New rates were not proposed in 1997 and 1998 because of major reorganizations within the Agency and other factors, even though all Federal employees received pay raises, and travel and overhead costs increased in each of those years. This resulted in the industry being underbilled in each of these years and the Agency not recovering the full costs it incurred in operating its voluntary programs. The compounded effect calculates the increase in a given year on top of the previous years' increases. That is, for every dollar earned by a Federal employee in 1996, he now is earning almost 10 cent more in 1999. Commenters were not opposed to the proposed increase cost for laboratory services.
Operating costs constitute a significant portion of the fee for laboratory services.
Operating costs have been kept in check over the last three years. The fees being finalized reflect the difference between the last fee change in 1996 and projected costs incurred by FSIS for FY 1999. If those fees were recalculated to reflect all actual costs through FY 1999, they would probably increase. However, the Agency has decided to finalize the fee rates it proposed. It will make appropriate adjustments in a new proposal it expects to publish in late 1999 regarding the fees that need to be charged for the inspection programs it operates.