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2007 HOWARD MBA CASE STUDY N AT I O N A L V E T E R I N A RY S TO C K P I L E P R O G R A M O F F I C E S U P P O RT
Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NOTICE: THE VIEWS, OPINIONS, AND FINDINGS CONTAINED IN THIS REPORT ARE THOSE OF LMI AND SHOULD NOT BE CONSTRUED AS AN OFFICIAL AGENCY POSITION, POLICY, OR DECISION, UNLESS SO DESIGNATED BY OTHER OFFICIAL DOCUMENTATION. LMI © 2007. ALL RIGHTS RESERVED.
National Veterinary Stockpile Program Office Support YOUR TASK You have been hired by the National Veterinary Stockpile (NVS) program office to help the fledgling program manage its operations. Because the program is so new, there is not yet adequate staff on board to assist with several key areas of management. The NVS Program Manager (PM) has asked your team for help in three critical areas. Specifically, the PM would like your team to ¡
prepare a template for a cost-benefit analysis (CBA) that will help to justify and defend an increase to future NVS budgets over the next 5 years, identifying the cost and benefit categories and the types of data you would require to conduct the analysis;
¡
develop at least three supply chain strategies that would allow the NVS program to respond to an animal disease outbreak, identifying the positives and negatives of each strategy and recommending the best strategy; and
¡
develop a set of performance measures the NVS could use to evaluate whether the program is achieving its mission goals, explaining how the NVS would collect the data for the identified measures.
To help you in your analysis, the NVS PM has provided all the data and information that he has regarding NVS program management, stockpile assets, animal population statistics, and supply chain management techniques.
PROGRAM BACKGROUND Mission The National Veterinary Stockpile is the nation’s repository of vaccines, personal protective equipment (PPE), and other critical veterinary products. It exists to augment state and local resources in the fight against dangerous animal diseases that could devastate American agriculture, seriously affect the economy, and threaten the public’s health. Homeland Security Presidential Directive 9 (HSPD-9) (see Appendix A) established the NVS in 2004 to respond to terrorist acts, major disasters, and other emergencies. It required the NVS to deploy within 24 hours “sufficient amounts 1 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
of animal vaccine, antiviral, or therapeutic products to appropriately respond to the most damaging animal diseases affecting human health and the economy…” The directive resulted from the nation’s concern that terrorists could, simultaneously and in multiple locations, release animal diseases of an unprecedented magnitude; thus, creating the need for an NVS that could deliver rapidly and at a lower cost, large quantities of critical veterinary supplies and equipment to the right place at the right time for as long as necessary. The NVS reflects two significant changes in the way the Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) can respond to and eradicate animal diseases. ¡
Logistics expertise focused on fighting disease. Previously, functional groups of specialists responding to an outbreak managed their own logistics support. This resulted in h duplication of effort by multiple groups, h more complex and potentially uncoordinated resource planning before
an event, h difficulty coordinating resources from multiple sources managed by
multiple groups during an event, and h higher response costs because each group purchased supplies in
smaller quantities and at higher prices. ¡
Larger supplies of vaccine and other critical items. Previously, APHIS eradicated disease outbreaks by destroying infected and potentially exposed animals. The unprecedented magnitude of an animal disease that terrorists might release makes the exclusive use of mass depopulation unlikely. Vaccines in the NVS give APHIS another option.
The NVS exists because state and local supplies are likely to be inadequate for responding to major outbreaks that could severely diminish the animal population and adversely affect the U.S. agricultural economy. While some states stockpile supplies for responding to animal outbreaks, their quantities are limited and not distributed universally among the states. If a state realizes it does not have the resources to contain and eradicate an animal outbreak, it can ask the NVS to provide the additional supplies it needs. Thus, the NVS is not intended to replace state efforts; it only augments what is already being done.
Organizational Structure The NVS is part of the APHIS Veterinary Services (VS) operational program unit. 1 Since the NVS is an emergency response organization, it falls under the 1
See http://www.aphis.usda.gov/.
2 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
National Center for Animal Health Emergency Management (NCAHEM) of VS. Figure 1 displays graphically where the NVS lies within USDA. Figure 1. NVS Organizational Chart
U.S. Department of Agriculture (USDA)
Animal and Plant Health Inspection Service (APHIS)
Veterinary Services (VS)
National Center for Animal Health Emergency Management (NCAHEM)
National Veterinary Stockpile (NVS)
Because the NVS is a relatively new program, it does not have its own line item within the APHIS/VS budget. Therefore, it must compete with other programs (not pictured here) that fall under the NCAHEM office for funding.
Program Goals The NVS has two primary goals. Within 5 years, it will acquire countermeasures against the 10 worst animal diseases including Highly Pathogenic Avian Influenza. Within 10 years, it will acquire countermeasures against all 17 of the most dangerous diseases. The NVS Steering Committee identified threats for which the NVS must have countermeasures. Comprised of veterinarians, emergency response experts, and individuals from partner government agencies, the Steering Committee specified 3 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
the diseases based on likelihood of disease outbreak, their potential effect on animal populations, and their potential threat to human beings. Diseases that animals can transfer to humans are referred to as zoonotic, of which Highly Pathogenic Avian Influenza (HPAI) is a prime example. HPAI would not only severely damage the U.S. poultry industry, but it could also lead to human pandemic influenza, the likes of which have not been seen since the 1918 pandemic that killed millions of people around the world. 2 During the past year, the NVS has begun to acquire the necessary vaccines and veterinary supplies to respond to these diseases including initially HPAI. 3
PROGRAM RESOURCES Staffing The NVS Program Office opened in February 2006. Currently, the federal employees are as follows: ¡
Program Manager—Oversees the entire program and its operations, including budget, acquisition of stockpile goods, risk management, evaluation of NVS performance, and other general management roles.
¡
Resource Manager—Assists the PM with budget formulation, finalizing acquisition purchases, and NVS data storage.
¡
Warehouse Manager—Oversees the NVS physical assets held in a government warehouse located in the Midwest. He/she manages inventory, reorders supplies, and ships items in case of an outbreak.
¡
Assistant Warehouse Manager—Assists the Warehouse Manager with day-to-day activities related to the physical assets of the stockpile.
Because the NVS program is new and has a very limited budget, the remaining Program Office employees are contract employees. Contractors are frequently used by programs until they can get permission for new positions or until the program budget is stable. Contractors oversee the NVS acquisition strategy, risk management process, and coordination with other emergency response federal agencies. Many of the functions currently provided by contractors are “inherently governmental” functions, which federal employees will eventually perform. The NVS has created a staffing plan that outlines the positions that it needs to fill with government employees, but budget constraints limit its hiring at this point. This is a major concern of the NVS PM who will hire additional federal workers as soon as the budget permits. 2 3
The ‘Animal Population Statistics’ section discusses these 17 diseases in more detail. The details of these efforts will be discussed in the next section, Program Resources.
4 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
Under current requirements, the PM believes the program will be fully staffed at 50 federal employees, with contractors continuing to support the Program Office in less critical roles. If program requirements should increase due to increasing terrorist or natural disease outbreak threats, the PM would increase necessary staffing capacity beyond this initial estimate. Increasing future staff requirements would also increase future budget needs. NVS staff will be augmented during disease outbreak responses by state and local personnel as well as by contracted staff for specific functions, such as decontamination and disposal of deceased animals. Additionally, USDA has 55 Area Veterinarians in Charge (AVICs) located around the country that have staff members who can be loaned to the NVS to assist with outbreak responses.
Budget For its initial year of operations, FY07, the NVS received a budget of $4.3 million. It also received $10 million from an Avian Influenza Prevention supplemental fund authorized by Congress. By comparison, the Strategic National Stockpile (SNS) at the Centers for Disease Control (CDC) received a first-year operating budget of more than $50 million. The NVS must meet many requirements within a very tight budget when compared to the CDC’s experience. Table 1 outlines the NVS PM’s hopes for increasing program budgets over future fiscal years. As the program grows, more funds will be needed each year to sustain the previous year’s operations and add increased capability. Table 1.NVS Budget Requests and Purpose FY
Budget Request
Purpose of Funds
2008
$40,000,000
Hire additional staff, purchase vaccines, PPE, IT logistics management system, decontamination and disposal services (at outbreak sites), training and exercises, and contracted services
2009
$75,000,000
Increase staff, mobile labs, satellite communication equipment, refresh vaccines and purchase for additional diseases, training and exercises, and contracted services
2010
$90,000,000
Increase staff, mobile command centers, refresh vaccines and purchase for additional diseases, training and exercises, and contracted services
2011
$110,000,000
Additional warehouse facility, increase staff, additional transportation contracts, refresh vaccines and purchase for additional diseases, and contracted services
2012
$150,000,000
Facility management, increased staff, additional transportation contracts, refresh vaccines and purchase for additional diseases, integration with state stockpiles, and contracted services
5 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
To increase the likelihood of receiving the budget amount it requested, the NVS will need to perform well on its performance measures, continue to support states during outbreaks, and demonstrate efficient use of previous funding.
Stockpile Assets The NVS Program is responsible for the acquisition, maintenance, security, transport, and timely deployment of the vaccines, personal protective equipment, and other critical veterinary supplies in the stockpile. The NVS supplies the following items and services: ¡
Vaccines
¡
Disease test kits
¡
Communications equipment
¡
Personal protective equipment for workers
¡
Cleaning and disinfectant items
¡
Contracted services for disposing of depopulated animals and decontaminating infected premises.
Table 2 displays the current NVS inventory and costs per unit. Table 2. NVS Inventory and Cost Per Unit Item
Cost per Unit
Quantity
Inventory Value
Poultry vaccine
$0.75
10,000,000
$7,500,000
Cattle vaccine
$1.45
5,000,000
$7,250,000
Swine vaccine
$1.23
5,000,000
$6,150,000
Disease test kits
$4.50
250,000
$1,125,000
$15.00
15,000
$225,000
PPE
$7.50
100,000
$750,000
Disinfectant items
$2.15
35,000
$75,250
$150,000.00
3
$450,000
Communications equipment
Contracts for animal carcass disposal Total
$23,525,250
RECENT OUTBREAK RESPONSE DATA The NVS responded to two actual outbreaks of low pathogenic avian influenza (LPAI) in 2007, one in West Virginia in March and one in Virginia in June. These outbreaks were very different in terms of size, the type of response, and the cost. These differences demonstrate the difficulty in planning for an emergency re6 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
sponse organization with a “one size fits all” mentality. Table 3 presents the data collected from each of the outbreaks. Table 3. Recent Outbreak Response Data Virginia
West Virginia
Number of infected 135 day-old turkeys (40-42 lbs) that were depopulated
31,235
15,456
Number of infected 16 day-old turkeys that were depopulated
29,000
0
Number of days of depopulation
5
2
Number of neighboring birds vaccinated ($0.75 per dose)
25,189
4,234
Number of USDA employees involved
2
10
Number of contractors used
25
4
Estimated NVS Cost
$1,235,000
$423,500
7 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
ANIMAL POPULATION INFORMATION Case for Vaccination Prior to establishment of the NVS, USDA’s typical response to dealing with an animal disease outbreak was to “depopulate,” or slaughter, the infected animals to control the disease from spreading further. However, this method of disease control is impractical as the sole method for responding to catastrophic disease outbreaks that terrorists might release. The effect of killing potentially millions of animals would be detrimental to the agricultural industry and the U.S. food supply. Therefore, USDA began focusing on vaccination as a means of controlling the spread of a disease and thus limiting the number of animals it might have to depopulate. Vaccination of every animal intended for the food supply against every potential disease is prohibitively expensive. Additionally, international trade issues arise when trying to export vaccinated beef or poultry to countries that do not accept “modified” food. For these reasons, universal vaccination of all animals at birth is not an option. Despite this fact, the use of vaccines in animal populations at risk of infection from a known disease can be an effective way of curbing further infection. For example, in a confirmed HPAI outbreak, it could be very useful to vaccinate poultry populations that are located near a confirmed outbreak. This establishes a zone around the infected population that stops the further spread of the disease. While the infected population must be destroyed, other animals could be saved from unnecessary depopulation.
Potential Diseases As discussed earlier, the NVS Steering Committee identified the most dangerous animal diseases that could threaten animal and human health. Table 4 lists these diseases and their effect on humans. All of these diseases are potentially fatal to the animal species they affect. The NVS does not currently have any probability data on which diseases are most likely to result in an outbreak.
8 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case Table 4. Diseases and Their Effects Disease
Within 5 Years
Within 10 Years
Animal industries affected
Public Health Threat?
Disease 1
Poultry
Yes, can be lethal
Disease 2
Cattle, swine, sheep
No
Disease 3
Cattle, sheep
Yes, can be lethal
Disease 4
Poultry
Yes, minor effects
Disease 5
Swine, horses
Yes, can be lethal
Disease 6
Swine
No
Disease 7
Swine
No
Disease 8
Cattle
Suspected
Disease 9
Cattle, sheep
No
Disease 10
Swine, equine
Yes, can be lethal
Disease 11
Equine
No
Disease 12
Equine
Yes, can be lethal
Disease 13
Cattle
No
Disease 14
Cattle, sheep, goats
Yes, can be lethal
Disease 15
Equine
Yes, can be lethal
Disease 16
Cattle, sheep, goats
Yes, can be lethal
Disease 17
Cattle, sheep, goats
No
Population Statistics The USDA has one of the largest research and data collection programs of all the civilian agencies. The NVS PM has provided your team with various animal population statistics to help you prepare the requested deliverables. The 17 animal diseases listed in Table 4 primarily affect poultry, swine, and cattle industries. Sales of these industries are in the billions. As you will see from the following tables and figures, regional populations of these animals vary significantly across the country. All of these statistics are from 2002. Table 5 provides national aggregate data on the number and sales value of animals. Table 5. National Inventory and Sales by Animal Type Inventory
Sales
Number
Value ($)
1,924,924,362
5,004,803,000
9,216,251,836
23,972,333,000
Swine
60,405,103
326,188,000
184,997,686
12,400,977,000
Cattle
95,497,994
58,607,119,000
73,509,165
45,115,184,000
Poultry
Number
Value ($)
9 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Figure 2 shows how USDA divides the 50 states into 13 regions for the purpose of collecting agricultural data. Figure 2. Geographic Agricultural Regions
Table 6 shows industry inventory and sales by region.
10 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case Table 6. Animal Population Inventory and Sales by Region Poultry Region
Swine
Inventory
Sales ($000)
1
183,228,707
835,316,886
1,370,630
4,827,907
4,264,330
1,958,315
2
140,680,815
202,666,564
26,003,769
68,754,378
13,318,779
13,222,025
3
25,755,018
65,999,610
1,462,793
4,083,637
4,336,326
2,049,199
767,497,856 4,168,085,469
11,720,620
47,445,566
10,242,643
5,292,351
117,712,440
33,479
50,533
1,738,874
847,869
6
494,390,728 2,753,944,081
5,782,646
20,132,601
13,555,531
8,565,789
7
106,473,139
565,447,909
956,779
1,664,948
15,569,756
13,667,695
8
53,856,420
109,900,182
11,060,982
32,114,778
16,434,776
14,286,143
9
9,082,689
8,819,207
1,570,793
5,195,944
5,344,854
5,813,847
10
19,977,919
56,558,384
74,582
162,649
4,449,754
3,913,519
11
67,822,295
300,050,226
163,465
308,769
6,075,454
3,830,318
12
815,442
1,342,165
23,364
33,231
154,308
60,739
13
7,240
13,390
1,201
2,002
12,609
1,356
4 5
32,696,604
Inventory
Cattle
Sales ($000)
Inventory
11 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Sales ($000)
THE SUPPLY CHAIN As the NVS expands, it will need an effective supply chain to support program requirements. Because of fiscal constraints, that supply chain will need to reflect a defensible compromise between cost and the responsiveness. Additionally, different items the NVS is procuring have different lead times from vendors, i.e. some take longer to be delivered than others. For instance, vaccines need time to become potent, whereas protective gloves for workers can be shipped as orders are processed. There also may be only one supplier for some items, limiting the ability for the NVS to shop around for the best availability. Based on current projections and budget constraints, the PM believes the NVS can be considered fully operational when it has stockpiled enough veterinary vaccines and equipment to vaccinate 5 percent of the U.S. poultry, cattle, and swine population. The PM has a basic understanding of the structure of two other government agencies that deal with similar emergency response functions: the Centers for Disease Control (CDC) and the Federal Emergency Management Agency (FEMA). These agencies serve significantly different target populations, so their systems may or may not be appropriate for the NVS.
CDC Description The CDC’s Strategic National Stockpile (SNS) developed its supply chain to respond within 12 hours to a variety of outbreaks, natural disasters, and terrorist attacks. The SNS program is well established and funded. Because of its mission to protect human populations, SNS is willing to pay a high price to make response time its top priority. Its response takes two forms. In the early hours of an event when people become sick or die in the early hours of an ill-defined event, the SNS will ship by truck or airplane a 12 hour push package “12 hours” because the package will arrive within 12 hours, “push” because a state need only ask for help and CDC will ship (i.e. push) 50 tons of a broad spectrum of pharmaceuticals and other critical medical supplies. CDC packs its push pack into 130 specialized containers that significantly reduce the time it spends pulling stock from warehouses or contacting multiple vendors once a disaster occurs. When authorities identify the threat, the SNS will typically follow the shipment of a push package with shipments of large quantities of specific pharmaceuticals and other critical medical supplies. Managed either internally (stockpile managed inventory or SMI) or by vendors (vendor managed inventory or VMI), these shipments typically arrive within 24 to 36 hours. If a threat is immediately known, these shipments may occur first without a prior push package shipment. 12 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
The CDC stores its push packages at secure, strategic locations across the United States. Much of the storage is in existing federal or state warehouses, but the CDC does use commercial warehouses, too. Through experience, government agencies have found that built-out costs for leasing commercial warehouses can run $4.5 million to renovate a 155,000 sq ft facility. Some push packages are located in or near airports, while others are near major population centers. When responding to an emergency, the push packages are sent by truck or plane to locations designated by the state. The CDC has negotiated contracts with major carriers that ensure availability of aircraft and trucks for deployment during an emergency. This service is relatively expensive. It requires extensive prior planning with state and local officials to determine the best location for delivery of SNS supplies and the procedures the state will use to receive and process the supplies once they arrive.
FEMA Description FEMA’s mission is to provide supplies and services to disaster victims when the President determines that an emergency warrants federal assistance. National emergencies include natural disasters, such as hurricanes, earthquakes, floods, and tornados, as well as man-made disasters, such as terrorist incidents. During such disasters, the National Response Plan assigns primary responsibility for responding to emergencies to local and state governments. When disaster requirements exceed the capabilities of local and state capabilities, the state’s Governor may request federal assistance by asking the President to declare a national emergency. If the President approves the request, FEMA and other federal resources activate. Once the President declares a national emergency, FEMA’s goal is to deliver its initial response of commodities and services within 24 hours. To support response and recovery efforts, FEMA operates four logistics centers (LC) in the continental United States in Frederick, MD; Atlanta, GA; Fort Worth, TX; and, San Jose, CA; and two overseas LCs in Puerto Rico and Guam. The LCs stock, store, and issue a small range of FEMA-owned life-saving and life-sustaining commodities, such as water, food, medical supplies, tarps, plastic sheeting, cots, and blankets. Many of these commodities have a limited shelf life, particularly when they are stored in outside trailers rather than in covered storage. Less urgent commodities are often purchased locally during disasters. FEMA outsources storage for select commodities, ice in particular, when the agency lacks sufficient internal infrastructure. Where storage is outsourced, FEMA contracts generally require the vendor to deliver on demand within specific time periods. Other government agencies augment the supplies that FEMA provides during emergencies. For example, the Defense Logistics Agency (DLA) provides MealsReady to Eat from its inventories and contracts; the US Army Corps of Engineers: 13 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
ice and water; and the General Services Administration provides a wide range of general commodities, such as blankets and tools. FEMA uses a combination of internal and external resources for transportation. The agency owns and manages a variety of vehicles, including communication RVs, medical support trailers, and trailers. It has a limited number of drivers for delivery. FEMA owns some of its trucks and leases others. The agency has contractual arrangements with commercial companies to provide additional drivers and power units when required. During a disaster, a joint field office (JFO)—FEMA’s onsite disaster support team—initiates all requests for federal materials and services. Depending upon availability, the JFO can either use existing supplies and contracts for services or place purchase orders with local vendors. FEMA uses existing inventories to satisfy the requirement if the material can be delivered by the required delivery date. FEMA supports the resource requirements for responding to emergencies in a variety of ways. For instance, its medical supplies and equipment are kitted so they are ready for shipment. The medical kits are designed to support a predetermined number of casualties. Local authorities order the kits based on the specific mission and anticipated demand. FEMA ships the kits directly to the disaster relief area. Inventories of other commodities are generally ordered and shipped in truckload quantities of a single commodity, which minimizes the need for subsequent handling at the final destination. FEMA uses algorithms to determine the required quantities and the number of trucks. Requests for inventory flows from a JFO to a regional response coordination center and ultimately to the Logistics Response Center (LRC) located in FEMA Headquarters (HQ) in Washington, DC. The LRC validates the requests and determines the availability of inventory. If stock is available, the LRC determines which LC will issue it and simultaneously forwards the request to both the LC and the transportation coordination team located in FEMA HQ. Transportation arranges for drivers and power units while the LCs pull the material. After pulling the material, the LC loads the trucks and notifies the LRC and JFO that the material has been shipped. Trucks are usually routed to a designated federal operations staging area (FOSA) for further distribution. FOSAs are generally located about 100 miles from the disaster, often on a military installation. The trucks are pre-staged at the FOSA until a state-operated point of distribution (POD) requires the material. During Hurricane Katrina, the Superdome served as a POD, which provides supplies to disaster victims. Inventory ownership generally transfers from the federal government to the state at a POD. A full trailer is dropped at the POD and an empty trailer is pulled back to the FOSA, where it is subsequently returned to the original LC. 14 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
In the event the FOSA capacity limits the number of trucks on site, FEMA will stage the trucks at an intermediate location, known as a mobilization center, between the LC and the FOSA to await subsequent routing to a FOSA.
15 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Existing NVS Infrastructure Presently, the NVS program has limited warehouse capacity and funding to store its veterinary inventory. Its sole warehouse facility is located in the Midwest and leased from the General Services Administration (GSA), another federal agency. This facility has limited storage capacity and will not provide any short- or longterm solutions for meeting the increased requirements of the NVS program. A potential solution is to convert several GSA tenant spaces—totaling 325,000 sq ft— to warehouse space. GSA is working on a concept design for renovating an additional 90,000 sq ft of warehouse space now occupied by Government Agency A (GOVA). GSA recently completed a concept design report detailing costs for renovating approximately 235,000 sq ft of warehouse space now occupied by Government Agency B (GOVB) as well. GSA plans to renovate the GOVA facility to meet NVS’s needs. This facility is environmentally controlled and currently contains a mix of office and warehouse space. The renovation is scheduled for completion in FY07. GSA’s plans also call for renovating two GOVB facilities that are located next to NVS’ current warehouses. The costs for renovating these facilities are significant because of the need for environmental cleanup. These facilities are environmentally controlled and tall enough to store inventory three levels high. The renovation is scheduled for completion in FY08. Table 7 summarizes the current renovation plans for the GSA complex. Table 7. Current Renovations and Cost
Facility GOVA GOVB facilities 1 and 2
Square footage
Cost ($)
Renovation completion
90,000 sq. ft.
$1.2 million
FY07
235,000 sq. ft.
$2.5 million
FY08
In addition to the annual charges, GSA will charge the NVS for preparing the facilities prior to occupancy and for managing the additional facilities. These two sources of cost are listed in Table 8 below.
16 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case Table 8. FY07-FY09 Costs: Renovated GSA Facilities Item
FY07
Facility name
FY08
GOVA
Square footage
GOVA
90,000
Structural costs ($)
1,015,804
Personnel costs ($)
424,000
Equipment costs ($) Office costs ($)
FY09
GOVB
90,000
48,900
GOVB
235,000
90,000
235,000
529,554 2,268,700
529,554
1,117,700
342,000
467,460
359,100
445,200 –
265,084
GOVA
262,838
70,900
–
–
210,000
270,980
102,500
1,267,994
1,679,300
Subtotal
1,753,788
1,237,592 2,891,600
Cumulative Total
1,753,788
4,129,192
2,947,294
To evaluate the cost of taking over GSA facilities, the NVS also has the information in Table 9, which outlines the costs of using commercial warehouses based on the CDC’s formulas. Table 9. FY07–FY09 Costs: Midwestern USA Commercial Warehouse FY07
FY08
FY09
Square footage ($)
90,000
90,000
235,000
90,000
235,000
Structural costs ($)
3,532,193
630,000
9,222,949
630,000
1,645,000
Personnel costs ($)
424,000
445,500
342,000
467,460
359,100
Equipment costs ($)
48,900
–
60,900
–
–
265,084
262,838
210,000
270980
202,500
10,000
10,000
20,000
10,000
20,000
Subtotal
4,280,177
1,348,038
9,855,849
1,378,440
2,226,600
Cumulative Total
4,280,177
Office costs ($) Utilities ($)
11,203,887
3,605,040
The cost of commercial warehouse space runs about $7 per square foot, and it is available around the country if NVS needs a decentralized system. At only $4.42 per square foot, GSA costs for warehouse space are significantly lower in cost but may not be available in all markets.
17 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Overview of Typical Government Supply Chains The NVS can choose one or multiple ways to procure and store the products it needs. Below are brief descriptions of four typical procurement and management techniques. ¡
Government-owned and government-managed—The government purchases materiel and manages it in its own warehouses located across the country. This method is used when the government expects to need the products immediately but may not be able to get them quickly from the commercial sector. This method is known as stockpile managed inventory, or SMI, because the government owns the products and manages their storage and shipment. This method poses a challenge for the government when its commodities have a limited shelf life or rigid environmental requirements such as temperature or humidity. In addition, this storage method requires significant investment in warehouses and full time staff even though demands for product may be rare.
¡
Government-owned and vendor-managed—The government purchases the material outright and compensates the vendor to store and rotate it at the vendor’s site. The government pays the vendor a management fee to cover the storage and rotation of the materiel. This method works well for products that require intermediate processing by the vendor before the government can ship them. Some veterinary products fall in this category. This method is referred to as vendor managed inventory or VMI.
¡
Government-owned with third party management—The government owns the material but uses a commercial firm to warehouse and manage the inventory. Third party logistics firms use newer technology and sometime benefit from economies of scale. In addition, with this method the government does not have to make a long-term investment in a single or multiple logistics centers with this method.
¡
Contracted for guaranteed access (vendor owned and managed)—the government pays vendors to hold a clearly defined quantity of materiel that it purchases only when it is required during an emergency. For example, vaccines stored by a vendor as bulk antigen (long shelf life) provide the government with guaranteed production to the final vaccine (short shelf life) and delivery during an outbreak. In this case, the NVS will pay a production fee to produce the final vaccine and a management and antigen purchase fee under this option. In this situation, the government has less control over the items it procures and may not be able to adequately assess the vendor’s capability before an event. This option may represent more risk than some agencies are willing to accept.
Procurement and storage arrangements have a direct impact on the resulting distribution system. In situations where products are government-owned and 18 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
-managed, the government can choose between centralized or decentralized distribution systems. In a centralized distribution system, all products are kept in one location (or several warehouses in a single location). This may reduce infrastructure costs and personnel costs, but it increases travel and response times. It also increases the risk that sabotage, weather, or other factors may interfere with emergency deployments. In a decentralized system products may be located in multiple locations that are closer to potential outbreaks. This system is typically more expensive, more responsive, and less risky. Other times the system develops as a hybrid with some products being available at only one location while others are available at most or all of the warehouses. As the NVS creates its infrastructure, it needs to consider transportation options. In considering its options, it wants to consider cost, reliability, ramp-up capability, and flexibility. The NVS can use trucks, rail, and/or cargo planes to transport goods to outbreaks and relocate inventory from one location to another. It can choose to maintain and operate an organic transportation capability or outsource this capability to a specialized commercial firm.
19 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Appendix A
Homeland Security Presidential Directive 9 Homeland Security Presidential Directive/HSPD-9 Subject: Defense of United States Agriculture and Food January 30, 2004 Purpose (1) This directive establishes a national policy to defend the agriculture and food system against terrorist attacks, major disasters, and other emergencies. Background (2) The United States agriculture and food systems are vulnerable to disease, pest, or poisonous agents that occur naturally, are unintentionally introduced, or are intentionally delivered by acts of terrorism. Americas agriculture and food system is an extensive, open, interconnected, diverse, and complex structure providing potential targets for terrorist attacks. We should provide the best protection possible against a successful attack on the United States agriculture and food system, which could have catastrophic health and economic effects. Definitions (3) In this directive: (a) The term critical infrastructure has the meaning given to that term in section 1016(e) of the USA PATRIOT Act of 2001 (42 U.S.C. 5195c(e)). (b) The term key resources has the meaning given that term in section 2(9) of the Homeland Security Act of 2002 (6 U.S.C. 101(9)). (c) The term Federal departments and agencies means those executive departments enumerated in 5 U.S.C. 101, and the Department of Homeland Security; indepen-dent establishments as defined by 5 U.S.C. 104(1); Government corporations as defined by 5 U.S.C. 103(1); and the United States Postal Service. (d) The terms State, and local government, when used in a geographical sense, have the same meanings given to those terms in section 2 of the Homeland Security Act of 2002 (6 U.S.C. 101). (e) The term Sector-Specific Agency means a Federal department or agency responsible for infrastructure protection activities in a designated critical infrastructure sector or key resources category. Policy (4) It is the policy of the United States to protect the agriculture and food system from terrorist attacks, major disasters, and other emergencies by: (a) identifying and prioritizing sector-critical infrastructure and key resources for establishing protection requirements;
A-1
(b) developing awareness and early warning capabilities to recognize threats; (c) mitigating vulnerabilities at critical production and processing nodes; (d) enhancing screening procedures for domestic and imported products; and (e) enhancing response and recovery procedures. (5) In implementing this directive, Federal departments and agencies will ensure that homeland security programs do not diminish the overall economic security of the United States. Roles and Responsibilities (6) As established in Homeland Security Presidential Directive-7 (HSPD-7), the Secretary of Homeland Security is responsible for coordinating the overall national effort to enhance the protection of the critical infrastructure and key resources of the United States. The Secretary of Homeland Security shall serve as the principal Federal official to lead, integrate, and coordinate implementation of efforts among Federal departments and agencies, State and local governments, and the private sector to protect critical infrastructure and key resources. This directive shall be implemented in a manner consistent with HSPD-7. (7) The Secretaries of Agriculture, Health and Human Services, and the Administrator of the Environmental Protection Agency will perform their responsibilities as Sector-Specific Agencies as delineated in HSPD-7. Awareness and Warning (8) The Secretaries of the Interior, Agriculture, Health and Human Services, the Administrator of the Environmental Protection Agency, and the heads of other appropriate Federal departments and agencies shall build upon and expand current monitoring and surveillance programs to: (a) develop robust, comprehensive, and fully coordinated surveillance and monitoring systems, including international information, for animal disease, plant disease, wildlife disease, food, public health, and water quality that provides early detection and awareness of disease, pest, or poisonous agents; (b) develop systems that, as appropriate, track specific animals and plants, as well as specific commodities and food; and (c) develop nationwide laboratory networks for food, veterinary, plant health, and water quality that integrate existing Federal and State laboratory resources, are interconnected, and utilize standardized diagnostic protocols and procedures. (9) The Attorney General, the Secretary of Homeland Security, and the Director of Central Intelligence, in coordination with the Secretaries of Agriculture, Health and Human Services, and the Administrator of the Environmental Protection Agency, shall develop and enhance intelligence operations and analysis capabilities focusing on the agriculture, food, and water sectors. These intelligence capabilities will include collection and analysis of information concerning threats, delivery systems, and methods that could be directed against these sectors. (10) The Secretary of Homeland Security shall coordinate with the Secretaries of Agriculture, Health and Human Services, and the Administrator of the Environmental Protection Agency, and the heads of other appropriate Federal departments and agencies to create a new biological threat awareness capacity that will enhance detection
A-2
Appendix A and characterization of an attack. This new capacity will build upon the improved and upgraded surveillance systems described in paragraph 8 and integrate and analyze domestic and international surveillance and monitoring data collected from human health, animal health, plant health, food, and water quality systems. The Secretary of Homeland Security will submit a report to me through the Homeland Security Council within 90 days of the date of this directive on specific options for establishing this capability, including recommendations for its organizational location and structure. Vulnerability Assessments (11) The Secretaries of Agriculture, Health and Human Services, and Homeland Security shall expand and continue vulnerability assessments of the agriculture and food sectors. These vulnerability assessments should identify requirements of the National Infrastructure Protection Plan developed by the Secretary of Homeland Security, as appropriate, and shall be updated every 2 years. Mitigation Strategies (12) The Secretary of Homeland Security and the Attorney General, working with the Secretaries of Agriculture, Health and Human Services, the Administrator of the Environmental Protection Agency, the Director of Central Intelligence, and the heads of other appropriate Federal departments and agencies shall prioritize, develop, and implement, as appropriate, mitigation strategies to protect vulnerable critical nodes of production or processing from the introduction of diseases, pests, or poisonous agents. (13) The Secretaries of Agriculture, Health and Human Services, and Homeland Security shall build on existing efforts to expand development of common screening and inspection procedures for agriculture and food items entering the United States and to maximize effective domestic inspection activities for food items within the United States. Response Planning and Recovery (14) The Secretary of Homeland Security, in coordination with the Secretaries of Agriculture, Health and Human Services, the Attorney General, and the Administrator of the Environmental Protection Agency, will ensure that the combined Federal, State, and local response capabilities are adequate to respond quickly and effectively to a terrorist attack, major disease outbreak, or other disaster affecting the national agriculture or food infrastructure. These activities will be integrated with other national homeland security preparedness activities developed under HSPD-8 on National Preparedness. (15) The Secretary of Homeland Security, in coordination with the Secretaries of Agriculture, Health and Human Services, the Attorney General, and the Administrator of the Environmental Protection Agency, shall develop a coordinated agriculture and foodspecific standardized response plan that will be integrated into the National Response Plan. This plan will ensure a coordinated response to an agriculture or food incident and will delineate the appropriate roles of Federal, State, local, and private sector partners, and will address risk communication for the general public. (16) The Secretaries of Agriculture and Health and Human Services, in coordination with the Secretary of Homeland Security and the Administrator of the Environmental Protection Agency, shall enhance recovery systems that are able to stabilize agriculture production, the food supply, and the economy, rapidly remove and effectively dispose of contaminated agriculture and food products or infected plants and animals, and decontaminate premises. (17) The Secretary of Agriculture shall study and make recommendations to the Homeland Security Council, within 120 days of the date of this directive, for the use of
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existing, and the creation of new, financial risk management tools encouraging selfprotection for agriculture and food enterprises vulnerable to losses due to terrorism. 18) The Secretary of Agriculture, in coordination with the Secretary of Homeland Security, and in consultation with the Secretary of Health and Human Services and the Administrator of the Environmental Protection Agency, shall work with State and local governments and the private sector to develop: (a) A National Veterinary Stockpile (NVS) containing sufficient amounts of animal vaccine, antiviral, or therapeutic products to appropriately respond to the most damaging animal diseases affecting human health and the economy and that will be capable of deployment within 24 hours of an outbreak. The NVS shall leverage where appropriate the mechanisms and infrastructure that have been developed for the management, storage, and distribution of the Strategic National Stockpile. (b) A National Plant Disease Recovery System (NPDRS) capable of responding to a high-consequence plant disease with pest control measures and the use of resistant seed varieties within a single growing season to sustain a reasonable level of production for economically important crops. The NPDRS will utilize the genetic resources contained in the U.S. National Plant Germplasm System, as well as the scientific capabilities of the Federal-State-industry agricultural research and extension system. The NPDRS shall include emergency planning for the use of resistant seed varieties and pesticide control measures to prevent, slow, or stop the spread of a high-consequence plant disease, such as wheat smut or soybean rust. Outreach and Professional Development (19) The Secretary of Homeland Security, in coordination with the Secretaries of Agriculture, Health and Human Services, and the heads of other appropriate Federal departments and agencies, shall work with appropriate private sector entities to establish an effective information sharing and analysis mechanism for agriculture and food. (20) The Secretaries of Agriculture and Health and Human Services, in consultation with the Secretaries of Homeland Security and Education, shall support the development of and promote higher education programs for the protection of animal, plant, and public health. To the extent permitted by law and subject to availability of funds, the program will provide capacity building grants to colleges and schools of veterinary medicine, public health, and agriculture that design higher education training programs for veterinarians in exotic animal diseases, epidemiology, and public health as well as new programs in plant diagnosis and treatment. (21) The Secretaries of Agriculture and Health and Human Services, in consultation with the Secretaries of Homeland Security and Education, shall support the development of and promote a higher education program to address protection of the food supply. To the extent permitted by law and subject to the availability of funds, the program will provide capacity-building grants to universities for interdisciplinary degree programs that combine training in food sciences, agriculture sciences, medicine, veterinary medicine, epidemiology, microbiology, chemistry, engineering, and mathematics (statistical modeling) to prepare food defense professionals. (22) The Secretaries of Agriculture, Health and Human Services, and Homeland Security shall establish opportunities for professional development and specialized training in agriculture and food protection, such as internships, fellowships, and other post-graduate opportunities that provide for homeland security professional workforce needs.
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Appendix A
Research and Development (23) The Secretaries of Homeland Security, Agriculture, and Health and Human Services, the Administrator of the Environmental Protection Agency, and the heads of other appropriate Federal departments and agencies, in consultation with the Director of the Office of Science and Technology Policy, will accelerate and expand development of current and new countermeasures against the intentional introduction or natural occurrence of catastrophic animal, plant, and zoonotic diseases. The Secretary of Homeland Security will coordinate these activities. This effort will include countermeasure research and development of new methods for detection, prevention technologies, agent characterization, and dose response relationships for high-consequence agents in the food and the water supply. (24) The Secretaries of Agriculture and Homeland Security will develop a plan to provide safe, secure, and state-of-the-art agriculture biocontainment laboratories that research and develop diagnostic capabilities for foreign animal and zoonotic diseases. (25) The Secretary of Homeland Security, in consultation with the Secretaries of Agriculture and Health and Human Services, shall establish university-based centers of excellence in agriculture and food security. Budget (26) For all future budgets, the Secretaries of Agriculture, Health and Human Services, and Homeland Security shall submit to the Director of the Office of Management and Budget, concurrent with their budget submissions, an integrated budget plan for defense of the United States food system. Implementation (27) Nothing in this directive alters, or impedes the ability to carry out, the authorities of the Federal departments and agencies to perform their responsibilities under law and consistent with applicable legal authorities and Presidential guidance. (28) This directive is intended only to improve the internal management of the executive branch of the Federal Government, and it is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity, against the United States, its departments, agencies, or other entities, its officers or employees, or any other person. GEORGE W. BUSH
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Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NOTICE: THE VIEWS, OPINIONS, AND FINDINGS CONTAINED IN THIS REPORT ARE THOSE OF LMI AND SHOULD NOT BE CONSTRUED AS AN OFFICIAL AGENCY POSITION, POLICY, OR DECISION, UNLESS SO DESIGNATED BY OTHER OFFICIAL DOCUMENTATION. LMI © 2007. ALL RIGHTS RESERVED.
National Veterinary Stockpile Program Office Support YOUR TASK You have been hired by the National Veterinary Stockpile (NVS) program office to help the fledgling program manage its operations. Because the program is so new, there is not yet adequate staff on board to assist with several key areas of management. The NVS Program Manager (PM) has asked your team for help in three critical areas. Specifically, the PM would like your team to ¡
prepare a template for a cost-benefit analysis (CBA) that will help to justify and defend an increase to future NVS budgets over the next 5 years, identifying the cost and benefit categories and the types of data you would require to conduct the analysis;
¡
develop at least three supply chain strategies that would allow the NVS program to respond to an animal disease outbreak, identifying the positives and negatives of each strategy and recommending the best strategy; and
¡
develop a set of performance measures the NVS could use to evaluate whether the program is achieving its mission goals, explaining how the NVS would collect the data for the identified measures.
To help you in your analysis, the NVS PM has provided all the data and information that he has regarding NVS program management, stockpile assets, animal population statistics, and supply chain management techniques.
PROGRAM BACKGROUND Mission The National Veterinary Stockpile is the nation’s repository of vaccines, personal protective equipment (PPE), and other critical veterinary products. It exists to augment state and local resources in the fight against dangerous animal diseases that could devastate American agriculture, seriously affect the economy, and threaten the public’s health. Homeland Security Presidential Directive 9 (HSPD-9) (see Appendix A) established the NVS in 2004 to respond to terrorist acts, major disasters, and other emergencies. It required the NVS to deploy within 24 hours “sufficient amounts 1 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
of animal vaccine, antiviral, or therapeutic products to appropriately respond to the most damaging animal diseases affecting human health and the economy…” The directive resulted from the nation’s concern that terrorists could, simultaneously and in multiple locations, release animal diseases of an unprecedented magnitude; thus, creating the need for an NVS that could deliver rapidly and at a lower cost, large quantities of critical veterinary supplies and equipment to the right place at the right time for as long as necessary. The NVS reflects two significant changes in the way the Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) can respond to and eradicate animal diseases. ¡
Logistics expertise focused on fighting disease. Previously, functional groups of specialists responding to an outbreak managed their own logistics support. This resulted in h duplication of effort by multiple groups, h more complex and potentially uncoordinated resource planning before
an event, h difficulty coordinating resources from multiple sources managed by
multiple groups during an event, and h higher response costs because each group purchased supplies in
smaller quantities and at higher prices. ¡
Larger supplies of vaccine and other critical items. Previously, APHIS eradicated disease outbreaks by destroying infected and potentially exposed animals. The unprecedented magnitude of an animal disease that terrorists might release makes the exclusive use of mass depopulation unlikely. Vaccines in the NVS give APHIS another option.
The NVS exists because state and local supplies are likely to be inadequate for responding to major outbreaks that could severely diminish the animal population and adversely affect the U.S. agricultural economy. While some states stockpile supplies for responding to animal outbreaks, their quantities are limited and not distributed universally among the states. If a state realizes it does not have the resources to contain and eradicate an animal outbreak, it can ask the NVS to provide the additional supplies it needs. Thus, the NVS is not intended to replace state efforts; it only augments what is already being done.
Organizational Structure The NVS is part of the APHIS Veterinary Services (VS) operational program unit. 1 Since the NVS is an emergency response organization, it falls under the 1
See http://www.aphis.usda.gov/.
2 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
National Center for Animal Health Emergency Management (NCAHEM) of VS. Figure 1 displays graphically where the NVS lies within USDA. Figure 1. NVS Organizational Chart
U.S. Department of Agriculture (USDA)
Animal and Plant Health Inspection Service (APHIS)
Veterinary Services (VS)
National Center for Animal Health Emergency Management (NCAHEM)
National Veterinary Stockpile (NVS)
Because the NVS is a relatively new program, it does not have its own line item within the APHIS/VS budget. Therefore, it must compete with other programs (not pictured here) that fall under the NCAHEM office for funding.
Program Goals The NVS has two primary goals. Within 5 years, it will acquire countermeasures against the 10 worst animal diseases including Highly Pathogenic Avian Influenza. Within 10 years, it will acquire countermeasures against all 17 of the most dangerous diseases. The NVS Steering Committee identified threats for which the NVS must have countermeasures. Comprised of veterinarians, emergency response experts, and individuals from partner government agencies, the Steering Committee specified 3 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
the diseases based on likelihood of disease outbreak, their potential effect on animal populations, and their potential threat to human beings. Diseases that animals can transfer to humans are referred to as zoonotic, of which Highly Pathogenic Avian Influenza (HPAI) is a prime example. HPAI would not only severely damage the U.S. poultry industry, but it could also lead to human pandemic influenza, the likes of which have not been seen since the 1918 pandemic that killed millions of people around the world. 2 During the past year, the NVS has begun to acquire the necessary vaccines and veterinary supplies to respond to these diseases including initially HPAI. 3
PROGRAM RESOURCES Staffing The NVS Program Office opened in February 2006. Currently, the federal employees are as follows: ¡
Program Manager—Oversees the entire program and its operations, including budget, acquisition of stockpile goods, risk management, evaluation of NVS performance, and other general management roles.
¡
Resource Manager—Assists the PM with budget formulation, finalizing acquisition purchases, and NVS data storage.
¡
Warehouse Manager—Oversees the NVS physical assets held in a government warehouse located in the Midwest. He/she manages inventory, reorders supplies, and ships items in case of an outbreak.
¡
Assistant Warehouse Manager—Assists the Warehouse Manager with day-to-day activities related to the physical assets of the stockpile.
Because the NVS program is new and has a very limited budget, the remaining Program Office employees are contract employees. Contractors are frequently used by programs until they can get permission for new positions or until the program budget is stable. Contractors oversee the NVS acquisition strategy, risk management process, and coordination with other emergency response federal agencies. Many of the functions currently provided by contractors are “inherently governmental” functions, which federal employees will eventually perform. The NVS has created a staffing plan that outlines the positions that it needs to fill with government employees, but budget constraints limit its hiring at this point. This is a major concern of the NVS PM who will hire additional federal workers as soon as the budget permits. 2 3
The ‘Animal Population Statistics’ section discusses these 17 diseases in more detail. The details of these efforts will be discussed in the next section, Program Resources.
4 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
Under current requirements, the PM believes the program will be fully staffed at 50 federal employees, with contractors continuing to support the Program Office in less critical roles. If program requirements should increase due to increasing terrorist or natural disease outbreak threats, the PM would increase necessary staffing capacity beyond this initial estimate. Increasing future staff requirements would also increase future budget needs. NVS staff will be augmented during disease outbreak responses by state and local personnel as well as by contracted staff for specific functions, such as decontamination and disposal of deceased animals. Additionally, USDA has 55 Area Veterinarians in Charge (AVICs) located around the country that have staff members who can be loaned to the NVS to assist with outbreak responses.
Budget For its initial year of operations, FY07, the NVS received a budget of $4.3 million. It also received $10 million from an Avian Influenza Prevention supplemental fund authorized by Congress. By comparison, the Strategic National Stockpile (SNS) at the Centers for Disease Control (CDC) received a first-year operating budget of more than $50 million. The NVS must meet many requirements within a very tight budget when compared to the CDC’s experience. Table 1 outlines the NVS PM’s hopes for increasing program budgets over future fiscal years. As the program grows, more funds will be needed each year to sustain the previous year’s operations and add increased capability. Table 1.NVS Budget Requests and Purpose FY
Budget Request
Purpose of Funds
2008
$40,000,000
Hire additional staff, purchase vaccines, PPE, IT logistics management system, decontamination and disposal services (at outbreak sites), training and exercises, and contracted services
2009
$75,000,000
Increase staff, mobile labs, satellite communication equipment, refresh vaccines and purchase for additional diseases, training and exercises, and contracted services
2010
$90,000,000
Increase staff, mobile command centers, refresh vaccines and purchase for additional diseases, training and exercises, and contracted services
2011
$110,000,000
Additional warehouse facility, increase staff, additional transportation contracts, refresh vaccines and purchase for additional diseases, and contracted services
2012
$150,000,000
Facility management, increased staff, additional transportation contracts, refresh vaccines and purchase for additional diseases, integration with state stockpiles, and contracted services
5 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
To increase the likelihood of receiving the budget amount it requested, the NVS will need to perform well on its performance measures, continue to support states during outbreaks, and demonstrate efficient use of previous funding.
Stockpile Assets The NVS Program is responsible for the acquisition, maintenance, security, transport, and timely deployment of the vaccines, personal protective equipment, and other critical veterinary supplies in the stockpile. The NVS supplies the following items and services: ¡
Vaccines
¡
Disease test kits
¡
Communications equipment
¡
Personal protective equipment for workers
¡
Cleaning and disinfectant items
¡
Contracted services for disposing of depopulated animals and decontaminating infected premises.
Table 2 displays the current NVS inventory and costs per unit. Table 2. NVS Inventory and Cost Per Unit Item
Cost per Unit
Quantity
Inventory Value
Poultry vaccine
$0.75
10,000,000
$7,500,000
Cattle vaccine
$1.45
5,000,000
$7,250,000
Swine vaccine
$1.23
5,000,000
$6,150,000
Disease test kits
$4.50
250,000
$1,125,000
$15.00
15,000
$225,000
PPE
$7.50
100,000
$750,000
Disinfectant items
$2.15
35,000
$75,250
$150,000.00
3
$450,000
Communications equipment
Contracts for animal carcass disposal Total
$23,525,250
RECENT OUTBREAK RESPONSE DATA The NVS responded to two actual outbreaks of low pathogenic avian influenza (LPAI) in 2007, one in West Virginia in March and one in Virginia in June. These outbreaks were very different in terms of size, the type of response, and the cost. These differences demonstrate the difficulty in planning for an emergency re6 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
sponse organization with a “one size fits all” mentality. Table 3 presents the data collected from each of the outbreaks. Table 3. Recent Outbreak Response Data Virginia
West Virginia
Number of infected 135 day-old turkeys (40-42 lbs) that were depopulated
31,235
15,456
Number of infected 16 day-old turkeys that were depopulated
29,000
0
Number of days of depopulation
5
2
Number of neighboring birds vaccinated ($0.75 per dose)
25,189
4,234
Number of USDA employees involved
2
10
Number of contractors used
25
4
Estimated NVS Cost
$1,235,000
$423,500
7 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
ANIMAL POPULATION INFORMATION Case for Vaccination Prior to establishment of the NVS, USDA’s typical response to dealing with an animal disease outbreak was to “depopulate,” or slaughter, the infected animals to control the disease from spreading further. However, this method of disease control is impractical as the sole method for responding to catastrophic disease outbreaks that terrorists might release. The effect of killing potentially millions of animals would be detrimental to the agricultural industry and the U.S. food supply. Therefore, USDA began focusing on vaccination as a means of controlling the spread of a disease and thus limiting the number of animals it might have to depopulate. Vaccination of every animal intended for the food supply against every potential disease is prohibitively expensive. Additionally, international trade issues arise when trying to export vaccinated beef or poultry to countries that do not accept “modified” food. For these reasons, universal vaccination of all animals at birth is not an option. Despite this fact, the use of vaccines in animal populations at risk of infection from a known disease can be an effective way of curbing further infection. For example, in a confirmed HPAI outbreak, it could be very useful to vaccinate poultry populations that are located near a confirmed outbreak. This establishes a zone around the infected population that stops the further spread of the disease. While the infected population must be destroyed, other animals could be saved from unnecessary depopulation.
Potential Diseases As discussed earlier, the NVS Steering Committee identified the most dangerous animal diseases that could threaten animal and human health. Table 4 lists these diseases and their effect on humans. All of these diseases are potentially fatal to the animal species they affect. The NVS does not currently have any probability data on which diseases are most likely to result in an outbreak.
8 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case Table 4. Diseases and Their Effects Disease
Within 5 Years
Within 10 Years
Animal industries affected
Public Health Threat?
Disease 1
Poultry
Yes, can be lethal
Disease 2
Cattle, swine, sheep
No
Disease 3
Cattle, sheep
Yes, can be lethal
Disease 4
Poultry
Yes, minor effects
Disease 5
Swine, horses
Yes, can be lethal
Disease 6
Swine
No
Disease 7
Swine
No
Disease 8
Cattle
Suspected
Disease 9
Cattle, sheep
No
Disease 10
Swine, equine
Yes, can be lethal
Disease 11
Equine
No
Disease 12
Equine
Yes, can be lethal
Disease 13
Cattle
No
Disease 14
Cattle, sheep, goats
Yes, can be lethal
Disease 15
Equine
Yes, can be lethal
Disease 16
Cattle, sheep, goats
Yes, can be lethal
Disease 17
Cattle, sheep, goats
No
Population Statistics The USDA has one of the largest research and data collection programs of all the civilian agencies. The NVS PM has provided your team with various animal population statistics to help you prepare the requested deliverables. The 17 animal diseases listed in Table 4 primarily affect poultry, swine, and cattle industries. Sales of these industries are in the billions. As you will see from the following tables and figures, regional populations of these animals vary significantly across the country. All of these statistics are from 2002. Table 5 provides national aggregate data on the number and sales value of animals. Table 5. National Inventory and Sales by Animal Type Inventory
Sales
Number
Value ($)
1,924,924,362
5,004,803,000
9,216,251,836
23,972,333,000
Swine
60,405,103
326,188,000
184,997,686
12,400,977,000
Cattle
95,497,994
58,607,119,000
73,509,165
45,115,184,000
Poultry
Number
Value ($)
9 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Figure 2 shows how USDA divides the 50 states into 13 regions for the purpose of collecting agricultural data. Figure 2. Geographic Agricultural Regions
Table 6 shows industry inventory and sales by region.
10 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case Table 6. Animal Population Inventory and Sales by Region Poultry Region
Swine
Inventory
Sales ($000)
1
183,228,707
835,316,886
1,370,630
4,827,907
4,264,330
1,958,315
2
140,680,815
202,666,564
26,003,769
68,754,378
13,318,779
13,222,025
3
25,755,018
65,999,610
1,462,793
4,083,637
4,336,326
2,049,199
767,497,856 4,168,085,469
11,720,620
47,445,566
10,242,643
5,292,351
117,712,440
33,479
50,533
1,738,874
847,869
6
494,390,728 2,753,944,081
5,782,646
20,132,601
13,555,531
8,565,789
7
106,473,139
565,447,909
956,779
1,664,948
15,569,756
13,667,695
8
53,856,420
109,900,182
11,060,982
32,114,778
16,434,776
14,286,143
9
9,082,689
8,819,207
1,570,793
5,195,944
5,344,854
5,813,847
10
19,977,919
56,558,384
74,582
162,649
4,449,754
3,913,519
11
67,822,295
300,050,226
163,465
308,769
6,075,454
3,830,318
12
815,442
1,342,165
23,364
33,231
154,308
60,739
13
7,240
13,390
1,201
2,002
12,609
1,356
4 5
32,696,604
Inventory
Cattle
Sales ($000)
Inventory
11 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Sales ($000)
THE SUPPLY CHAIN As the NVS expands, it will need an effective supply chain to support program requirements. Because of fiscal constraints, that supply chain will need to reflect a defensible compromise between cost and the responsiveness. Additionally, different items the NVS is procuring have different lead times from vendors, i.e. some take longer to be delivered than others. For instance, vaccines need time to become potent, whereas protective gloves for workers can be shipped as orders are processed. There also may be only one supplier for some items, limiting the ability for the NVS to shop around for the best availability. Based on current projections and budget constraints, the PM believes the NVS can be considered fully operational when it has stockpiled enough veterinary vaccines and equipment to vaccinate 5 percent of the U.S. poultry, cattle, and swine population. The PM has a basic understanding of the structure of two other government agencies that deal with similar emergency response functions: the Centers for Disease Control (CDC) and the Federal Emergency Management Agency (FEMA). These agencies serve significantly different target populations, so their systems may or may not be appropriate for the NVS.
CDC Description The CDC’s Strategic National Stockpile (SNS) developed its supply chain to respond within 12 hours to a variety of outbreaks, natural disasters, and terrorist attacks. The SNS program is well established and funded. Because of its mission to protect human populations, SNS is willing to pay a high price to make response time its top priority. Its response takes two forms. In the early hours of an event when people become sick or die in the early hours of an ill-defined event, the SNS will ship by truck or airplane a 12 hour push package “12 hours” because the package will arrive within 12 hours, “push” because a state need only ask for help and CDC will ship (i.e. push) 50 tons of a broad spectrum of pharmaceuticals and other critical medical supplies. CDC packs its push pack into 130 specialized containers that significantly reduce the time it spends pulling stock from warehouses or contacting multiple vendors once a disaster occurs. When authorities identify the threat, the SNS will typically follow the shipment of a push package with shipments of large quantities of specific pharmaceuticals and other critical medical supplies. Managed either internally (stockpile managed inventory or SMI) or by vendors (vendor managed inventory or VMI), these shipments typically arrive within 24 to 36 hours. If a threat is immediately known, these shipments may occur first without a prior push package shipment. 12 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
The CDC stores its push packages at secure, strategic locations across the United States. Much of the storage is in existing federal or state warehouses, but the CDC does use commercial warehouses, too. Through experience, government agencies have found that built-out costs for leasing commercial warehouses can run $4.5 million to renovate a 155,000 sq ft facility. Some push packages are located in or near airports, while others are near major population centers. When responding to an emergency, the push packages are sent by truck or plane to locations designated by the state. The CDC has negotiated contracts with major carriers that ensure availability of aircraft and trucks for deployment during an emergency. This service is relatively expensive. It requires extensive prior planning with state and local officials to determine the best location for delivery of SNS supplies and the procedures the state will use to receive and process the supplies once they arrive.
FEMA Description FEMA’s mission is to provide supplies and services to disaster victims when the President determines that an emergency warrants federal assistance. National emergencies include natural disasters, such as hurricanes, earthquakes, floods, and tornados, as well as man-made disasters, such as terrorist incidents. During such disasters, the National Response Plan assigns primary responsibility for responding to emergencies to local and state governments. When disaster requirements exceed the capabilities of local and state capabilities, the state’s Governor may request federal assistance by asking the President to declare a national emergency. If the President approves the request, FEMA and other federal resources activate. Once the President declares a national emergency, FEMA’s goal is to deliver its initial response of commodities and services within 24 hours. To support response and recovery efforts, FEMA operates four logistics centers (LC) in the continental United States in Frederick, MD; Atlanta, GA; Fort Worth, TX; and, San Jose, CA; and two overseas LCs in Puerto Rico and Guam. The LCs stock, store, and issue a small range of FEMA-owned life-saving and life-sustaining commodities, such as water, food, medical supplies, tarps, plastic sheeting, cots, and blankets. Many of these commodities have a limited shelf life, particularly when they are stored in outside trailers rather than in covered storage. Less urgent commodities are often purchased locally during disasters. FEMA outsources storage for select commodities, ice in particular, when the agency lacks sufficient internal infrastructure. Where storage is outsourced, FEMA contracts generally require the vendor to deliver on demand within specific time periods. Other government agencies augment the supplies that FEMA provides during emergencies. For example, the Defense Logistics Agency (DLA) provides MealsReady to Eat from its inventories and contracts; the US Army Corps of Engineers: 13 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
ice and water; and the General Services Administration provides a wide range of general commodities, such as blankets and tools. FEMA uses a combination of internal and external resources for transportation. The agency owns and manages a variety of vehicles, including communication RVs, medical support trailers, and trailers. It has a limited number of drivers for delivery. FEMA owns some of its trucks and leases others. The agency has contractual arrangements with commercial companies to provide additional drivers and power units when required. During a disaster, a joint field office (JFO)—FEMA’s onsite disaster support team—initiates all requests for federal materials and services. Depending upon availability, the JFO can either use existing supplies and contracts for services or place purchase orders with local vendors. FEMA uses existing inventories to satisfy the requirement if the material can be delivered by the required delivery date. FEMA supports the resource requirements for responding to emergencies in a variety of ways. For instance, its medical supplies and equipment are kitted so they are ready for shipment. The medical kits are designed to support a predetermined number of casualties. Local authorities order the kits based on the specific mission and anticipated demand. FEMA ships the kits directly to the disaster relief area. Inventories of other commodities are generally ordered and shipped in truckload quantities of a single commodity, which minimizes the need for subsequent handling at the final destination. FEMA uses algorithms to determine the required quantities and the number of trucks. Requests for inventory flows from a JFO to a regional response coordination center and ultimately to the Logistics Response Center (LRC) located in FEMA Headquarters (HQ) in Washington, DC. The LRC validates the requests and determines the availability of inventory. If stock is available, the LRC determines which LC will issue it and simultaneously forwards the request to both the LC and the transportation coordination team located in FEMA HQ. Transportation arranges for drivers and power units while the LCs pull the material. After pulling the material, the LC loads the trucks and notifies the LRC and JFO that the material has been shipped. Trucks are usually routed to a designated federal operations staging area (FOSA) for further distribution. FOSAs are generally located about 100 miles from the disaster, often on a military installation. The trucks are pre-staged at the FOSA until a state-operated point of distribution (POD) requires the material. During Hurricane Katrina, the Superdome served as a POD, which provides supplies to disaster victims. Inventory ownership generally transfers from the federal government to the state at a POD. A full trailer is dropped at the POD and an empty trailer is pulled back to the FOSA, where it is subsequently returned to the original LC. 14 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
In the event the FOSA capacity limits the number of trucks on site, FEMA will stage the trucks at an intermediate location, known as a mobilization center, between the LC and the FOSA to await subsequent routing to a FOSA.
15 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Existing NVS Infrastructure Presently, the NVS program has limited warehouse capacity and funding to store its veterinary inventory. Its sole warehouse facility is located in the Midwest and leased from the General Services Administration (GSA), another federal agency. This facility has limited storage capacity and will not provide any short- or longterm solutions for meeting the increased requirements of the NVS program. A potential solution is to convert several GSA tenant spaces—totaling 325,000 sq ft— to warehouse space. GSA is working on a concept design for renovating an additional 90,000 sq ft of warehouse space now occupied by Government Agency A (GOVA). GSA recently completed a concept design report detailing costs for renovating approximately 235,000 sq ft of warehouse space now occupied by Government Agency B (GOVB) as well. GSA plans to renovate the GOVA facility to meet NVS’s needs. This facility is environmentally controlled and currently contains a mix of office and warehouse space. The renovation is scheduled for completion in FY07. GSA’s plans also call for renovating two GOVB facilities that are located next to NVS’ current warehouses. The costs for renovating these facilities are significant because of the need for environmental cleanup. These facilities are environmentally controlled and tall enough to store inventory three levels high. The renovation is scheduled for completion in FY08. Table 7 summarizes the current renovation plans for the GSA complex. Table 7. Current Renovations and Cost
Facility GOVA GOVB facilities 1 and 2
Square footage
Cost ($)
Renovation completion
90,000 sq. ft.
$1.2 million
FY07
235,000 sq. ft.
$2.5 million
FY08
In addition to the annual charges, GSA will charge the NVS for preparing the facilities prior to occupancy and for managing the additional facilities. These two sources of cost are listed in Table 8 below.
16 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case Table 8. FY07-FY09 Costs: Renovated GSA Facilities Item
FY07
Facility name
FY08
GOVA
Square footage
GOVA
90,000
Structural costs ($)
1,015,804
Personnel costs ($)
424,000
Equipment costs ($) Office costs ($)
FY09
GOVB
90,000
48,900
GOVB
235,000
90,000
235,000
529,554 2,268,700
529,554
1,117,700
342,000
467,460
359,100
445,200 –
265,084
GOVA
262,838
70,900
–
–
210,000
270,980
102,500
1,267,994
1,679,300
Subtotal
1,753,788
1,237,592 2,891,600
Cumulative Total
1,753,788
4,129,192
2,947,294
To evaluate the cost of taking over GSA facilities, the NVS also has the information in Table 9, which outlines the costs of using commercial warehouses based on the CDC’s formulas. Table 9. FY07–FY09 Costs: Midwestern USA Commercial Warehouse FY07
FY08
FY09
Square footage ($)
90,000
90,000
235,000
90,000
235,000
Structural costs ($)
3,532,193
630,000
9,222,949
630,000
1,645,000
Personnel costs ($)
424,000
445,500
342,000
467,460
359,100
Equipment costs ($)
48,900
–
60,900
–
–
265,084
262,838
210,000
270980
202,500
10,000
10,000
20,000
10,000
20,000
Subtotal
4,280,177
1,348,038
9,855,849
1,378,440
2,226,600
Cumulative Total
4,280,177
Office costs ($) Utilities ($)
11,203,887
3,605,040
The cost of commercial warehouse space runs about $7 per square foot, and it is available around the country if NVS needs a decentralized system. At only $4.42 per square foot, GSA costs for warehouse space are significantly lower in cost but may not be available in all markets.
17 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Overview of Typical Government Supply Chains The NVS can choose one or multiple ways to procure and store the products it needs. Below are brief descriptions of four typical procurement and management techniques. ¡
Government-owned and government-managed—The government purchases materiel and manages it in its own warehouses located across the country. This method is used when the government expects to need the products immediately but may not be able to get them quickly from the commercial sector. This method is known as stockpile managed inventory, or SMI, because the government owns the products and manages their storage and shipment. This method poses a challenge for the government when its commodities have a limited shelf life or rigid environmental requirements such as temperature or humidity. In addition, this storage method requires significant investment in warehouses and full time staff even though demands for product may be rare.
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Government-owned and vendor-managed—The government purchases the material outright and compensates the vendor to store and rotate it at the vendor’s site. The government pays the vendor a management fee to cover the storage and rotation of the materiel. This method works well for products that require intermediate processing by the vendor before the government can ship them. Some veterinary products fall in this category. This method is referred to as vendor managed inventory or VMI.
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Government-owned with third party management—The government owns the material but uses a commercial firm to warehouse and manage the inventory. Third party logistics firms use newer technology and sometime benefit from economies of scale. In addition, with this method the government does not have to make a long-term investment in a single or multiple logistics centers with this method.
¡
Contracted for guaranteed access (vendor owned and managed)—the government pays vendors to hold a clearly defined quantity of materiel that it purchases only when it is required during an emergency. For example, vaccines stored by a vendor as bulk antigen (long shelf life) provide the government with guaranteed production to the final vaccine (short shelf life) and delivery during an outbreak. In this case, the NVS will pay a production fee to produce the final vaccine and a management and antigen purchase fee under this option. In this situation, the government has less control over the items it procures and may not be able to adequately assess the vendor’s capability before an event. This option may represent more risk than some agencies are willing to accept.
Procurement and storage arrangements have a direct impact on the resulting distribution system. In situations where products are government-owned and 18 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
NVS Business Case
-managed, the government can choose between centralized or decentralized distribution systems. In a centralized distribution system, all products are kept in one location (or several warehouses in a single location). This may reduce infrastructure costs and personnel costs, but it increases travel and response times. It also increases the risk that sabotage, weather, or other factors may interfere with emergency deployments. In a decentralized system products may be located in multiple locations that are closer to potential outbreaks. This system is typically more expensive, more responsive, and less risky. Other times the system develops as a hybrid with some products being available at only one location while others are available at most or all of the warehouses. As the NVS creates its infrastructure, it needs to consider transportation options. In considering its options, it wants to consider cost, reliability, ramp-up capability, and flexibility. The NVS can use trucks, rail, and/or cargo planes to transport goods to outbreaks and relocate inventory from one location to another. It can choose to maintain and operate an organic transportation capability or outsource this capability to a specialized commercial firm.
19 Certain facts in this case study have been changed to protect NVS proprietary information. Data provided is based in reality, but has been modified.
Appendix A
Homeland Security Presidential Directive 9 Homeland Security Presidential Directive/HSPD-9 Subject: Defense of United States Agriculture and Food January 30, 2004 Purpose (1) This directive establishes a national policy to defend the agriculture and food system against terrorist attacks, major disasters, and other emergencies. Background (2) The United States agriculture and food systems are vulnerable to disease, pest, or poisonous agents that occur naturally, are unintentionally introduced, or are intentionally delivered by acts of terrorism. Americas agriculture and food system is an extensive, open, interconnected, diverse, and complex structure providing potential targets for terrorist attacks. We should provide the best protection possible against a successful attack on the United States agriculture and food system, which could have catastrophic health and economic effects. Definitions (3) In this directive: (a) The term critical infrastructure has the meaning given to that term in section 1016(e) of the USA PATRIOT Act of 2001 (42 U.S.C. 5195c(e)). (b) The term key resources has the meaning given that term in section 2(9) of the Homeland Security Act of 2002 (6 U.S.C. 101(9)). (c) The term Federal departments and agencies means those executive departments enumerated in 5 U.S.C. 101, and the Department of Homeland Security; indepen-dent establishments as defined by 5 U.S.C. 104(1); Government corporations as defined by 5 U.S.C. 103(1); and the United States Postal Service. (d) The terms State, and local government, when used in a geographical sense, have the same meanings given to those terms in section 2 of the Homeland Security Act of 2002 (6 U.S.C. 101). (e) The term Sector-Specific Agency means a Federal department or agency responsible for infrastructure protection activities in a designated critical infrastructure sector or key resources category. Policy (4) It is the policy of the United States to protect the agriculture and food system from terrorist attacks, major disasters, and other emergencies by: (a) identifying and prioritizing sector-critical infrastructure and key resources for establishing protection requirements;
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(b) developing awareness and early warning capabilities to recognize threats; (c) mitigating vulnerabilities at critical production and processing nodes; (d) enhancing screening procedures for domestic and imported products; and (e) enhancing response and recovery procedures. (5) In implementing this directive, Federal departments and agencies will ensure that homeland security programs do not diminish the overall economic security of the United States. Roles and Responsibilities (6) As established in Homeland Security Presidential Directive-7 (HSPD-7), the Secretary of Homeland Security is responsible for coordinating the overall national effort to enhance the protection of the critical infrastructure and key resources of the United States. The Secretary of Homeland Security shall serve as the principal Federal official to lead, integrate, and coordinate implementation of efforts among Federal departments and agencies, State and local governments, and the private sector to protect critical infrastructure and key resources. This directive shall be implemented in a manner consistent with HSPD-7. (7) The Secretaries of Agriculture, Health and Human Services, and the Administrator of the Environmental Protection Agency will perform their responsibilities as Sector-Specific Agencies as delineated in HSPD-7. Awareness and Warning (8) The Secretaries of the Interior, Agriculture, Health and Human Services, the Administrator of the Environmental Protection Agency, and the heads of other appropriate Federal departments and agencies shall build upon and expand current monitoring and surveillance programs to: (a) develop robust, comprehensive, and fully coordinated surveillance and monitoring systems, including international information, for animal disease, plant disease, wildlife disease, food, public health, and water quality that provides early detection and awareness of disease, pest, or poisonous agents; (b) develop systems that, as appropriate, track specific animals and plants, as well as specific commodities and food; and (c) develop nationwide laboratory networks for food, veterinary, plant health, and water quality that integrate existing Federal and State laboratory resources, are interconnected, and utilize standardized diagnostic protocols and procedures. (9) The Attorney General, the Secretary of Homeland Security, and the Director of Central Intelligence, in coordination with the Secretaries of Agriculture, Health and Human Services, and the Administrator of the Environmental Protection Agency, shall develop and enhance intelligence operations and analysis capabilities focusing on the agriculture, food, and water sectors. These intelligence capabilities will include collection and analysis of information concerning threats, delivery systems, and methods that could be directed against these sectors. (10) The Secretary of Homeland Security shall coordinate with the Secretaries of Agriculture, Health and Human Services, and the Administrator of the Environmental Protection Agency, and the heads of other appropriate Federal departments and agencies to create a new biological threat awareness capacity that will enhance detection
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Appendix A and characterization of an attack. This new capacity will build upon the improved and upgraded surveillance systems described in paragraph 8 and integrate and analyze domestic and international surveillance and monitoring data collected from human health, animal health, plant health, food, and water quality systems. The Secretary of Homeland Security will submit a report to me through the Homeland Security Council within 90 days of the date of this directive on specific options for establishing this capability, including recommendations for its organizational location and structure. Vulnerability Assessments (11) The Secretaries of Agriculture, Health and Human Services, and Homeland Security shall expand and continue vulnerability assessments of the agriculture and food sectors. These vulnerability assessments should identify requirements of the National Infrastructure Protection Plan developed by the Secretary of Homeland Security, as appropriate, and shall be updated every 2 years. Mitigation Strategies (12) The Secretary of Homeland Security and the Attorney General, working with the Secretaries of Agriculture, Health and Human Services, the Administrator of the Environmental Protection Agency, the Director of Central Intelligence, and the heads of other appropriate Federal departments and agencies shall prioritize, develop, and implement, as appropriate, mitigation strategies to protect vulnerable critical nodes of production or processing from the introduction of diseases, pests, or poisonous agents. (13) The Secretaries of Agriculture, Health and Human Services, and Homeland Security shall build on existing efforts to expand development of common screening and inspection procedures for agriculture and food items entering the United States and to maximize effective domestic inspection activities for food items within the United States. Response Planning and Recovery (14) The Secretary of Homeland Security, in coordination with the Secretaries of Agriculture, Health and Human Services, the Attorney General, and the Administrator of the Environmental Protection Agency, will ensure that the combined Federal, State, and local response capabilities are adequate to respond quickly and effectively to a terrorist attack, major disease outbreak, or other disaster affecting the national agriculture or food infrastructure. These activities will be integrated with other national homeland security preparedness activities developed under HSPD-8 on National Preparedness. (15) The Secretary of Homeland Security, in coordination with the Secretaries of Agriculture, Health and Human Services, the Attorney General, and the Administrator of the Environmental Protection Agency, shall develop a coordinated agriculture and foodspecific standardized response plan that will be integrated into the National Response Plan. This plan will ensure a coordinated response to an agriculture or food incident and will delineate the appropriate roles of Federal, State, local, and private sector partners, and will address risk communication for the general public. (16) The Secretaries of Agriculture and Health and Human Services, in coordination with the Secretary of Homeland Security and the Administrator of the Environmental Protection Agency, shall enhance recovery systems that are able to stabilize agriculture production, the food supply, and the economy, rapidly remove and effectively dispose of contaminated agriculture and food products or infected plants and animals, and decontaminate premises. (17) The Secretary of Agriculture shall study and make recommendations to the Homeland Security Council, within 120 days of the date of this directive, for the use of
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existing, and the creation of new, financial risk management tools encouraging selfprotection for agriculture and food enterprises vulnerable to losses due to terrorism. 18) The Secretary of Agriculture, in coordination with the Secretary of Homeland Security, and in consultation with the Secretary of Health and Human Services and the Administrator of the Environmental Protection Agency, shall work with State and local governments and the private sector to develop: (a) A National Veterinary Stockpile (NVS) containing sufficient amounts of animal vaccine, antiviral, or therapeutic products to appropriately respond to the most damaging animal diseases affecting human health and the economy and that will be capable of deployment within 24 hours of an outbreak. The NVS shall leverage where appropriate the mechanisms and infrastructure that have been developed for the management, storage, and distribution of the Strategic National Stockpile. (b) A National Plant Disease Recovery System (NPDRS) capable of responding to a high-consequence plant disease with pest control measures and the use of resistant seed varieties within a single growing season to sustain a reasonable level of production for economically important crops. The NPDRS will utilize the genetic resources contained in the U.S. National Plant Germplasm System, as well as the scientific capabilities of the Federal-State-industry agricultural research and extension system. The NPDRS shall include emergency planning for the use of resistant seed varieties and pesticide control measures to prevent, slow, or stop the spread of a high-consequence plant disease, such as wheat smut or soybean rust. Outreach and Professional Development (19) The Secretary of Homeland Security, in coordination with the Secretaries of Agriculture, Health and Human Services, and the heads of other appropriate Federal departments and agencies, shall work with appropriate private sector entities to establish an effective information sharing and analysis mechanism for agriculture and food. (20) The Secretaries of Agriculture and Health and Human Services, in consultation with the Secretaries of Homeland Security and Education, shall support the development of and promote higher education programs for the protection of animal, plant, and public health. To the extent permitted by law and subject to availability of funds, the program will provide capacity building grants to colleges and schools of veterinary medicine, public health, and agriculture that design higher education training programs for veterinarians in exotic animal diseases, epidemiology, and public health as well as new programs in plant diagnosis and treatment. (21) The Secretaries of Agriculture and Health and Human Services, in consultation with the Secretaries of Homeland Security and Education, shall support the development of and promote a higher education program to address protection of the food supply. To the extent permitted by law and subject to the availability of funds, the program will provide capacity-building grants to universities for interdisciplinary degree programs that combine training in food sciences, agriculture sciences, medicine, veterinary medicine, epidemiology, microbiology, chemistry, engineering, and mathematics (statistical modeling) to prepare food defense professionals. (22) The Secretaries of Agriculture, Health and Human Services, and Homeland Security shall establish opportunities for professional development and specialized training in agriculture and food protection, such as internships, fellowships, and other post-graduate opportunities that provide for homeland security professional workforce needs.
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Appendix A
Research and Development (23) The Secretaries of Homeland Security, Agriculture, and Health and Human Services, the Administrator of the Environmental Protection Agency, and the heads of other appropriate Federal departments and agencies, in consultation with the Director of the Office of Science and Technology Policy, will accelerate and expand development of current and new countermeasures against the intentional introduction or natural occurrence of catastrophic animal, plant, and zoonotic diseases. The Secretary of Homeland Security will coordinate these activities. This effort will include countermeasure research and development of new methods for detection, prevention technologies, agent characterization, and dose response relationships for high-consequence agents in the food and the water supply. (24) The Secretaries of Agriculture and Homeland Security will develop a plan to provide safe, secure, and state-of-the-art agriculture biocontainment laboratories that research and develop diagnostic capabilities for foreign animal and zoonotic diseases. (25) The Secretary of Homeland Security, in consultation with the Secretaries of Agriculture and Health and Human Services, shall establish university-based centers of excellence in agriculture and food security. Budget (26) For all future budgets, the Secretaries of Agriculture, Health and Human Services, and Homeland Security shall submit to the Director of the Office of Management and Budget, concurrent with their budget submissions, an integrated budget plan for defense of the United States food system. Implementation (27) Nothing in this directive alters, or impedes the ability to carry out, the authorities of the Federal departments and agencies to perform their responsibilities under law and consistent with applicable legal authorities and Presidential guidance. (28) This directive is intended only to improve the internal management of the executive branch of the Federal Government, and it is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity, against the United States, its departments, agencies, or other entities, its officers or employees, or any other person. GEORGE W. BUSH
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