The Secretary, after consultation with the Assistant Secretary, shall require appropriate peer review of grants, cooperative agreements, and contracts to be administered through the agency which exceed the simple acquisition threshold as defined in section 134 of title 41.

The members of any peer review group established under subsection (a) shall be individuals who by virtue of their training or experience are eminently qualified to perform the review functions of the group. Not more than one-fourth of the members of any such peer review group shall be officers or employees of the United States. In the case of any such peer review group that is reviewing a grant, cooperative agreement, or contract related to mental illness treatment, not less than half of the members of such peer review group shall be licensed and experienced professionals in the prevention, diagnosis, or treatment of, or recovery from, mental illness or co-occurring mental illness and substance use disorders and have a medical degree, a doctoral degree in psychology, or an advanced degree in nursing or social work from an accredited program, and the Secretary, in consultation with the Assistant Secretary, shall, to the extent possible, ensure such peer review groups include broad geographic representation, including both urban and rural representatives.

If the direct cost of a grant or cooperative agreement (described in subsection (a)) exceeds the simple acquisition threshold as defined by section 134 of title 41, the Secretary may make such a grant or cooperative agreement only if such grant or cooperative agreement is recommended—

(1) after peer review required under subsection (a); and

(2) by the appropriate advisory council.

The Secretary may establish limited exceptions to the limitations contained in this section regarding participation of Federal employees and advisory council approval. The circumstances under which the Secretary may make such an exception shall be made public.

(July 1, 1944, ch. 373, title V, § 504, formerly § 506, as added Pub. L. 98–24, § 2(b)(7), Apr. 26, 1983, 97 Stat. 178; amended Pub. L. 99–158, § 3(c), Nov. 20, 1985, 99 Stat. 879; renumbered § 507 and amended Pub. L. 99–570, title IV, §§ 4004(a), 4007, Oct. 27, 1986, 100 Stat. 3207–109, 3207–115; renumbered § 504 and amended Pub. L. 102–321, title I, § 104, July 10, 1992, 106 Stat. 333; Pub. L. 102–352, § 2(a)(7), Aug. 26, 1992, 106 Stat. 938; Pub. L. 105–392, title IV, § 412, Nov. 13, 1998, 112 Stat. 3590; Pub. L. 106–310, div. B, title XXXIV, § 3401(b), Oct. 17, 2000, 114 Stat. 1218; Pub. L. 114–255, div. B, title VI, §§ 6001(c)(2), 6009, Dec. 13, 2016, 130 Stat. 1203, 1215.)