Laboratory Accreditation for Analyses of Foods FRIA

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration

Laboratory Accreditation for Analyses of Foods
(LAAF)
Docket No. FDA-2019-N-3325

Final Regulatory Impact Analysis
Final Regulatory Flexibility Analysis
Unfunded Mandates Reform Act Analysis

Economics Staff
Office of Economics and Analysis
Office of Policy, Legislation, and International Affairs
Office of the Commissioner

Table of Contents
I. Introduction and Summary......................................................................................................... 5
A. Introduction ............................................................................................................................ 5
B. Summary of Costs and Benefits ............................................................................................. 6
C. Definition of Terms Used in the Analysis .............................................................................. 8
D. Comments to this Rule ......................................................................................................... 11
E. Other Updates in the FRIA ................................................................................................... 20
II. Final Regulatory Impact Analysis............................................................................................ 27
A. Background .......................................................................................................................... 27
B. Need for Federal Regulatory Action .................................................................................... 29
C. Purpose of the Rule............................................................................................................... 31
D. Baseline Conditions .............................................................................................................. 32
1. Number of entities ............................................................................................................ 33
a. The pool of ABs potentially affected by the rule .......................................................... 33
b. The pool of labs potentially affected by the rule .......................................................... 34
i. The pool of labs that perform covered tests of import related food potentially
affected by the rule .................................................................................................... 35
ii. The pool of labs that test shell eggs, sprouts, and bottled drinking water subject to
specific testing requirements and labs that conduct other tests covered under the rule
potentially affected by the rule .................................................................................. 35
c. The number of affected owners or consignees of import related food the tests of which
are covered under this rule ............................................................................................ 36
d. The number of shell egg, sprouts, and bottled drinking water manufacturers affected by
this rule .......................................................................................................................... 37
e. The total number of entities affected by the rule .......................................................... 37
2. The current baseline practices of affected entities ............................................................ 38
a. The current accreditation status of labs that perform tests that will be covered by the
rule ................................................................................................................................ 38
b. The baseline number of analytical reports .................................................................... 39
i. Analytical reports of import related food testing covered under this rule ................. 39
ii. Analytical reports of tests of shell eggs subject to specific testing requirements ..... 39
iii. Analytical reports of tests of sprouts and bottled drinking water subject to specific
testing requirements covered under this rule ............................................................. 40
iv. Analytical reports of tests conducted to satisfy Directed Food Laboratory Orders
(DFLO), and for tests to satisfy other administrative orders covered by the rule ..... 41
c. Baseline costs for labs to compile and for us to review an analytical report ................ 43
E. Benefits of this Rule ............................................................................................................. 47
1. Cost savings from abridged analytical reports for tests of import related food covered
under this rule ................................................................................................................... 51
2. Total cost savings from allowing abridged analytical reports .......................................... 53
3. Cost savings from reduced burdens to review analytical reports of tests of import related
food covered under this rule due to improvements to the current management systems . 54
4. Total cost savings from this rule....................................................................................... 55
5. Improved test performance ............................................................................................... 55
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a. Fewer false negative results for tests covered under this rule....................................... 59
i. Consumer exposure to fewer contaminated servings of import related food the tests
of which are covered under this rule ......................................................................... 60
ii. Consumer exposure to fewer contaminated servings of shell eggs, sprouts and
bottled drinking water the tests of which are covered under this rule ....................... 63
iii. Fewer illnesses from fewer contaminated servings on the market ............................ 67
a. Illnesses avoided from fewer contaminated servings of import related food,
sprouts, and bottled water covered by the rule ...................................................... 68
b. Illnesses avoided from fewer contaminated servings of shell eggs covered by the
rule ......................................................................................................................... 72
c. Illnesses avoided from fewer contaminated servings of food subject to a DFLO
and covered tests from other administrative orders ............................................... 73
iv. Avoided Quality-adjusted Life-days (QALDs) from fewer contaminated servings on
the market .................................................................................................................. 74
b. Avoided revenue losses from fewer false positive test results...................................... 78
i. Avoided revenue losses from fewer false positive test results for import related food
the tests of which are covered under this rule ........................................................... 79
ii. Avoided revenue losses from fewer false positive test results for shell eggs, sprouts,
and bottled drinking water subject to testing requirements ....................................... 80
iii. Total avoided revenue losses ..................................................................................... 82
6. Deterrence of unsafe food manufacturing practices due to better expected test
performance ...................................................................................................................... 83
7. Improved test reporting practices from test reporting requirements ................................ 85
8. Total benefits of this rule .................................................................................................. 85
F. Costs of this Rule.................................................................................................................. 86
1. Costs incurred by participating ABs ................................................................................. 87
a. Costs for initial applications for recognition................................................................. 88
b. Costs for applications for renewal of recognition ......................................................... 89
c. Costs to modify existing programs to accredit labs to the standards established by this
rule ................................................................................................................................ 90
d. Costs to periodically assess participating labs .............................................................. 91
e. Recordkeeping and reporting costs ............................................................................... 92
f. Summary of costs incurred by ABs .............................................................................. 93
2. Costs incurred at the lab level........................................................................................... 94
a. Costs to attain and maintain accreditation to the ISO/IEC 17025:2017 standard ......... 95
b. Costs for participating labs to be assessed by us and ABs.......................................... 103
c. Costs to participate in a proficiency testing program ................................................. 104
d. Costs to validate testing methodology ........................................................................ 104
e. One-time costs to compile and submit five consecutive successful full analytical
reports per major food testing discipline prior to requesting permission to submit
abridged analytical reports .......................................................................................... 105
f. Total costs incurred at the participating lab level ....................................................... 106
3. Costs incurred for each test............................................................................................. 107
a. Costs of the advance notice of sampling ..................................................................... 108
3

b. Costs to generate a sample collection plan and to compile a sample collection report
109
c. Costs for participating labs to collect sampler credentials, sample collection plans, and
reports and to confirm LAAF-accreditation status for methods of testing that they
conduct ........................................................................................................................ 111
d. Costs to report results from validation and verification studies.................................. 112
e. Costs to compile an analytical report with test results ................................................ 114
f. Costs for switching to participating labs accredited to the appropriate scope ............ 116
g. Costs for the DFLO and covered tests from other administrative orders covered by the
rule .............................................................................................................................. 119
h. Summary of costs incurred by test .............................................................................. 121
4. Cost of fewer false negative test findings ....................................................................... 121
5. One-time costs to read and understand the rule .............................................................. 123
6. FDA costs ....................................................................................................................... 124
a. Costs for management systems upgrades, maintenance, and training ........................ 125
b. Costs to evaluate the initial applications for recognition ............................................ 126
c. Costs to evaluate applications for renewal .................................................................. 126
d. Costs to maintain website registry with information on ABs and labs ....................... 127
e. One-time costs to review five consecutive successful full analytical reports per major
food testing discipline per lab prior to qualifying for abridged analytical reports ..... 128
f. Costs to review analytical reports ............................................................................... 129
g. Costs to review the performance of participating labs ................................................ 130
h. Summary of FDA costs ............................................................................................... 131
7. Summary of total annualized and present value of costs of this rule discounted at seven
percent and at three percent over 10 years...................................................................... 132
a. Distributional effects ................................................................................................... 133
b. International effects..................................................................................................... 134
c. Uncertainty and sensitivity analysis ............................................................................ 134
G. Analysis of Regulatory Alternatives to this Rule ............................................................... 135
1. Do not allow abridged analytical reports ........................................................................ 135
2. Cover only tests of import related food covered under this rule .................................... 135
3. Exclude the DFLO and requirements to use a participating lab for other administrative
orders covered under this rule......................................................................................... 136
III. Final Small Entity Analysis .................................................................................................. 137
A. Description and Number of Affected Small Entities .......................................................... 137
B. Description of the Potential Impacts of the Rule on Small Entities ................................... 139
C. Alternatives to Minimize the Burden on Small Entities ..................................................... 142
IV. References ............................................................................................................................. 143

4

I.

Introduction and Summary

A. Introduction
We have examined the impacts of this rule under Executive Order 12866, Executive
Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all
costs and benefits of available regulatory alternatives and, when regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts; and equity). We believe that
this final rule is not a significant regulatory action as defined by Executive Order 12866.
The Regulatory Flexibility Act requires us to analyze regulatory options that would
minimize any significant impact of a rule on small entities. Because the per-entity one-time costs
of the rule may exceed one percent of revenues for accreditation bodies and laboratories that
choose to participate in the Laboratory Accreditation for Analyses of Foods (LAAF) program,
we find that the final rule will have a significant economic impact on a substantial number of
small entities.
The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a
written statement, which includes an assessment of anticipated costs and benefits, before issuing
“any rule that includes any Federal mandate that may result in the expenditure by State, local,
and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more
(adjusted annually for inflation) in any one year.” The current threshold after adjustment for
inflation is $158 million, using the most current (2020) Implicit Price Deflator for the Gross
Domestic Product. This final rule would not result in an expenditure in any year that meets or
exceeds this amount.
5

B. Summary of Costs and Benefits
The rule will require that testing of food in certain circumstances be performed by a
laboratory (LAAF-accredited or participating lab) accredited to the new standards established by
the final rule by a recognized accreditation body (participating AB), and for the test results to be
submitted to us. The costs of the rule will primarily be incurred by participating ABs,
participating labs, shell egg producers, sprouts producers, bottled drinking water manufacturers,
owners and consignees of import related food, and us. Rarely, certain firms will have
participating labs conduct tests for several reasons including as part of a corrective action plan
after an order suspending registration, as part of evidence for a hearing prior to issuance of a
mandatory recall order, as part of evidence for an appeal of an administrative detention order,
and as would be required under a food testing order (FTO) (now referred to as a Directed Food
Laboratory Order (DFLO)). We will incur costs to establish and maintain the program for
recognizing ABs that apply to participate in our program, evaluating participating ABs and
reviewing the performance of participating labs, and for reviewing associated documents and
reports. The present value of the costs of the rule ranges from $38 million to $66 million when
discounted by 7 percent over 10 years and from $43 million to $77 million when discounted by 3
percent over 10 years. Annualized costs over 10 years range from $5.8 million to $9.6 million
when discounted by 7 percent, and from $5.9 million to $9.7 million when discounted by 3
percent.
The rule will generate some quantified and unquantified benefits. Quantified benefits
include a reduction in the number of foodborne illnesses from fewer false negative test results for
import related food covered under the rule and for shell eggs, sprouts, and bottled drinking water
6

and other food subject to testing requirements covered under the rule. We anticipate cost savings
from the clarifications of the process for compiling, submitting, and reviewing analytical reports
for import related food covered under this rule, including reduced reporting burden. There would
be less revenue lost from fewer false positive test results for import related food covered under
the rule and for tests of shell eggs, sprouts, and bottled drinking water and other food subject to
testing requirements covered under the rule. The present value of the benefits of the rule ranges
from $46 million to $88 million when discounted at 7 percent over 10 years and range from $56
million to $106 million when discounted at 3 percent over 10 years. Annualized benefits over 10
years range from $6.6 million to $12.5 million when discounted by both 7 and 3 percent.
Unquantified benefits may include fewer illnesses from deterring unsafe manufacturing
practices by all entities covered by the rule. We expect that specific test reporting requirements
will result in more accurate analytical reports and reporting. 1
We have developed a comprehensive Economic Analysis of Impacts that assesses the
impacts of this rule. In Table 1 we provide the Regulatory Information Service Center (RISC)
and Office of Information and Regulatory Affairs Consolidated Information System accounting
information.

1

We note that there are currently no reporting requirements for tests of shell eggs, sprouts, or bottled drinking water.

7

Table 1: Summary of Benefits, Costs and Distributional Effects of Final Rule1
Category
Annualized
Monetized
$millions/year

Benefits

Annualized
Quantified
Qualitative

Year
Dollars

Units
Discount
Rate

Period
Covered

$12.5

2020

7%

10 years

$12.5

2020

3%

10 years

Primary Estimate

Low
Estimate

High
Estimate

$9.1

$6.6

$9.1

$6.6

Reduced risk of food-related illness from
improved test performance for covered tests.
Cost savings from clarifying reporting
requirements and from allowing abridged
analytical reports

7%
3%

Reduced risk of food-related illness from unsafe
food manufacturing practices
$7.9
$5.8
$9.6

Notes
Cost
savings
and
avoided
QALD
losses

Annualized
2020
7%
10 years
Monetized
$7.9
$5.9
$9.7
2020
3%
10 years
$millions/year
Costs
Annualized
7%
Quantified
3%
Qualitative
Federal
7%
Annualized
3%
Monetized
$millions/year
From/ To
From:
To:
Transfers
Other
7%
Annualized
3%
Monetized
$millions/year
From/To
From:
To:
State, Local, or Tribal Government: None
Small Business: Potential impacts on laboratories currently not accredited to ISO/IEC 17025:2017 that would
participate in the LAAF program described by this rule.
Effects
Wages: None
Growth: None
1
The lower bound equals the fifth percentile and the upper bound equals the 95th percentile.

C. Definition of Terms Used in the Analysis
Throughout the analysis we use the following terms. We note that the definitions of these
terms only apply to this document.
•

We/us/our/Agency is used to refer to the Food and Drug Administration (FDA).
8

•

ISO/IEC 17025 (ISO/IEC 17025:2017) is the 2017 version of the International
Organization for Standardization/International Electrotechnical Commission
(ISO/IEC) standard, an internationally recognized set of management and
technical requirements used to evaluate a laboratory’s competence to carry out
tests or calibrations, including sampling. ISO/IEC 17025 is a voluntary
international consensus standard for which labs hold accreditation to be deemed
technically competent.

•

ISO/IEC 17011 (ISO/IEC 17011:2017) is the 2017 version of the voluntary
international consensus standard that specifies requirements for the competence,
consistent operation, and impartiality of accreditation bodies assessing and
accrediting testing laboratories and other conformity assessment bodies.

•

Accreditation refers to the independent assessment of a laboratory, against
recognized standards, to carry out specific activities that ensure impartiality and
competence.

•

International Laboratory Accreditation Cooperation (ILAC) is an international
organization for accreditation bodies operating in accordance with ISO/IEC
17011 and involved in assessing and accrediting testing laboratories; ILAC’s
primary purpose is to establish an international arrangement between member
accreditation bodies based on peer evaluation and mutual acceptance.

•

ILAC Mutual Recognition Arrangement (MRA) is an international agreement that
provides the technical basis to assess and accredit testing laboratories to ISO/IEC
17025. Accreditation bodies that are signatories to the ILAC MRA have been peer
evaluated in accordance with the requirements of ISO/IEC 17011 to demonstrate
their competence and agree to recognize each other’s results.

•

Accreditation Bodies (ABs) is a general term that includes all accreditation bodies
that could be affected by the rule.

•

LAAF is an acronym for Laboratory Accreditation for Analyses of Foods, which
refers to our laboratory accreditation program as established by the rule.

•

Labs is a general term that includes all laboratories that could be affected by the
rule.

•

Participating or LAAF-accredited labs refers to laboratories that participate in the
LAAF program.

•

Participating ABs refers to ABs that participate in the LAAF program.

•

Food testing or testing of food means the analysis of food product samples or
environmental samples.
9

•

Import Alerts are FDA alerts listing products which may be detained after they
are imported or offered for import, without physically examining the products,
due to their violative history or potential.

•

Import related food testing refers to the testing of food offered for import or
potentially offered for import, where the findings from analytical tests are used to
support admissibility of the food. Food testing related to an import alert falls into
this category.

•

Other testing covered under this rule refers to:
o testing required by FDA in a directed food laboratory order (DFLO), or
o testing to address an identified or suspected food safety problem and
presented to FDA as part of evidence for a hearing prior to the issuance of a
mandatory food recall order, as part of a corrective action plan submitted after
an order suspending the registration of a food facility, or as part of evidence
submitted for an appeal of an administrative detention order.

•

Owners and consignees refer to any person with an ownership or consignment
interest in the food product or environment that is the subject of food testing
covered by the rule.

•

Scope refers to the testing methods to which a lab is LAAF-accredited.

•

Specific testing requirements refer to food testing conducted in any of the
following circumstances:
o In response to explicit testing requirements that address an identified or
suspected food safety problem, which are contained in regulations for the
production of sprouts, shell eggs, and bottled drinking water. Each of these
explicit testing requirements refers to a follow-up or corrective action after a
routine test is positive for a pathogen, or indicator organism.

•

Switching costs refer to the incremental costs to send samples to a participating
lab instead of a currently used lab that chooses not to participate in the LAAF
program.

•

Proficiency test (PT), according to ISO, is an evaluation of participant
performance against pre-established criteria by means of interlaboratory
comparison measures.

•

Full analytical report refers to the entire set of information, including test results,
that will be sent by a LAAF-accredited lab to FDA.

10

•

Major Food Testing Discipline refers to the major types of tests for which a
participating lab is accredited.

•

Abridged analytical report refers to a subset of the information that would be
required in a full analytical report that will be sent by a LAAF-accredited lab to
FDA.

•

Negative means a food test showed no indication of a public health concern.

•

Positive means a food test showed some indication of a public health concern
(e.g., pathogen).

D. Comments to this Rule
FDA’s proposed rule “Laboratory Accreditation for Analyses of Foods” (84 FR 59452)
was published on November 4, 2019. The comment period was extended twice – on February 28,
2020 (85 FR 11893) and April 6, 2020 (85 FR 19114) – and closed July 6, 2020. We describe
and respond to comments we received on the Preliminary Regulatory Impact Analysis (PRIA) of
the proposed rule in the following paragraphs. We have numbered each comment to help
distinguish between the different comment themes. The number assigned to each comment is
purely for organizational purposes and does not signify the comment’s value, or the order in
which topics were discussed in the comment(s).
(Comment 1) We received comments stating that the assumption that large ISO/IEC
17025:2017 accredited laboratories also adhere to the AOAC/ALACC Guidelines, while small
laboratories may not, is incorrect. The comments assert that laboratories that test only animal
food (including feed), whether large or small, likely adhere to the AAFCO Guidelines for Feed
Laboratories whether these laboratories are accredited to ISO/IEC 17025:2017 or not. These
comments recommend that we include cost considerations for laboratories that adhere to the
AAFCO Guidelines both singly and jointly with the AOAC/ALACC Guidelines.
11

(Response 1) We adopt the recommendation provided in the comments that both large
and small laboratories accredited to ISO/IEC 17025:2017 are equally likely to adhere to
AOAC/ALACC Guidelines, and have revised our estimate of the costs for the proficiency testing
requirement (per AOAC Guidelines) accordingly. We assume laboratories that adhere to AOAC
Guidelines and AAFCO Guidelines will incur fewer costs to become accredited to ISO/IEC
17025:2017 and we have made that assumption explicit in the Final Regulatory Impact Analysis
(FRIA) by adding “...we assume the costs to become accredited to ISO/IEC 17025:2017 for
laboratories that adhere to AOAC Guidelines and AAFCO Guidelines would fall in the lower
end of the estimated range....”
(Comment 2) Some comments note that the loaded wage, including overhead, used to
estimate the costs to generate a sample collection plan, to compile a sample collection report, or
to prepare an advance notice of sampling is very high and not representative of the actual wages,
including overhead, of laboratory technicians around the world.
(Response 2) We acknowledge that the loaded wage used in the PRIA may not be
representative of the wages, including overhead, of laboratory technicians around the world. We
have added to the text the caveat “...costs for sample collection plans and reports and advance
notices of sampling prepared outside the United States may differ based on the wages of the
countries where they are prepared....”
(Comment 3) A small number of comments suggest that only 8-10 accreditation bodies
would apply to be recognized, based on commenters’ experience with ABs that participate in the
Accredited Third-Party Certification Program (ATPCP), and ask that we justify our estimate of
17.5 ABs used in the PRIA.

12

(Response 3) We concur with the comments’ suggestion to use information from the
ATPCP to estimate the number of accreditation bodies that will participate in the LAAF
program. Currently, there are 4 ABs that participate in the ATPCP. The LAAF Program will
cover tests of shell eggs, sprouts, and bottled drinking water, as well as import related food tests.
Because accreditation bodies covered by the ATPCP could also oversee laboratories that conduct
these tests, we estimate that 4 ABs will participate in the LAAF program – the same number that
participate in the ATPCP.
(Comment 4) Some comments disagree with our estimate of the costs for Inter
Laboratory Comparisons (ILCs) and proficiency tests. A subset of the comments disagrees with
our assumption that ILCs are half the costs of proficiency testing (PT) programs. We understand
the comments to suggest that the total cost to a participating laboratory for an ILC would be
about the same as that for a PT because the cost for either of those items is just a fraction of the
laboratory’s total cost of participation; the comments list additional costs including labor and
supplies. Another subset of the comments disagrees with our use of $0 as a lower bound on cost
for ILCs. These comments suggest that although ILCs may be “free” to a participating lab, the
provider still incurs costs such as those associated with providing the test items and issuing
reports. Further, these comments note that long-standing ILC series may cost participating
laboratories a nominal fee and for shipping, or participating laboratories may rotate the role of
provider.
(Response 4) We adopt the recommendation provided in the comments that the total cost
for an ILC is about the same as that for a PT. The requirements in the final rule are similar to the
AOAC Guidelines for PT and require PT at least once a year for each method within each scope
of LAAF-accreditation. This exceeds the requirements for PT in the current ISO/IEC
13

17025:2017 standard which allows flexibility for laboratories to participate in either ILC or PT at
unspecified frequencies. Consequently, we now estimate the costs of the rule from the
requirement for PT are the one-time costs for 50 percent of laboratories to incorporate that
change into their laboratory management systems. We assume the one-time cost to incorporate
changes into management systems from participating in ILCs to performing PTs is negligible.
(Comment 5) Some comments express concern that the PRIA did not consider the costs
from the food testing order (FTO, now directed food laboratory order (DFLO) in the final rule)
requirements. Some comments suggest that the costs associated with the DFLO outweigh the
benefits. In particular, these comments focus on the costs from “test and hold” programs that
would be incurred while waiting for the test results. These comments claim that test and hold
programs could precipitate disruptions in production schedules. A subset of these comments
claims that the requirement to use a LAAF-accredited laboratory and the potential need for us to
observe sampling (were we to require an advance notice of sampling), could also cause
disruptions to production scheduling.
Some comments note that the PRIA does not estimate the direct costs of the FTO (now
DFLO), including the costs of testing, the costs associated with validating specific test methods
and matrices, and the cost of maintaining accreditation. A subset of these comments is
specifically concerned that we could require firms under FTOs (now DFLOs) to engage in
method validation. Other comments note that the use of labs accredited under the LAAF program
under circumstances requiring a DFLO could cost more than the use of other available
laboratories.
(Response 5) We did not make explicit our estimate of the direct costs of the DFLO or
demonstrate quantitatively that the costs outweigh the benefits. We do so here and refer to the
14

section entitled “Costs for the DFLO and covered tests from other administrative orders covered
by the rule” in the FRIA for further details. The DFLO is a new administrative tool requiring the
use of a LAAF-accredited lab for analyses in the rare situations when we have reason to question
the accuracy and reliability of past or present test results and an identified or suspected food
safety problem exists. We intend to issue a DFLO when there is both a validated method and
sufficient laboratories LAAF-accredited to that method. Consequently, we do not address costs
associated with firms engaging in method validation here.
In the PRIA we estimated the frequency of our use of a DFLO (previously FTO) as the
same as our use of other administrative tools with tests covered by this rule; Administrative
Detentions (AD), Suspensions of Registrations (SR) and Mandatory Recalls (MR). In the FRIA
we make that link quantitative and report our method and estimates here. We required ADs 10
times between 2011 and 2020 and MRs once during that time period (Ref. 1 and 2). We used
SRs six times between 2011 and 2020 (Ref. 3). We estimate our annual use of a DFLO will be
between 0.1 and 1 (1/10 years and 10/10 years) and report the baseline frequencies of ADs, SRs,
and MRs and our estimate for DFLOs in the section entitled “Analytical reports of tests
conducted to satisfy Directed Food Laboratory Orders (DFLO), and for tests to satisfy other
administrative orders covered by the rule” in the FRIA and in Table 2.

Table 2: Numbers of ADs, SRs, MRs and DFLOs
ADs
SRs
MRs
DFLOs

Total since 2011
10
6
1
N/A

15

Annual Frequency
1
0.6
0.1
0.1 to 1

A DFLO requires a firm to use a LAAF-accredited lab to conduct the analysis of food
product samples or environmental samples and have the results sent directly to us. We do not
know the total number of tests and analytical reports that will be subject to a DFLO requirement
and use as a guide the rounds of testing ordered in recently adjudicated consent decrees
involving food facilities found to be in violation of the FD&C Act.
Many consent decrees have no explicit food product testing requirements. We identified
four consent decrees ordered in 2016 that made explicit the testing frequencies (e.g., weekly) and
prescribed additional details for finished product testing (e.g., every lot per finished product, one
lot from each finished product). We use these four adjudicated consent decrees as the basis for
estimating the numbers of tests and analytical reports that will be subject to a DFLO. The first
round may require daily product tests over the course of a week’s worth of production (5 tests),
the second round may require weekly tests over the course of the subsequent month (4 tests), and
the third round may require monthly tests over the subsequent year (12 tests). We assume these
tests would be analyzed by a LAAF-accredited lab and the results and related analytical report
sent directly to us. Consequently, we estimate there will be 21 analytical reports generated for
each DFLO.
We estimate the costs of the DFLO requirement using the same methodology we used in
the PRIA to estimate costs for other tests that will be subject to the rule. We refer to the section
entitled “Costs for the DFLO and other testing covered by the rule related to other administrative
orders covered by the rule” section in the FRIA for additional details. We summarize the costs
below:
1) generate a sample collection plan ($38.55 to $77.10),
2) compile a sample collection report ($38.55 to $77.10),
16

3) collect the sample collection report and ensure the analysis and methods fall
within the participating LAAF-accredited lab’s scope ($12.85 to $25.70),
4) verify analytic methods for specific foods (matrix extensions) ($0.88),
5) switching costs ($72.98),
6) compile and submit an analytic report ($205.98 to $411.98), and
7) our review ($225).
We estimate the annual cost of the DFLO provision is $10,000. We assume the number
of tests and analytical reports estimated for a DFLO is the same as the number of tests and
analytical reports for the other testing covered by the rule that relates to other administrative
orders and estimate the costs of these provisions are about $10,000.
We also estimate the avoided Quality-adjusted Life-day (QALD) losses from the DFLO
and covered tests for other administrative orders. In the PRIA we estimated avoided QALD
losses from better tests of import related food covered by the rule and for tests of shell eggs,
sprouts, and bottled drinking water covered by the rule - treating tests of shell eggs, sprouts, and
bottled drinking water as one category without distinguishing between them. In the FRIA, we
make explicit our estimate for the avoided QALD losses from the DFLO and tests for other
administrative orders covered by the rule. We separately estimate the avoided QALD losses from
better tests of shell eggs, sprouts, and bottled drinking water.
In the FRIA, we estimate that more consistently accurate tests required by the DFLO will
prevent illnesses at the same rate as those prevented for import related food tests covered by the
rule. Moreover, we assume the number of servings of food subject to a DFLO is the same as the
number of servings in a shipment of import related food covered by the rule. Consequently, we
divide the number of illnesses averted from reducing the number of false negative shipments of
import related food (an average of about 322 illnesses) by the number of fewer false negative
17

tests of that food (an average of about 21 fewer shipments with false negative test results) to
obtain the number of illnesses avoided per contaminated shipment of import related food (an
average of about 15 illnesses per contaminated shipment). We then multiply by the annual
number of DFLO (0.1 to 1.0) to obtain the annual number of illnesses avoided from the DFLO
(an average of about 10).
We assume the QALD loss from an illness from food that will now be subject to a DFLO
would be the same as the QALD loss from an illness of import related food covered under the
rule and obtain the annual average avoided QALD losses from the DFLO of about $69,000.
Please see the section entitled “Avoided Quality-adjusted Life-days (QALDs) from fewer
contaminated servings on the market” in the FRIA for additional details of this estimate. We
make the same assumptions for the avoided QALD losses from the other tests covered under the
rule related to other administrative orders, and estimate the annual average avoided QALD losses
from those tests combined are about $69,000. We also estimate fewer false positives from more
accurate tests of food subject to a DFLO and other administrative orders will result in negligible
savings. This is consistent with the small number of tests per year.
We disagree with the comment that any test and hold activities that arise from the FTO
(now DFLO) constitute a cost of the rule. Consumers would ordinarily assume the food is safe to
consume at the time of purchase and obtain utility from that assumption. If the food is actually
unsafe at the time of purchase, the utility obtained from assuming it is safe is misplaced. Rather
the consumers’ utility of unsafe food at the time of purchase is likely close to zero or even
negative. We consider any costs incurred from disruptions in production and shipping schedules
as a transfer from producers to consumers from making food safe that would otherwise be unsafe

18

at the time of purchase. We do not consider transfers to be costs and have added this discussion
in the FRIA.
(Comment 6) Some comments state that the PRIA did not clearly define large and small
labs.
(Response 6) We disagree that there was no definition of large and small labs in the
PRIA. We adopt the definitions of “small” used by the Small Business Administration for the
various types of entities affected by the rule, including labs, as described in Section III. A. in the
Initial Small Entity Analysis. In the Final Small Entity Analysis, we use the Small Business
Administration definitions of “small” and report our estimate that all entities covered by the
proposed rule are small.
(Comment 7) Several comments note that the cost estimates are unclear. Some comments
express uncertainty regarding whether the PRIA accounted for the time and resources to collect
and store the data required by the rule. Some comments contend that the costs may outweigh the
benefits. Some comments indicate that the unquantified benefits of the rule contribute to
uncertainty.
(Response 72) We try to be clear and transparent with our methods and assumptions for
estimating the costs and benefits. We estimate the benefits (about $9.1 million) are greater than
the costs (about $7.9 million). We acknowledge there may be some uncertainty from the
unquantified benefits but the costs of the activities that generate these benefits is quantified, and
the unquantified benefits generated from these activities is greater than zero. We also
acknowledge there will be costs for data collection and storage most of which are captured in the
costs to become accredited to the ISO/IEC 17025:2017 standard described in the FRIA.

19

Although the comments did not specify which data or storage costs we failed to capture, we
discuss in detail in the FRIA the costs incurred by ABs and LAAF-accredited labs.

E. Other Updates in the FRIA
Eastern Research Group (ERG) completed a profile of the laboratory and analytical
testing sector (Profile) affected by the final rule in January 2020 (Ref. 4). Per that Profile, there
are 70 to 200 sprouts testing labs 2 and 15 to 38 shell egg testing labs that will be affected by the
final rule compared to our estimate of 16 to 50 total shell egg, sprouts, and bottled drinking water
testing labs in the PRIA. Moreover, per the Profile, current rates of ISO/IEC 17025:2017
accreditation for shell egg testing labs are lower than those estimated for the PRIA (0.30 - 0.37
compared to 0.51 – 0.95).
We used estimates reported in the Profile to estimate the number of shell egg, sprouts,
and bottled drinking water analytical reports that will be submitted, and reviewed by us, per the
final rule requirements. ERG derived the number of shell egg tests (144,000 - 187,000) from
reports of the annual number of environmental positives obtained from hen houses (720 - 1,400)
using an estimated positive rate of 1.1 percent of environmental tests. In the FRIA, we use expert
judgment that a majority of shell eggs from molted flocks (50 to 75 percent) will be diverted to
the processed egg market following an environmental positive test, with 20 percent of flocks
molted (Ref. 5). Consequently, we estimate that 10 to 15 percent of shell eggs will be diverted to
the processed egg market to avoid additional shell egg testing (20 percent hens molted x 50 to 75

Throughout the FRIA we use “sprouts testing lab” as a shorthand way of describing labs that conduct the follow-up
tests related to sprouts in existing FDA regulations (the Produce Safety Rule), but actually much of that testing is not
of sprouts themselves but rather the sprout-growing environment.

2

20

percent diversion rate for molted hens = 10 to 15 percent shell eggs diverted following a positive
environmental test result) and that 2,520 to 5,023 shell egg analytical reports at 50 test results per
report will be submitted, and reviewed by us, annually. We use estimates reported in the Profile
that 60 to 480 sprouts analytical reports at 10 test results per report will be submitted to and
reviewed by us. The Profile reports that positive bottled drinking water test results that will
require the use of a LAAF-accredited lab are rare, and we estimate 0 to 2 analytical reports for
bottled drinking water will be submitted to and reviewed by us annually.
Internal data and comments to the proposed rule suggest that most labs that currently test
food offered for import covered under the rule are accredited to ISO/IEC 17025:2017. In the
PRIA, we estimated that only labs that test import related food currently accredited to ISO/IEC
17025:2017 will participate in the LAAF program and that two to eight labs that perform tests of
shell eggs, sprouts, and bottled drinking water covered under the rule that are not accredited to
ISO/IEC 17025:2017 will incur costs to become accredited to ISO/IEC 17025:2017 in order to
participate in the LAAF program. In the FRIA we refine our estimates of the number of labs
from each sector that will choose to participate in the LAAF program and the numbers that will
choose not to participate based on the estimated costs to become accredited to ISO/IEC
1725:2017 and the estimated revenue from covered tests for each sector.
Based on information contained in the Profile we estimate the total revenue to labs from
covered tests of shell eggs, sprouts, and bottled drinking water, and assume the costs to
participate in the LAAF program will be lower for labs already accredited to ISO/IEC
17025:2017 and that currently conduct covered tests. We assume the covered tests for shell eggs,
sprouts, and bottled drinking water currently conducted by labs are distributed uniformly across
all labs in each sector, including those that are accredited to ISO/IEC 17025:2017 and those that
21

are not accredited to ISO/IEC 17025:2017. We estimate the number of labs that may incur the
one-time and annual costs to become accredited to ISO/IEC 17025:2017 due to the rule based on
the revenue from covered tests that remains after labs already accredited to ISO/IEC 17025:2017
participate in the LAAF program. In the FRIA we estimate that for covered tests of import
related food, sprouts, and bottled drinking water only labs that are currently accredited to
ISO/IEC 17025:2017 and conduct those tests will participate in the LAAF program. We estimate
that revenues from covered tests for import related food, sprouts, and bottled drinking that are
left over after labs that are already accredited to ISO/IEC 17025:2017 have chosen to participate
in the LAAF program are insufficient to cover the costs of becoming accredited to ISO/IEC
17025:2017. Consequently, we estimate that 10 to 44 labs that conduct covered tests of import
related food, 60 to 190 labs that conduct covered tests of sprouts, and 0 to 1 labs that conduct
covered tests of bottled drinking water will participate in the LAAF program. We estimate that
labs that currently conduct covered tests of import related food, sprouts, and bottled drinking
water and that are not accredited to ISO/IEC 17025:2017 are not likely to participate in the
LAAF program.
We estimate there will be sufficient revenue left over from covered tests of shell eggs
once labs currently accredited to ISO/IEC 17025:2017 participate in the LAAF program to cover
the costs for some labs to become accredited to ISO/IEC 17025:2017 that are currently not
accredited to that standard. We estimate that 7 to 10 labs that conduct covered tests of shell eggs
may incur one-time and annual costs to become accredited to ISO/IEC 17025:2017 to participate
in the LAAF program and that a total of 15 to 21 labs that conduct covered tests of shell eggs
will participate in the LAAF program.

22

There will be switching costs – costs to switch to a participating lab – added to the costs
of those tests currently performed by labs that choose not to participate in the LAAF program.
We estimate switching costs as the additional costs to ship a sample to a LAAF-accredited lab
that may be located further away than the lab that otherwise would have been selected. We
acknowledge the possibility that when switching costs are high or costs to become accredited to
ISO/IEC 17025:2017 are low, additional labs may choose to participate in the LAAF program.
We did not estimate the number of such labs that would choose to participate in the LAAF
program because of high switching costs or low costs to become accredited to ISO/IEC
17025:2017. Rather, we assume switching costs and the costs for these labs to become accredited
to ISO/IEC 17025 are offsetting.
We note there is uncertainty about the number of labs that will participate in the LAAF
program, and the Agency’s plan to issue a Federal Register notice 6 months prior to requiring
owners and consignees to use a LAAF-accredited laboratory for testing ensures there will be
enough lab capacity in the LAAF program for any tests that are required. The stepwise approach
to implementation and giving a 6-month notice to owners and consignees prior to requiring the
use of LAAF-accredited laboratories affects the timing of costs incurred for tests covered by the
rule. We estimate that the benefits and costs will be incurred for import related food covered by
the rule one to two years following publication of the final rule. We believe that timeframe is
realistic because import related owners and consignees, and labs conducting import related tests,
are already used to sending analytical reports to FDA, and because comments assert there is
currently sufficient lab capacity to conduct at least all import related tests covered by the rule.
For tests of shell eggs, sprouts, and bottled drinking water covered by the rule, we estimate
benefits and costs will be incurred two to three years following publication of the rule. Those
23

industries and laboratories do not currently submit analytical reports to FDA in connection with
the tests covered by the rule, so we anticipate that it will take longer to attain sufficient lab
capacity for such tests. We discount public health benefits from better tests of food covered by
the rule by three percent and the costs and cost savings by seven percent. We report a summary
of the updates based on estimates from the Profile as well as from public comments in Table 3,
Table 4, and Table 5.

Table 3: Summary of substantive changes in the FRIA based on public comments,
clarifications, and updates
Labs that currently test shell
eggs, sprouts, and bottled
drinking water1
Labs that would incur costs to
become ISO/IEC 17025:2017
accredited
Rates of ISO/IEC 17025:2017
accreditation of labs that test
shell eggs
The annual number of
analytical reports for tests of
import related food covered by
the rule
The annual number of
analytical reports: shell eggs,
sprouts, and bottled drinking
water
Number of full analytical
reports prior to gaining
permission to submit abridged
analytical reports
Number of ABs that will apply
to be recognized
Number of labs that test import
related food covered under the
rule that will participate in the
LAAF program
Number of labs that test shell
eggs subject to specific testing
requirements that will

PRIA

FRIA

16 – 50 labs

215 – 418 labs

2 – 8 labs

7 – 10 labs

51 – 95 percent

30 – 37 percent

10,708 – 15,110

11,648

1,334 – 7,060

2,640 – 5,985

10 full analytical reports
representative of the lab’s
major food testing disciplines

5 full analytical reports per major
food testing discipline. 1 to 3 major
food testing disciplines per lab.

5 – 80, with a mean of 17.5
ABs

4, the current number of ATPCPapproved ABs

4 – 25

10 – 44

15 – 50

15 – 21

24

participate in the LAAF
program
Number of labs that test sprouts
subject to specific testing
requirements that will
participate in the LAAF
program
Number of verification and
validation studies evaluated by
ABs for purposes of the LAAF
program
Annual frequencies of
Administrative Detentions,
Mandatory Recalls and
Suspensions of Registrations
Annual frequencies of the FTO
(now DFLO)
Benefits and costs of the FTO
(now DFLO)
Benefits and costs of tests of
other administrative orders
covered by the rule
Estimate of the effect of the
improved laboratory
performance on the number of
shipments.
Benefits of covered tests of
sprouts and bottled drinking
water

Fully loaded wages

PRIA

FRIA

Included in the number of labs
that test shell eggs and bottled
drinking water

60 – 190

1 – 10 studies per lab

0

Infrequent

0.1 to 1 per year

Negligible number of
analytical reports
Infrequent

2.1 to 21 analytical reports
annually
0.1 to 1 per year

Negligible number of
analytical reports
We did not separately estimate
benefits and costs of the FTO
We did not separately estimate
benefits and costs of the tests
from other administrative
orders covered by the rule

2.1. to 21 analytical reports
annually
Benefits: $69,000
Costs: $10,000

Applied the improved
performance rate to the
baseline rates of test findings
Benefits estimated jointly with
those of covered tests of shell
eggs
Microbiologist: $75.38
Natural Science Manager:
$128.52
Food Scientist and
Technologist: $69.22
Lawyer: $136.44
FDA/ORA: $116.75

25

Benefits: $69,000
Costs: $10,000
Obtained the number of false test
results from the rule and subtracted
from the baseline number of false
test results to obtain the number of
fewer false test results from the rule
Benefits of covered tests of shell
eggs, sprouts, and bottled drinking
water estimated separately
Microbiologist: $88.30
Natural Science Manager: $148.89
Food Scientist and Technologist:
$77.10
Lawyer: $143.18
FDA/ORA wage: $119.08
Acknowledge in the FRIA that the
loaded wage used in the PRIA may
not be representative of the wages,
including overhead, of laboratory
technicians around the world.

PRIA

Estimates of QALD losses per
illness from import related
food, shell eggs, sprouts, and
bottled drinking water updated

Switching cost occurrence by
testing category

Timing of costs and benefits
(the effect of the stepwise
approach to implementation
and the 6-month FR notice
provision)

FRIA
QALD loss per illness of imported
QALD loss per illness of
food estimated using Gould, et al.
imported food is the average
illnesses from imports, Scallan, et
QALD loss per illness reported
al. underreporting multipliers and
in Minor, et al. (about $1,100)
Minor, et al. QALD loss estimates,
updated to 2016 levels.
updated to 2020 values.
0 - 5 percent of samples of
3.2 - 7.5 percent of samples of
import related food, and 5 - 49
import related food, 5 -15 percent
percent of samples of shell
of sprouts samples and bottled
eggs, sprouts, and bottled
drinking water samples and 63 to 70
drinking water.
percent of shell egg samples.
Costs and benefits for tests of
import related food covered by the
rule will be incurred one to two
All costs and benefits would be
years following publication of the
incurred in the first year
rule. Costs and benefits for tests of
following publication of the
shell eggs, sprouts, and bottled
rule
drinking water will be incurred two
to three years following publication
of the rule.

Final estimate includes 70 - 200 sprouts testing labs and 15 - 38 shell egg testing labs in the pool of labs potentially
affected by the rule per ERG report.

1

Table 4: Summary of changes in the cost estimates
Categories of costs
AB costs
Costs incurred at the lab level
Costs incurred by test
Cost incurred from fewer false negatives
Learning costs
Government costs
Total annualized costs of this rule

PRIA primary estimate
$203,257
$2,148,893
$2,296,107
$2,561
$769,098
$1,308,178
$6,728,094

26

FRIA primary estimate
$175,166
$3,527,536
$1,589,601
$4,206
$1,030,784
$1,569,189
$7,896,481

Table 5: Summary of changes in the benefits estimates
Categories of benefits
Cost savings from clarifications of the processes for
compiling and reviewing analytical reports of tests of
import related food covered by the rule
Cost savings from allowing abridged analytical reporting
of tests of import related food covered by the rule
Cost savings from management systems upgrade
Cost savings from fewer false positives - import related
food
Cost savings from fewer false positives - Shell Eggs
Cost savings from fewer false positives - Sprouts
Cost savings from fewer false positives - Bottled
Drinking Water
Avoided QALD losses from fewer servings of
contaminated imported food
Avoided QALD losses from fewer servings of
contaminated Shell Eggs
Avoided QALD losses from fewer servings of
contaminated Sprouts
Avoided QALD losses from fewer servings of
contaminated Bottled Drinking Water
Avoided QALD losses from DFLO
Avoided QALD losses from covered tests from other
administrative orders
Total annualized benefits of this rule

II.

PRIA primary
estimate

FRIA primary
estimate

$2,426,228

$1,892,655

$4,629,879

$3,969,236

$148,096

$131,260

$2,954

$5,249

$20,317
Not estimated

$70,161
$2,802

Not estimated

$0

$317,377

$2,689,678

$108,254

$153,177

Not estimated

$1,699

Not estimated

$209

Not estimated

$68,966

Not estimated

$68,966

$7,555,215

$9,054,057

Final Regulatory Impact Analysis

A. Background
On January 4, 2011, President Obama signed the FDA Food Safety Modernization Act
(FSMA) into law. FSMA is intended to help FDA to better protect public health by helping
ensure the safety and security of the U.S. food supply by focusing on preventing food safety
problems rather than primarily reacting to these problems once they surface. FSMA recognized
that food testing could perform different roles in supporting a modern food safety system and
that food testing can play a role in detecting and responding to food safety problems. Section 202
27

of FSMA requires that food be tested by laboratories accredited to standards established by FDA
in four circumstances:
•

in response to a specific testing requirement (see list of terms above);

•

as required by the Secretary to address an identified or suspected food safety
problem;

•

in support of admission of an article of food offered for import; and

•

under an Import Alert that requires successful consecutive tests.

In these circumstances, FSMA requires the results of food testing that must be conducted by a
LAAF-accredited laboratory to be sent directly to us.
In recent years we have explored various approaches to improving the quality and
consistency of food testing and reporting. On April 29, 2004, we proposed a rule (never
finalized) establishing standards for sampling and testing practices that targeted imported food
and for improving the reliability and scientific validity of the test results that we use to make
food import admissibility decisions (Ref. 6). That proposed rule would have required that (1)
samples of food be properly identified, collected, and maintained; (2) labs conducting the testing
use validated analytical methods; and (3) these labs submit the test results directly to us.
On January 16, 2009, we issued a draft guidance entitled “Guidance for Industry:
Submission of Laboratory Packages by Accredited Laboratories,” in which we recommended a
voluntary accreditation program for labs that test to support decisions regarding the admissibility
of food offered for import (Ref. 7). The draft guidance noted that oversight of labs by ABs would
enhance our confidence in the test results, and the draft guidance recommended that:
•

ABs operate in accordance with the standard ISO/IEC 17011:2004 “General
requirements for accreditation bodies accrediting conformity assessment bodies”,

•

ABs be signatories to the ILAC MRA,
28

•

labs accredited by ABs submit all test results directly to us, and

•

importers notify us in advance of which accredited laboratory they intended to
use.

In addition, the draft guidance suggested a process that would allow labs to submit “abbreviated”
analytical reports to us rather than a “full” analytical report.
This rule codifies many elements of the 2004 proposed rule and 2009 draft guidance. For
instance, the rule requires labs to be accredited to ISO/IEC 17025:2017 in order to participate in
the LAAF program. The rule also defines the circumstances under which tests must be conducted
by a participating lab, including in support of admission of import related food, and for tests of
shell eggs, sprouts, and bottled drinking water subject to specific testing requirements and for
food subject to other testing requirements covered by the rule. To fulfill the FSMA mandate and
the regulatory purpose of the LAAF program, the rule codifies some laboratory requirements
beyond those required by ISO/IEC 17025:2017, including certain test method verification and
validation reporting requirements. In addition, the rule provides for oversight of the sampling
process, including by requiring the participating lab to obtain information about the training and
experience of the sampler as well as sampling plans and sample collection reports. The rule also
defines the elements of a full analytical report, the process by which participating labs may be
allowed to submit abridged analytical reports, and the requirements for us to administer the
LAAF program and for ABs and labs to participate in the LAAF program.

B. Need for Federal Regulatory Action
The rule implements provisions in FSMA that require us to establish a program for the
testing of food by accredited labs, including the recognition of accreditation bodies and the
29

development of model standards that labs must meet to be LAAF-accredited to conduct testing
under this rule.
There are several sources of asymmetric information between the owner or consignee, the
testing laboratory, and us that create a need for federal regulatory action. Food owners and
consignees may not know the true quality of a lab’s tests at the time a lab is selected or even after
the lab has reported the test result if they assume tests from a lab not accredited to the industry
standard are as accurate as tests from a lab accredited to the industry standard. For some tests,
FDA may not know the true quality of the lab results even after the food is tested if they are not
currently reported to us.
Food contamination is often difficult to detect without the assistance of sophisticated
laboratory techniques performed by trained technicians and analysts. Food owners and
consignees depend on lab results to confirm the safety of their food. Consumers rely on owners
and consignees to provide safe food which otherwise would not be consumed. Unsafe food that
has been identified by a poor-quality laboratory as safe is able to enter commerce and may cause
illness among the unsuspecting public. Had the owners or consignees known the food was unsafe
they might have withdrawn it from commerce prior to it causing illness among unsuspecting
consumers. Had we known the food was unsafe we would have better targeted our enforcement
resources to prevent illness from occurring.
There is evidence that these sources of information asymmetry occur and have an impact
on public health outcomes. For instance, unsafe imported food continues to cause illness among
unsuspecting consumers – possibly even after the unsafe food has been tested, found to be safe,
and the test results sent to us. Also, unsafe food subject to other FDA monitoring regulations

30

such as shell eggs, sprouts, and bottled drinking water, continues to cause illness among
unsuspecting consumers.
This rule addresses these sources of asymmetric information and the resulting public
health risk. Owners or consignees of food subject to the tests covered under the rule will now
know they are hiring a high-quality lab as there will be a public registry of labs that participate in
the LAAF program. In addition, owners or consignees of food subject to the tests covered under
the rule will know that the quality of the tests performed by the participating labs will conform to
the standards established in the final rule, including that the labs be assessed by recognized
accreditation bodies (ABs) and have their performance reviewed by us to ensure that the tests
more consistently reveal the true safety of the food. Consequently, owners or consignees will be
better able to withdraw unsafe food from commerce, we will more accurately target our
enforcement resources to prevent illness among the unsuspecting public, and consumers will
have greater assurance that the food they purchase is safe.

C. Purpose of the Rule
The purpose of the rule is to better protect public health by helping ensure the quality of
tests and reporting in certain situations. The rule establishes a program (the LAAF program) that
recognizes ABs, provides standards that participating ABs and labs must meet, and under certain
circumstances requires the use of LAAF-accredited labs. ABs may apply to us for recognition,
maintain recognition status, and accredit labs to the LAAF standards defined by the rule.
Participating ABs will incorporate the LAAF program requirements, assess participating labs for
adherence to the LAAF program requirements, maintain current records, and report to us
relevant updates regarding changes in the accreditation status of participating labs. Participating
31

ABs will be periodically evaluated by us for adherence to the LAAF requirements. We assume
that all ABs that currently participate in our ATPCP will apply for recognition from the LAAF
program.
Labs participating in the LAAF program will be accredited to ISO/IEC 17025:2017 and
participate in a proficiency testing program for analytical methods at a prescribed frequency.
Under certain circumstances, LAAF-accredited labs will validate and verify analytical methods
beyond the validation and verification requirements of ISO/IEC 17025:2017. The rule requires,
among other things, that LAAF-participating labs:
•

be periodically assessed by their AB for adherence to the requirements under the
LAAF program;

•

send certain test results directly to us and adhere to format and content
requirements for an analytical report;

•

provide advance notice of sampling prior to collecting the sample in certain
situations;

•

submit to FDA sample documentation such as a sampling plan, a collection
report, and the sampler’s credentials; and

•

ensure the analytical methods required are appropriate for the scope to which it is
LAAF-accredited.

We will recognize and oversee the participating ABs. We will also review test results and
reports from participating labs. We will administer the LAAF program and have the authority to
review the performance of participating labs.

D. Baseline Conditions
In this section we describe the number and types of affected entities and the baseline
conditions for our analysis. We use a simulation model to estimate current baseline practices.
32

This allows us to account for uncertainty in our estimates. Throughout this document, we report
our assumptions about the distribution of the inputs, and report the fifth percentile, mean, and
95th percentile for our simulated outputs. The rule will primarily affect the following entities:
•

eligible ABs seeking recognition by FDA;

•

labs that conduct import related food testing covered by the rule;

•

labs that conduct testing on shell eggs, sprouts, and bottled drinking water
covered by the rule;

•

owners and consignees; and

•

FDA.

We estimate the number of affected entities and the current ISO 17025:2017 accreditation
status of labs. We then describe the numbers of analytical reports we expect to receive under the
rule. We also describe the inefficiencies in the current process to submit and review analytical
reports of import related food testing that will be covered by the rule.

1. Number of entities

a. The pool of ABs potentially affected by the rule
ABs that are signatories to the ILAC MRA exist in 70 countries; however, most countries
have one national AB. Four countries have more than one AB: the U.S. has five ABs; Thailand,
Canada, and Japan each have three ABs. The signatory members follow the ISO/IEC
17011:2017 standard and any related ILAC guidance documents. ABs ensure that their
accredited labs comply with ISO/IEC 17025:2017 and any related ILAC guidance documents.

33

Several existing ABs already fulfill many of the rule’s requirements such as signatory to
the ILAC MRA, conforming to the ISO/IEC 17011:2017 standard, and accrediting labs to the
ISO/IEC 17025:2017 standard. These ABs currently perform assessments of labs’ processes and
management systems, at the frequencies specified in the ISO/IEC 17025:2017 standard and
generally have the capacity to assess labs to determine a lab’s ability to meet the LAAFaccreditation requirements. Moreover, existing ABs can place a lab on suspension, or withdraw,
renew, or reduce the scope of a laboratory’s accreditation to the LAAF standard. In addition,
ISO/IEC 17011 requires an AB to have a written program that addresses and protects against
potential conflicts of interest with the labs that the AB accredits. Consequently, we estimate that
between 5 domestic ABs and 80 ABs (5 domestic ABs + 75 foreign ABs) are in the pool of ABs
that could potentially be affected by the rule.

b. The pool of labs potentially affected by the rule
We assume that all labs that choose to participate in the LAAF program will come from
the pool of labs that currently conduct the testing that will be covered under this rule. We
estimate that some labs from the pool may decide not to participate in the LAAF program to
avoid the additional costs associated with LAAF program participation. We estimate that labs
from the pool will decide to participate in the LAAF program if performing the covered tests
constitutes a significant share of their business, if the costs for becoming LAAF-accredited are
low, or a combination of these factors.
Labs that perform covered tests of import related food differ from the labs that perform
covered tests of shell eggs, sprouts, and bottled drinking water. Labs that test import related food
are located close to ports of entry and specialize in testing protocols for foods based on import
34

alerts. Labs that test shell eggs, sprouts, and bottled drinking water are more geographically
dispersed to account for proximity as a factor determining lab use. In addition, according to the
Profile their use tends to be sector specific, with labs that perform tests for one sector tending to
be different than those that perform tests for the others.

i.

The pool of labs that perform covered tests of import related food potentially
affected by the rule
We estimate the pool of labs that will test import related food covered under the rule from

the pool of all labs reported in our Private Laboratory Analytical Package System (PLAPS) for
January 1, 2016, through December 31, 2017 (Ref. 8). Approximately 106 private labs
performed the covered tests of import related food during this period, with 44 of the labs
accredited to ISO/IEC 17025.

ii.

The pool of labs that test shell eggs, sprouts, and bottled drinking water subject
to specific testing requirements and labs that conduct other tests covered under
the rule potentially affected by the rule

Our contractor, ERG, completed a profile in January 2020 of the laboratory and
analytical testing sector (Profile) that will be affected by the final rule (Ref. 4). Information from
the Profile indicates that there are 70 to 200 sprouts testing labs, 15 to 38 shell egg testing labs,
and 130 to 180 bottled drinking water testing labs that may be affected by the final rule
compared to a total of 16 to 50 shell egg, sprouts, and bottled drinking water testing labs
estimated in the PRIA. Moreover, the final rule will affect labs that test under the following
circumstances:
•

as part of a corrective action plan after an order suspending registration;
35

•

to submit evidence for a hearing prior to a mandatory recall order;

•

to submit evidence for an appeal of an administrative detention order; and

•

under a DFLO.

We estimate in a later section that these latter tests will occur infrequently, 0.1 to 1 time
annually as part of a corrective action plan to reinstate a registration, prior to a mandatory recall,
and appealing an administrative detention order; and 0.1 to 1 time annually for a DFLO. We
consider it unlikely that the small number of tests that might be conducted in these situations will
support the costs to participate in the LAAF program if these were the only tests performed by
the lab. Consequently, we estimate the number of participating labs that test shell eggs, sprouts,
and bottled drinking water as a subset of the pool of labs potentially affected by the rule.

c. The number of affected owners or consignees of import related food the tests of
which are covered under this rule
There were 1,219 food importers during the 2018 fiscal year. We assume the number of
food importers is the same as the number of owners or consignees of import related food covered
by the rule. Consequently, we assume a lower bound of 1,219 owners or consignees of import
related food covered by the rule will incur a one-time cost to read and understand the rule. We
anticipate that the number of owners or consignees of import related food covered by the rule
will vary from year to year. We assume that three times the lower bound (3,657) will be the
upper bound on the total number of owners or consignees of import related food covered by the
rule that will incur one-time costs to read and understand the rule.

36

d. The number of shell egg, sprouts, and bottled drinking water manufacturers
affected by this rule
We do not know by how much the number of covered shell egg producers has changed
since that number was estimated in relation to the shell egg safety rule published in 2009 (Ref.
9). Consequently, we use the number of producers (7,359) published in the Regulatory Impact
Analysis of the shell egg safety rule in our analysis. We do not know by how much the number
of covered sprouts producers has changed since the number was estimated in relation to the
Produce Safety Rule published in 2015 (Ref. 10). Consequently, we use the number of producers
(285) published in the Regulatory Impact Analysis of the Produce Safety Rule in our analysis.
There were 669 domestic bottled drinking water manufacturing establishments inspected
between 2002 and 2016 that will be affected by this rule. Manufacturing establishments that
bottle drinking water and have not yet been inspected will be excluded from this estimate.
Manufacturing establishments that exited the industry after being inspected may still be listed in
our database. We assume that these numbers offset each other.

e. The total number of entities affected by the rule
We estimate that the final rule will affect between about 9,800 to about 12,500 entities,
including certain labs and ABs that choose to participate in the LAAF program, and owners or
consignees of import related food subject to tests covered under the rule and food subject to
specific testing requirements. We report the estimated numbers of entities by type of entity in
Table 6.

37

Table 6: The pool of entities potentially affected by the rule by entity type
Accreditation bodies (ABs)
Labs that test import related food
Labs that test shell eggs covered by the rule
Labs that test sprouts covered by the rule
Labs that test bottled drinking water covered by the rule
Owners or consignees of import related food the tests of which
are covered by the rule
Shell egg producers
Sprouts producers
Bottled drinking water manufacturers
Total

Low
5
106
15
70
130

High
80
106
38
200
180

1,219

3,657

7,359
285
669
9,858

7,359
285
669
12,569

2. The current baseline practices of affected entities

a. The current accreditation status of labs that perform tests that will be covered by
the rule
The final rule will require that participating labs be accredited to ISO/IEC 17025:2017
and meet some additional management and technical requirements beyond ISO/IEC 17025:2017.
In the PRIA, we used information from an internal study of PLAPS reports from January 1,
2016, through December 31, 2017, to estimate that 44 labs in the pool of 106 labs that conduct
covered tests of import related food are accredited to ISO/IEC 17025 (41.5 percent) and that
these labs perform between 92.47 percent and 96.78 percent of all covered tests of import related
food (Ref. 8).
Information from the Profile indicates that the current rate of ISO/IEC 17025:2017
accreditation for shell egg testing labs is 30 to 37 percent and 85 to 95 percent for sprouts testing
labs. Because we estimate the number of covered tests of bottled drinking water is so small, for
purposes of this analysis we assume the accreditation status of labs that perform covered tests of
bottled drinking water is the same as that for sprouts tests. We do not have information on the
38

rates at which covered tests of shell eggs, sprouts, and bottled drinking water are performed by
ISO/IEC 17025:2017 accredited labs, and assume they are the same as the accreditation rates of
labs that conduct covered tests of shell eggs, sprouts, and bottled drinking water. Table 7 shows
current rates of accreditation to ISO 17025:2017 for labs and the percent of covered tests they
perform.
Table 7: Current rates of accreditation to ISO 17025:2017 by labs and the percent of tests
they perform that will be covered by the rule
To comply with import related food
testing requirements
To comply with shell egg testing
requirements
To comply with sprouts testing
requirements
To comply with bottled drinking water
testing requirements

Low
41.5 percent of labs
(92.5 percent of tests)
30.0 percent of labs
(assume 30 percent of tests)
85.0 percent of labs
(assume 85 percent of tests)
85.0 percent of labs
(assume 85 percent of tests)

High
41.5 percent of labs
(96.8 percent of tests)
37.0 percent of labs
(assume 37 percent of tests)
95.0 percent of labs
(assume 95 percent of tests)
95.0 percent of labs
(assume 95 percent of tests

b. The baseline number of analytical reports

i.

Analytical reports of import related food testing covered under this rule

We use information from the Private Laboratory Analytical Packages (PLAPs) dataset to
estimate the annual number of analytical reports of import related food testing covered under this
rule. Our information indicates there were 11,648 PLAPs submitted to support import
admissibility decisions in 2019 and that for the years 2018 and 2019 approximately 4.63 percent
report positive test findings.

ii.

Analytical reports of tests of shell eggs subject to specific testing requirements

We used estimates reported in the Profile of the number of analytical reports of shell egg,
sprouts, and bottled drinking water tests that will be submitted to us per the final rule
39

requirements. The Profile derives 144,000 to 187,000 shell egg tests based on an estimated 720
to 1,400 environmental positives, obtained using an estimated positive rate of 1.1 percent of
environmental tests. We adjust the number of covered shell egg tests to account for the
probability that shell eggs will be diverted to the processed egg market following an
environmental positive. We use expert judgment (Ref. 7) that most shell eggs (50 to 75 percent)
obtained from molted flocks will be diverted to the processed egg market following an
environmental positive test and that 20 percent of flocks are molted (Ref. 8). Consequently, we
estimate that 10 to 15 percent of shell eggs will be diverted to the processed egg market to avoid
additional shell egg testing costs (20 percent hens molted x 50 to 75 percent diversion rate for
molted hens = 10 to 15 percent shell eggs diverted following a positive environmental test result)
and that 2,520 – 5,023 shell egg analytical reports, at 50 test results per report, will be submitted
to and reviewed by us annually.

iii.

Analytical reports of tests of sprouts and bottled drinking water subject to
specific testing requirements covered under this rule

This rule will require that sprout producers have participating labs conduct follow-up
tests following a positive finding of Listeria species or L. monocytogenes from environmental
surveillance required under the Produce Safety Rule (Ref. 10). Sprout producers must conduct
additional testing of surfaces and areas surrounding the area where Listeria species or L.
monocytogenes was detected, conduct additional testing to determine whether the Listeria
species or L. monocytogenes has been eliminated, and conduct finished product testing when
appropriate. We use estimates reported in the Profile that between 60 – 480 sprouts analytical
reports at 10 test results per report will be submitted to and reviewed by us annually.
40

This rule will require certain bottled drinking water testing required by the Bottled Water
Final Rule (Ref. 11) to be subject to testing under this rule. The Profile reports that positive
bottled drinking water test results that will require the use of a LAAF-accredited lab are rare, and
we estimate 0 - 2 analytical reports for bottled water at 5 results per report will be submitted to
and reviewed by us annually.

iv.

Analytical reports of tests conducted to satisfy Directed Food Laboratory Orders
(DFLO), and for tests to satisfy other administrative orders covered by the rule
Use of a LAAF-accredited lab may be necessary as part of a corrective action plan after

an order suspending registration (SR), to submit evidence for a hearing prior to a mandatory
recall order (MR), to submit evidence for an appeal of an administrative detention order (AD),
and as required under a Directed Food Laboratory Order (DFLO). We required ADs 10 times
and MRs once between 2011 and 2020 (Ref. 1 and 2). In addition, we used SRs six times
between 2011 and 2020 (Ref. 3). We assume we will require the use of a participating lab under
these circumstances at the same frequencies.
The DFLO is a new administrative tool requiring the use of a LAAF-accredited lab for
analyses in the rare situations when we have reason to question the accuracy and reliability of
past or present test results, and an identified or suspected food safety problem exists. In the
PRIA, we estimated the frequency of our use of a DFLO (previously FTO) as the same as our
use of other administrative tools with tests covered by this rule (ADs, SRs, and MRs). In the
FRIA, we make that link quantitative and report our method and estimates here. We estimate our
annual use of a DFLO will be between 0.1 and 1 (1/10 years and 10/10 years) and report the
baseline frequencies of ADs, SRs, and MRs, and our estimate for DFLOs in Table 8.
41

Table 8: Numbers of ADs, SRs, and MRs and DFLOs
ADs
SRs
MRs
DFLOs

Total since 2011
10
6
1
N/A

Annual Frequency
1
0.6
0.1
0.1 to 1

A DFLO requires a firm to use a participating LAAF-accredited lab to conduct
environmental tests or food product tests and have the results sent directly to us. We do not know
the total number of tests and analytical reports that will be subject to a DFLO requirement. We
use as a guide the rounds of testing ordered in recently adjudicated consent decrees involving
food facilities found to be in violation of the FD&C Act.
Many consent decrees have no explicit product testing requirements. We identified four
consent decrees ordered in 2016 that made explicit the testing frequencies (e.g., weekly) and
prescribed additional details for finished product testing (e.g., every lot per finished product, one
lot from each finished product, etc.) for finished product testing. We use these four adjudicated
consent decrees as examples for estimating the numbers of tests and analytical reports that will
be subject to a DFLO. The first round may require daily product tests over the course of a week’s
worth of production (5 tests), the second round may require weekly tests over the course of the
subsequent month (4 tests), and the third round may require monthly tests over the subsequent
year (12 tests). We assume these tests would be analyzed by a participating LAAF-accredited lab
and the results compiled into an analytical report and sent directly to us. Consequently, we
estimate there will be 21 analytical reports generated for each DFLO. We report the total number
of analytical reports of tests that we estimate will be compiled by a LAAF-accredited lab in
Table 9.
42

Table 9: Number of analytical reports that will be compiled by a LAAF-accredited lab and
submitted to us
Regulatory effort
Import related food
Shell eggs
Sprouts
Bottled drinking water
ADs, SRs, and MRs
DFLOs
Total number of analytical packages

Lower value
11,648
2,520
60
0
2.1
2.1
14,232

Mean
11,648
3,771
270
1.0
11.6
11.6
15,713

Upper value
11,648
5,023
480
2
21
21
17,195

c. Baseline costs for labs to compile and for us to review an analytical report
This rule will establish clear procedures and expectations for industry to submit analytical
reports for tests covered by this rule and for FDA to review these analytical reports. The current
process for reviewing analytical reports of tests of human or animal food offered for import
covered under this rule includes an initial check (IC) for completeness upon receipt of the
analytical report, a non-technical review of documents to establish a link between the sample and
the detained shipment as well as the adequacy of the sample, and a high-level technical review
that examines documentation to determine the adequacy of the analytical methods used. We use
information from an internal analysis of information from 10 of our regional labs to derive an
estimate of the average burden to review an analytical report for tests of import related food
covered under this rule. We assume the costs to review an analytical report for tests of shell eggs,
sprouts, and bottled drinking water subject to specific testing requirements and other tests
covered by the rule will be the same as that for reports of import related food covered under this
rule.
We assume the baseline cost for industry to compile an analytical report and for us to
review an analytical report includes the probability that some analytical reports submitted by
43

industry are initially deficient and returned to industry before resubmitting a deficiency-free
analytical report. We use an internal study on the burden incurred by us to review an analytical
report and the percent of analytical reports that are deficient at the three stages of the review
process: the IC, the non-technical review, and high-level technical review. We assume the extra
burden incurred by industry to address a deficient analytical report is proportional to the extra
burden incurred by us to review a deficient analytical report.
A deficiency found at the IC stage is returned to industry without going further into the
review process. Deficiencies found during the non-technical review may require resampling the
lot of human or animal food or require additional information necessary to establish a link
between the sample and the lot of human or animal food it represents. A deficiency found during
high-level technical review may require us to convene a panel of Technical Leads, or field
scientists who are recognized within FDA as able to provide recommendations on technical
matters. The Technical Leads may require labs to submit additional information to support the
analytical methods used for the test. An internal study indicates that approximately 5 percent of
analytical reports are found to be deficient at the IC stage, 10 percent at the non-technical review
stage, and 60 percent of analytical reports are found to be deficient at the high-level technical
review stage.
Experts from our field labs estimate the burdens for each of the review stages: the burden
for the IC is 0.08 hours, for the non-technical review is 0.30 hours, and the high-level technical
review is 1.51 hours, for a total burden to review an analytical report of 1.89 hours (0.08 + 0.30
+ 1.51). Consequently, we assume an acceptable analytical report that contains no deficiencies
will require a review burden of 1.89 hours. The current baseline burden to review an analytical
report includes the probability of it being deficient. To estimate the current baseline costs that
44

include the extra review burdens incurred from deficient analytical reports we assume that each
deficient analytical report is found to be fully acceptable after the first pass-back to industry.
Consequently, we estimate the baseline burden to review an analytical report, including the
probability of it being deficient is 2.83 hours (0.08 hours for IC x (1 + 0.05 probability of
deficiency) + 0.30 hours for non-technical review x (1 + 0.1 probability of deficiency) + 1.51
hours for a high-level technical review x (1 + 0.6 probability of deficiency) = 2.83 hours). We
present the results in Table 10.

Table 10: Average burden to review an analytical report including the probability of it
being deficient
Review stage
IC
Non-technical review
High-level technical review
Total

Burden to review a
fully acceptable
report (hours)
0.08
0.30
1.51
1.89

Probability of
being deficient
by review stage
0.05
0.10
0.60

Baseline burden to
review an analytical
report (hours)
0.08
0.33
2.42
2.83

We obtain the average extra burden of 0.94 hours for us to review an analytical report
that includes the probability of it being deficient (2.83 hours burden to review an analytical
report, including the probability of it being deficient – 1.89 hours to review a fully acceptable
analytical report = 0.94 hours). We assume the average extra burden for industry to compile an
analytical report that includes the probability of it being deficient is proportional to the average
extra burden incurred by us to review an analytical report. We do not have information on the
current baseline burden incurred by industry to compile an analytical report. We estimate the
current burden to compile an analytical report of between four hours and eight hours, which
includes the probability of it being deficient. We obtain the extra burden per analytical report
incurred by industry of between 1.3 hours (4 hours x 0.94 hours extra review burden / 2.83
45

review burden) and 2.7 hours (8 hours x 0.94 hours extra review burden / 2.83 hours average
review burden). We report the parameters used to estimate the extra burden per analytical report
for us and industry in Table 11a and Table 11b.

Table 11a: Extra burden to review an analytical report incurred by us
FDA current burden to review an analytical report that includes the
probability of being deficient
FDA burden to review a fully acceptable analytical report
Extra review burden per report due to deficiencies

Burden estimate (hours)
2.83
1.89
0.94

Table 11b: Extra burden to compile an analytical report incurred by industry
Current baseline burden for industry to compile an
analytical report that includes the probability of being
deficient
Extra burden per report for industry due to
deficiencies

Lower estimate
(hours)

Upper estimate
(hours)

4.0

8.0

1.3

2.7

We multiply the burden to FDA to review an analytical report by the fully loaded hourly
wage for an ORA reviewer of $119.08, derived from the FY2020 annual fully loaded salary for
ORA personnel used by FDA for budgeting purposes, to obtain the cost for us to review an
analytical report of about $337 (2.83 hours x $119.08 = $337) and an extra burden to review a
deficient analytical report of about $112 (0.94 hours x $119.08 = $111.94). We multiply burden
for industry to compile an analytical report by the fully loaded wage of a Food Scientist and
Technologist of $77.10 to obtain the baseline cost for industry to compile an analytical report of
between about $308 (4 hours x $77.10 = $308.40) and $617 (8 hours x $77.10 = $616.80), with
an extra review burden of between about $102 (1.3 hours x $77.10 = $102.44) and $205 (2.7
hours x $77.10 = $204.87). We report the current baseline costs and extra burdens for us to
46

review an analytical report and for industry to compile an analytical report in Table 12a and
Table 12b.

Table 12a: Baseline costs and extra burdens for us to review an analytical report
Average burden
(hours)
2.83
0.94

Baseline costs for us to review an analytical report
Cost of the extra review burden due to deficiencies

Wage

Total cost

$119.08
$119.08

$337.01
$111.94

Table 12b: Baseline costs and extra burdens for industry to compile an analytical report
Baseline costs to compile an analytical report
Cost of the extra burden to compile an
analytical report due to deficiencies

Low burden
(hours)
4.0

High burden
(hours)
8.0

Low
cost
$308.40

High
cost
$616.80

1.3

2.7

$102.44

$204.87

E. Benefits of this Rule
There are quantified and unquantified benefits from the rule. Quantified benefits include
the reduction in the number of false negative and false positive results for all tests covered by
this rule. Fewer false negatives would result in fewer illnesses and QALD losses stemming from
contaminated shipments of food. Fewer false positives would result in fewer revenue losses from
shipments of safe food. Quantified benefits also include (1) cost savings from specifying the
requirements for tests and analytical reports that would reduce the extra burdens incurred by us
and industry to review and compile analytical reports of tests of import related food covered
under this rule and (2) cost savings from allowing participating labs to submit abridged analytical
reports for tests of import related food covered under this rule following the successful
submission of five consecutive fully acceptable analytical reports per major food testing

47

discipline. In addition, improvements to our management systems required for establishing the
LAAF program would reduce the amount of time we spend to review an analytical report.
Unquantified benefits include increased deterrence of unsafe food manufacturing
practices by all covered entities due to improved test performance. Test reporting and sample
collection oversight requirements may deter improper test reporting practices and improve
sample collection practices. Improved test reporting practices may result in fewer false negative
test results (if current practices allow for the intentional reporting of false negative test results)
while the requirement to develop sample collection reports may result in better sample collection
practices resulting in samples that better represent the lot or shipment of human or animal food.
These improvements may add to the deterrence of unsafe food manufacturing practices.
We note that there is uncertainty about the number of labs that will participate in the
LAAF program; however, the Agency’s plan to issue a Federal Register notice 6 months prior to
requiring owners and consignees to use a LAAF-accredited laboratory for the testing ensures
there will be enough lab capacity in the LAAF program for any tests that are required. The
stepwise approach to implementation and giving a 6-month notice to owners and consignees
prior to requiring them to comply with the final rule affects the timing of costs and benefits of
the rule. We estimate that the benefits will be incurred for import related food covered by the
rule one to two years following publication of the final rule. We believe that timeframe is
realistic because import related owners and consignees and labs conducting import related tests
are already used to sending analytical reports to FDA, and because comments assert there is
currently sufficient lab capacity to conduct at least all import related tests covered by the rule.
For tests of shell eggs, sprouts, and bottled drinking water covered by the rule, we estimate
benefits will be incurred two to three years following publication of the rule. Those industries
48

and laboratories do not currently submit analytical reports to FDA in connection with the tests
covered by the rule, so we anticipate that it will take longer to attain sufficient lab capacity for
such tests. We discount public health benefits from better tests of food covered by the rule by
three percent and cost savings by seven percent.
We currently do not receive analytical reports for the tests of shell eggs, sprouts, and
bottled drinking water that are covered under this rule. Thus, in this section and the subsequent
section we calculate cost savings from tests and analytical reports for import related food
covered under this rule. Some analytical reports may be deficient for many reasons, including
failures to include data necessary to replicate test results, to verify and validate methods, to
include names of analysts, and other reasons. By specifying the requirements for tests and
analytical reports, we anticipate that this rule would generate cost savings for us and industry.
We would spend less time reviewing deficient analytical reports before returning them to
industry to address the deficiencies. Likewise, industry would spend less time addressing
deficiencies and would submit fully acceptable analytical reports the first time. We assume the
clarifications from this rule would reduce the extra review burden incurred by us by between 20
percent (assuming some reduction in the extra review burden) and 100 percent, and the extra
burden incurred by industry by between 20 percent and 100 percent.
To obtain the upper bound of cost savings accrued to us we multiply 100 percent of the
upper bound number of analytical reports of tests of import related food covered under this rule
(11,648) by the extra review burden due to deficiencies from Table 11a ($111.94). Thus, the
upper bound on the potential cost savings from the clarifications in the rule equals $1,303,866.
To obtain the lower bound on the cost savings accrued to us we multiply this by 20 percent to

49

obtain $260,773. We assume the estimate of the cost savings accrued to us would be uniformly
distributed between the lower and upper bounds.
To obtain the upper bound of cost savings accrued to industry we multiply 100 percent of
the upper bound number of analytical reports of tests of import related food covered under this
rule (11,648) by the extra burden to compile an analytical report from Table 11b ($204.87).
Thus, the upper bound of potential cost savings for industry equals $2,386,367. To obtain the
lower bound on the cost savings accrued to industry we multiply this by 20 percent to obtain the
lower bound of potential cost savings from clarifications in the rule, which equals $238,637. We
assume the estimate of the cost savings accrued to industry would be uniformly distributed
between the lower and upper bounds. In Table 13, we report the cost savings for industry and us
from clarifying expectations of tests of import related food covered under this rule.

Table 13: Annual cost savings to industry and us from clarifying expectations for compiling
and reviewing analytical reports of import related food covered under this rule
Cost savings for industry from clarifications
Cost savings for us from clarifying expectations

Lower bound Medium value Upper bound
$238,637
$1,312,502
$2,386,367
$260,773
$782,320
$1,303,866

We assume a uniform distribution of the cost savings to us and industry and use a Monte
Carlo simulation to obtain the fifth percentile, mean, and 95th percentile estimates. We report
these estimates in Table 14.

Table 14: Annual cost savings to industry and us from clarifying expectations for compiling
and reviewing analytical reports of tests of import related food covered by this rule
Industry cost savings
FDA cost savings

5th percentile
$345,283
$312,627

50

Mean
$1,312,502
$782,320

95th percentile
$2,278,419
$1,251,592

Total cost savings

$1,001,762

$2,094,821

$3,226,529

1. Cost savings from abridged analytical reports for tests of import related food covered
under this rule
We propose to reduce the quantity of information required in an analytical report once
participating labs have successfully submitted five consecutive full analytical reports per major
food testing discipline. Participating labs that successfully submit five consecutive full analytical
reports per major food testing discipline can request permission to submit abridged analytical
reports. We currently require a full analytical report to contain detailed and substantive
documentation that allows us to confirm the analysis was performed correctly. Moreover,
information in a full analytical report will allow us to review each analytical step in the test and
confirm the test results, if necessary. Participating labs permitted to submit abridged analytical
report will submit a fraction of the amount of information required in a full analytical report. We
assume the burdens to compile and to review an abridged analytical report to be between 25
percent and 33 percent of the burdens to compile and review a full analytical report. Participating
labs permitted to submit abridged analytical reports will still be required to maintain records of
all information required in a full analytical report. As a check of participating labs permitted to
submit abridged analytical reports, we will occasionally audit information required in a full
analytical report.
All cost savings from allowing abridged analytical reports will come from analytical
reports of tests of import related food covered under this rule, because those are the only
laboratory analytical reports we currently receive and review. There will be no cost savings
generated from abridged analytical reports for tests of shell eggs, sprouts, bottled drinking water,

51

or other food subject to specific testing requirements because there is no current requirement to
submit these analytical reports.
We use the burden estimates for industry to compile a full analytical report assuming the
efficiency gains from this rule’s clarifying requirements have been realized. Thus, the time to
compile and submit a full analytical report will fall from 4 hours to 2.7 hours in the lower bound
and fall from 8 hours to 5.3 hours in the upper bound. We multiply this time by the fully loaded
wage of a Food Scientist and Technologist of $77.10 to obtain the cost to compile a full
analytical report of between about $206 (2.7 hours x $77.10 = $205.96) and $412 (5.3 hours x
$77.10 = $411.93). Similarly, we use the burden estimates for us to review a full analytical report
assuming the efficiency gains from this rule’s clarifying requirements have been realized. Thus,
the time we spend reviewing a full analytical report will fall from 2.83 hours to 1.89 hours. We
multiply this time by the fully loaded hourly wage for an ORA reviewer of $119.08 and obtain
the cost to review a full analytical report of about $225 (1.89 hours x $119.08 = $225.07).
We assume the cost to compile an abridged analytical report and the cost to review an
abridged analytical report ranges between 25 percent and 33 percent of the cost to compile and
the cost to review a full analytical report. Consequently, we estimate the costs for industry to
compile and submit an abridged analytical report will be between about $51 (25 percent x
$205.96 = $51.49) and $136 (33 percent x $411.93 = $135.94), and costs for us to review an
abridged analytical report will be between about $56 (25 percent x $225.07 = $56.27) and $74
(33 percent x $225.07 = $74.27). In Table 15a and Table 15b we report the costs to compile and
review a full analytical report and an abridged analytical report, both incorporating the cost
savings from this rule’s clarification discussed in the previous section.

52

Table 15a: Cost for industry to compile an abridged analytical report – net of the efficiency
gains from this rule’s clarifications
Cost to compile and submit a full analytical report (net of
efficiency gains from clarifications)
Cost to compile and submit an abridged analytical report

Lower bound

Upper bound

$205.96

$411.93

$51.49

$135.94

Table 15b: Cost for us to review an abridged analytical report – net of the efficiency gains
from this rule’s clarifications
Cost for us to review a full analytical report (net of efficiency
gains from clarifications)
Cost for us to review an abridged analytical report

Lower bound

Upper bound

$225.07

$225.07

$56.27

$74.27

2. Total cost savings from allowing abridged analytical reports
We estimate the annual cost savings for industry to compile and submit abridged
analytical reports and for us to review abridged analytical reports as the difference between the
costs to compile and submit 11,648 full analytical reports at between $205.96 and $411.93 per
report and the costs to compile and submit 11,648 abridged analytical reports at between $56.27
and $135.94 per report, less the costs to compile and submit five consecutive successful full
analytical reports per major food testing discipline, assuming 1 to 3 major food testing
disciplines, at the cost of a full analytical report for 10 to 44 participating labs (see Section
II.F.2.a for the estimate of the number of participating labs that test import related food covered
by the rule) that we expect would qualify for abridged analytical reports. We report the fifth
percentile, mean, and 95th percentile estimates of the cost savings for us and industry from
allowing abridged analytical reports in Table 16.

Table 16: Cost savings from allowing abridged analytical reports
5th
percentile
estimate

53

Mean
estimate

95th
percentile
estimate

Annual cost savings accrued to industry from
abridged analytical reports for tests of import related
food covered under this rule
Annual cost savings accrued to us from reviewing
abridged analytical reports for tests of import related
food covered under this rule

$1,309,286

$2,521,671

$3,726,613

$1,779,409

$1,871,545

$1,963,278

3. Cost savings from reduced burdens to review analytical reports of tests of import
related food covered under this rule due to improvements to the current management
systems
The rule will improve upon current management systems to administer the requirements
of the program. Improvements in the management systems will expedite our processes for
creating work assignments, including identifying and convening technical lead panels, routing
analytical reports to the labs most appropriate for reviews, notifying labs and reviewers of new
work activities and for closing out and reopening reviews of analytical reports. In addition,
improvements in current management systems will facilitate retrieval of information on
participating labs from previous analytical reports, including validation and verification studies
and other relevant information on the participating labs’ qualifications. Once these improvements
become operational, we expect a reduction in the amount of time required to review an analytical
report. While this would not be a cost savings attributable to requirements of this rule per se, we
adjust current baseline analytical report review times by the new lower review times that will
result from the one-time costs of establishing the LAAF program, discussed later in the analysis.
We expect this rule will reduce the time to review an abridged analytical report uniformly
by between 10 percent and 25 percent. We apply the estimated percent reduction in review time
to the costs of reviewing abridged analytical reports of tests of import related food covered under
this rule in a Monte Carlo simulation to obtain the fifth percentile, mean, and 95th percentile

54

estimates of the annual cost savings from improvements in the management systems. These cost
savings are reported in Table 17.

Table 17: Cost savings to review analytical reports of tests of import related food covered
under this rule because of the LAAF program’s improved management systems
5th percentile estimate
$78,534

Mean estimate
$131,260

95th percentile estimate
$185,759

4. Total cost savings from this rule
We use a Monte Carlo simulation to add together the cost savings to industry and FDA
from clarifying submission and review processes, allowing abridged reporting and improvements
in the management systems with the establishment of the LAAF program to obtain estimates of
the fifth percentile, mean, and 95th percentile of the cost savings accrued to industry and to us.
We report the total cost savings from this rule in Table 18.

Table 18: Total cost savings from this rule
Total industry cost savings
Total FDA cost savings
Total cost savings

5th percentile
estimate
$2,263,556
$2,318,658
$4,976,793

Mean estimate
$3,834,173
$2,785,125
$6,619,298

95th percentile
estimate
$5,482,578
$3,260,652
$8,330,334

5. Improved test performance
We expect that the requirements to maintain accreditation to the ISO/IEC 17025:2017
standard, for annual proficiency testing (PT) or a comparison program, and for verifying and
validating methods, will provide quality assurance for testing methods. Evidence of a positive
effect of lab accreditation on PT performance is somewhat mixed. For example, in a statistical
analysis of 50 randomly selected sets of PT for food analysis conducted in 2006, Thompson, et
55

al. (2009) found no statistical effect of a method’s accreditation status on PT performance (Ref.
12). However, in a later study of Canadian labs, Middlebrook (2017) did find evidence that
accredited labs outperform non-accredited labs when comparing randomly selected PT results for
the two groups. Middlebrook found that the percentage of Questionable and Unsatisfactory
performance was higher for non-accredited labs than for accredited labs (Ref. 13). For example,
Middlebrook reports that 3.42 percent of PT outcomes were Unsatisfactory for accredited labs
while 6.19 percent of outcomes were Unsatisfactory for unaccredited labs, where Unsatisfactory
was defined as greater than 3 standard deviations from the mean. Moreover, Middlebrook reports
that 4.91 percent of outcomes were Questionable for accredited labs while 6.12 percent of
outcomes were Questionable for unaccredited labs, where Questionable was defined as between
2 and 3 standard deviations from the mean. Diagnostic statistics indicate the differences reported
in the PT performance outcomes for accredited and unaccredited labs are statistically significant.
Unlike previous studies, Middlebrook controls for experience with PT participation and
found evidence that some (but not all) of the difference in PT performance could be explained by
labs’ familiarity with PT. Middlebrook attributes findings from other studies that find no
statistically significant differences between the PT performances of accredited and unaccredited
labs to inability to control for familiarity with the PT scheme. We assume there is no difference
between the performance of accredited and unaccredited labs in the United States and in Canada
and use Middlebrook’s findings of better PT performance by accredited labs compared to
unaccredited labs to estimate the reduced number of false negatives and false positives from tests
of import related food covered by this rule. Specifically, we assume the rate of false negatives
and false positives for accredited labs is between 3.42 percent and 8.33 percent (3.42 percent
Unsatisfactory + 4.91 percent Questionable = 8.33 percent), while that for unaccredited labs is
56

between 6.19 percent and 12.31 percent (6.19 percent Unsatisfactory + 6.12 percent
Questionable = 12.31 percent).
To estimate the baseline performance rate for food testing covered under this rule we add
the weighted percentages of Unsatisfactory and Questionable outcomes obtained from accredited
and unaccredited labs, with the corresponding shares of tests performed by those labs as the
weights (accredited labs perform between 95 percent and 100 percent of tests of import related
food covered under this rule). Similarly, we estimate the baseline performance for tests of shell
eggs, sprouts, and bottled drinking water subject to specific testing requirements covered under
this rule by adding the weighted percentage of Unsatisfactory and Questionable outcomes
obtained from accredited and unaccredited labs - with the corresponding shares of tests
performed by accredited labs as the weights. Accredited labs perform between 30 percent and 37
percent of tests covered under this rule for shell eggs, and between 85 percent and 95 percent of
tests covered under this rule for sprouts. We assume the baseline accreditation rates for tests of
bottled drinking water covered under this rule are the same as those for tests of sprouts covered
under the rule, and that those for the DFLO and tests for other covered administrative orders are
the same as those for tests of import related food covered by the rule. For purposes of this
analysis we assume the performance of “accredited labs” referred to in Middlebrook refers to the
ISO/IEC 17025:2017 standard. We report the baseline test performance rate variables and the
expected test performance rate variables under this rule that we use to estimate improved test
performance in Table 19a, Table 19b, and Table 19c.

57

Table 19a: Variables used to estimate improved test performance for tests of import
related food covered under this rule and for DFLO and from other covered tests from
administrative orders under this rule
Rate of unsatisfactory and questionable tests performed by labs
accredited to ISO/IEC 17025:2017
Rate of unsatisfactory and questionable tests performed by labs not
accredited to ISO/IEC 17025:2017
Share of tests of import related food currently performed by labs not
accredited to ISO/IEC 17025:2017
Baseline test performance rate
Test performance rate with this rule

Lower
bound

Medium
value

Upper
bound

3.42%

5.88%

8.33%

6.19%

9.25%

12.31%

3.20%

5.35%

7.50%

3.51%
3.42%

6.06%
5.88%

8.63%
8.33%

Table 19b: Variables used to estimate improved test performance for tests of shell eggs
subject to specific testing requirements covered under this rule
Lower
bound

Medium
value

Upper
bound

3.42%

5.88%

8.33%

6.19%

9.25%

12.31%

Share of tests of shell eggs subject to specific testing requirements
currently performed by labs not accredited to ISO/IEC 17025:2017

63.00%

66.50%

70.00%

Baseline test performance rate
Test performance rate with this rule

5.17%
3.42%

8.12%
5.88%

11.12%
8.33%

Rate of unsatisfactory and questionable tests performed by labs
accredited to ISO/IEC 17025:2017
Rate of unsatisfactory and questionable tests performed by labs not
accredited to ISO/IEC 17025:2017

Table 19c: Variables used to estimate improved test performance for tests of sprouts and
bottled drinking water subject to specific testing requirements covered under this rule
Rates of false negatives for sprouts requirements under
scenarios of the baseline and proposed rule
Rate of false negatives for tests performed by labs accredited to
ISO/IEC 17025:2017
Rate of false negatives for tests performed by labs not accredited to
ISO/IEC 17025:2017
Share of tests currently performed by labs not accredited to
ISO/IEC 17025:2017 to support sprouts and bottled drinking water
testing requirements
Baseline scenario: Rate of false negatives for tests performed by
labs under baseline accreditation status
Test performance rate with this rule

58

Lower
bound

Medium
value

Upper
bound

3.42%

5.88%

8.33%

6.19%

9.25%

12.31%

5.00%

10.00%

15.00%

3.56%

6.21%

8.93%

3.42%

5.88%

8.33%

a. Fewer false negative results for tests covered under this rule
We apply Monte Carlo methods and assume the variables for the improved rates of test
performance from this rule and from the current baseline are uniformly distributed. We estimate
the improved number of false negative findings from tests of import related food by multiplying
the number of negative findings by the improved rate of test performance from the rule. We then
obtain the baseline number of false negative findings from tests of import related food by
multiplying the baseline number of negative findings by the baseline rate of test performance.
We then subtract the improved number of false negative findings from the baseline number of
false negative findings to obtain the number of fewer false negative findings from the rule. We
consider that each test, even if environmental, applies to an entire shipment or lot of the
corresponding human or animal food. We refer to quantities of import related food in terms of
“lines” of human or animal food, with the line reflecting the quantity of import related food
covered under this rule that will be represented by a test result.
We estimate that, on average, there will be 21 fewer lines per year of import related food
covered under the rule with false negative test results as a result of this rule. We estimate that, on
average, there will be 85 fewer shipments per year of shell eggs with false negative test results as
a result of this rule and less than one fewer shipment each of sprouts and bottled drinking water
per year with false negative test results as a result of this rule. We estimate the baseline and
improved rates of test performance for a DFLO and tests for other administrative orders covered
by the rule are the same as those for tests of import related food covered by the rule. We report
the fifth percentile estimate, mean, and 95th percentile estimate of the reduction in false negative
lines of import related food and shipments of shell eggs, sprouts, and bottled drinking water
covered under the rule in Table 20.
59

Table 20: The estimated fewer number of false negative findings from shipments of import
related food, shell eggs, sprouts, and bottled drinking water1

1

The fewer number of false negative lines of import
related food covered under this rule
The fewer number of false negative shipments of shell
eggs subject to specific testing requirements
The fewer number of false negative shipments of sprouts
subject to specific testing requirements
The fewer number of false negative shipments of bottled
drinking water subject to specific testing requirements

5th
percentile

Mean

95th
percentile

0

21

49

0

85

189

0

0.9

3

0

0.002

0.006

We report the fifth percentile as zero when the simulated value obtained is a negative number.

i.

Consumer exposure to fewer contaminated servings of import related food the
tests of which are covered under this rule
We apply the reduction in the number of false negative tests of import related food

covered under this rule to the estimated number of food servings in a line of imported food. We
estimate the number of servings in a line of imported food using internal Operational and
Administrative System for Import Support (OASIS) data on the number of kilograms in a line by
industry code. We convert the number of kilograms to servings by applying estimates of the
Reference Amounts Customarily Consumed reported in the Serving Size regulations for the food
category that closely corresponds to the industry code reported in the OASIS data (Ref. 14). We
then apply an estimate of the probability that a serving from a line is contaminated given the
composite sample from the corresponding line tests positive to estimate the number of
contaminated servings in a line of imported food with false negative test results.
We obtain the mean numbers of kilograms in an imported line for each of 26 industry
codes reported in OASIS for 2016. The 26 industry codes represent most of the imported food.
We include in the data only those industry codes with a large fraction of lines measured in
kilograms and exclude a small number of industry codes where the lines are measured in a unit
60

other than kilograms (for example, beverage categories may be reported by volume, such as
liters). After an initial cleaning of the data to account for lines reported with $0 value or with 0
kg quantity, we use two criteria to eliminate outliers that would have overstated quantities
because of observed systematic input errors. We then calculate the values per kg for each line
and either (1) eliminate lines with values per kg that lie outside the interval $0.01 and $100, or
(2) eliminate lines with values per kg that lie outside the interval $0.001 and $1,000. We sampled
the eliminated data to determine if they were likely candidates for systematic input error and
found that to be the case. There were between about 8.5 and 8.7 million lines of imported human
and animal food in the remaining data, depending on the cleaning criterion.
We apply the average Reference Amount Customarily Consumed for the food categories
reported in the Serving Size regulations to the mean number of kilograms found for the closely
corresponding industry code from the OASIS data and compute an average number of servings
in a line for each industry code. We then aggregate across all industry codes and compute the
weighted average number of servings in an imported line using the industry code’s share of the
total lines as the weights for each data set.
We assume the sample collected is randomly selected and representative of the imported
line. We adjust the average number of servings in a line to account for the probability that a
serving from a line is contaminated given that a composite sample of that line tests positive.
Guidance recommends collecting up to 60 sub-samples per sample, depending on the analysis of
interest. If just one of the sub-samples is contaminated, the composite sample may test positive –
even if the remaining sub-samples are free of contamination. Without additional information, we
assume that 50 percent of sub-samples contain some contaminated servings given the composite
sample tests positive.
61

Not all servings in a contaminated sub-sample of food are necessarily contaminated. For
example, a sub-sample weighing 1 kg would contain approximately 36 servings of food with an
average serving size of 60 grams (1,000 grams / 60 grams per serving = approximately 36
servings). Without additional information, we assume that 50 percent of servings in a sub-sample
are contaminated given a contaminated sub-sample. We multiply the probabilities together and
estimate that 25 percent of servings in a line are contaminated when a composite sample of that
line tests positive (50 percent of sub-samples are contaminated x 50 percent of servings in a subsample that are contaminated = 25 percent).
We apply Monte Carlo methods to multiply the average number of servings in an
imported line to the reduction in the number of lines with false negative test results and adjust by
the probability that a serving in a line is contaminated given that the composite sample tests
positive. We assume the number of servings in a line is lognormally distributed with the mean
and standard deviation themselves uniformly distributed between the means and standard
deviations obtained using the different data cleaning criteria. We assume the reduction in the
number of false negative results of tests of import related food covered under this rule is
uniformly distributed between the lower and upper bounds reported earlier. Consequently, we
estimate an annual average of about 6,903,011 contaminated servings will be avoided from fewer
false negative covered tests of import related food. In Table 21 we report the variables used to
estimate the number of contaminated servings avoided from fewer false negative tests of import
related food covered under this rule.

62

Table 21: The variables used and estimates of the number of contaminated servings
avoided from fewer false negative tests of import related food offered covered under
this rule1

1

The number of lines with negative findings from tests of
import related food
The baseline number of lines with false negative findings
The fewer number of false negative lines (shipments) from
the rule
Average number of servings per line
Probability of a serving being contaminated given that the
composite sample from the shipment tests positive
Number of contaminated servings avoided from better
tests of import related food

Lower bound

Medium
Value

Upper Bound

11,648

11,648

11,648

459

705

948

0

21

49

583

1,312,864

3,172,534

0.25
0

6,903,011

18,857,179

We report the lower bound as zero when the fifth percentile is used and is a negative number.

ii.

Consumer exposure to fewer contaminated servings of shell eggs, sprouts and
bottled drinking water the tests of which are covered under this rule

We assume that the number of shell eggs contained in an egg shipment has not changed
since publication of the shell egg rule in 2009. We estimate the number of servings of shell eggs
in a shipment represented by a test result from information contained in the final regulatory
impact analysis of the shell egg rule. The shell egg rule reports that approximately 3,328 egg
farms subject to testing requirements produce about 72,113,000 eggs per year, or approximately
21,668,570 eggs per farm. We use information from Table 6 of the shell egg final rule to
estimate a weighted average of approximately 39,785 hens per farm subject to shell egg test
requirements. We obtain an average annual production per hen of approximately 545 eggs
(21,668,570 eggs per farm per year / 39,785 hens per farm = 545 eggs per hen) for daily
production of a hen of about 1.49 eggs (545 eggs / 365 days). Multiplying the daily production
per hen by the number of hens per farm (39,785) we estimate an average of 59,366 eggs
produced daily per farm. We then divide by the weighted average number of hen houses per farm

63

of 2.21, derived from Table 6 in the final shell egg rule, to obtain 26,839 eggs per house
produced daily.
We assume a range of between 1 and 2 days-worth of egg production would be
represented by a sample of shell eggs subject to testing requirements. Consequently, we estimate
that the size of a shipment of shell eggs represented by a test is between 26,839 (26,839 eggs per
hen house daily x 1 day = 26,839 eggs) and 53,678 shell eggs (26,839 eggs per hen house daily x
2 days = 53,678 eggs). We assume one shell egg per serving and apply the probability that a
serving in a shipment of shell eggs is contaminated given the composite sample tests positive
(0.25) described earlier.
We estimate the improved number of false negative findings from tests of shell eggs by
multiplying the number of negative findings by the improved rate of test performance from the
rule. We then obtain the baseline number of false negative findings from tests of shell eggs by
multiplying the baseline number of negative findings by the baseline rate of test performance.
We then subtract the improved number of false negative findings from the baseline number of
false negative findings to obtain the number of fewer false negative findings from the rule.
We apply Monte Carlo methods to multiply the number of servings of shell eggs in a
shipment (between 26,839 and 53,678 shell eggs per shipment) to the reduction in the number of
false negative test results of shell eggs. We adjust by the probability that a serving of shell eggs
in a shipment is contaminated given the composite sample tests positive (0.25). We assume the
reduction in the number of false negative results of tests of shell eggs is uniformly distributed
between the fifth percentile and 95th percentile estimates reported earlier, and that the number of
servings of shell eggs in a shipment is uniformly distributed between the one and two days-worth
of production for a hen house. Consequently, we estimate that an annual average of about
64

852,000 fewer contaminated servings of shell eggs subject to specific testing requirements from
fewer false negative test results. We report the variables used to obtain the number of
contaminated servings of shell eggs subject to specific testing requirements that will be avoided
in Table 22.

Table 22: The variables used and estimates of the number of contaminated servings
avoided from fewer false negative test results of shell eggs subject to specific testing
requirements1

1

The number of negative findings from covered tests of shell eggs
The baseline number of tests with false negative findings
The fewer number of false negative findings from the rule
Average number of servings per shipment represented by the test
Probability that a serving from the corresponding shipment would
test positive given that the composite sample tests positive
Number of contaminated servings avoided from better tests of
shell eggs

Lower
Bound
2,520
197
0
26,839

Medium
Value
3,771
306
85
40,259

Upper
Bound
5,023
433
187
53,678

0.25
0

851,891

2,019,383

We report the lower bound as zero when the fifth percentile is used and is a negative number.

We use the findings reported in the ERG Profile to estimate the size of a shipment of
sprouts represented by a test covered under this rule (400 – 1,400 lbs. per shipment) and divide
by the serving size for seeds and nuts obtained from the Serving Size rule (approximately 0.066
lbs. per serving) to obtain the number of servings contained in a shipment of sprouts (6,061 –
212,121 servings). We apply Monte Carlo methods to multiply the number of servings of sprouts
in a shipment by the reduction in number of false negative test results of sprouts subject to
specific test requirements covered under this rule. We adjust by the probability that a serving of
sprouts in a shipment is contaminated given the composite sample tests positive (0.25). We
assume the reduction in the number of false negative test results is uniformly distributed between
the upper and lower bounds. Consequently, we estimate that an annual average of about 25,000
65

fewer contaminated servings of sprouts subject to specific testing requirements from fewer false
negative test results. We report the variables used to obtain the reduction in the number of
contaminated servings of sprouts subject to specific testing requirements from the rule in Table
23.

Table 23: The variables used and estimates of the number of contaminated servings
avoided from fewer false negative test results for sprouts subject to specific testing
requirements1

1

The number of negative findings from covered tests of sprouts
The baseline number of shipments with false negative findings
The fewer number of false negative findings from the rule
Average number of servings per shipment represented by the test
Probability that a serving from the corresponding shipment would test
positive given that the composite sample tests positive
Number of contaminated servings avoided from better tests of sprouts

Lower
Bound
60
5
0
6,061

Medium
Value
270
17
0.9
109,091

Upper
Bound
480
32
3
212,121

0.25
0

24,852

We report the lower bound as zero when the fifth percentile is used and is a negative number.

80,988

We use findings from the Profile that weekly source water testing for bottled drinking
water is typically conducted per tanker load and that the amount of source water represented by a
sample is around 6,300 gallons, which is the typical amount of water that a tanker holds. We
estimate that a sample of source water used for bottled drinking water represents between 5,500
and 6,500 gallons of bottled drinking water. We multiply by 3.7854 liters per gallon and again by
six servings per liter to obtain between 1,249,185 and 1,476,310 servings of bottled drinking
water represented by a sample of source water. We apply Monte Carlo methods to multiply the
number of servings of bottled drinking water in a shipment by the reduction in number of false
negative test results of bottled drinking water subject to specific test requirements covered by the
rule. We adjust by the probability that a serving of bottled drinking water in a shipment is
contaminated given the composite sample tests positive (0.25). We assume the reduction in the
66

number of false negative test results is uniformly distributed between the upper and lower
bounds. Consequently, we estimate that an annual average of 615 fewer contaminated servings
of bottled drinking water subject to specific testing requirements will reach consumer as a result
of this rule. We report the variables used to obtain the reduction in the number of contaminated
servings of bottled drinking water subject to specific testing requirements from the rule in Table
24.

Table 24: The variables used and estimates of the number of contaminated servings
avoided from fewer false negative test results for bottled drinking water subject to specific
testing requirements1

1

The number of negative findings from tests of bottled
drinking water
The baseline number of lines with false negative
findings
The fewer number of false negative findings from the
rule
Average number of servings per shipment represented
by the test
Probability that a serving from the corresponding
shipment would test positive given that the composite
sample tests positive
Number of contaminated servings avoided from better
tests of bottled drinking water

Lower
Bound

Medium
Value

Upper Bound

0

1

2

0.005

0.061

0.129

0

0.002

0.005

1,249,185

1,362,748

1,476,310

0.25

0

615

1,729

We report the lower bound as zero when the fifth percentile is used and is a negative number.

iii.

Fewer illnesses from fewer contaminated servings on the market

We use the endpoints of the range of the estimated number of contaminated servings that
will be avoided as inputs into separate runs of FDA’s Food Handling Practices Model (FHPM) to
estimate the range in the number of illnesses that will be avoided from this rule (Ref. 15). The
FHPM allows for food contaminated at the source to either be eliminated prior to consumption or
to grow and become even more of a hazard. We modified the baseline scenario in the FHPM,
67

which is calibrated to reproduce the number of foodborne illnesses reported in Scallan, et al., by
assuming that each endpoint of the range of the number of contaminated servings of import
related food covered under this rule is distributed uniformly across all seven food categories used
in the model and that each serving is contaminated with a probability of one. In simulations
using endpoints of the range of the number of avoided contaminated servings of shell eggs
subject to covered testing, we assume each serving is contaminated with Salmonella with a
probability of one. We adjust the baseline probabilities of being contaminated at retail and
household levels to be zero so that the outputs contain only the number of illnesses caused by
contaminated servings of import related food covered under this rule upon import and by
contaminated shell eggs subject to covered tests upon production.

a. Illnesses avoided from fewer contaminated servings of import related food,
sprouts, and bottled water covered by the rule
We first estimate the illnesses avoided from import related food covered by the rule using
FHPM. We define parameters in the FHPM to estimate the probability that a serving of food
contaminated at the source will cause an illness. It is less straightforward for the FHPM to
estimate the probability that a serving of bottled drinking water or a serving of sprouts will cause
an illness. Consequently, we estimate illnesses avoided from contaminated servings of sprouts
and bottled drinking water covered under the rule by prorating the illnesses avoided from better
tests of import related food by the fractions of contaminated servings of sprouts and bottled
drinking water subject to specific testing covered by the rule.
The fifth percentile estimate of the number of illnesses from import related food
computed by FHPM using the fifth percentile estimate of contaminated servings of import
68

related food covered under this rule is zero. When we input the mean number of contaminated
servings of import related food covered under this rule, the FHPM calculates between about 259
and 316 illnesses will be avoided annually from this rule. When we input the 95th percentile
estimate of the number of avoided contaminated servings of import related food covered under
this rule, the FHPM calculates between about 737 and 831 illnesses will be avoided annually.
We incorporate these ranges into a Monte Carlo simulation model and assume the
number of illnesses avoided is distributed as a Pert, with the lower value equal to the number of
illnesses avoided when using the fifth percentile estimate of contaminated servings as an input
into the FHPM, the most likely value equals the number of illnesses avoided when we use the
mean estimate of contaminated servings, and the upper value equal to the number of illnesses
avoided when we use the 95th percentile estimate of contaminated servings. For estimates of
illnesses avoided from fewer contaminated servings of import related food we assume the mean
and upper values are themselves uniformly distributed between the fifth percentile and 95th
percentile estimates of those numbers reported above. We estimate about 322 fewer illnesses
from fewer contaminated servings of import related food covered by the rule.
We prorate the fifth percentile, mean, and 95th percentile estimates of the number of
illnesses avoided from import related food covered by the rule by the fractions of fewer
contaminated servings from sprouts and bottled drinking water to obtain the fifth percentile,
mean, and 95th percentile estimates of the number of illnesses avoided from fewer false
negatives from covered tests of sprouts and bottled drinking water. We assume the illnesses
avoided from fewer contaminated servings of sprouts and bottled drinking water are the
corresponding means of these estimates distributed uniformly between the fifth percentiles and
95th percentiles. We report the annual numbers of illnesses avoided from fewer contaminated
69

servings of import related food covered under the rule and from sprouts and bottled drinking
water subject to specific testing covered under the rule in Table 25a, Table 25b, and Table 25c.

70

Table 25a: Annual illnesses avoided from fewer contaminated servings of import related
food being consumed
Illnesses estimated by the FHPM assuming the fifth percentile
estimate of the number of avoided contaminated servings of
import related food covered under this rule
Illnesses estimated by the FHPM assuming the mean estimate
of the number of avoided contaminated servings of import
related food covered under this rule
Illnesses estimated by the FHPM assuming the 95th percentile
estimate of the number of avoided contaminated servings of
import related food covered under this rule
Total illnesses avoided from fewer false negatives distributed
as a Pert1

5th
percentile

Mean

95th
percentile

0

0

0

259

287

316

737

783

831

97

322

575

Total avoided illnesses from fewer contaminated servings of import related food are distributed as a Pert, with a
lower value, most likely value, and upper value distributed uniformly between the fifth percentile and 95th
percentile estimates reported in the first three rows of this table.

1

Table 25b: Annual illnesses avoided from fewer contaminated servings of sprouts being
consumed1
Illnesses assuming the fifth percentile estimate of the number
of contaminated servings
Illnesses assuming the mean estimate of the number of
contaminated servings
Illnesses assuming the 95th percentile estimate of the number
of contaminated servings

5th
percentile

Mean

95th
percentile

0

0

0

0.9

1.0

1.1

2.7

2.8

3.0

We assume the illnesses avoided from fewer contaminated servings of sprouts is the mean of these estimates
distributed uniformly between the fifth percentile and 95th percentile.

1

Table 25c: Annual illnesses avoided from fewer contaminated servings of bottled drinking
water being consumed1
Illnesses avoided assuming the fifth percent estimate of the
number of contaminated servings
Illnesses avoided assuming the mean estimate of the number of
contaminated servings
Illnesses avoided assuming the 95th percent estimate of the
number of contaminated servings

5th
percentile

Mean

95th
percentile

0

0

0

0.02

0.03

0.03

0.07

0.07

0.07

We assume the illnesses avoided from fewer contaminated servings of bottled drinking water is the mean of these
estimates distributed uniformly between the fifth percentile and 95th percentile.

1

71

b. Illnesses avoided from fewer contaminated servings of shell eggs covered by the
rule
We estimate the illnesses avoided from fewer contaminated servings of shell eggs from
the rule using the FHPM which specifically identifies eggs as a food category. The estimated
average number of illnesses avoided when the fifth percentile estimate of the number of
contaminated servings of shell eggs is used as an input in the FHPM is zero. When we input the
mean number of contaminated servings of shell eggs into the FHPM we obtain an average of
about 22 illnesses avoided. When we input the 95th percentile estimate of the number of
contaminated servings of shell eggs avoided into the FHPM we obtain an average of about 51
illnesses avoided.
We assume the number of illnesses avoided is distributed as a Pert, with the lower value
equal to the number of illnesses avoided when we use the fifth percentile estimate of
contaminated servings of shell eggs avoided, the most likely value equal to the number of
illnesses avoided when we use the mean estimate of the number of contaminated servings of
shell eggs avoided, and the upper value equals the number of illnesses avoided when we use the
95th percentile estimate of the number of contaminated servings of shell eggs avoided as an
input into the FHPM. We assume the lower value, mean and upper value in the Pert distributions
are themselves uniformly distributed between the fifth percentile and 95th percentile estimates
reported earlier, with a most likely value as the mean number of illnesses avoided. We apply
Monte Carlo methods to estimate the average number of illnesses avoided from improvements in
tests of shell eggs will be about 23. We report the results of the simulation in Table 26.

72

Table 26: Annual illnesses avoided from fewer contaminated servings of shell eggs
consumed

Illnesses estimated by the FHPM assuming the fifth
percentile estimate of the number of contaminated servings
Illnesses estimated by the FHPM assuming the mean estimate
of the number of contaminated servings
Illnesses estimated by the FHPM assuming the 95th
percentile estimate of the number of contaminated servings
Total annual illnesses avoided1

5th
percentile

Mean

95th
percentile

0

0

0

14

22

30

39

51

63

8

23

39

Total avoided illnesses are distributed as a Pert, with a lower value, most likely value, and upper value distributed
uniformly between the fifth percentiles and 95th percentiles reported in the first three rows of this table.

1

c. Illnesses avoided from fewer contaminated servings of food subject to a DFLO
and covered tests from other administrative orders
We assume a contaminated serving of food that will now be subject to a DFLO would
result in an illness with the same probability as a contaminated serving of import related food
covered by the rule. Moreover, we assume the number of servings of food subject to a DFLO is
the same as the number of servings in a shipment of import related food covered by the rule.
Consequently, we divide the number of illnesses avoided from reducing the number of false
negative shipments of import related food (about 322) by the number of fewer false negative
tests of that food (about 21) to obtain the number of illnesses avoided per contaminated shipment
of import related food (about 15). We then multiply by the annual number of DFLO (0.1 to 1.0)
to obtain the annual number of illnesses avoided from the DFLO (an average of about 8). We
make the same assumptions for calculating the number of illnesses avoided from covered tests of
food subject to other administrative orders covered under the rule. We report in Table 27a the
fifth percentile, mean, and 95th percentile illnesses avoided from better tests subject to DFLO
when the fifth percentile, mean, and 95th percentile of the avoided number of contaminated
servings of food subject to a DFLO are input into the FHPM. We report in Table 27b the fifth
73

percentile, mean, and 95th percentile illnesses avoided from better covered tests from other
administrative orders covered by the rule.

Table 27a: Annual illnesses avoided from fewer contaminated servings of food subject to a
DFLO
Illnesses avoided assuming the fifth percentile estimate of
the number of contaminated servings
Illnesses avoided assuming the mean estimate of the
number of contaminated servings
Illnesses avoided assuming the 95th percentile estimate of
the number of contaminated servings
Average illnesses avoided from fewer false negatives
distributed uniformly across the mean estimates, fifth
percentile estimates and 95th percentile estimates

5th
percentile

Mean

95th
percentile

0

0

0

0

8

47

0

20

127

1

10

68

Table 27b: Annual illnesses avoided from fewer contaminated servings of food subject to
other administrative orders covered under the rule
Illnesses avoided assuming the fifth percentile estimate of
the number of contaminated servings
Illnesses avoided assuming the mean estimate of the
number of contaminated servings
Illnesses avoided assuming the 95th percentile estimate of
the number of contaminated servings
Average illnesses avoided from fewer false negatives
distributed uniformly across the mean estimates, fifth
percentile estimates and 95th percentile estimates

iv.

5th
percentile

Mean

95th
percentile

0

0

0

0

8

47

0

20

127

1

10

68

Avoided Quality-adjusted Life-days (QALDs) from fewer contaminated servings
on the market
We estimate the range in the value of illnesses avoided from improved tests of import

related food, shell eggs, sprouts, and bottled drinking water covered under this rule using
QALDs. The QALDs are derived from the 2019 value of a statistical life (VSL) of $5 million,
$10 million, and $16.2 million and inflated to 2020 values using Department of Health and
74

Human Services Guidance. We use findings of the numbers of outbreaks and illnesses by
pathogen associated with imported food reported in Gould, et al., to estimate the average QALD
loss from an illness associated with imported food (Ref. 16). We then apply illness multipliers by
pathogen found in Scallan, et al. (Ref. 17) and Pennotti and Scallan (Ref. 18) to account for
underreporting and underdiagnosing and apply the QALD loss estimates by pathogen reported in
Minor, et al. (Ref. 19) to obtain the QALD loss per case from imported food. We report the total
number of illnesses and outbreaks reported in Gould, et al., adjusted to account for
underreporting and underdiagnosing in Table 28.

Table 28: Outbreaks and Illnesses reported in Gould, et al., adjusted for underreporting
and underdiagnosing
Outbreaks

1

Scombroid toxin
Salmonella
Ciguatoxin
Cyclospora
Norovirus
Escherichia coli O157
Shigella sonnei
Vibrio
parahaemolyticus
Listeria
monocytogenes
Hepatitis A virus
Brucella
Other
Unspecified

Illnesses

Illnesses per outbreak
Adjusted to
account for
Reported
underreporting
and undiagnosing1
3
33
85
2,491
4
42
321
26,690
13
384
19
505
125
33

Number

Percent

Number

Percent

57
52
18
11
10
6
5

0.31
0.28
0.1
0.06
0.05
0.03
0.03

192
4,421
76
3,533
131
116
625

0.02
0.42
0.007
0.33
0.01
0.01
0.06

5

0.03

243

0.02

49

7,613

4

0.02

67

0.006

17

35

4
3
9

0.02
0.02
0.05

1,150
11
38

0.11
0.001
0.004

288
4
4

2,878
61
85

Scallan, et al. (Ref. 17)

We apply the QALD loss per case from Minor, et al. to the pathogens from imported
foods found by Gould, et al., and weigh each by the percent of outbreaks associated with each
75

pathogen. We report the mean QALD loss associated with each pathogen from Minor et al. and
the weighted mean in Table 29.
We estimate the lower bound, medium value, and upper bound of the weighted average
QALD loss from an illness from import related food the tests for which are covered under the
rule based on 2019 VSL and inflated to 2020 VSL values. We use the value of a QALD loss
from a case of Salmonellosis obtained from Minor, et al. (Ref. 19) to estimate the value of
illnesses avoided from better tests of shell eggs subject to testing requirements. We inflate to
2020 dollars the mean value of a QALD loss from a case of a Salmonellosis from the 2019 VSL
values reported earlier. We scale the mean value by the lower and upper bounds of the 2019 VSL
and inflate those to 2020 VSL values to obtain the lower and upper bounds of a QALD loss
attributable to contaminated shell eggs.

Table 29: Mean QALD loss per case by pathogen with weights for computing the weighted
average

1

Scombroid toxin
Salmonella
Ciguatoxin
Cyclospora
Norovirus
Escherichia coli O157
Shigella sonnei
Vibrio parahaemolyticus
Listeria monocytogenes
Hepatitis A virus
Brucella
Other

Minor, et al. (Ref. 19)

Mean QALD loss per
case1
$1,374
$5,337
$26,610
$3,252
$363
$10,274
$2,800
$1,904
$1,456,676
$42,780
$14,627
$3,488

Mean QALD loss per case weighted by the
percent of outbreaks from imported food
$426
$1,494
$2,661
$195
$18
$308
$84
$57
$29,134
$856
$293
$174

We use the mean value of $1,592 for a QALD of an illness attributable to contaminated
sprouts obtained from the Final Regulatory Impact Analysis of the Produce Safety Rule to
76

estimate the value of illnesses avoided from improved tests of sprouts subject to testing
requirements. We inflate to 2020 dollars to obtain a mean QALD loss of $1,829 per illness
attributable to sprouts. We assume the value of a QALD loss from an illness attributable to
bottled drinking water is the same as that from imported food, and the QALD loss from food
subject to a DFLO or other covered tests from administrative orders covered under the rule is the
average of the values of all other QALD losses covered by the rule. We report the QALD losses
used for this analysis in Table 30.

Table 30: QALD loss per case
1

QALD loss per case from imported food
QALD loss per case from Salmonella in shell eggs2
QALD loss per case from sprouts contamination3
QALD loss per case from bottled drinking water
contamination
QALD loss per case from facilities subject to a DFLO and
other administrative orders covered under the rule

Lower bound

Mean

Upper bound

$4,114
$3,296
$847

$8,998
$7,119
$1,829

$13,883
$10,942
$2,811

$4,114

$8,998

$13,883

$3,093

$6,736

$10,380

Mean QALD per illness from Minor, et al. and inflated to 2020 dollars.
Mean QALD per case of Salmonellosis from Minor, et al. and inflated to 2020 dollars.
3
Mean case of illness attributable to sprouts obtained from the Produce Safety Final Rule and inflated to 2020
dollars.
1
2

We multiply the values of a QALD loss by the numbers of illnesses avoided from
improved tests of import related food covered under this rule and from shell eggs, sprouts,
bottled drinking water, and DFLO and other administrative orders subject to testing covered
under this rule using Monte Carlo methods and estimate the fifth percentile, mean, and 95th
percentile estimates of the total avoided QALD losses. We obtain the avoided QALD losses from
improved tests of import related food covered under this rule and from shell eggs, sprouts,
bottled drinking water, and DFLO and other administrative orders subject to testing covered
77

under this rule and add them together to obtain the total avoided QALDs from fewer false
negative test results. We report the means, fifth percentile and 95th percentile estimates in Table
31.

Table 31: Annual avoided QALDs from improved tests
QALD loss avoided from better covered tests of
imported related food
QALD loss avoided from better tests of shell eggs
QALD loss avoided from better tests of sprouts
QALD loss avoided from better tests of bottled
drinking water
QALD loss avoided from DFLO
QALD loss avoided from better tests for other
administrative tools
Total

5th
percentile

Mean

95th
percentile

$756,353

$2,895,966

$5,819,669

$42,823
$938

$164,925
$1,829

$326,774
$2,772

$112

$225

$351

$4,291

$68,966

$391,202

$4,291

$68,966

$391,202

$1,018,505

$3,200,876

$6,543,439

b. Avoided revenue losses from fewer false positive test results
This rule may also result in fewer false positive test results for import related food
covered under the rule and shell eggs, sprouts, and bottled drinking water and other food subject
to testing covered under the rule. A false positive test result for import related food covered
under this rule will result in refusing entry into the U.S. market of uncontaminated human and
animal food. A false positive test result for shell eggs, sprouts, and bottled drinking water and
other food subject to testing covered under this rule will prevent uncontaminated shell eggs,
sprouts, and bottled drinking water and other food from entering the market and could also set
into motion a range of unnecessary corrective actions by shell egg, sprouts, bottled drinking
water, and other, producers.
We assume the upper bound on the cost of a false positive test result will be the full
wholesale value of the corresponding shipment of human or animal food offered for import
78

covered under this rule or shell eggs, sprouts, or bottled drinking water subject to specific test
requirements. The full wholesale value of the shipment may overstate the loss to the extent that
the shipment can be reconditioned and resold. We assume the cost of reconditioning a shipment
of import related food covered under this rule is between $500 and $1,500 and the cost savings
from fewer false positives is uniformly distributed between the wholesale value of the shipment
and the cost of reconditioning the shipment.

i.

Avoided revenue losses from fewer false positive test results for import related
food the tests of which are covered under this rule
Internal records from PLAPs for all countrywide import alerts 2018-2019 indicate that

the annual rate of private lab-confirmed positive test results for human and animal food offered
for import covered under this rule is about 4.6 percent. We assume the rate of improved test
performance from this rule discussed earlier will reduce the number of false positive test results
for tests of import related food covered under this rule by the same rate. We use 2016 OASIS
data from our Office of Regulatory Affairs, updated to 2020 values using the Consumer Price
Index, to obtain the means and standard deviations of the wholesale values of imported lines for
26 categories of food cleaned using the two criteria discussed above to estimate the wholesale
loss from a false positive result from tests of import related food covered by this rule.
We estimate the improved number of false negative findings from tests of shell eggs by
multiplying the number of negative findings by the improved rate of test performance from the
rule. We then obtain the baseline number of false negative findings from tests of shell eggs by
multiplying the baseline number of positive findings by the baseline rate of test performance. We
then subtract the improved number of false positive findings from the baseline number of false
79

positive findings to obtain the number of fewer false positive findings from the rule. We estimate
the lower and upper bounds of the wholesale values of an imported line by assuming a lognormal
distribution, with mean and standard deviation themselves random variables distributed
uniformly between the means and standard deviations obtained using the two data cleaning
criteria discussed earlier. We assume the wholesale values of a shipment of food subject to a
DFLO or testing for other administrative orders covered by the rule is the same as that for food
offered for import covered by the rule. We report the upper and lower bounds and medium
values of the variables used to estimate the avoided retail loss from fewer false positive test
results for import related food covered under this rule in Table 32.

Table 32: Variables used to estimate revenue losses avoided from fewer false positive test
results for import related food covered under this rule and from the DFLO
The number of lines of import related food that test positive
The baseline number of false positive lines
The number of fewer false positive lines
Average $ wholesale value per shipment

ii.

Lower
Bound
566
22
0
$130

Medium
Value
566
34
1.02
$10,377

Upper
Bound
566
46
2
$37,232

Avoided revenue losses from fewer false positive test results for shell eggs,
sprouts, and bottled drinking water subject to testing requirements

We assume the current baseline rate of positive test results for shell eggs, sprouts, and
bottled drinking water is the same as the current baseline rate of positive test results for import
related food covered under this rule. We estimate an average of 183 shipments of shell eggs
subject to covered testing currently test positive annually, 13 shipments of sprouts subject to tests
covered by the rule test positive annually, and 0.05 shipments of bottled drinking water subject
to covered tests covered by the rule test positive annually. We assume the same baseline
performance for sprouts and bottled drinking water tests covered by the rule as for covered tests
80

of shell eggs. We estimate the improved number of false positive findings from tests of shell
eggs, sprouts, and bottled drinking water by multiplying the baseline numbers of positive
findings by the improved rates of test performance from the rule. We then obtain the baseline
number of false positive findings from tests of shell eggs, sprouts, and bottled drinking water by
multiplying the baseline numbers of positive findings by the baseline rates of test performance.
We then subtract the improved numbers of false positive findings from the baseline numbers of
false positive findings to obtain the numbers of fewer false positive findings of shell eggs,
sprouts, and bottled drinking water under the rule. We assume uniform distributions for the
baseline test performance and improved test performance from this rule and estimate an average
of about four fewer false positive test results for shipments of shell eggs, 0.4 fewer false
positives for sprouts shipments, and a negligible number of false positive shipments of bottled
drinking water annually.
We obtain the wholesale value of a shipment that corresponds to a test of shell eggs
subject to specific testing requirements by multiplying the number of shell eggs in a shipment,
from Table 22, by the price per shell egg received by the egg farm. We obtain average monthly
farm prices received for a dozen shell eggs from the USDA Farm Price Received report for 2020
(Ref. 20). We find the mean monthly farm price received for a dozen shell eggs for 2020 to be
about $0.91, with a standard deviation of about $0.28. We assume a lognormal distribution of the
farm price received for a dozen shell eggs, divide by 12 to obtain the price per shell egg and
multiply by the number of shell eggs in a shipment to obtain the wholesale value of a shipment
of shell eggs. We use the wholesale values of shipments of sprouts and bottled drinking water as
a finished product reported in the ERG Profile and report the lower bound, medium value, and

81

upper bound wholesale values of shipments of shell eggs, sprouts, and bottled drinking water in
Table 33a, Table 33b, and Table 33c.

Table 33a: Variables used to estimate the avoided revenue losses from fewer false positive
test results for shell eggs subject to covered testing
The total number of shipments of shell eggs that test positive
The baseline number of false positive shipments
The number of fewer false positives from the rule
Average $ wholesale value per shipment of shell eggs

Lower
Bound
122
9
0
$24,524

Medium
Value
183
15
4.1
$36,787

Upper
Bound
244
22
9
$49,049

Table 33b: Variables used to estimate the avoided revenue losses from fewer false positive
test results for sprouts subject to covered testing
The total number of shipments of sprouts that test positive
The baseline number of false positive shipments
The number of fewer false positives from the rule
Average $ wholesale value per shipment of sprouts

Lower
Bound
3
0
0.00
$160

Medium
Value
13
1
0.04
$70,080

Upper
Bound
23
2
0.12
$140,000

Table 33c: Variables used to estimate the avoided revenue losses from fewer false positive
test results for bottled drinking water subject to covered testing
The total number of shipments of bottled water that test
positive
The baseline number of false positives
The number of fewer false positives from the rule
Average $ wholesale value per shipment of bottled water

iii.

Lower
Bound

Medium
Value

Upper
Bound

0.000

0.049

0.097

0
0.00
$900

0
0.00
$2,250

0
0.00
$3,600

Total avoided revenue losses

We apply Monte Carlo methods to the random variables reported in the tables above to
simulate the fifth percentile, mean, and 95th percentile estimates of the total avoided retail loss
from the reduction in false positive test results due to this rule. We assume uniform distributions
between the lower and upper bounds for the number of positive test results and the reduction in
the numbers of false positive test results reported in the tables above. We assume the wholesale
82

value of a shipment of import related food covered under this rule is distributed lognormally with
the means and standard deviations reported earlier. To estimate the savings from false positives
for shipments subject to DFLO and testing required from other administrative orders covered
under the rule we obtain the difference between the baseline number of false positives and the
number of false positives from this rule and multiply by the annual frequency of a DFLO (0.1 to
1) to obtain a negligible savings from fewer false positives from the DFLO. We report the
means, fifth percentile estimates, and 95th percentile estimates of the cost savings from fewer
false positives from the rule in Table 34.

Table 34: Estimated annual avoided revenue losses from fewer false positive test results

1

Avoided revenue losses from fewer false positives of import
related food
Avoided revenue losses from fewer false positives of shell
eggs subject to testing requirements
Avoided revenue losses from fewer false positives of sprouts
subject to covered testing requirements
Avoided revenue losses from fewer false positives of bottled
drinking water subject to covered testing requirements
Avoided revenue losses from fewer false positives for DFLO
subject to covered testing requirements
Avoided revenue losses from fewer false positive test results
for other administrative orders subject to covered testing
requirements

5th
percentile1

Mean

95th
percentile

$0

$5,810

$24,919

$0

$77,655

$199,679

$0

$3,101

$9,980

$0

$0.20

$1

$0

$0

$0

$0

$0

$0

We report the lower bound as zero when the estimate is reported as a negative number.

6. Deterrence of unsafe food manufacturing practices due to better expected test
performance
The possibility of more positive test findings from more accurate testing by participating
labs may deter human and animal food suppliers from unsafe manufacturing practices if the
additional cost of being caught with contaminated food is greater than the additional cost of
providing safe food. The cost of a positive test finding includes any required corrective actions,
83

such as reconditioning, combined with the value of the lost shipment. The deterrence of unsafe
food manufacturing practices from the threat of a positive test finding is greater as the
probability of false findings declines.
When safe food practices are prevalent, we would expect a high prevalence of
contaminant-free food and the probability of a negative test finding to be high if tests are
accurate. That describes the current situation with the estimated share of negative findings from
tests of human and animal food offered for import covered under this rule to be between 96
percent and 98 percent, indicating a high prevalence of food safety practices. Consequently,
under current conditions and assuming diminishing marginal returns we expect the additional
costs required to increase food safety practices by manufacturers to be comparatively high.
When baseline rates of test performance are high, we would expect the rates of false
negative and false positive test results to be low. That describes our assessment of current
baseline conditions for which we estimated rates of false positives and false negatives to be
between 3.4 percent and 8.3 percent (see the earlier discussion on improved test performance).
Consequently, we expect the additional commercial losses from even fewer false negative test
findings to be low.
With the assumed current high prevalence of food safety practices and the current high
rates of test performance, the additional costs that will be incurred by manufacturers to provide
even further assurances of safe food potentially subject to more accurate testing may be close to,
or even greater than, the additional costs to the manufacturer from the greater likelihood that
contaminated food will be caught. We assume the additional costs to the manufacturer from the
lost commercial value due to fewer false negative test findings is greater than the additional cost
of providing even further assurances of safe human or animal food potentially subject to even
84

more accurate testing, and that there will be some deterrence of unsafe practices by all
manufacturers affected by this rule from improved test performance.

7. Improved test reporting practices from test reporting requirements
The requirement for LAAF-accredited labs to send all test results and analytical reports to
us if they participate in the LAAF program may deter possible selective reporting behavior
designed to increase the likelihood of reporting false negative test results. Selective reporting
includes such practices as “testing into compliance” (testing multiple samples and reporting the
results for only those that are found to be negative) and “banking negative test results” (saving
negative analytic findings for later use) and “laboratory shopping” (a practice where an owner or
consignee sends samples to several laboratories in hopes that one will return results indicating
the sample complies with FDA requirements; the owner or consignee would then submit only
that result to us). Evidence from a 2009 outbreak involving peanut butter suggests the existence
of behavior of selectively reporting false negative test results (Ref. 21).

8. Total benefits of this rule
We apply Monte Carlo methods to obtain the fifth percentile, mean, and 95th percentile
estimates for the total cost savings from clarifying analytical report submission and review
processes, from abridged reporting and management systems improvements and the total avoided
QALD losses and revenue losses from better tests. We report the means, fifth percentile
estimates and 95th percentile estimates of these variables and the total benefits of this rule in
Table 35.

85

Table 35: Total benefits from this rule1
Total benefits

1

Cost savings from clarifications of the processes for
compiling and reviewing analytical reports of tests of
import related food covered by the rule
Cost savings from allowing abridged analytical reports of
tests of import related food covered by the rule
Cost savings from management systems upgrade
Cost savings from fewer false positives – import related
food covered by the rule
Cost savings from fewer false positives – Shell eggs
Cost savings from fewer false positives – Sprouts
Cost savings from fewer false positives – Bottled
Drinking Water
Avoided QALD losses from fewer servings of
contaminated imported food
Avoided QALD losses from fewer servings of
contaminated shell eggs
Avoided QALD losses from fewer servings of
contaminated sprouts
Avoided QALD losses from fewer servings of
contaminated bottled drinking water
Avoided QALD losses from DFLO
Avoided QALD losses from MR, AD and SR provisions
Total quantified benefits

5th
percentile
$903,648

$1,892,655

95th
percentile
$2,916,164

$2,871,042

$3,969,236

$5,060,875

$78,534
$0

$131,260
$5,249

$185,759
$25,343

$0
$0
$0

$70,161
$2,802
$0

$221,540
$9,754
$1

$749,095

$2,689,678

$5,714,506

$42,494

$153,177

$299,416

$869

$1,699

$2,530

$105

$209

$334

$3,926
$3,926
$6,604,454

$68,966
$68,966
$9,054,057

$375,818
$375,818
$12,461,223

Mean

We report the lower bound as zero when the estimate is reported as a negative number.

F. Costs of this Rule
We note that there is uncertainty about the number of labs that will participate in the
LAAF program; however, the Agency’s plan to issue a Federal Register notice 6 months prior to
requiring owners and consignees to use a LAAF-accredited laboratory for the testing ensures
there will be enough lab capacity in the LAAF program for any tests that are required. The
stepwise approach to implementation and giving a 6-month notice to owners and consignees
prior to requiring them to comply with the final rule affects the timing of costs and benefits of
the rule. We estimate that the costs will be incurred for import related food covered by the rule
one to two years following publication of the final rule. We believe that timeframe is realistic
86

because import related owners and consignees and labs conducting import related tests are
already used to sending analytical reports to FDA, and because comments assert there is
currently sufficient lab capacity to conduct at least all import related tests covered by the rule.
For tests of shell eggs, sprouts, and bottled drinking water covered by the rule, we estimate costs
will be incurred two to three years following publication of the rule. Those industries and
laboratories do not currently submit analytical reports to FDA in connection with the tests
covered by the rule, so we anticipate that it will take longer to attain sufficient lab capacity for
such tests. We discount costs of the rule by seven percent.

1. Costs incurred by participating ABs
The final rule includes requirements for ABs to apply for recognition by FDA and to
renew that recognition periodically. The final rule will require recognized ABs to be members of
ILAC and signatories of the ILAC MRA, to conform to the ISO/IEC 17011:2017 standard, and
to renew recognition at least every 5 years. All ABs currently considered potential applicants
already satisfy the requirements of the ISO standards and are monitored and evaluated on an ongoing basis. Additional costs that recognized ABs will incur include:
•

modifying existing programs and standard operating procedures for accrediting
labs to the requirements established by this rule and

•

maintaining and submitting reports and other records to us.

Consistent with comments we received on the PRIA, we use information from our
ATPCP to estimate the number of ABs that will participate in the LAAF program. Currently,
there are 4 ABs that participate in the ATPCP. We assume the ABs that accredit labs for testing
foods offered for import are the same ABs that will accredit labs for testing shell eggs, sprouts,
87

and bottled drinking water. Consequently, we estimate that 4 ABs will apply to be recognized
and incur costs of the rule.
For estimates of the labor costs incurred by ABs and other entities described in the
following sections we use the mean hourly wage of a microbiologist, a natural science manager,
and a lawyer reported in the Bureau of Labor Statistics, May 2020 National Occupational Survey
under occupation codes 19-1022, 11-9121 and 23-1011 (Ref. 22). We multiply these wages by
two to account for overhead to obtain fully loaded hourly wages of $88.30 for a microbiologist,
$148.98 for a natural sciences manager, and $143.18 for a lawyer.

a. Costs for initial applications for recognition
This rule will require ABs that wish to be recognized to submit an application that
demonstrates their qualifications to accredit labs to meet the requirements established by this
rule. We assume that this process will be overseen by a lawyer and a natural science manager
and estimate that it will take a total of between 40 and 80 hours to compile all the relevant
information, prepare for an assessment, and complete the initial application process. This may
overstate the burden to the extent that ABs applying for recognition are already subject to FDA
oversight through other programs. We estimate the cost incurred by ABs for submitting
applications for recognition to range from about $23,373 (40 hours x ($143.18 per hour +
$148.98 per hour) / 2) x 4 ABs = $23,373 to about $46,746 (80 hours x $143.18 per hour +
$148.98 per hour) / 2) x 4 ABs = $46,746). We estimate the annualized costs for initial
recognition discounted at seven percent over 10 years to range from $3,110 to $6,220. When we
assume a three percent discount rate over 10 years the annualized costs range from $2,660 to
$5,320.
88

b. Costs for applications for renewal of recognition
This rule will require an AB to apply for renewal of recognition at the end of their term of
recognition, which for purposes of this analysis we assume will be the maximum duration of
recognition (five years). We assume that application for renewal of recognition will take less
time than the initial application for recognition as the information already will have been mostly
compiled. We assume that the renewal application will be overseen by a lawyer and a natural
science manager and estimate that it will take between 20 and 40 hours. We assume renewal
costs will be incurred every five years, or twice over a 10-year period, and add the discounted
present value of the renewal costs incurred during year 5 to the discounted present value of the
renewal costs incurred during year 10 to obtain the total renewal costs. We assume discount rates
of seven percent for the lower bound estimate and three percent for the upper bound estimate.
Consequently, we estimate cost to submit applications for renewal over 10 years will range from
$14,273 (4 ABs x 20 hours x the average of $148.98 per hour and $143.18 per hour divided by
1.07 raised to the 5th power + 4 ABs x 20 hours x the average of $148.98 per hour + $143.18 per
hour divided by 1.07 raised to the 10th power = $14,273) to $37,553 (4 ABs x 40 hours x the
average of $143.18 per hour and $148.98 per hour per hour divided by 1.03 raised to the 5th
power + 4 ABs x 40 hours x the average of $148.98 per hour and $143.18 per hour per hour per
hour divided by 1.03 raised to the 10th power = $37,553). We estimate the annualized renewal
cost discounted at seven percent over 10 years will range from $1,899 to $4,997. The annualized
costs discounted by 3 percent over five years will range from $1,625 to $4,274.

89

c. Costs to modify existing programs to accredit labs to the standards established by
this rule
ABs will incur one-time costs to modify their existing program for accrediting labs to the
requirements of this rule. Activities for establishing a program could include modifying
•

a strategic plan for accrediting labs to the standards established by this rule,

•

implementation plans for assuring that quality standards are met,

•

quality management system procedures (QMSPs) for defining policies,

•

standard operating procedures (SOPs) for assessing labs against the LAAF
standards, and

•

training of assessors to monitor the performance of LAAF-accredited labs.

We assume managers and scientists in each AB will spend time to modify existing
programs for participating labs to meet the requirements of this rule. We assume that each
activity will require between 20 hours and 40 hours for a manager and between 20 hours and 40
hours for a scientist. We apply the fully loaded wages for a manager ($148.98) and a scientist
($88.30) to these hourly burdens and multiply by the number of ABs to obtain a total one-time
cost to the industry of between about $56,947 and about $113,894 for modifying existing
programs for accrediting labs to the new standards. We report the one-time costs to establish a
program to accredit labs to the standards established by this rule in Table 36.

Table 36: One-time costs for participating ABs to modify existing programs to accredit labs
to the standards established by this rule

Strategic and Action
Plans

Manager
hourly
burden
(lower
bound)

Manager
hourly
burden
(upper
bound)

Scientist
hourly
burden
(lower
bound)

Scientist
hourly
burden
(upper
bound)

20

40

20

40

90

Total
industry
costs (lower
bound) 1

Total
industry
costs (upper
bound) 1

QMSPs and SOPs
20
40
20
Training
20
40
20
Total Industry Cost
1
We estimate 4 ABs will participate in the LAAF program.

40
40

$56,947.20

$113,894.40

We divide the upper and lower bounds for the total industry costs by 4 participating ABs
to obtain the range on the one-time costs per AB to establish a program of between $14,237 and
$28,474. The annualized costs for all participating ABs to modify existing programs to accredit
labs discounted at seven percent over 10 years range from $7,577 to $15,155. The annualized
costs discounted by three percent over 10 years range from $6,482 to $12,963.

d. Costs to periodically assess participating labs
There will be costs incurred by participating ABs to periodically assess participating labs
for compliance with the LAAF standard. Because ISO/IEC 17011:2017 requires the AB to
reassess a sample of a lab’s scope at least every two years, although not necessarily on-site, we
assume that only some of the costs to periodically assess participating labs for compliance with
LAAF will be incurred over and above those required to accredit labs to the ISO/IEC
17025:2017 standard. This rule will require a participating AB to conduct an on-site assessment
of a participating lab every two years. Certain assessment activities may be conducted remotely.
We assume that each assessment will take between 16 and 24 hours, including for preparation,
travel, and any follow-up reporting and correspondence. Consequently, we estimate the
additional monitoring and assessing costs incurred by ABs annually due to the rule to be between
about $50,797 (16 hours x $88.30 per hour x 75 participating labs that test shell eggs, sprouts,
and bottled drinking water after 4 to 6 years and 10 labs that test import related food covered by
the rule after one to two years x 0.5 inspections per year = $50,797) and about $230,907 (24
91

hours x $88.30 per hour x 212 participating labs that test shell eggs, sprouts, and bottled drinking
water after 4 to 6 years and 44 labs that test import related food covered by the rule after one to
two years x 0.5 inspections per year = $230,907).

e. Recordkeeping and reporting costs
This rule will require a participating AB to maintain records of participating lab
accreditation activities for five years after the date of the creation of the record, including any
changes to the scopes of accreditation. ILAC requires that ABs maintain these records, although
ILAC does not specify the number of years. We do not have information on the number of years
that ABs keep records. For our analysis, we assume that ABs keep records at least five years
after the date of creation and that no additional recordkeeping costs will be incurred.
This rule will require a participating AB to report to us any significant changes affecting
its recognition or the accreditation status of participating labs it accredits. This rule will require
participating ABs to provide us with access to records and other resources, including selfassessments by ABs and participating labs, records related to a participating lab’s accreditation
status or AB’s recognition, assessments of participating labs or evaluations of ABs, and
information on the AB's qualifications, resources, quality assurance programs, recordkeeping,
reporting, monitoring procedures. The participating AB will also incur costs for making records
available electronically to us. The amount of time the AB must devote to these activities will
depend, in part, on the number of participating labs that it has accredited.
In the PRIA, we estimate that participating ABs will incur one hour per month, or 12
hours per year submitting reports and notifications to us. We scale the burden per AB estimated
in the PRIA to account for the large number of participating labs estimated in this analysis to
92

obtain a burden per AB of 42 hours. We assume this task will be undertaken by an employee at
the level of microbiologist. Consequently, we estimate the annual cost to participating ABs to be
about $14,834 (42 hours x $88.30 per hour x 4 ABs = $14,834).

f. Summary of costs incurred by ABs
We report the costs of this rule that will be incurred by participating ABs by cost
category and frequency with which they will occur in Table 37. For the one-time costs of the
initial application for recognition and for modifying existing programs we discount over 10 years
at seven percent and at three percent. For the costs for application renewal, we assume costs are
incurred at year 5 and year 10. The present value of these costs is discounted over 10 years at
seven percent and three percent.

Table 37: Summary of the costs and frequencies incurred by ABs by cost category
Task
Costs for initial application for recognition
Costs for application for renewal of recognition
Modify existing programs for accrediting labs
Periodically assess participating labs
Recordkeeping and reporting costs

Lower bound
$23,373
$14,273
$56,947
$51,990
$14,834

Upper bound
$46,746
$37,553
$113,894
$230,907
$14,834

Frequency
One-time
Every 5 years
One-time
Annual
Annual

We use a Monte Carlo simulation to estimate total annualized costs and the present
values of costs incurred by participating ABs. We assume uniform distributions for annualized
cost estimates that range between the lower bound and upper bound described in each cost
category. We report the simulation results for the total present values and annualized costs
incurred by ABs discounted by seven percent and three percent over 10 years in Table 38.

93

Table 38: Present values and total annualized costs incurred by ABs discounted at 7
percent and 3 percent over 10 years
Annualized costs at 7 percent
Annualized costs at 3 percent
Present value at 7 percent
Present value at 3 percent

5th percentile

Mean

95th percentile

$94,770
$92,431
$649,970
$769,981

$175,762
$172,944
$1,242,361
$1,483,015

$257,132
$253,274
$1,830,190
$2,190,828

2. Costs incurred at the lab level
Labs currently used for tests covered by the rule may incur the costs of accreditation to
the standards established by this rule. This rule incorporates by reference the ISO/IEC
17025:2017 standard. Consequently, labs will have to be accredited to the ISO/IEC 17025:2017
standard to participate in the LAAF program. There will be costs over and above those required
to maintain accreditation to the ISO/IEC 17025:2017 standard to participate in the LAAF
program, such as costs:
•

to be periodically assessed against the LAAF program standards by the AB,

•

to meet requirements to participate in a proficiency testing program, and

•

when necessary, to validate an analytical method.

Labs will also incur costs at the analysis level. These include costs related to the sampling
process, verifying analytical methods, and compiling and submitting analytical reports to us. The
costs of these requirements for the oversight of sampling include:
•

developing or obtaining a sample collection plan and sample collection report and

•

one-time costs to develop or obtain sampler’s applicable qualifications by training
and experience.

94

To estimate the costs incurred at the lab level we use the fully loaded wage of $77.10 for
a food scientist and technologist, code 11-9121, obtained from the Occupation Employment and
Wages, May 2020 report.

a. Costs to attain and maintain accreditation to the ISO/IEC 17025:2017 standard
The Association of Public Health Laboratories (APHL) reported the results of a survey
administered to 30 accredited labs associated with FDA cooperative agreements (FDA’s ISO
cooperative agreement, the FDA Animal Food Regulatory Program Standards cooperative
agreement, and accredited labs that receive assistance through the FDA Associations
Cooperative Agreement) regarding the costs to attain and maintain accreditation to the ISO/IEC
17025 standard (Ref. 23). Representatives from 18 labs responded to the survey, for a response
rate of 60 percent. A limitation of the survey was that the information obtained depended on the
respondents’ ability to recall costs, which may have been incurred several years prior to
responding. The respondents did not specify the number of scopes to which their cost estimates
would apply. We assume the range in scopes implied from the survey responses corresponds to
the same range in scopes that will participate in the LAAF program.
The costs to become accredited to ISO/IEC 17025:2017 were incurred over a number of
years. We report the lower bounds, medians, and upper bounds for the one-time costs and annual
costs to obtain accreditation to ISO/IEC 17025 found by the survey in Table 39. We assume
triangle distributions using the lower bounds, medians, and upper bounds as the parameters and
use the @RISK software to obtain the average one-time costs of $237,137 and the average
annual costs of $374,655 to become accredited to ISO/IEC 17025. Consistent with public
comments, we assume the costs to become accredited to ISO 17025:2017 for labs that adhere to
95

AOAC Guidelines and AAFCO Guidelines will fall in the lower end of the estimated range. We
assume these costs would be incurred by any lab that conducts tests covered by the rule, that is
currently not accredited to ISO/IEC 17025, and that chooses to participate in the LAAF program.

Table 39: One-time and annual costs to attain and maintain accreditation to the ISO/IEC
17025:2017 standard per lab1
Training costs
Recurring assessment fees
Consultant costs
Supplies and equipment
Calibration
Preventive maintenance
Proficiency testing
Software and monitoring
systems
Annual salaries

Lower bound
$0
$1,300
$0
$100
$1,241
$0
$0

Median
$12,715
$6,000
$3,000
$15,300
$10,927
$60,788
$3,327

Upper bound
$155,600
$17,201
$35,500
$49,576
$41,650
$300,857
$9,000

$0

$44,627

$460,000

$0

$164,000

$442,697

Association of Public Health Laboratories, “Laboratory Costs of ISO/IEC 17025 Accreditation: A 2017 Survey
Report.” February 2018.

1

Labs that currently conduct tests covered by the rule will participate in the LAAF
program if the costs of doing so are less than the revenues from conducting the covered tests. We
assume that only labs that are in the pools of labs that currently conduct covered tests of import
related food, shell eggs, sprouts, and bottled drinking water may participate in the LAAF
program. The costs for labs to participate in the LAAF program are lower for labs that are
currently accredited to ISO/IEC 17025, and we assume that labs that conduct covered tests of
import related food, shell eggs, sprouts, and bottled drinking water that are already accredited to
ISO/IEC 17025:2017 would participate in the LAAF program if the revenues from LAAF
participation exceed the costs. If there is sufficient revenue from covered tests remaining to
cover the costs to become accredited to ISO/IEC 17025:2017, there may be labs not currently
96

accredited to ISO/IEC 17025:2017 in the pool of labs affected by the rule that may choose to
incur these costs in order to participate in the LAAF program.
Data from the 2017 PLAPs indicates that 10 labs that test import related food covered by
the rule conduct between 82 percent and 86 percent of the covered tests of import related food,
and that these labs are currently accredited to ISO /IEC 17025:2017. We assume 10 labs is the
lower bound on the number of labs that conduct covered tests of import related food that will
participate in the LAAF program. The data also indicates that between 93 percent and 96 percent
of all covered tests of import related food are conducted by labs accredited to ISO/IEC
17025:2017 and that 44 labs of the 106 labs in the pool of labs that conduct covered tests of
import related food are accredited to ISO/IEC 17025:2017. We estimate that the remaining
revenue from four percent to seven percent (100 percent – 96 percent, and 100 percent – 93
percent) of tests of import related food is insufficient to cover the costs for labs to become
accredited to ISO/IEC 17025 to participate in the LAAF program. Consequently, we estimate
between 10 and 44 labs that conduct covered tests of import related food and that are already
accredited to ISO/IEC 17025:2017 will participate in the LAAF program.
Because no labs that test import related food will incur costs to become accredited to
ISO/IEC 17025:2017 to participate in the LAAF program, we assume the four percent to seven
percent of the covered tests of import related food currently conducted by labs not accredited to
ISO/IEC 17025:2017 will now be conducted by a LAAF participating lab. These tests may be
subject to some costs from switching to labs that participate in the LAAF program.
We use information reported in the Profile to estimate the number of labs that conduct
covered tests of shell eggs that will participate in the LAAF program and information from
Section II.D.2.b.ii to obtain between 126,000 and 251,125 tests of shell eggs (287,000 tests of
97

shell eggs reported in the Profile - 12.5 percent of shell eggs that will be diverted to the
processed market upon receipt of a positive environmental test finding) that will be covered by
the rule. We do not know the percent of these tests that are currently performed by labs already
accredited to ISO/IEC 17025 and assume they are uniformly distributed among the 15 to 38 labs
in the pool of labs that conduct the covered tests of shell eggs. The Profile reports that labs
charge between $26 and $30 per test. Consequently, we estimate the average total revenue from
all covered tests of shell eggs is $5,279,750, and the average revenue per lab is $199,238 for
each of the 15 to 38 labs in the pool of labs that conduct covered tests of shell eggs.
Labs in the pool of labs that conduct covered tests of shell eggs and that are currently
accredited to ISO/IEC 17025:2017 will have a cost advantage for participating in the LAAF
program over labs not accredited to ISO/IEC 17025:2017. We assume that labs currently
accredited to ISO/IEC 17025:2017 that conduct covered tests of shell eggs will be the first to
participate in the LAAF program. Labs that currently conduct the covered tests of shell eggs but
that are not accredited to ISO/IEC 17025:2017 will participate in the LAAF program only if
there is sufficient revenue left over to warrant incurring the costs to become accredited to
ISO/IEC 17025:2017. We estimate that between 4.5 and 14.06 labs that conduct covered tests of
shell eggs are accredited to ISO/IEC 17025:2017 (30 percent accredited to ISO/IEC 17025 x 15
labs = 4.5 labs; and 37 percent accredited to ISO/IEC 17025:2017 x 38 total labs = 14.06 labs.)
We multiply the $199,238 average revenue per lab by the number of labs that conduct covered
tests of shell eggs that are already accredited to ISO/IEC 17025:2017 to obtain a total revenue of
between $896,561.32 and $2,801,256.04 for labs that conduct covered tests of shell eggs that are
already accredited to ISO/IEC 17025:2017.

98

Labs not already accredited to ISO/IEC 17025:2017 that conduct covered tests of shell
eggs may incur the costs to become accredited to ISO/IEC 17025:2017 in order to participate in
the LAAF program if the remaining revenues from the covered tests exceed the annual costs to
become accredited to ISO/IEC 17025:2017. To estimate the number of labs that conduct covered
tests of shell eggs that are not currently accredited to ISO/IEC 17025:2017 that will incur costs to
become accredited ISO/IEC 17025:2017 to participate in the LAAF program, we divide the total
revenue remaining for labs that conduct covered tests of shell eggs and that are not accredited to
ISO/IEC 17025:2017 by the annual costs to maintain accreditation to ISO/IEC 17025:2017.
Consequently, we estimate that between 6.6 and 11.7 labs that are not currently accredited to
ISO/IEC 17025:2017 may incur costs to become accredited to ISO/IEC 17025:2017 to
participate in the LAAF program (($5,279,750 total revenue from all tests - $2,801,256 revenue
for 14.06 labs already accredited to ISO/IEC 17025:2017) / $374,655 annual costs to become
accredited = 6.6 labs; and ($5,279,750 total revenue from all tests - $2,801,256 revenue for 4.5
labs already accredited to ISO/IEC 17025:2017) / $374,655 annual costs to become accredited =
11.7 labs).
We derive the estimate of 7 labs (6.6 rounded to the nearest integer) that may incur costs
to become accredited to ISO/IEC 17025:2017 to participate in the LAAF program when we
assume there are 38 labs in the pool that conduct covered tests of shell eggs - 14 (14.06 rounded
to the nearest integer) of which are already accredited to ISO/IEC 17025:2017 and 24 of which
are not accredited to ISO/IEC 17025:2017. We derive the estimate of 12 labs (11.7 rounded to
the nearest integer) that may incur costs to become accredited to ISO/IEC 17025:2017 to
participate in the LAAF program when we assume there are 15 labs in the pool that conduct
covered tests of shell eggs - 5 (4.5 rounded to the nearest integer) of which are already accredited
99

to ISO/IEC 17025:2017 and 10 of which are not accredited to ISO/IEC 17025:2017. Because the
12-lab estimate exceeds the number of labs remaining in the pool of 15 labs that conduct covered
tests of shell eggs and that are not accredited to ISO/IEC17025:2017 (10), we assume that 10
labs rather than 12 labs that conduct covered tests of shell eggs may incur costs to become
accredited to ISO/IEC 17025:2017 to participate in the LAAF program.
The number of labs that conduct covered tests of shell eggs that will incur costs to
become accredited to ISO/IEC 17025:2017 in order to participate in the LAAF program will
depend on the number of labs that conduct covered tests of shell eggs that are already accredited
to ISO/IEC 17025. We estimate that 10 labs that conduct covered tests of shell eggs and that are
not already accredited to ISO/IEC 1705:2017 will incur costs to become accredited to ISO/IEC
17025:2017 when there are five labs that conduct covered tests of shell eggs and that are already
accredited to ISO/IEC 17025:2017. We estimate that 7 labs not already accredited to ISO/IEC
17025:2017 will incur costs to become accredited to ISO/IEC 17025:2017 when there are 14 labs
that conduct covered tests of shell eggs already accredited to ISO/IEC 17025:2017.
Consequently, we estimate that between 15 labs and 21 labs that conduct covered tests of shell
eggs will participate in the LAAF program (10 labs that conduct covered tests of shell eggs that
are currently not accredited to ISO/IEC 17025:2017 + 5 labs that conduct covered tests of shell
eggs and that are currently accredited to ISO/IEC 17025:2017 = 15 labs; and 7 labs that conduct
covered tests of shell eggs that are currently not accredited to ISO/IEC 17025:2017 + 14 labs that
conduct covered tests of shell eggs and that are currently accredited to ISO/IEC 17025:2017 = 21
labs)).
We do not know the number of labs that conduct covered tests of sprouts that will
participate in the LAAF program. We assume that labs currently accredited to ISO/IEC
100

17025:2017 that conduct covered tests of sprouts will be the first to participate in the LAAF
program and that labs that currently conduct the covered tests of sprouts that are currently not
accredited to ISO/IEC 17025:2017 will participate in the LAAF program only if there is
sufficient revenue left over to warrant incurring the costs to become accredited to ISO/IEC:2017
17025:2017.
We obtain from Section II.D.2.b and the Profile that there are between 60 and 480
analytical reports of sprouts tests, with each report containing the results of 10 tests.
Consequently, we estimate between 600 and 4,800 tests of sprouts will be covered by the rule.
We do not know the percent of these tests that are currently performed by labs already accredited
to ISO/IEC 17025:2017 and assume they are uniformly distributed among the 70 to 200 labs in
the pool of labs that conduct covered tests of sprouts. The Profile reports that labs charge about
$40 per covered test of sprouts. Consequently, we estimate the average total revenue from all
covered tests of sprouts is $108,000, and an average revenue of $800 per lab that conducts tests
of covered sprouts. Because the annual costs that would be incurred to become accredited to
ISO/IEC 17025:2017 for labs that are not already accredited to that standard are so much greater
than the average revenue per lab from covered tests of sprouts, and that between 85 and 95
percent of labs that conduct covered tests of sprouts are already accredited to ISO /IEC
17025:2017 we estimate that only labs that conduct covered tests of sprouts and that are already
accredited to ISO/IEC 17025:2017 will participate in the LAAF program. Consequently, we
estimate that between 60 and 190 labs that conduct covered tests of sprouts will participate in the
LAAF program. We estimate covered tests of bottled drinking water will be rare and that any
covered tests of bottled drinking water will be performed by labs that participate in the LAAF
program but primarily conduct covered tests for import related food, shell eggs, or sprouts.
101

We estimate that any tests currently performed by labs not accredited to ISO/IEC
17025:2017 and that choose not to participate in the LAAF program will result in costs to switch
to a LAAF-accredited lab. We estimate switching costs as the additional costs to ship a sample to
a LAAF-accredited lab that may be located further away than the lab that otherwise would have
been selected. We acknowledge the possibility that when switching costs are high or costs to
become accredited to ISO/IEC 17025:2017 are low, labs that do not currently conduct covered
tests may choose to participate in the LAAF program. We did not estimate the number of such
labs that would choose to participate in the LAAF program because of high switching costs or
low costs to become accredited to ISO/IEC 17025:2017 and assume switching costs and the costs
for these labs to become accredited to ISO/IEC 17025 are offsetting. However, we acknowledge
that if labs incur costs to become accredited to ISO/IEC 17025:2017 because of high switching
costs or low costs to become accredited to ISO/IEC 17025, we may underestimate the number of
labs that will participate in the LAAF program. We estimate switching costs in Section II.F.3.f
below.
We report the number of labs that we estimate will participate in the LAAF program in
Table 40a and the one-time and annual costs incurred for labs that conduct covered tests of shell
eggs to become accredited to ISO/IEC 17025:2017 in order to participate in the LAAF program
in Table 40b.

Table 40a: The number of labs that will participate in the LAAF program
The number of labs that test import related food covered
by the rule that will participate in the LAAF program
The number of labs that test shell eggs covered by the
rule that will participate in the LAAF program

102

Lower
bound

Medium
value

Upper
bound

10

27

44

15

18

21

The number of labs that test sprouts and bottled drinking
water covered by the rule that will participate in the
LAAF program

60

125

190

Table 40b: One-time and annual costs incurred for labs that conduct covered tests of shell
eggs to become accredited to ISO/IEC 17025 to participate in the LAAF program
One-time costs incurred for labs that conduct
covered tests of shell eggs to become accredited to
ISO/IEC 17025
Annual costs incurred for labs that conduct covered
tests of shell eggs to become accredited to ISO/IEC
17025

Lower bound Medium value Upper bound
$1,660,031.33 $2,015,752.33 $2,371,473.33

$2,625,289.33

$3,187,851.33

$3,750,413.33

b. Costs for participating labs to be assessed by us and ABs
This rule will allow us to review the performance of participating labs to determine
whether they are complying with the requirements established by the rule. We may review any
records pertaining to the LAAF program and may conduct an on-site review at any time, with or
without the presence of a representative from the participating AB that LAAF-accredited the
participating lab. Moreover, this rule will require participating ABs to conduct an on-site review
of participating labs every two years to maintain accreditation status of participating labs. We
estimate that we will conduct an on-site review once every four years. We assume some of these
costs will be over and above those incurred for maintaining accreditation to the ISO/IEC
17025:2017 standard.
We estimate that a participating lab will spend an additional 4 to 8 hours once every two
years preparing for and following up with these assessment activities. Assuming a fully loaded
wage for a food scientist and technologist of $77.10, we estimate the annual costs to be assessed
by ABs and FDA to range from about $17,332 to about $101,278. We report the annual costs for
participating labs to be assessed by us and ABs in Table 41.
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Table 41: Costs for participating labs to be assessed by us and ABs
Lower bound
$17,332.26

Upper bound
$101,278.02

c. Costs to participate in a proficiency testing program
The proficiency testing (PT) requirements in this rule are similar to those in the
Association of Analytical Chemists (AOAC) Guidelines; the rule requires PTs (or a comparison
program if no proficiency testing program is available or practicable) at least once a year for
each method within the scope of LAAF-accreditation. This exceeds the requirements for PTs in
the current ISO/IEC 17025:2017 standard. The current ISO standard allows flexibility for labs to
participate in either ILCs or PT programs at unspecified frequencies.
We assume that 50 percent of participating labs will change from participating in ILCs to
performing PTs instead. We adopt the suggestion in the comments that the costs of ILCs are
about the same as for PT. Consequently, the costs of the final rule from the requirement for PTs
are the one-time costs for 50 percent of labs to incorporate that change into their laboratory
management systems. We assume the one-time cost to incorporate changes into management
systems from participating in ILCs to performing PTs is negligible.

d. Costs to validate testing methodology
This rule will require participating labs to use validated methodologies. Because the
ISO/IEC 17025:2017 standard requires that non-standard methods be validated, we assume that
our estimates of the recurring costs to maintain accreditation to the ISO/IEC 17025:2017
standard include these costs. Moreover, any additional costs that may be incurred to verify
104

methods that have not been validated for specific foods are discussed in a following section on
costs incurred by test.

e. One-time costs to compile and submit five consecutive successful full analytical
reports per major food testing discipline prior to requesting permission to submit
abridged analytical reports
We will review the last five full analytical reports submitted for a major food testing
discipline to determine whether the lab will be permitted to submit abridged analytical reports for
the major food testing discipline. If the full analytical reports contain no shortcomings which call
into question the validity of the results and the lab is not on probation, we will grant permission
to submit abridged analytical reports for the major food testing discipline requested. For
purposes of this analysis, we assume that each participating lab will be accredited by a
recognized AB for scopes covering one to three major food testing disciplines. We multiply the
cost to review a full analytical report by five for each major food testing discipline for which the
lab wishes to submit abridged analytical reports and finally by the number of participating labs.
We use Monte Carlo simulation methods to obtain the fifth percentile, mean, and 95th percentile
estimates of the one-time cost to industry from this requirement and report them in Table 42.

Table 42: One-time costs for participating labs to compile and submit five full analytical
reports per major food testing discipline prior to requesting permission to submit abridged
analytical reports
5th percentile
$41,580.83

Mean
$85,385.46

105

95th percentile
$144,410

f. Total costs incurred at the participating lab level
We report the upper and lower bounds for the annualized costs incurred at the lab level
by cost category discounted at seven percent and three percent over 10 years in Table 43a and
Table 43b.
Table 43a: Annualized costs incurred at the participating lab level by cost category
discounted at 7 percent over 10 years
Costs for labs to attain and maintain accreditation to ISO 17025
for a testing scope
Costs for labs to be assessed by AB and reviewed by FDA
Costs for labs to submit five successful full analytical reports per
major food testing discipline prior to abridged analytical reports

Lower bound
$2,846,178

Upper bound
$4,065,969

$17,332

$101,278

$5,575

$21,343

Table 43b: Annualized costs incurred at the participating lab level by cost category
discounted at 3 percent over 10 years
Costs for labs to attain and maintain accreditation to ISO 17025
for a testing scope
Costs for labs to be assessed by AB and reviewed by FDA
Costs for labs to submit five successful full analytical reports per
major food testing discipline prior to abridged analytical reports

Lower bound
$2,814,228

Upper bound
$4,020,325

$17,332

$101,278

$4,590

$17,573

We also used Monte Carlo methods to simulate total annualized costs and the present
values of costs incurred at the participating lab level. We assume a uniform distribution for the
costs to be assessed by ABs, to be reviewed by FDA, and the costs to submit five successful full
analytical reports per major food testing discipline between the reported lower and upper bounds.
We report the fifth percentile, mean, and 95th percentile estimates of the total costs annualized
over 10 years at seven percent and three percent and present values of costs discounted at seven
percent and three percent over 10 years in Table 44.

Table 44: Annualized costs and present values of costs incurred industry-wide at the lab
level, discounted by 7 percent and 3 percent over 10 years
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Annualized costs at 7 percent
Annualized costs at 3 percent
Present value at 7 percent
Present value at 3 percent

5th percentile

Mean

95th percentile

$1,588,728
$1,471,424
$8,895,695
$10,678,751

$3,527,536
$3,486,591
$24,711,273
$29,561,350

$5,260,086
$5,204,149
$38,080,547
$45,439,281

3. Costs incurred for each test
There will be costs incurred by test. These include costs to comply with standards related
to sampling, including advance notices of sampling in limited circumstances, submitting test
results, verifying analytical methods, and the costs of compiling and submitting an analytical
report which are incurred each time a test is performed. In addition, costs may be incurred for
switching from the current lab to an appropriately accredited participating lab for each test
performed. Costs to comply with the standards related to sampling include the costs to obtain
relevant documentation of samplers’ training and experience, a sample collection plan, and a
sample collection report. Moreover, participating labs will also incur the cost to ensure that
methods required for each test fall within their scope of accreditation.
We use the mean hourly wage for food scientists and technologists, Occupation Code 191012, Occupational Employment and Wages May from 2020 and multiply by 2 to account for
overhead to obtain a fully loaded wage of $77.10 for estimates of the labor costs incurred at the
analysis level. Consistent with public comments we assume that costs for sample collection plans
and reports, and advance notices of sampling prepared outside the United States, may differ
based on the wages of the countries where they are prepared. From information reported in the
baseline conditions section there will be 11,648 analytical reports submitted for tests of import
related food covered under this rule, between 2,520 and 5,023 analytical reports of tests of shell
eggs subject to specific testing requirements, between 60 and 480 analytical reports of tests of
107

sprouts, and between 0 and 2 tests of bottled drinking water a subject to testing covered under
this rule. The cost estimates assume there will be sufficient participation by labs that test shell
eggs, sprouts, and bottled drinking water two to three years following publication of the rule and
by labs that test import related food one to two years following publication of the rule.

a. Costs of the advance notice of sampling
This rule provides that in certain circumstances we may require the participating lab to
submit an advance notice of sampling to us, 48 hours prior to when the sampling will occur. This
will allow us the option to observe the sampling process. The advance notice of sampling will
require a unique identification code, the name of the LAAF-accredited lab that will test the
sample, the name and street address of the sampling firm, a primary contact for the sampling
firm, the reason the food product or environment is to be sampled, the location of the food
product or environment that will be sampled, applicable entry line numbers and product codes or
a description of the environment, and the date and approximate time the sampling will begin.
We assume that it will take a lab analyst between 1 and 2 hours to compile the required
information and submit the advance notice of sampling to us. The intent of this requirement is to
allow us the option to observe the sample collection process on an occasional and random basis.
We assume that we may require advance notice of sampling for 1 percent to 5 percent of all
analyses submitted annually. We use a fully loaded wage of a food scientist and technologist to
estimate the cost of the advance notice of sampling requirement to range from about $10,973 (1
hour x $77.10 hourly wage x 1 percent x 14,232 samples = $10,973.03) to about $132,570 (2
hours x $77.10 hourly wage x 5 percent x 17,195 samples = $132,569.60).

108

b. Costs to generate a sample collection plan and to compile a sample collection report
This rule will require each participating lab to submit to us appropriate documentation of
the sampler’s credentials, a sample collection plan, and sample collection report to ensure the
sampling does not impact the validity of the subsequent testing, including controlling for the
representational nature of the sample. A sample collection report must include:
•

the product code of the food product or the location of the environment to be
sampled,

•

the date of sampling,

•

the lot number, size, identity, and quantity of the sample,

•

documentation of the sample collection procedures and sample preparation
techniques, and

•

documentation of the chain of custody of the sample and of measures taken to
ensure the validity of the subsequent analytical testing.

Participating labs will be required to submit sample collection plans and sample
collection reports with analytical reports of tests covered by this rule. We do not know the extent
to which current sampling plans for tests of import related food covered under this rule already
conform to the requirements in this rule. We assume that all samples collected for tests covered
by this rule will have some sample collection reports and that some may be deficient in their
sample collection plans and reports. In the earlier section describing cost savings from this rule
we assume that 10 percent of analytical reports submitted for tests of human or animal food
offered for import covered under this rule may currently be deficient in requirements to satisfy
the non-technical review and may result in some cost savings from the clarifications of this rule.
Because we do not interact with entities that collect samples of shell eggs, sprouts, or bottled
109

drinking water at the time of the collection, we assume that all sample collection plans and
sample collection reports that will be submitted with analytical reports for tests of shell eggs,
sprouts, or bottled drinking water subject to specific testing requirements do not currently
conform to the same format and information required by this rule and will all be deficient.
We assume that an additional 1/2 hour to 1 hour will be spent to generate the additional
information required in a sample collection plan and 1/2 hour and 1 hour to compile the
additional information required for a sample collection report. We multiply by the fully loaded
wage of $77.10 to obtain the lower and upper bound cost estimates of between $38.55 and
$77.10 to generate the additional information required for a sample collection plan, and the same
additional amount to compile a sample collection report. We multiply by the number of
analytical reports of shell eggs, sprouts, and bottled drinking water subject to specific testing
requirements to obtain the total range of sample collection reports and sample collection plans
affected by these requirements. As shown in Table 45a, industry will incur costs from
$84,118.41 to $361,088.74 to generate a sample collection plan. As shown in Table 45b, industry
will incur costs from $84,118.41 to $361,088.74 to compile a sample collection report. These
results assume labs that test import related food covered under the rule will participate in the
LAAF program one to two years following publication of the rule, and that labs that test shell
eggs, sprouts, and bottled water will participate in the LAAF program two to three years
following publication of the rule.

110

Table 45a: Costs to generate a sample collection plan
Lower bound
Upper bound

Fully loaded
wage
$77.10
$77.10

Hours to
generate a plan
0.5
1.0

Table 45b: Costs to compile a sample collection report
Lower bound
Upper bound

Fully loaded
wage
$77.10
$77.10

Hours to compile
a report
0.5
1.0

Cost per sample
collection plan
$38.55
$7.10

Cost per sample
collection report
$38.55
$77.10

Cost for industry
$84,118.41
$361,088.74

Cost for industry
$84,118.41
$361,088.74

c. Costs for participating labs to collect sampler credentials, sample collection plans,
and reports and to confirm LAAF-accreditation status for methods of testing that
they conduct
This rule will not require accreditation of samplers but will require participating labs to
obtain or develop records related to sampling. Specifically, this rule will require a participating
lab to obtain or develop a sample collection plan, a sample collection report, and appropriate
sampler credentials to be submitted to us with the analytical report. Moreover, the participating
lab will have to confirm that the methods to be used and analysis to be performed fall within its
scope of LAAF-accreditation.
We assume a participating lab will take between 10 minutes (0.17 hours) and 20 minutes
(0.34 hours) to collect the sampling plan and the sampler’s credentials for inclusion in the
analytical report, and to confirm a match between the test method and the scope of LAAFaccreditation. Using the fully loaded wage of $77.10, we estimate that participating labs will
spend between $12.85 and $25.70 per sample collection report. We multiply the cost per sample
collection report by the total annual number of reports to obtain a total cost of these
requirements. We report the costs to review collection plans and reports and to confirm the lab is
LAAF-accredited to the appropriate scope in Table 46. These results assume labs that test import
111

related food covered under the rule will participate in the LAAF program one to two years
following publication of the rule, and that labs that test shell eggs, sprouts, and bottled drinking
water will participate in the LAAF program two to three years following publication of the rule.

Table 46: Costs for participating labs to collect sampler credentials, sample collection
plans, and reports and to confirm a match between the test method and the scope of
accreditation
Lower bound
Upper bound

Fully loaded
wage
$77.10
$77.10

Hours
0.17
0.33

Cost per
report
$12.85
$25.70

Number of sample
collection reports
14,232
17,195

Total costs
$163,271.27
$390,826.51

d. Costs to report results from validation and verification studies
This rule will sometimes require the participating lab to submit verification and
validation studies to us with an analytical report. Additional studies may include information to
verify that a method previously validated for a specific food item is also valid for a different food
item, in what is called a “matrix extension.” Internal experts suggest that between 5 percent and
30 percent of analytical reports currently submitted for tests of import related food covered under
this rule require verification studies such as matrix extensions, and that it requires less time to
perform a matrix extension than to validate a method. We estimate the burden for a matrix
extension is 75 percent of the burden to validate a method.
The ISO/IEC 17025:2017 standard requires the use of validated methods for testing
foods. We included this burden in the estimated costs of maintaining accreditation. However, this
rule will require additional verification studies over and above the requirements in ISO/IEC
17025:2017 such as matrix extensions. We estimate the cost of requiring participating labs to
submit these additional verification studies to be between 1 percent and 5 percent of the costs for
verification and validation activities required to maintain accreditation to ISO/IEC 17025:2017.
112

Because foods subject to specific testing requirements covered by the rule are each
subject to being tested for only one or two pathogens (Salmonella enteritidis for shell eggs;
Listeria, sp. or Listeria monocytogenes for sprouts; and E. coli for bottled drinking water), we
assume these tests will not require matrix extensions. While we acknowledge that verification
studies might also be extended to include new contaminants, we assume that methods used to test
shell eggs, sprouts, and bottled drinking water will have been validated, and the costs to do so
will have been included in the costs to maintain accreditation to the ISO/IEC 17025:2017
standard. Consequently, we assume that shell eggs, sprouts, and bottled drinking water producers
will incur no additional costs from this requirement.
We estimate the costs to perform a matrix extension from responses to an internal survey
of representatives from 13 State labs with which we have cooperative agreements regarding the
burden incurred to verify an analytical method. The average low response was 27.3 hours and the
average high response was 59.1 hours. We multiply by 0.75 to obtain the lower burden for
conducting a matrix extension of between about 22 hours (27.3 hours x 0.75 for a matrix
extension = about 22 hours) and about 46 hours (59.1 hours x 0.75 = about 46 hours). We use the
fully loaded wage for a food scientist and technologist of $77.10 to obtain the cost of a matrix
extension of between about $1,694 ($77.10 per hour x 22 hours = $1,694.27) and about $3,527
($77.10 per hour x 46 hours = $3,527.33).
Finally, to estimate the number of analytical reports containing the results of tests
requiring matrix extensions, we multiply the share of analytical reports submitted to us
containing the results of tests of import related food covered under this rule that will require
matrix extensions (between 5 percent and 30 percent based on our experts), by the total number
of analytical reports containing the results of tests of import related food covered under this rule
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(11,648 analytical reports). To obtain the cost of the matrix extensions, we multiply the number
of affected analytical reports by our estimated cost to verify each matrix extension. The total cost
to industry to verify that analytical methods will apply to specific food items ranges from
$8,915.16 to $556,816.93. We report the additional costs from this rule for labs to verify
analytical methods in Table 47. These results assume labs that test import related food covered
under the rule will participate in the LAAF program one to two years following publication of
the rule, and that labs that test shell eggs, sprouts, and bottled drinking water will participate in
the LAAF program two to three years following publication of the rule.

Table 47: Cost to report results from validation and verification studies for matrix
extensions
Fully
loaded
wage
Lower bound
Upper bound

$77.10
$77.10

Hours for
lab to
verify an
analytical
method
22
46

Cost per
sample to
verify an
analytical
method
$1,694.27
$3,527.33

Percent
analytical
reports
requiring
verification
5%
30%

Percent of
costs over
and above
ISO/IEC
17025:2017
1%
5%

Total costs
$8,915.16
$556,816.93

e. Costs to compile an analytical report with test results
This rule will require each participating lab to submit to us a full analytical report with
test results, unless they can submit abridged analytical reports. As described in the cost savings
section, we propose to reduce the quantity of information required in an analytical report once
participating labs have submitted five consecutive successful full analytical reports per major
food testing discipline. Participating labs that submit these five consecutive successful full
analytical reports per major food testing discipline will then be allowed to submit abridged
analytical reports for the methods included in major food testing discipline thereafter.
Each submission will contain:
114



test results;



sampling plans, sample collection reports, and if not previously submitted, the
sampler’s qualifications;



when a validation study is required, the documentation required by ISO/IEC
17025:2017;



when a verification study is required, documentation such as results and
supporting analytical data;



either a full or abridged analytical report (see below); and



certification that the test results and reports are true and accurate, and that they
include the results of all tests conducted under this program on the product at
issue.

In the cost savings section we estimated the cost to compile an abridged analytical report to be
between 25 percent and 33 percent of the costs to compile a full analytical report.
Participating labs allowed to submit abridged analytical reports will still be required to
maintain records of all information required in a full analytical report. We anticipate occasionally
reviewing the records of information required in a full analytical report of participating labs
allowed to submit abridged analytical reports.
Analytical reports are currently submitted for tests of import related food covered under
this rule and, as discussed in the cost savings section, will accrue cost savings from clarifications
of the reporting requirements, and those who qualify for abridged analytical reports (and incur
the costs of compiling five successful full analytical reports per major food testing discipline),
will accrue additional cost savings. Because we currently do not receive analytical reports for
tests of shell eggs, sprouts, and bottled drinking water subject to specific testing requirements,
we assume they are currently not generated with the same information as will be required by this
rule. We assume that all tests of shell eggs, sprouts, and bottled drinking water subject to specific
testing requirements will result in costs from compiling analytical reports from this rule – the
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first five consecutive successful full analytical reports per major food testing discipline, and then
abridged analytical reports thereafter.
We estimated the costs for participating labs to qualify for abridged analytical reports in
the section on lab level costs. As reported in the cost savings section, we estimate the cost to
compile an abridged analytical report of between $51.49 and $135.94, and multiply by the
annual number of tests of shell eggs, sprouts, and bottled drinking water subject to specific
testing requirements (between 2,580 and 5,503) and obtain the lower and upper bounds for
compiling abridged analytical reports. We report the costs to compile abridged analytical reports
in Table 48. These results assume labs that test shell eggs, sprouts, and bottled drinking water
will participate in the LAAF program two to three years following publication of the rule.

Table 48: Costs to compile and submit abridged analytical reports
Cost to compile an
abridged analytical
report
Lower bound
Upper bound

$51.49
$135.94

Numbers of tests of shell
eggs, sprouts, bottled
drinking water, and other
tests
2,580
5,503

Total cost to compile
abridged analytical
reports
$112,173.43
$631,588.60

f. Costs for switching to participating labs accredited to the appropriate scope
This rule may result in switching costs if owners and consignees must switch from their
current lab to a participating lab that is accredited to the appropriate scope that may not be as
conveniently located or may otherwise be a higher cost lab. We estimate that any tests currently
performed by labs not accredited to ISO/IEC 17025:2017 and that choose not to participate in the
LAAF program will result in costs to switch to a LAAF-accredited lab. We define switching
costs as the increase in costs to ship food samples to participating labs that are located further
away than the labs currently used that choose not to participate in the LAAF program.
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Without additional information, we assume the shipping cost to a participating lab
accredited to the appropriate scope is between 0 and 25 percent more than the shipping cost to
the current lab, net of any current costs of inter-lab transfers. We estimate the ranges for the
increased shipping costs for tests of import related food covered by the rule and all other tests
covered by the rule except shell eggs using internal documents regarding the numbers and
weights of sub-samples recommended to be collected for each food category and the 2017
shipping costs published on the UPS website (Ref. 24) and inflated to 2020 dollars. A sample
may be comprised of several sub-samples, with each sub-sample weighing an average of 2.5
pounds. FDA’s internal Compliance Program Guidance Manual recommends collecting 10 subsamples per sample of imported food in the absence of specific sample collection instructions
when testing food with no identified pathogen (Ref. 25). We use 10 sub-samples as the lower
bound in the range of sub-samples that will be shipped to a participating lab.
When testing for pathogens such as Salmonella and other specified microbes that might
be consumed by vulnerable populations (infants, elderly, immune-compromised, etc.), the
Bacteriological Analytical Manual (BAM), Chapter 1, calls for 60 sub-samples per sample for
foods that will not normally be subjected to a process lethal to the microbe of interest (Category I
foods) (Ref. 26). We use 60 sub-samples as the upper bound in the range of sub-samples that will
be shipped to a participating lab and 35 sub-samples as the average number that comprise a
sample. For shell eggs we assume a shell egg weighs 1.5 oz. to 2.5 oz., or 0.094 lbs. to 0.156
lbs., and that 1,080 shell eggs are shipped in one sample.
We use the weight of 2.5 pounds per sub-sample obtained from internal guidance, an
average weight of 7.5 pounds for packaging materials, and shipping costs based on retail rates
published by UPS, distributed uniformly between $2.30 per pound and $7.67 per pound of
117

import related food samples and sprouts samples inflated to 2020 values. We assume that
switching costs will be incurred for the number of samples currently not analyzed by labs
accredited to ISO/IEC 17025:2017. Consequently, we estimate that between 3.2 percent and
about 7.5 percent of all tests of import related food covered under this rule (100 percent – 96.8
percent of reports analyzed by an accredited lab = 3.2 percent and 100 percent – 92.5 percent =
7.5 percent), between 5 percent and 15 percent of tests of sprouts subject to specific testing
requirements covered by the rule, and between 63 percent and 70 percent of shell eggs subject to
specific testing requirements covered by the rule will be switched to a different lab. We adjust
the tests of shell eggs that will be subject to switching costs to account for labs that test shell
eggs that will incur costs to become accredited to ISO/IEC 17025:2017 to participate in the
LAAF program. Consequently, we adjust the number of tests of shell eggs that will be subject to
switching costs by between 0 percent (100 percent – [10 labs that will incur costs to become
accredited to ISO/IEC 17025:2017 /10 labs currently not accredited to ISO/IEC 17025:2017] = 0
percent) and 70 percent (100 percent – [7 labs that will incur the costs to become accredited to
ISO/IEC 17025:2017 / 24 labs currently not accredited to ISO/IEC 17025:2017]) = 70 percent).
We estimate switching costs for tests of bottled drinking water will be negligible. Consequently,
we estimate that on average about 623 covered tests of import related food, 27 covered tests of
sprouts, and 1,245 covered tests of shell eggs will be subject to switching costs. We report the
switching costs from this rule in Table 49.

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Table 49: Incremental costs to switch to participating labs accredited to the appropriate
scope
Number of sub-samples collected (low for
filth, high for Category 1 Salmonella)
Lbs. of eggs per samples, 1 sample of
shell eggs = 1,000 eggs
Extra shipping cost of samples of import
related food and sprouts: 0.25 x (@$2.30
- $7.67 per lb.; Assume 2.5 lbs. packaging
costs, 2.5 lbs. per sub, gross weight)
Extra shipping cost of samples of eggs.
0.25 x (@$2.30 - $7.67 per lb.; Assume 510 lbs. packaging costs)1
Total number of samples of import related
food and that will be subject to switching
costs.
Total number of samples of egg
shipments that will be subject to
switching costs
Total number of samples of sprouts and
bottled drinking water that will be subject
to switching costs
Total cost to switch to testing entities
LAAF-accredited to the appropriate scope

Lower Bound

Medium Value

Upper Bound

10

35

60

101

135

169

$3.90

$59.54

$149.53

$9.29

$94.27

$188.14

373

623

874

0

1,245

2,490

3

27

72

$8,570.98

$133,988.38

$354,946.39

A sample comprises 1,000 shell eggs – 50 pools at 20 eggs per pool. We estimate shipping costs for an extra 80
shell eggs to account for the possibility of breakage.

1

g. Costs for the DFLO and covered tests from other administrative orders covered by
the rule
The DFLO is a new administrative tool requiring the use of a LAAF-accredited lab for
analyses in the rare situations when we have reason to question the accuracy and reliability of
past or present test results, and an identified or suspected food safety problem exists. In the PRIA
we estimated the frequency of our use of a DFLO (previously FTO) as the same as our use of
other administrative tools with tests covered by this rule: Administrative Detentions (AD),
Suspensions of Registrations (SR), and Mandatory Recalls (MR). In this analysis, we make that
link quantitative and report our method and estimates here. We required ADs 10 times and MRs
once between 2011 and 2020 (Ref. 1 and 2). Internal records indicate we used SRs six times
119

between 2011 and 2020 (Ref. 3). We estimate our annual use of a DFLO will be between 0.1 and
1 (1/10 years and 10/10 years).
A DFLO requires a firm to use a participating LAAF-accredited lab to conduct
environmental tests or food product tests and have the results sent directly to us. We do not know
the total number of tests and analytical reports that will be subject to a DFLO requirement and
use as a guide the rounds of testing ordered in recently adjudicated consent decrees involving
food facilities found to be in violation of the FD&C Act.
Many consent decrees have no explicit product testing requirements. We identified four
consent decrees ordered in 2016 that made explicit the frequencies (e.g., weekly) and scopes
(e.g., every lot per finished product, one lot from each finished product, etc.) for product testing.
We use these four adjudicated consent decrees as examples for estimating the numbers of tests
and analytical reports that will be subject to a DFLO. The first round may require daily product
tests over the course of a week’s worth of production (we assume 5 tests), the second round may
require weekly tests over the course of the subsequent month (we assume 4 tests), and the third
round may require monthly tests over the subsequent year (we assume 12 tests). We assume
these tests would be analyzed by a LAAF-accredited lab and the results submitted with an
analytical report and sent directly to us. Consequently, we estimate there will be 21 analytical
reports generated for each DFLO. We make the same assumptions for the costs of covered tests
for other administrative orders covered by the rule. We estimate the costs of submitting and
reviewing an analytical report generated by a DFLO requirement as well as covered tests of other
administrative requirements covered by the rule using the same methodology that we used for
estimating the costs of submitting and reviewing all other analytical reports subject to the rule.

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h. Summary of costs incurred by test
We report a summary of the costs incurred by test by sub-category and their frequencies
in Table 50.

Table 50: Summary of costs incurred annually by test
Costs of the advance notice of sampling
Costs to generate a sample collection plan
Costs to compile a sample collection report
Costs for labs to confirm accreditation to the appropriate
scope
Costs to include results from validation and verification
studies
Costs to compile an analytical report with test results
Costs for switching to a lab accredited to the appropriate
scope

Lower bound

Upper bound

$10,973
$84,118
$84,118

$132,570
$361,089
$361,089

$163,271

$390,827

$8,915
$112,173

$556,817
$631,589

$8,571

$354,946

We use Monte Carlo methods to simulate total annualized costs and the present values
incurred by test. In Table 51 we report the simulated fifth percentile, mean, and 95th percentile
estimates of the annual and present value of costs by test discounted at seven percent and three
percent over 10 years.

Table 51: Total annual costs and present value of costs incurred by test discounted over 10
years at seven percent and three percent
Annualized costs at 7 percent
Annualized costs at 3 percent
Present value of costs at 7 percent
Present value of costs at 3 percent

5th percentile
$1,173,560
$1,150,422
$8,167,071
$9,918,982

Mean
$1,589,601
$1,589,601
$11,164,689
$13,559,615

95th percentile
$2,041,812
$2,040,799
$14,290,130
$17,355,492

4. Cost of fewer false negative test findings
The cost of fewer false negative test findings from better tests will include the cost of
salvaging any shipments of import related food covered by this rule that will now test positive.
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We assume consumers would not pay for human or animal food if they knew it to be
contaminated, and that the consumer surplus gained by knowing the food is contaminated is at
least as high as the lost wholesale value of the contaminated human or animal food incurred by
the supplier. We consider this private transfer from supplier to consumer separately from the
public health benefit of reducing foodborne illness.
There might be some portion of shipments of import related food covered under this rule
that currently test negative but will instead test positive under this rule that could be salvaged by
reconditioning. We estimate a cost for reconditioning of between $500 and $1,500 per line for 20
percent of shipments of import related food covered under this rule from fewer false negative test
findings. We assume that shipments of shell eggs, sprouts, and bottled drinking water, and other
food subject to specific testing requirements will either be discarded or diverted to another use if
a sample were to test positive. We assume zero costs for discarding contaminated shell eggs,
sprouts, and bottled drinking water subject to specific testing requirements, and that any
diversion of these products to a lower value use is a reduction in the private transfer from
producer to the consumer discussed above.
We use Monte Carlo methods to estimate that 20 percent of shipments of human and
animal food offered for import covered under this rule will incur a reconditioning cost of
between $500 and $1,500 per shipment. We report the five percent, mean and 95 percent
estimates for the cost of false negatives and the present value of the cost discounted at seven
percent and three percent over 10 years in Table 52.

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Table 52: Annual and present value of costs to recondition import related food covered
under this rule with fewer false negatives, discounted at seven percent and three percent
over 10 years1

1

Annualized cost at 7 percent
Annualized cost at 3 percent
Present value of costs at 7 percent
Present value of costs at 3 percent

5th percentile
$0
$0
$0
$0

Mean
$4,206.38
$4,206.38
$29,544
$35,881

We report $0 as the lower bound when the fifth percentile is less than or equal to $0.

95th percentile
$10,441
$10,441
$73,330
$89,060

5. One-time costs to read and understand the rule
We model the one-time learning costs to read and understand the rule as the time required
by regulatory affairs personnel from human and animal food importers, ABs, private and public
laboratories, shell egg producers, sprouts producers, and bottled drinking water producers, and
other entities to access and read the rule. We estimate that a regulatory affairs expert will incur a
burden of between 15 minutes and 30 minutes to access the rule and will read the preamble and
codified provisions at a rate of 200 to 250 words per minute. The preamble and codified text
have approximately 83,000 words. We estimate that it will take between 5.53 and 6.92 hours for
a regulatory affairs expert to read and understand the preamble and codified text.
We estimate the mean hourly wage of a regulatory affairs expert using wages reported in
the Bureau of Labor Statistics, Occupation Employment Statistics, May 2020 National IndustrySpecific Occupational Employment Estimates for a lawyer, which are doubled to account for
overhead ($143.18). Applying the fully loaded mean hourly wage to the hourly burdens
described above, we obtain a one-time cost of between $792.26 and $891.30 for a regulatory
affairs expert to access and read the final rule (between 0.25 hours and 0.5 hours to access the
rule + between 4.36 and 5.45 hours to read the rule x $143.18 per hour). The total access and
learning costs for all affected entities, including importers, ABs, labs, shell egg, sprouts, and
bottled drinking water producers, will equal between $7,621,934.46 (for 9,620 entities) and
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$12,111,715.52 (for 12,230 entities) if incurred in the first year following publication of the rule.
However, we assume that entities will incur one-time access and learning costs uniformly over 5
years following publication of the rule. The present value of learning costs distributed uniformly
over 5 years at a discount rate of 7 percent is between $5,984,085.67 and $9,509,074.59, with
annualized costs between $796,260.91 and $1,265,306.82.

6. FDA costs
FDA currently does not have a process to officially recognize ABs for the accreditation
of labs. Costs to FDA from this rule will include the one-time costs to establish a process and
program to recognize ABs that include the one-time costs for training and investments in
information technology. We will also incur recurring costs to evaluate initial applications for AB
recognition, to evaluate the renewal of recognition and to evaluate recognized ABs and review
the performance of participating labs. In addition, there will be costs to maintain a website with
the public registry with current contact information and recognition status of recognized ABs and
the scopes of accreditation, contact information, and accreditation status of participating labs.
We will incur costs to review and maintain records of analytical reports submitted for tests
subject to the rule and to review advance notices of sampling. For estimating the costs reported
in this section we use the fully loaded hourly wage of $119.08, which is derived from the 2020
annual fully loaded salary for ORA personnel of $247,695 used by FDA for budgeting purposes.
We note there is uncertainty about the number of labs that will participate in the LAAF
program, and the Agency’s plan to issue a Federal Register notice 6 months prior to requiring
owners and consignees to use a LAAF-accredited laboratory for the testing ensures there will be
enough lab capacity in the LAAF program for any tests that are required. The stepwise approach
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to implementation and giving a 6-month notice to owners and consignees prior to requiring them
to comply with the final rule affects the timing of costs and benefits of the rule. We estimate that
costs will be incurred for tests of import related food covered by the rule one to two years
(discounted at seven percent) following publication of the final rule based on comments that
assert there is currently sufficient lab capacity for this to be the case. For tests of shell eggs,
sprouts, and bottled drinking water covered by the rule, we estimate costs will be incurred two to
three years (discounted at seven percent) following publication of the rule, after we have
determined that sufficient lab capacity exists for covered tests of shell eggs, sprouts, and bottled
drinking water.

a. Costs for management systems upgrades, maintenance, and training
Implementation of this rule will require expansion and modification of FDA’s existing
management systems to enable the processing of AB applications for initial recognition and
renewal of recognition, the maintenance of databases of recognized ABs and participating labs,
and for processing analytical reports submitted by participating labs. FDA experts estimate the
one-time costs for improving the management systems for the LAAF program, including
information technology improvements, hardware, software, training, and associated labor costs
to be about $3.0 million; and the annual maintenance costs of the improved management systems
to be about $0.5 million. The annualized costs to establish and maintain the improved
management systems to support this rule discounted at seven percent over 10 years equal
$899,189. With a three percent discount rate over 10 years, the establishment and maintenance
costs equal $841,448.

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b. Costs to evaluate the initial applications for recognition
This rule requires us to review any completed application for recognition by an AB to
determine whether the applicant meets all requirements specified in the rule. Applications will be
submitted electronically and will initially go through an automated screening. They will then be
reviewed and evaluated, and the applicants will be notified whether the application has been
approved or denied. Approvals may be accompanied by requests for further information and
denials will state the basis for the decision and provide instructions for requesting
reconsideration.
The total estimated costs to review the initial application include the costs to review the
outcome of the automated screening, any follow-up requests for information, and informing the
applicant of the outcome. We estimate the initial review of an AB’s application for recognition
will take between 40 and 80 hours. The cost for reviewing an application from an AB will range
from about $4,763 ($119.08 per hour x 40 hours = $4,763.37) to about $9,527 ($119.08 per hour
x 80 hours = $9,526.73). We estimate 4 ABs will apply to be recognized and that the total onetime cost of reviewing applications will range from $19,053.46 ($4,763.37 per AB x 4 ABs =
$19,053.46) to $38,106.92 ($9,527.73 per AB x 4 ABs = $38,106.92). We estimate the
annualized costs to review an initial application will range from $2,535.31 to $5,070.62 when
discounted by seven percent over 10 years and between $2,168.59 and $4,337.18 when
discounted by three percent over 10 years.

c. Costs to evaluate applications for renewal
This rule provides that FDA may grant recognition to an AB for up to five years, after
which ABs must submit an application for renewal of recognition up to another five years.
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Evaluations of applications for renewal can include reviews of one or more of the following: (1)
AB’s self-assessments; (2) reviews, accreditations, audits, and investigations of labs; and (3)
documents or other relevant information concerning the AB’s authority, qualifications,
resources, quality assurance program and recordkeeping, reporting, notification, and monitoring
procedures. We estimate the burden for our evaluation of an application for renewal of
recognition will be equal to that for a review of an initial application for recognition, or between
40 hours and 80 hours per application for renewal of recognition.
We assume renewal costs will be incurred every five years, or twice over a 10-year
period, and add the discounted present value of the renewal costs incurred during year 5 to the
discounted present value of the renewal costs incurred during year 10 to obtain the total renewal
costs. We assume discount rates of seven percent for the lower bound estimate and three percent
for the upper bound estimate. Consequently, we estimate the cost to review renewals over 10
years will range from about $5,817.67 (4 ABs x 40 hours x $119.08 per hour divided by 1.07
raised to the 5th power + 4 ABs x 40 hours x $119.08 per hour divided by 1.07 raised to the 10th
power = $5,817.67) to about $15,306.62 (4 ABs x 80 hours x $119.08 per hour divided by 1.03
raised to the 5th power + 4 ABs x 40 hours x $119.08 per hour divided by 1.03 raised to the 10th
power = $15,306.62). We estimate the annualized renewal cost discounted at seven percent over
10 years will range from $3,313.22 to $8,717.28. The annualized costs discounted by 3 percent
over five years will range from $2,728.03 to $7,177.61.

d. Costs to maintain website registry with information on ABs and labs
This rule will require us to provide information on our website on all ABs, including ABs
who have been placed on probation, whose recognition has been revoked, or whose application
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for recognition has been denied. In addition, this rule will require us to provide information on
participating labs, including scopes of accreditation, contact information and their program
participation status, and including those that have been suspended or had their accreditation
withdrawn or their scope of LAAF-accreditation reduced. We anticipate an annual burden for
maintaining a website with information on ABs to be one hour per AB, and for maintaining a
website with information on participating labs to be one hour per participating lab.
Consequently, we estimate the annual costs to maintain website information on ABs to be about
$476.34 (1 hour x $119.08 per hour x 4 ABs = $476.34) and the annual costs to maintain website
information on participating labs to range between $10,296.49 (1 hour x $119.08 per hour x 85
labs = $10,058.32) and $30,366.45 (1 hour x $119.08 per hour x 255 labs = $30,366.45). We
assume labs that test shell eggs, sprouts, and bottled drinking water will participate in the LAAF
program two to three years following publication of the rule and labs that test import related food
will participate in the LAAF program one to two years following publication of the rule.

e. One-time costs to review five consecutive successful full analytical reports per major
food testing discipline per lab prior to qualifying for abridged analytical reports
Each participating lab will be required to provide five consecutive full analytical reports
per major food testing discipline prior to qualifying to submit abridged analytical reports. For
purposes of this analysis, we assume that each participating lab will be accredited by a
participating AB to scopes represented by one to three major food testing disciplines. We
multiply the cost to review a full analytical report of $225.07 by 75 percent and 90 percent to
account for cost savings from management systems improvements. We assume five consecutive
successes for each of one to three major food testing disciplines and multiply by the number of
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participating labs (between 85 and 256 participating labs). We report the one-time costs for us to
review five full analytical reports per lab for each major food testing discipline in Table 53.

Table 53: One-time per lab cost for us to review full analytical reports to qualify for
abridged analytical reports
5th Percentile
$32,967

Mean
$62,457.21

95th percentile
$99,408

f. Costs to review analytical reports
This rule will require us to review analytical reports submitted by participating labs for
adherence to the requirements established by this rule and to notify the participating lab of our
findings. The current process for reviewing analytical reports of tests of human or animal food
offered for import covered under this rule includes an initial check for completeness upon receipt
of the analytical report, a non-technical review of documents to establish a link between the
sample and the detained shipment as well as the adequacy of the sample, and a high-level
technical review that examines documentation to determine the adequacy of the analytical
methods used. We may require resampling of the shipment during the non-technical review if the
evidence suggests deficiencies on the sample collection. Moreover, a reviewer may convene a
panel of Technical Leads, as described in section II.D.2.c. to address any concerns about the
analytical package that may arise during the high-level technical review.
Subject to a few exceptions, we assume that all participating labs will submit abridged
analytical reports once they have qualified to do so. Moreover, we assume between 10 percent
and 25 percent time saved to review an analytical report due to improvements in the management
systems required for us to implement the LAAF program. Consequently, we estimate the cost for
us to review an abridged analytical report including time saved from management systems
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improvements is between $42.20 and $66.85 (from Table 15b review costs are between $56.27
and $74.27 per analytical report, multiplied by between 10 percent and 25 percent review time
saved from management systems improvements).
We assume we will incur costs to review all analytical reports of tests of shell eggs,
sprouts, and bottled drinking water subject to specific testing and for other testing requirements
from this rule. We assume we will not incur additional costs to review analytical reports
submitted for tests of import related food covered under this rule because that is the current
baseline practice. Consequently, we estimate the costs for us to review analytical reports from
this rule is between $91,934.23 ($56.27 per analytical report x [2,520 shell egg tests + 60 sprouts
tests + 0 bottled drinking water test] x 75 percent due to cost savings from management systems
improvements = $91,934.23) and $258,910.31 ($74.27 per analytical report x [5,023 shell egg
tests + 480 sprouts tests + 2 bottled drinking water tests] x 90 percent due to cost savings from
management systems improvements = $258,910.31), assuming labs that test shell eggs, sprouts,
and bottled drinking water participate in the LAAF program in two to three years following
publication of the rule.

g. Costs to review the performance of participating labs
FDA may review the performance of a participating lab to determine whether it complies
with the new requirements. We may review a participating lab’s records, conduct an on-site
evaluation, and obtain any other related information. We assume that we will evaluate each
participating lab once every three to four years and that an evaluation will take between 40 and
80 hours to complete. We multiply the hourly burden by the fully loaded wage of $119.08 to
obtain a cost of between $100,583.22 (40 hours x $119.08 per hour x 85 participating labs / 4
130

years = $100,583.22) and $809,772.12 (80 hours x $119.08 per hour x 256 participating labs / 3
years = $809,772.12) for FDA to evaluate each participating lab once every three to four years,
and assuming labs that test shell eggs, sprouts, and bottled drinking water participate in the
LAAF program in two to three years following publication of the rule.

h. Summary of FDA costs
We report upper and lower bounds and annual frequencies of the costs to us from this
rule by cost category in Table 54.

Table 54: Summary of costs incurred by FDA
Management systems upgrade
Management systems maintenance costs
Costs of recognizing ABs
Costs of renewing recognition of ABs
Costs to maintain website registry with information
on ABs and labs
Reviewing notifications and lab packages
Costs to review participating labs’ performance
Costs to review five successful full analytical
reports per lab and scope prior to abridged reporting

Lower bound
$3,000,000
$500,000
$19,053
$23,271

Upper bound
$3,000,000
$500,000
$38,107
$61,226

Frequency
One-time
Annual
One-time
Every 5 years

$10,535

$30,843

Annual

$91,934
$100,583

$258,910
$809,772

Annual
Annual

$56,186

$146,295

One-time

We use Monte Carlo methods to simulate the total annualized and present values of the
costs incurred by us. In Table 55, we present our estimate assuming uniform distributions
between the lower and upper bounds reported earlier in the section for each cost category. We
report the fifth percentile, 95th percentile, and mean estimates of the total annualized costs that
will be incurred by us discounted at seven percent and three percent over 10 years.

Table 55: Estimated total annualized and present value of costs to FDA at discount rates of
7 percent and 3 percent over 10 years
5th percentile

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Mean

95th percentile

Annualized costs at 7 percent
Annualized costs at 3 percent
Present value of costs at 7 percent
Present value of costs at 3 percent

$1,235,891
$1,185,176
$4,764,682
$5,130,303

$1,569,189
$1,508,264
$7,570,720
$8,531,652

$1,904,776
$1,840,658
$10,355,675
$11,906,236

7. Summary of total annualized and present value of costs of this rule discounted at seven
percent and at three percent over 10 years
We add together the costs incurred by ABs, costs incurred at the participating lab level,
costs incurred on a per test basis, costs incurred with fewer false negatives, learning costs, and
government costs in a Monte Carlo simulation model to estimate the fifth percentile, mean, and
95th percentile range of the total annualized costs of this rule. We report the estimated range of
total annualized costs from this rule discounted over 10 years at seven percent and at three
percent in Table 56a and Table 56b. We report the present values of the benefits and costs from
this rule discounted by seven percent and by three percent over 10 years in Table 57.

Table 56a: Summary of total costs of this rule annualized at seven percent over 10 years

1

AB costs
Costs incurred at the lab level
Costs incurred by test
Cost incurred from fewer false negatives1
Learning costs
Government costs
Total annualized costs

5th percentile
$93,875
$1,588,728
$1,173,560
$0
$796,261
$1,235,891
$5,783,823

Mean
$175,166
$3,527,536
$1,589,601
$4,206
$1,030,784
$1,569,189
$7,896,481

We report $0 as the lower bound when the fifth percentile is less than or equal to $0.

95th percentile
$256,805
$5,260,086
$2,041,812
$10,441
$1,265,307
$1,904,776
$9,646,508

Table 56b: Summary of total costs of this rule annualized at three percent over 10 years

1

AB costs
Costs incurred at the lab level
Costs incurred by test
Costs incurred from fewer false negatives1
Learning costs
Government costs
Total annualized costs

5th percentile
$91,298
$1,471,424
$1,150,422
$0
$906,205
$1,185,176
$5,866,735

Mean
$172,348
$3,486,591
$1,589,601
$4,206
$1,173,110
$1,508,264
$7,934,120

We report $0 as the lower bound when the fifth percentile is less than or equal to $0.

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95th percentile
$252,802
$5,204,149
$2,040,799
$10,441
$1,440,015
$1,840,658
$9,693,149

Table 57: Present value of the benefits and costs of this rule discounted at 7 percent and 3
percent over 10 years
Present value of costs at 7 percent
Present value of costs at 3 percent
Present value of benefits at 7 percent
Present value of benefits at 3 percent

5th percentile
$37,976,705
$43,375,955
$46,386,921
$56,337,332

Mean
$53,105,904
$61,555,452
$63,591,906
$77,232,941

95th percentile
$66,095,251
$76,973,885
$87,522,413
$106,296,756

We use a Monte Carlo simulation to subtract the total annualized costs of this rule
reported from the total annualized benefits reported earlier. We report the annualized net benefits
discounted by seven percent and three percent in Table 58.

Table 58: Annualized Net Benefits of this Rule Over 10 Years
Annualized net benefits at 7 percent
Annualized net benefits at 3 percent

5th percentile
-$2,075,396
-$1,948,935

Mean
$1,157,576
$1,119,937

95th percentile
$5,721,795
$5,719,000

a. Distributional effects
This rule will affect the distribution of revenues from tests of import related food covered
under this rule and from tests of shell eggs, sprouts, and bottled drinking water and other foods
subject to testing covered under this rule’s requirements. We quantify the distributional effects as
switching costs – the costs to switch from labs that currently perform the tests required under this
rule but choose not to participate in the LAAF program to labs that choose to participate in the
LAAF program. In Table 49 in the earlier section entitled “Costs for switching to participating
labs accredited to the appropriate scope” we reported the average switching costs will be about
$0.134 million.

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b. International effects
We expect the effects from this rule on the level of international trade to be small since
the current share of tests of import related food covered under this rule conducted by
international labs is small. We also expect the effects of this rule on the composition of
international trade to be small. There may be a slight redistribution of international ABs and labs
that perform the tests of import related food covered under this rule across countries, depending
on the amount of food exported to the U.S. Some international labs and ABs from countries that
export small amounts of human and animal food to the U.S. may relinquish any business from
tests of import related food covered under this rule to a competitor, likely located in a different
country, if the one-time costs to participate in the LAAF program are too high.

c. Uncertainty and sensitivity analysis
We obtained fifth percentile, mean, and 95th percentile estimates of the benefits, costs,
and net benefits using Monte Carlo simulation methods. The means obtained using Monte Carlo
simulation methods are not different than the means that will be obtained using non-simulation
methods; however, Monte Carlo simulation methods provide fifth percentile estimates and 95th
percentile estimates that quantify the degree of uncertainty in the outputs (costs, benefits, and net
benefits). Moreover, Monte Carlo simulation methods allow us to weigh the importance that the
estimate of each input contributes to the uncertainty in the corresponding output. We estimate net
benefits will range from -$2.0 million to $5.7.2 million with a mean of $1.2 million. The main
source of uncertainty is from the estimate of the rates of false negatives for tests currently
performed by labs not accredited to the ISO/IEC 17025:2017 standard (6.2 percent to 12.3

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percent). Uncertainty in this estimate accounts for about 60.5 percent of the variance in the net
benefits.

G. Analysis of Regulatory Alternatives to this Rule

1. Do not allow abridged analytical reports
Following five successful full analytical reports per major food testing discipline, a
participating lab will thereafter be allowed to submit abridged analytical reports. Abridged
analytical reports will contain information that will meet the ISO/IEC 17025:2017 standard for
reporting, but less than that needed for us to replicate the test results. All information contained
in a full analytical report will be available to us on an as-needed basis. We estimated cost savings
from compiling and reviewing abridged analytical reports of tests of import related food covered
under this rule, as well as a reduced cost for compiling and reviewing analytical reports of tests
of shell eggs, sprouts, and bottled drinking water. For the regulatory alternative that does not
allow abridged analytical reports the mean net benefits from this rule would fall from about $1.2
million to about -$2.8 million.

2. Cover only tests of import related food covered under this rule
When only tests of import related food covered under this rule are subject to the new
requirements, labs that test shell eggs, sprouts, and bottled drinking water will not be affected by
the rule, and analyses of shell eggs, sprouts, and bottled drinking water will not be subject to the
requirements of this rule. This regulatory alternative is most consistent with current baseline
practices for reporting test results since currently only analytical reports of tests of import related
135

food covered under this rule are regularly submitted to us. By not covering tests of shell eggs,
sprouts, and bottled drinking water, the mean net benefits of the rule would increase from about
$1.2 million to about $3.6 million.

3. Exclude the DFLO and requirements to use a participating lab for other administrative
orders covered under this rule
The DFLO is a new administrative tool requiring the use of a LAAF-accredited lab for
analyses in the rare situations when we have reason to question the accuracy and reliability of
past or present test results, and an identified or suspected food safety problem exists. In the
FRIA, we estimated our use of a DFLO will be between 0.1 and 1 per year. A DFLO requires a
firm to use a participating LAAF-accredited lab to conduct environmental tests or food product
tests and have the results sent directly to us. In the FRIA, we estimate the annual costs of the
DFLO to be about $12,000 and the annual avoided QALD losses from the DFLO to be about
$65,000. Consequently, we estimate the mean annual cost savings from the regulatory alternative
of excluding the DFLO requirement is about $10,000 and the mean annual avoided QALD losses
would decrease by about $69,000. Table 59 presents a comparison of the regulatory alternatives
discussed.

Table 59: A comparison of regulatory alternatives to this rule
Regulatory alternative
Do not allow abridged analytical
reports
Cover only tests of import related
food
Exclude the DFLO provisions of
the rule

Comparison to this rule
Mean net benefits fall from $1.2 million
to -$2.8 million
Mean net benefits increase from $1.2
million to $3.6 million
Average cost saving of about $10,000 and
an average reduction in avoided QALD
losses of about $69,000.

136

Reason not selected
Too costly
Inconsistent with
Statute
Too costly

III.

Final Small Entity Analysis

FDA has examined the economic implications of this final rule as required by the
Regulatory Flexibility Act (5 U.S.C. 601–612). If a rule has a significant economic impact on a
substantial number of small entities, the Regulatory Flexibility Act requires agencies to analyze
regulatory options that would lessen the economic effect of the rule on small entities. The
Agency’s plan to issue a Federal Register notice 6 months prior to requiring owners and
consignees to use a LAAF-accredited laboratory for the testing may lessen the burden on small
entities while ensuring there will be enough lab capacity in the LAAF program for any tests that
are required.

A. Description and Number of Affected Small Entities
The primary impact of this rule will be on ABs and testing laboratories. Importers, shell
egg producers, sprouts producers, and bottled drinking water producers and other food
manufacturers will also be affected by this rule. The Small Business Administration (SBA)
reports size standards for industry categories defined by North American Industry Classification
System (NAICS) codes (Ref. 27). Using the SBA’s standards, testing laboratories (NAICS
54138) are considered small if they earn $15 million revenue or less, chicken egg producers
(NAICS code 112310) are considered small if they earn $15 million in revenues or less, and
bottled drinking water manufacturers (NAICS 312112) are considered small if they have fewer
than 1,000 employees. We assume the SBA standard of small for Perishable Prepared Food
Manufacturing (NAICS 311991) of 500 or fewer employees applies to sprouts producers and

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importers, and we assume the SBA standard of small for All Other Professional, Scientific and
Technical Services (NAICS 541990) of $15 million or less will apply to ABs.
We apply data from the Economic Census by NAICS code to determine the numbers of
ABs, testing labs, shell egg producers, sprouts producers, and bottled drinking water producers
and importers that are small by the SBA standards. The 2012 Economic Census reports that over
95 percent of all testing laboratories under NAICS code 54138 have annual revenues below $15
million, over 95 percent of bottled water manufacturers under NAICS 312112 have fewer than
1,000 employees (Ref. 28), and over 85 percent of establishments under NAICS 311991
(including sprouts manufacturing establishments) have fewer than 100 employees. We assume
that the number of sprouts producers with more than 100 employees is distributed uniformly
between 100 employees and more than 500 employees, by increments of 100, so that fewer than
3 percent of sprouts manufacturing establishments have more than 500 employees. Moreover,
consistent with the regulatory impact analysis of the final shell egg rule, over 99 percent of shell
egg producers (NAICS code 112320) covered by this final rule will be considered small as well.
For purposes of this analysis, we assume that 100 percent of ABs, labs, shell egg producers, and
sprouts producers, importers and bottled drinking water manufacturers affected by this final rule
are small.
We compare the costs per entity from this rule with the average revenue per
establishment by NAICS code obtained from the 2012 Economic Census. We obtain the average
revenue per establishment by dividing the total revenue reported in the 2012 Economic Census
for each NAICS code by the total number of establishments reported for the corresponding
NAICS code. We obtain the average revenue per testing laboratory of $2,502,209, the average
revenue per accreditation body of $904,257, the average revenue per sprouts producer of
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$14,468,090 and the average revenue per bottled water manufacturer of $19,520,408. We derive
the average revenue per shell egg producer ($1,022,458) from information reported in Table 60
of the Regulatory Flexibility Analysis for the shell egg final rule. We report the NAICS codes,
SBA thresholds, the numbers of entities, and the average revenue per entity covered by this rule
in Table 60.

Table 60: Entities affected by this rule

1
2

Testing laboratories, NAICS
541381
Accreditation bodies, (All
Other Professional, Scientific
and Technical Services)
NAICS 541990
Sprouts producers and
importers (Perishable Prepared
Food Manufacturing), NAICS
311991
Bottled drinking water
manufacturers, NAICS
312112
Shell egg producers, NAICS
code 112310 2

Number of
Establishments1

Annual
Revenue
($ million)1

Revenue per
Establishment
($ thousand)

SBA Size
Standard

6,045

$15,125.86

$2,502.21

$15 million

12,294

$11,116.93

$904.26

$15 million

702

$10,156.60

$14,468.09

500
employees

294

$5,739.00

$19,520.41

1,000
employees

7,359

$7,524.27

$1,022.46

$15 million

No. of Establishments and Annual Revenue reported in the 2012 Economic Census
No. of Establishments and Revenue per Establishment derived from figures reported in Table 39 of the Regulatory
Flexibility Act for the shell egg final rule

B. Description of the Potential Impacts of the Rule on Small Entities
The Regulatory Flexibility Act requires us to analyze regulatory options that would
minimize any significant impact of a rule on small entities. In the FRIA, we estimate the onetime and annual costs for ABs, testing laboratories, shell egg, sprouts, importers, and bottled
drinking water producers. We use a Monte Carlo simulation to estimate the fifth percentile,
mean, and 95th percentile levels of one-time costs per entity using the distributional assumptions
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discussed in the Regulatory Impact Analysis. ABs that choose to participate in the LAAF
program may incur costs to become accredited to ISO/IEC 17025:2017 and will incur one-time
costs to apply for recognition, establish an accreditation program, as well as to read and learn
about the rule equaling between about $22,000 and $33,000 per entity. Labs that currently
perform tests that will be subject to the rule but choose not to participate in the LAAF program
will incur one-time costs of about $30,000 to about $164,000 per entity. Labs that currently
perform tests that will be subject to the rule but choose not to participate in the LAAF program
will no longer perform those tests. Using information from the FRIA, we estimate that about 250
labs that test import related food covered by the rule and shell eggs, sprouts, and bottled drinking
water subject to specific testing requirements will choose not to participate in the LAAF
program. In the FRIA, we estimate the costs to switch from these labs to a LAAF-accredited lab
will be about $460 per affected lab. Shell egg producers, sprouts producers, importers, and
bottled drinking water manufacturers will incur one-time costs to read and understand the rule
equaling between about $800 to about $980 per entity. Importers will incur one-time costs to
learn about the rule. We report the one-time costs per entity from this final rule in Table 61.

Table 61: One-time per entity costs of this rule
ABs that choose to participate
Labs that choose to participate in the LAAF program
Labs that choose not to participate in the LAAF program
Bottled drinking water manufacturers
Shell egg producers
Sprouts producers and importers

5th
percentile
$22,387.91
$29,839.27
$32.05
$802.15
$802.15
$802.15

Mean
$27,544.50
$96,683
$459.25
$891.30
$891.30
$891.30

95th
percentile
$32,733.44
$163,526.62
$1,115.24
$980.41
$980.41
$980.41

The range in one-time costs for ABs that choose to participate in our program is between
about 2.5 percent and 3.6 percent of average revenue per entity. Labs that will participate in the
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LAAF program will incur one-time costs of between 1 percent and 6 percent of the average
revenue per entity. Labs that choose not to participate in the LAAF program will incur a loss of
between 0.003 percent and 0.02 percent of the average revenue per entity from lost business. The
range in one-time costs for bottled drinking water manufacturers is between 0.004 percent and
0.005 percent of the average revenue per entity, the one-time costs for shell egg producers is
between 0.078 percent and 0.096 percent of the average revenue per entity, and the one-time
costs for sprouts producers and importers is between about 0.006 percent and 0.007 percent of
the average revenue per entity. We report the costs per entity as a percent of average revenue per
entity, for all entities affected by this rule in Table 62.

Table 62: One-time per entity costs as a percent of average per entity revenue

ABs participating in the program
Labs that choose to participate in the
LAAF program
Labs that choose not to participate in the
LAAF program
Bottled drinking water manufacturers
Shell egg producers
Sprouts producers and importers

Costs as a
percent of
revenue
(lower bound)
2.476%

Costs as a
percent of
revenue
(mean estimate)
3.046%

Costs as a
percent of
revenue
(upper bound)
3.620%

1.135%

1.135%

6.143%

0.003%

0.037%

0.082%

0.004%
0.078%
0.006%

0.005%
0.087%
0.006%

0.005%
0.096%
0.007%

We consider costs per entity over and above one percent of annual revenues to be a
substantial impact. Because the mean estimates of the costs per entity for ABs that choose to
participate in the LAAF program and for labs that choose to participate in the LAAF program
exceed one percent of annual revenues, we certify that this rule will have a substantial impact on
a significant number of small entities.

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C. Alternatives to Minimize the Burden on Small Entities
The Agency’s plan to issue a Federal Register notice 6 months prior to requiring owners
and consignees to use a LAAF-accredited laboratory for the testing ensures there will be enough
lab capacity in the LAAF program for any tests that are required. The stepwise approach to
implementation and giving a 6-month notice to owners and consignees prior to requiring them to
comply with the final rule affects the timing of costs and benefits of the rule. We estimate that
costs will be incurred for tests of import related food covered by the rule one to two years
(discounted at seven percent) following publication of the final rule based on comments that
assert there is currently sufficient lab capacity for this to be the case. For tests of shell eggs,
sprouts, and bottled drinking water covered by the rule, we estimate costs will be incurred two to
three years (discounted at seven percent) following publication of the rule, after we have
determined that sufficient lab capacity exists for covered tests of shell eggs, sprouts, and bottled
drinking water.

142

IV.

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