most up-to-date material. Thank-you for all the hard work and dedication you have shown to this program. We appreciate your efforts, we applaud your successes and we look forward to continued work and growth together.

Melissa Sanders CDR, USPHS Branch Chief

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TABLE OF CONTENTS PCD #1 – New Construction …………………………………………………………………… PCD #2 – Hospital Security Equipment ………………………………………………………… PCD #3 – Vehicles……………………………………………………………………………….. PCD #4 - Trailers/ Storage Shed Purchases …………………………..…………………………. PCD #5 – ChemPack …………………………………………………………………………… PCD #6 – Purchase of Flu Vaccine for Mass Vaccination Drills ……………………………… PCD #7 – Personnel Costs …………………………………………………………………… PCD #8 – Personal Protective Equipment and Decontamination …………………………. PCD #9 – Leased Warehouse Space …………………………………………………………….

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PCD #1 – Use of Cooperative Agreement Funds for New Construction Directive: HRSA NBHPP Cooperative Agreement funds may not be used for new construction purposes. New construction is interpreted as “bricks and mortar” building that effectively changes the footprint (square footage) of an existing structure.

Legislative citation: The Public Health Security and Bioterrorism Response Act of 2002 Sec 131(2) (d) Use of funds(3) The purchase or upgrade of equipment (including stationary or mobile communications equipment), supplies, pharmaceuticals or other priority countermeasures to enhance preparedness for and response to bioterrorism or other public health emergencies, consistent with the plan. HRSA Office of General Counsel Interpretation: The general rule remains that construction is not permitted absent explicit statutory authority. Consult applicable grants policy directives and cost principles for those definitions and rules that describe the permitted use of grant funds for minor alterations and renovations. Supporting Grants Management Documentation: OMB Circular A-87 Cost Principles for State, Local and Indian Tribal Governments Attachment B, Selected Items of Cost The following rules of allowability shall apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except where approved in advance by the awarding agency. (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5000 or more have the prior approval of the awarding agency.

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(3) Capital expenditures for improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior approval of the awarding agency. (HRSA has said that retrofitting and updating costs are allowed when they are budgeted for. If awardees realize after a budget has been approved, these kinds of expenses are needed a formal request to the Grants Management Specialist and Project Officer is necessary) (4) When approved as a direct charge pursuant to Attachment B, section 15.b (1), (2), and (3) above, capital expenditures will be charged in the period in which the expenditure is incurred, or as otherwise determined appropriate and negotiated with the awarding agency. In addition, Federal awarding agencies are authorized at their option to waive or delegate the prior approval requirement. (5) Equipment and other capital expenditures are unallowable as indirect costs. However, see section 11, Depreciation and use allowance, for rules on the allowability of use allowances or depreciation on buildings, capital improvements, and equipment. Also, see section 37, Rental costs, concerning the allowability of rental costs for land, buildings, and equipment. (6) The unamortized portion of any equipment written off as a result of a change in capitalization levels may be recovered by continuing to claim the otherwise allowable use allowances or depreciation on the equipment, or by amortizing the amount to be written off over a period of years negotiated with the cognizant agency. (7) When replacing equipment purchased in whole or in part with Federal funds, the governmental unit may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property.

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PCD#2 - Use of Cooperative Agreement Funds for Hospital Security Equipment Directive: HRSA NBHPP Cooperative Agreement funds may be used for the purchase and upgrade of hospital based security equipment when the following conditions have been met: a) All HRSA funded hospitals, either on a regional or individual basis, have been assessed on their progress in fulfilling the 16 critical benchmarks; b) A copy of the assessment is submitted to the HRSA project officer; c) The equipment being requested is clearly linked to critical benchmarks; d) The cost of the equipment is justified and reasonable; and e) The HRSA project officer has approved the purchase plans. In order for hospitals and other healthcare facilities to adequately provide for site management and surge capacity during any Mass Casualty Incident, it is imperative that adequate security measures are in place. It is critical that both awardees and HRSA staff have a very clear understanding of the progress that has been made by hospitals and other healthcare facilities receiving funding from the cooperative agreement to fulfill the critical benchmarks. Awardees have the ability to determine for themselves if the assessment of facilities will be done on an individual basis or at a regional level. Given the fact the cooperative agreement guidance stresses the need for regional planning, coordination and response it makes more sense to approach the assessment and purchase of equipment on a regional basis, where appropriate. Awardees may determine that not all hospitals in a region require the same level of security, if it is needed at all. This is a perfect opportunity for awardees and hospital associations to partner in the effort to undertake the assessments and prioritize the types of equipment to be made and the facilities that will be receiving the equipment. It is important to remember that states are ultimately accountable to HRSA for the purchases made under this cooperative agreement. All requests for equipment will be reviewed and approved on a case-by-case basis, pending the submission of the assessment, the detailed justification for the equipment and a budget. All equipment purchased with cooperative agreement funds must be cataloged for future reference and in order to meet close-out requirements of the award.

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45 CFR 74, Uniform Administrative Requirements for Awards and Subawards to Institutions of Higher Education, Hospitals, Other Nonprofit Organizations and Commercial Organizations, Section 74.34 clearly spells out the requirements in relation to equipment purchases.

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PCD#3 – Use of Cooperative Agreement Funds for the Purchase of Vehicles Directive: HRSA NBHPP Cooperative Agreement funds may be used for the purchase of vehicles, when the following conditions have been met: a) All HRSA funded hospitals, either on a regional or individual basis, have been assessed on their progress in fulfilling the 16 critical benchmarks; b) A copy of the assessment is submitted to the HRSA project officer; c) The vehicle, being requested is clearly linked to critical benchmarks; d) The cost of the vehicle and who will be using it is justified and reasonable; e) A description of how the purchase of the vehicle, will support the cooperative agreement; and f) The HRSA project officer has approved the purchase plans. Through funds provided under the HRSA Cooperative Agreement many states and hospitals have been able to purchase Personal Protective Equipment (PPE) and Decontamination assets but there is limited physical space for storage in many healthcare facilities. Trailers and storage sheds have been purchased for these caches in order to provide storage space and the ability to transport caches through out the state. Many localities are now asking for vehicles to tow the trailers. In regards to these purchases, they are deemed allowable uses of the cooperative agreement money when it is clearly articulated in the spending plan that is submitted to HRSA for approval. The costs must be detailed, justified and reasonable and clearly articulate how the purchase of these items will support the cooperative agreement. While these purchases are deemed to be allowable, it is the strong recommendation of HRSA that other low cost options such as lease agreements or contracts with vendors providing these kinds’ of services be looked into as alternative options to the purchase of high priced vehicles. It is critical that both awardees and HRSA staff have a very clear understanding of the progress that has been made by hospitals and other healthcare facilities receiving funding from the cooperative agreement to fulfill the critical benchmarks. Awardees have the ability to determine for themselves if the assessment of facilities will be done on an individual basis or at a regional level. Given the fact the cooperative agreement guidance stresses the need for regional planning and response it makes more sense to approach the assessment and purchase of equipment on a

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regional basis, where appropriate. Awardees may determine that not all hospitals in a region require vehicles. This is a perfect opportunity for awardees and hospital associations to partner in the effort to undertake the assessments and prioritize the types of equipment to be made and the facilities that will be receiving the equipment. All requests for equipment will be reviewed and approved on a case-by-case basis, pending the submission of the assessment, the detailed justification for the equipment and a budget. All equipment purchased with cooperative agreement funds must be cataloged for future reference and in order to meet close-out requirements of the award. 45 CFR 74, Uniform Administrative Requirements for Awards and Subawards to Institutions of Higher Education, Hospitals, Other Nonprofit Organizations and Commercial Organizations, Section 74.34 clearly spells out the requirements in relations to equipment purchases.

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PCD #4 – Use of Cooperative Agreement Funds for Trailers/ Storage Sheds Directive: HRSA NBHPP Cooperative Agreement funds may be used for the purchase of trailers and storage sheds when the following conditions have been met: a) All HRSA funded hospitals, either on a regional or individual basis, have been assessed on their progress in fulfilling the 16 critical benchmarks; b) A copy of the assessment is submitted to the HRSA project officer; c) The trailer or shed being requested is clearly linked to critical benchmarks; d) The cost of the equipment and who will be using it is justified and reasonable; e) A description of how the purchase of the trailer or shed will support the cooperative agreement; and f) The HRSA project officer has approved the purchase plans. Through funds provided under the HRSA Cooperative Agreement many states and hospitals have been able to purchase Personal Protective Equipment (PPE) and Decontamination assets but there is limited physical space for storage in many healthcare facilities. Trailers and storage sheds have been purchased for these caches in order to provide storage space and the ability to transport caches through out the state. In regards to these purchases, they are deemed allowable uses of the cooperative agreement money when it is clearly articulated in the spending plan that is submitted to HRSA for approval. The costs must be detailed, justified and reasonable and clearly articulate how the purchase of these items will support the cooperative agreement. It is critical that both awardees and HRSA staff have a very clear understanding of the progress that has been made by hospitals and other healthcare facilities receiving funding from the cooperative agreement to fulfill the critical benchmarks. Awardees have the ability to determine for themselves if the assessment of facilities will be done on an individual basis or at a regional level. Given the fact the cooperative agreement guidance stresses the need for regional planning and response it makes more sense to approach the assessment and purchase of equipment on a regional basis, where appropriate. Awardees may determine that not all hospitals in a region require the same level of storage facilities. This is a perfect opportunity for awardees and hospital associations to partner in the effort to undertake the assessments and prioritize the types of equipment to be made and the facilities that will be receiving the equipment.

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All requests for equipment will be reviewed and approved on a case-by-case basis, pending the submission of the assessment, the detailed justification for the equipment and a budget. All equipment purchased with cooperative agreement funds must be cataloged for future reference and in order to meet close-out requirements of the award. 45 CFR 74, Uniform Administrative Requirements for Awards and Subawards to Institutions of Higher Education, Hospitals, Other Nonprofit Organizations and Commercial Organizations, Section 74.34 clearly spells out the requirements in relations to equipment purchases.

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PCD #5 – Use of Cooperative Agreement Funds Participation in the CHEMPACK Program Directive: HRSA NBHPP Cooperative Agreement funds of up to $2,500.00 per site may be used to allow hospital participation in the joint HRSA / CDC CHEMPACK program. CHEMPACK, is a project within the Strategic National Stockpile (SNS) Program that will deploy containers filled with nerve agent antidotes to approximately 2300 cache locations in the 50 states; the cities of Chicago, Washington D.C., Los Angeles and New York City; and to Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa and the Commonwealth of the Northern Marianna Islands. The CHEMPACK Project participates in the FDA Shelf Life Extension Program (SLEP) that is designed to ensure that medications are stored in a controlled, monitored, and secure environment. This may allow the FDA to extend the manufacturer's expiration date, thereby saving the cost of replacing medications that may still have sufficient potency as determined by FDA testing. In order to participate in SLEP, the materiel remains the property of the SNS Program until used by state / local first responders. The federal procurement value of each Hospital CHEMPACK container is more than $37,000 and each EMS or First Responder CHEMPACK container is more than $70,000. Each nerve agent antidote container has stocks to treat approximately 1,000 patients and is provided to the project areas "free of cost." HRSA NBHPP funds of up to $2,500.00 per facility may be used to offset reasonable costs associated with CHEMPACK cache storage facilities to meet FDA/SLEP requirements. Following are the steps required to participate in this joint program: 1. The Awardee HRSA NBHPP Coordinator will notify the State BT Coordinator of the intent to participate in the program; 2. The State BT / All Hazards Plan will drive what cache locations are appropriate for placement of the CHEMPACK. If the proposed cache location meets the State's Plan requirements, the State BT Coordinator will arrange with the CHEMPACK project staff to work with the potential CHEMPACK recipient sites to prepare the cache location and coordinate receipt;

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3. The Awardees Department of Health will send a letter on letterhead, addressed to the Awardee HRSA NBHPP Coordinator and the HRSA Grant’s Manager. This letter should be copied to the CDC Regional ChemPack Coordinator, the State SNS Coordinator, the State BT Coordinator, and the State Hospital Preparedness Coordinator. 4. This letter shall include the following information: a. A list of the ChemPack locations identified. b. A budget of the expected costs for EACH proposed location and the amount expected to be covered by HRSA NBHPP funds. Note: HRSA funds may be used ONLY to retrofit existing facilities. New construction is NOT authorized! Maintenance fees for the phone lines and security system may be included in this budget; c. Anticipated beginning date for implementation. d. Anticipated completion date for the implementation. 5. HRSA NBHPP will determine whether or not the CHEMPACK cache request is reasonable and send an approval/disapproval letter to the HRSA NBHPP Hospital Coordinator; 6. Upon approval of the proposal, the State BT Coordinator and the HRSA NBHPP Hospital Coordinator will work with the proposed cache storage location (i.e. hospital, ER, EMS, etc) to prepare the CHEMPACK cache storage areas for receipt of the containers; 7. The State's HRSA NBHPP Hospital Coordinator will notify HRSA in writing once the CHEMPACK cache has been brought on-line.

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PCD#6 – Use of Cooperative Agreement funds for the Purchase of Flu Vaccines for use in Vaccination Exercises Directive: HRSA NBHPP Cooperative Agreement funds may be used for the purchase of Flu Vaccines for use in Vaccination Exercises in accordance with the following guidelines that have been agreed upon by HRSA and CDC. Instructions for Requesting Bioterrorism Cooperative Agreement Funds to Purchase Flu Vaccine for use in Vaccination Exercises Effective as of August 1, 2004 Purpose: This document is intended to provide further instruction for funding requests to use Bioterrorism Cooperative Agreement (BTCA) funds for the purchase of flu vaccine proposed to be administered in bioterrorism vaccination exercises. Criteria for Use of the Vaccine: Recipients of BTCA purchased vaccine may include: 1) persons who meet the criteria in the CDC/ACIP recommendations for who should receive an influenza vaccine for and, 2) Are NOT eligible to receive the vaccine through other entitlement programs such as Medicare or the Vaccines for Children (VFC) program. You may include VFC-eligible children or Medicare beneficiaries in your exercise. They should be immunized with vaccine purchased from the appropriate funding source. This does not mean you must have a dose-for-dose accounting system. It means you must have vaccine supply for your clinic from other sources. BTCA-purchased vaccines should not be used to replace or supplant your regular sources of influenza vaccine funding or to immunize persons eligible for Federal entitlement programs in a non-emergency. Requests for Proposed Funding: Requests for purchase of flu vaccine with BTCA funds must be submitted to the BTCA grantee’s project officer for prior approval and must contain the following information:

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1. Exercise Information: • • • • •

Provide a description of the proposed exercise including a brief synopsis of the exercise. Provide a list of participating organizations Provide a proposed timeframe to accomplish the activity Provide a post-exercise evaluation/after action report plan Provide a description of vaccine recipient populations and subpopulations

2. Cost of flu vaccine: • Estimated number of doses • Cost per dose 3. Justification of redirection of BTCA funds for flu vaccine: •

State if the purchase of flu vaccine is an activity in grantee’s original BTCA proposal.

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If the purchase of flu vaccine is not listed as an activity in grantee’s original cooperative agreement, indicate from what BTCA activity the funds are being drawn for redirection to flu vaccine.

4. Liability: • Include the following statement in the request “In accordance with the Federal Torts Claim Act (FTCA) the Federal Government is not liable for the acts of its grantees.”

Process for Approval: BTCA Project Officers in the Division of State and Local Readiness, OTPER, CDC and HRSA National Bioterrorism Hospital Preparedness Program will review requests and provide feedback on approval to the project BT coordinator. If the request is part of a redirection of funds the project officer will provide guidance to the project on appropriate submission of the redirection. 3rd Party Billing: 3rd party payers, including Medicare, Medicaid and private insurance, may NOT be billed for vaccine purchased with BTCA funds. The state or local health agency, or contractors hired by the health agency, may bill a 3rd party for the administration of the vaccine. CDC is not requiring that public health agencies bill for an administration fee.

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PCD #7 – Use of Cooperative Agreement Funds for Personnel Costs Directive: Personnel costs associated with the administration of the cooperative agreement are allowable and must be limited to no more than ten-percent of the total cooperative agreement award. Since the inception of the NBHPP personnel costs have been an allowed use of cooperative agreement funds. FY 2002 guidance specified that at a minimum a BT Coordinator and Medical Director must be hired for this program. Personnel costs associated with contracts to associations and other entities that provide support to the awardee are treated as health department costs and as such count against the ten-percent administrative cost cap. Other types of personnel costs that are included in the ten-percent cap are items such as fringe benefits, travel and etc., to assure other operating costs (e.g. supplies, phone, audit costs, etc.). Awardees must carefully plan to insure that these costs in aggregate do not cause the state to exceed the 10% cap.

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PCD #8 – Use of Cooperative Agreements for the Purchase of Personal Protective Equipment (PPE) and Decontamination Equipment Directive: HRSA NBHPP Cooperative Agreement funds may be used to purchase and maintain PPE and Decontamination equipment, as well as provide the necessary training for personnel on relation to these items. The use of cooperative agreement dollars for the purchase, maintenance, and training of personnel in the proper use and wear of PPE and in the principles of decontamination are allowable. HRSA has not been prescriptive in terms of the type and level of PPE that must be purchased or the type of decontamination shelters that may be purchased, choosing instead to rely on state vulnerability assessments to guide the purchase of these materials. For those hospitals that have identified high risk scenarios (i.e., the hospital functions near an organophosphate production plant with a history of employee contamination incidents) higher levels of PPE and more stringent decontamination processes are essential and will thus require more sophisticated types of equipment and the necessary training associated with that equipment. It is important that equipment purchased is interoperable with equipment purchased with funds from the DHS State Homeland Security Grant Program (SHSGP) for first responders. Purchasing PPE is only a part of the lifecycle of this important equipment. The proper maintenance of PPE in storage can help save medical personnel lives in an actual Biological or Chemical event. Please let your sub-recipients know that it is their responsibility to maintain their PPE in storage. Sub-recipients should consult their owner’s manuals or ask the manufacturer of an individual PPE item for inspection and maintenance in storage recommendations. The following are just examples of some of the equipment checks: 1. Conduct at least semi-annual inspections of the overall condition of every level of PPE to include: a. Examine exterior of suit for rips, cuts or any other damage. b. Examine the overall condition of the respirator for dry rot, cuts or other deterioration.

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c. Don the respirator and check the inhalation/exhalation valves to ensure ease of operation. d. Examine filters for expiration date-order new filters for all filters reaching expiration date before next inspection. e. Examine all Positive Air Purifying Respirators (PAPR) for proper condition and operation, including battery type-(either rechargeable battery or disposable battery types)-for charge. Replace as necessary. 2. Inspect storage area for temperature and humidity-Excessive heat, cold or humidity will accelerate deterioration. If environmental conditions are inappropriate for PPE storage, look for a better storage location-hopefully easily accessible to those who require it. 3. Insure all medical personnel requiring PPE are familiar and comfortable with their PPE during exercises. Proper operation of PPE may mean the difference between life and death in an actual event.

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PCD #9 – Use of Cooperative Agreement Funds to Lease Warehouse Space Directive: HRSA NBHPP Cooperative Agreement funds may be used to lease warehouse space (as opposed to purchasing trailers, sheds, etc.) for the storage of materials to be shared regionally. Supporting Grants Management Documentation: 7. COSTS UNDER PHS GRANTSUPPORTED PROJECTS/ACTIVITIES (PHS GPS 9505) - Rental or Lease of Facilities and Equipment Allowable as indicated below. Due to the complex nature of determining the allowable amount under certain types of leases, grantees are encouraged to consult the PHS awarding office GMO before entering into leases that will result in direct charges to the grant project. In general, the rental costs for facilities and equipment applicable to each budget period should be charged to that period as specified on the NGA. However, see section 8, "Procurement," for an exception to this general rule. Subject to the limitations below, rental costs are allowable to the extent that the rates are reasonable at the time of the decision to lease, in light of such factors as rental costs of comparable property, if any; market conditions in the area; the type, life expectancy, condition, and value of the property leased; and available alternatives. Rental costs under leases that create a material equity (5) in the leased property are allowable only up to the amount that would be allowed under the applicable cost principles had the lessee purchased the property on the date the lease agreement was executed. This would include depreciation or use allowances, maintenance, taxes, insurance, etc., but would exclude unallowable costs. A lease giving rise to material equity would be one that is non-cancelable or is only cancelable upon the occurrence of some remote contingency and has one or more of the following characteristics: •

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The lessee has the right to purchase the property for a price that at the beginning of the lease appears to be substantially less than the probable fair market value when it is permitted to purchase the property (commonly called a lease with a bargain purchase option.) Title to the property passes to the lessee at some time during or after the lease period. 19

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The term of the lease (initial term plus periods covered by bargain renewal options, if any) is equal to 75 percent or more of the economic life of the property, i.e., the period the property is expected to be economically usable by one or more users. When an institution transfers property to a third party through sale, lease, or otherwise and then leases the property back from that third party, the lease cost that may be charged to PHS projects generally may not exceed the equivalent of the cost of ownership.

Rental costs under less-than-arms-length leases are allowable only up to the amount that would be allowed under the applicable cost principles had title to the property been vested in the lessee. Under such leases, one party to the lease agreement is able to control or substantially influence the actions of the other. Such leases include but are not limited to those between divisions of an organization; organizations under common control through common officers, directors, or members; and an organization and a director, trustee, officer, or key employee of the organization, or his or her family, either directly or through corporations, trusts, or similar arrangements in which they hold a controlling interest.

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