On Friday, the FDA announced the availability of a draft guidance describing its current thinking on how to determine whether a business is a “qualified facility” that is subject to modified requirements under its previously released rules governing current good manufacturing practice, hazard analysis and risk-based preventive controls for human food and animal food (“the Preventive Controls Rules”).  Under FSMA and the Preventive Controls Rules, a “qualified facility” is not generally subject to hazard analysis and risk-based preventive controls and supply-chain requirements imposed under the Preventive Controls Rules.  However, a qualified facility must submit an attestation that the facility meets the definition of a qualified facility and that the facility has identified potential hazards, implemented preventive controls to control those hazards, and is monitoring the effectiveness of those controls.  The draft guidance provides more information about how a facility can determine whether it is indeed a “qualified facility” and how it should submit the required attestation.

While a facility can meet the “qualified facility” definition in two ways, the draft guidance indicates that FDA “believe[s] the definition of a very small business will apply to most qualified facilities” and thus focuses on determining whether a facility will meet that definition.  Under the Preventive Controls for Human Food Rule, a “very small business” is a business, including any subsidiaries and affiliates, averaging less than $1,000,000, adjusted for inflation, per year, during the 3-year period preceding the applicable calendar year in sales of human food plus the market value of human food manufactured, processed, packed, or held without sale (e.g., held for a fee).   The Preventive Controls for Animal Food Rule defines “very small business” similarly, except that the relevant figure is $2,500,000.

In addition to summarizing the relevant provisions of the Preventive Controls Rules, the draft guidance offers new insight into how facilities should evaluate whether they meet the relevant definition.  Notably, the draft guidance explains:

  • The total annual sales criteria applies equally to all affiliated entities, regardless of whether the entity is the parent, subsidiary or affiliate, such that either all or none of related entities will constitute a qualified facility.
  • Facilities must include all human or animal food, depending on the rule, when determining sales and market value.  This means that the facility must include in its calculations both: (1) food that is not subject to the Preventive Controls Rules (e.g., seafood, juice, low-acid canned foods, and dietary supplements); and (2) raw agricultural commodities and products subject to regulation by USDA.
  • In determining annual sales, facilities should look to preexisting resources such as tax forms, accounting documents, invoices, and bills of lading.
  • In determining the market value of food manufactured, processed, packed or held without sale, facilities should consider factors such as the cost of the incoming food, the amount of insurance that a warehouse holds for its products, and assets on a balance sheet.

The draft guidance also provides examples of calculations and responds to potential questions about specific situations.  Human food facilities are required to submit their first attestation to FDA by December 17, 2018, while animal food facilities are required to submit their first attestation by December 16, 2019.  While stakeholders can always submit comments on guidance documents, FDA encourages comments to be submitted by November 14, 2016 in order to ensure consideration before it begins work on the final version of the guidance.