[House Report 107-520]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-520
======================================================================
ENTERPRISE INTEGRATION ACT OF 2002
_______
June 20, 2002.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Boehlert, from the Committee on Science, submitted the following
R E P O R T
[To accompany H.R. 2733]
[Including cost estimate of the Congressional Budget Office]
The Committee on Science, to whom was referred the bill (H.R.
2733) to authorize the National Institute of Standards and
Technology to work with major manufacturing industries on an
initiative of standards development and implementation for
electronic enterprise integration, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
CONTENTS
Page
I. Amendment.......................................................2
II. Purpose of the Bill.............................................3
III. Background and Need for the Legislation.........................4
IV. Summary of Hearings.............................................6
V. Committee Actions...............................................6
VI. Summary of Major Provisions of the Bill.........................6
VII. Section-by-Section Analysis (by Title and Section)..............6
VIII. Committee Views.................................................8
IX. Cost Estimate...................................................8
X. Congressional Budget Office Cost Estimate.......................9
XI. Compliance With Public Law 104-4 (Unfunded Mandates)...........10
XII. Committee Oversight Findings and Recommendations...............10
XIII. Statement on General Performance Goals and Objectives..........10
XIV. Constitutional Authority Statement.............................10
XV. Federal Advisory Committee Statement...........................10
XVI. Congressional Accountability Act...............................10
XVII. Statement on Preemption of State, Local, or Tribal Law.........11
XVIII.Changes in Existing Law Made by the Bill, as Reported..........11
XIX. Committee Recommendations......................................11
I. AMENDMENT
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Enterprise Integration Act of 2002''.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) Over 90 percent of United States companies engaged in
manufacturing are small and medium-sized businesses.
(2) Most of these manufacturers produce goods for assemblage
into products of large companies.
(3) The emergence of the World Wide Web and the promulgation
of international standards for product data exchange greatly
accelerated the movement toward electronically integrated
supply chains during the last half of the 1990's.
(4) European and Asian countries are investing heavily in
electronic enterprise standards development, and in preparing
their smaller manufacturers to do business in the new
environment. European efforts are well advanced in the
aerospace, automotive, and shipbuilding industries and are
beginning in other industries including home building,
furniture manufacturing, textiles, and apparel. This investment
could give overseas companies a major competitive advantage.
(5) The National Institute of Standards and Technology,
because of the electronic commerce expertise in its
laboratories and quality program, its long history of working
cooperatively with manufacturers, and the nationwide reach of
its manufacturing extension program, is in a unique position to
help United States large and smaller manufacturers alike in
their responses to this challenge.
(6) It is, therefore, in the national interest for the
National Institute of Standards and Technology to accelerate
its efforts in helping industry develop standards and
enterprise integration processes that are necessary to increase
efficiency and lower costs.
SEC. 3. ENTERPRISE INTEGRATION INITIATIVE.
(a) Establishment.--The Director shall establish an initiative for
advancing enterprise integration within the United States. In carrying
out this section, the Director shall involve, as appropriate, the
various units of the National Institute of Standards and Technology,
including the National Institute of Standards and Technology
laboratories (including the Building and Fire Research Laboratory), the
Manufacturing Extension Partnership program established under sections
25 and 26 of the National Institute of Standards and Technology Act (15
U.S.C. 278k and 278l), and the Malcolm Baldrige National Quality
Program. This initiative shall build upon ongoing efforts of the
National Institute of Standards and Technology and of the private
sector, shall involve consortia that include government and industry,
and shall address the enterprise integration needs of each United
States major manufacturing industry at the earliest possible date.
(b) Assessment.--For each major manufacturing industry, the Director
may work with industry, trade associations, professional societies, and
others as appropriate, to identify enterprise integration
standardization and implementation activities underway in the United
States and abroad that affect that industry and to assess the current
state of enterprise integration within that industry. The Director may
assist in the development of roadmaps to permit supply chains within
the industry to operate as an integrated electronic enterprise. The
roadmaps shall be based on voluntary consensus standards.
(c) Reports.--Within 180 days after the date of the enactment of this
Act, and annually thereafter, the Director shall submit to the
Committee on Science of the House of Representatives and the Committee
on Commerce, Science, and Transportation of the Senate a report on the
National Institute of Standards and Technology's activities under
subsection (b).
(d) Authorized Activities.--In order to carry out this Act, the
Director may work with industry, trade associations, professional
societies, and others as appropriate--
(1) to raise awareness in the United States of enterprise
integration activities in the United States and abroad,
including by the convening of conferences;
(2) on the development of enterprise integration roadmaps;
(3) to support the development, testing, promulgation,
integration, adoption, and upgrading of standards related to
enterprise integration including application protocols; and
(4) to provide technical assistance and, if necessary,
financial support to small and medium-sized businesses that set
up pilot projects in enterprise integration.
(e) Manufacturing Extension Program.--The Director shall ensure that
the Manufacturing Extension Program is prepared to advise small and
medium-sized businesses on how to acquire the expertise, equipment, and
training necessary to participate fully in supply chains using
enterprise integration.
SEC. 4. DEFINITIONS.
For purposes of this Act--
(1) the term ``automotive'' means land-based engine-powered
vehicles including automobiles, trucks, busses, trains, defense
vehicles, farm equipment, and motorcycles;
(2) the term ``Director'' means the Director of the National
Institute of Standards and Technology;
(3) the term ``enterprise integration'' means the electronic
linkage of manufacturers, assemblers, suppliers, and customers
to enable the electronic exchange of product, manufacturing,
and other business data among all partners in a product supply
chain, and such term includes related application protocols and
other related standards;
(4) the term ``major manufacturing industry'' includes the
aerospace, automotive, electronics, shipbuilding, construction,
home building, furniture, textile, and apparel industries and
such other industries as the Director designates; and
(5) the term ``roadmap'' means an assessment of manufacturing
interoperability requirements developed by an industry
describing that industry's goals related to enterprise
integration, the knowledge and standards including application
protocols necessary to achieve those goals, and the necessary
steps, timetable, and assignment of responsibilities for
acquiring the knowledge and developing the standards and
protocols.
SEC. 5. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Director to carry out
functions under this Act--
(1) $2,000,000 for fiscal year 2002;
(2) $10,000,000 for fiscal year 2003;
(3) $15,000,000 for fiscal year 2004; and
(4) $20,000,000 for fiscal year 2005.
II. PURPOSE OF THE BILL
The purpose of H.R. 2733, the Enterprise Integration Act of
2002 is to authorize the National Institute of Standards and
Technology (NIST) to work with major manufacturing industries
on an initiative of standards development and implementation
for electronic enterprise integration. Through this initiative,
NIST will help industries reach a consensus on their electronic
data exchange standards needs, support the development of those
standards and help smaller businesses in those industries to
automate. When industries are fully integrated electronically,
information will flow to all companies along the supply chains
within the industry without corruption or loss. For example, if
Ford changes a design specification for a bumper, every one of
the suppliers that contribute to that part would be able to
quickly and easily see how the new specification affects their
component. This kind of integration will help large and small
businesses in the industry's supply chains to reduce costs and
design cycles times. Suppliers, especially small businesses,
that do not have the capability to collect data needed by
others in the supply chain and to exchange it electronically
run the risk of being replaced by other suppliers who can.
III. BACKGROUND AND NEED FOR THE LEGISLATION
The application of the Internet to manufacturing has led to
companies being asked to work together electronically in ways
that were impossible just a few years ago. Design times and
useful lives of manufactured goods are shrinking dramatically.
Manufacturers in today's marketplace must be more flexible,
efficient, and responsive to changes in customer preference.
Around the world, manufacturers who wish to stay competitive
are shifting to a new manufacturing environment in which
designs and assembly lines change quickly and where all of the
companies involved in manufacturing a product must be able to
share designs, engineering data, and production information
regularly and instantaneously. This change has been made
possible by advances in networking, shop-floor automation, and
product data exchange software.
Developing a seamless exchange of information, without data
loss or corruption, along a vertical supply chain is known as
``enterprise integration''. Enterprise integration permits a
group of manufacturers and suppliers to operate as a single
virtual company. Achieving enterprise integration among an
original equipment manufacturer such as Ford or Boeing and all
levels of its supply chain would lead to dramatically reduced
amounts of time spent in the design and manufacturing of
specific products. A 1999 study commissioned by NIST estimated
potential savings in the auto supply chains of General Motors,
Ford, and Chrysler from enterprise integration of at least $1
billion per year. Similarly dramatic savings are possible in
shipbuilding, major construction, homebuilding, furniture
manufacturing, electronics manufacturing, textiles and apparel,
and all other industries whose products depend on a series of
companies working efficiently together. A February 2001 report
of the National Coalition for Advanced Manufacturing identified
ways that the Federal Government, manufacturing industries,
software companies, and private sector consultants could work
together to promote enterprise integration. This bill addresses
several of these recommendations.
The large number of incompatible design, engineering, and
manufacturing systems now in place within a typical supply
chain complicates enterprise integration. Before the Internet,
factories were automated with no thought of sharing
manufacturing data. Factories installed those software packages
that best met their individual needs and often developed custom
software for unique problems. This has led to a typical supply
chain containing suppliers using a variety of different
software packages. For enterprise integration to work, all of
these software systems must either be replaced at great expense
or must be made to work together. Incompatibility problems get
worse the farther down the supply chain one goes. Companies at
the bottom of supply chains, such as tool and die makers, are
being asked to be able to supply data compatible with all of
the manufacturers higher up the chain. This frequently places
an intolerable burden on the companies least able to afford
multiple software systems.
One promising solution to compatibility problems in design
and manufacturing software is product data exchange standards,
an area where NIST has 20 years of experience. This family of
standards sets the rules for exchanging all manufacturing data
including three-dimensional models of parts and processes. The
basic product data exchange standard has been adopted as an
international standard but the hard work of developing
additional standards permitting product data exchange in
specific industries is just getting underway. Product data
exchange standards that permit interoperability among the
various design and manufacturing software packages used by an
industry can run tens of thousands of pages of text. These
standards can be thought of as huge dictionaries that make sure
that colors, materials, processes, and all other variables in
manufacturing a ship or a plane can be translated in a way that
protects the proprietary information of the various companies
in the industry. The European Union understands the importance
of enterprise integration and is aggressively pursuing the
development of application protocols in each of the
manufacturing sectors mentioned above.
For U.S.-based companies to participate fully in
manufacturing that uses enterprise integration, NIST must be
integrally involved in the process of developing these
standards. If it is not, the United States runs the risk of the
application protocols being promulgated as international
standards in forms that are incompatible with some U.S.
software packages. Should this happen, U.S. companies would be
at a substantial competitive disadvantage and faced with the
replacement of large amounts of costly software. H.R. 2733 is
designed to help solve several aspects of this problem. NIST
will help industry sectors to achieve a common understanding of
enterprise integration within U.S. industry sectors through
cooperative public and private efforts in road mapping. It will
support product data exchange standards development including
pilot efforts. Automation support of small manufacturers will
be accelerated through NIST's Manufacturing Extension Program.
The National Institute of Standards is the natural
organization to take the lead for the United States in
promoting enterprise integration. NIST has a long track record
in manufacturing and has done or sponsored much of the
government research on the factory of the future and factory
automation that has helped bring us to the point where we can
contemplate enterprise integration and virtual companies. NIST
has worked closely with the leading private sector companies
that develop manufacturing software and that help industries
understand how to position themselves to take advantage of the
technology. Rather than compete with the private sector, it has
worked cooperatively with benchmarking companies such as IMTI
in Oak Ridge, Tennessee and organizations such as ERIM (now
Altarum) and PDES, Inc., that have been pioneers in the
development of product data exchange software. NIST was the
first of the National laboratories and has over 100 years of
experience working with industry and with manufacturers. It
also has the largest role of any Federal agency in
international standards. For the last 14 years, NIST through
its Manufacturing Extension Partnership has worked with state
and local governments, educational institutions, and private
consultants to make sure that any manufacturer who wishes to
become more competitive can acquire the knowledge and equipment
to do so.
IV. SUMMARY OF HEARINGS
There were no hearings on H.R. 2733 in the current
Congress. However, on June 22, 2000, the Committee on Science's
Subcommittee on Technology held a hearing entitled E-Commerce,
A Review of Standards and Technology to Support
Interoperability. Witnesses included Dr. Karen Brown, Deputy
Director, National Institute of Standards and Technology; Mr.
Keith Krach, Chief Executive Officer and Chairman of the Board
of Ariba; and Mr. Ken Baker, President of ERIM. Dr. Brown
discussed NIST's role in working closely with the private
sector to provide tools such as measurements and standards for
hardware, software, and networks infrastructure; direct hands-
on assistance through Manufacturing Extension Partnership (MEP)
to U.S. small manufacturers; and co-funding private sector
research through the ATP to develop new technologies. Mr. Ken
Baker testified that the problem of interoperability in the
U.S. industrial supply chain costs American automotive industry
more than $1 billion each year. ERIM's Center for Electronic
Commerce has been working on interoperability issues for over
10 years. They have also worked with the Automotive Industry
Action Group (AIAG) and NIST to conduct pilots to improve the
quality and timeliness of data exchange among current
automotive manufacturers and their suppliers.
V. COMMITTEE ACTIONS
On August 2, 2001, Mr. Barcia and Mr. Ehlers introduced
H.R. 2733. The bill was referred to the Committee on Science
and its Subcommittee on Environment, Technology, and Standards.
The Subcommittee marked up the bill on December 12, 2001 and
ordered the bill reported to the Full Committee by a voice
vote. H.R. 2733 was then ordered reported by the Committee on
Science on May 22, 2002.
VI. SUMMARY OF MAJOR PROVISIONS OF THE BILL
H.R. 2733 requires the Director of the National Institute
of Standards and Technology to establish an initiative for
advancing enterprise integration within the United States. This
initiative is to draw on all relevant parts of NIST and its
contractors as well as on other private sector experts. Under
the bill, NIST, using in-house capabilities as well as the
talents of private sector organizations with road-mapping
expertise, will work with all major manufacturing sectors that
desire to develop roadmaps that outline the steps for a
specific industry to become integrated electronically. NIST
will also support the development of voluntary consensus
product data exchange standards that will permit all of the
manufacturing software programs used in an industry to use data
generated under the other systems.
VII. SECTION-BY-SECTION ANALYSIS (BY TITLE AND SECTION)
Sec. 1--Short title
Enterprise Integration Act of 2001.
Sec. 2--Findings
The legislation finds it is in the national interest that
the National Institute of Standards and Technology (NIST)
accelerate its ongoing efforts to help major manufacturing
sectors develop enterprise integration standards because most
companies involved in manufacturing are small businesses,
because the emergence of the Internet has accelerated the
movement towards electronically integrated supply chains,
because European and Asian countries are giving their companies
a competitive advantage by investing heavily in electronic
enterprise standards and in preparing their smaller
manufacturers to participate in this new business environment,
and because NIST's long history of assisting manufacturers puts
it in a unique position to help both American supply chains and
the small businesses that are part of them.
Sec. 3--Enterprise integration initiative
The Director of NIST is to establish an enterprise
integration initiative to permit electronic exchange of product
data among the companies including small businesses that make
up major manufacturing sectors. The initiative shall involve
the NIST laboratories, the manufacturing Extension Program, and
the Malcolm Baldrige National Quality Program, where
appropriate. The initiative is to build on NIST's long history
of working with the private sector in this area. NIST also is
to take advantage of private sector expertise in areas such as
adapting B2B standards in manufacturing sectors as diverse as
autos and furniture, in pilot projects, and in demonstrations
of best industry practices.
This initiative will help industry representatives,
organizations, and others from major manufacturing sectors who
are currently engaged in enterprise integration activities to
identify all enterprise standardization and implementation
activities underway affecting that industry. It is assumed that
NIST and its contractors will assist industry representatives
and organizations in the development of roadmaps that will
identify the remaining steps needed to ensure that supply
chains in the industry can operate as an integrated electronic
enterprise.
Within 90 days of the enactment of this Act, the Director
shall submit to Congress a report on the efforts to publicize
the program and the anticipated related activities of the
initiative, and within 180 days, and annually thereafter, a
report on the activities of the initiative.
The Director may carry out the following activities in
support of the legislation:
(1) Work with companies and trade associations to
raise awareness of enterprise integration activities;
(2) Work with industries on the development of
enterprise integration roadmaps;
(3) Support the development, testing, promulgation,
and adoption of standards;
(4) Support the integration and upgrading of
standards related to enterprise integration;
(5) Support pilot projects that include small and
medium-sized businesses for new standards and
enterprise integration;
(6) Ensure the training and continuing education of
Manufacturing Extension Program (MEP) employees;
(7) Develop tool kits and training materials to
permit small and medium-sized businesses to participate
in an integrated enterprise; and
(8) Set up legal and financial mechanisms to permit
groups of MEP centers to work collectively on
modernizing and integrating a company's or an
industry's supply chain.
Sec. 4--Definitions
The term ``enterprise integration'' is defined as the
electronic linkage of manufacturers, assemblers, suppliers, and
customers to enable all the partners in a product supply chain
to exchange standards and other information related to the
manufacture and supply of products.
The term ``major manufacturing industry'' includes:
aerospace, automotive, electronics, shipbuilding, construction,
home building, furniture, textile, and apparel industries, and
such other industries as the Director designates.
The term ``automotive'' is defined as land-based engine-
powered vehicles including: automobiles, trucks, busses,
trains, defense vehicles, farm equipment, and motorcycles.
Sec. 5--Authorization of appropriations
Fiscal year 2002--$2 million.
Fiscal year 2003--$10 million.
Fiscal year 2004--$15 million.
Fiscal year 2005--$20 million.
VIII. COMMITTEE VIEWS
The Committee expects that the program set forth in H.R.
2733 will be a logical extension of NIST's 20 plus years of
close cooperation with the private sector in developing the
standards required by modern manufacturing. The purpose of this
legislation is to bring a renewed sense of urgency to this
important mission and to make sure that America's smaller
manufacturers are world-class and have the capabilities to
participate in virtual companies. This enhanced effort is
important because the United States is facing a serious
challenge from other countries that are investing large sums to
make sure that the international standards for manufacturing
favor their domestic companies. Product data exchange standards
is an area where the United States has been a leader, but where
its leadership faces a serious challenge. Therefore, H.R. 2733
has been designed to bring the best talent available from NIST
and its contractors, from manufacturers, and from companies
that support manufacturers into an effective partnership to
meet this challenge. To accomplish this objective in a
reasonable timeframe, NIST is encouraged to continue to
supplement its in-house expertise with that of contractors in
road mapping, in adapting these standards to the needs of each
of these sectors, and in carrying out pilot projects to support
the initiative.
IX. COST ESTIMATE
A cost estimate and comparison prepared by the Director of
the Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974 has been submitted in a timely
manner to the Committee on Science prior to the filing of this
report and is included in Section X of this report pursuant to
House Rule XIII, clause 3(c)(3).
H.R. 2733 does not contain new budget authority, credit
authority, or changes in revenues or tax expenditures. Assuming
that the sums authorized under the bill are appropriated, H.R.
2733 does authorize additional discretionary spending, as
described in the Congressional Budget Office report on the
bill, which is contained in Section X of this report.
X. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 3, 2002.
Hon. Sherwood L. Boehlert,
Chairman, Committee on Science,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2733, the
Enterprise Integration Act of 2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Ken Johnson.
Sincerely,
Steven M. Lieberman
(For Dan L. Crippen, Director).
Enclosure.
H.R. 2733--Enterprise Integration Act of 2001
Summary: H.R. 2733 would require the National Institute of
Standards and Technology (NIST) to perform research, provide
technical assistance, and develop standards related to
enterprise integration. Enterprise integration is the effort to
facilitate the exchange of data among manufacturing companies
within supply chains. The bill would authorize the
appropriation of $47 million over four years to carry out these
activities.
Assuming the appropriation of the specified amounts, CBO
estimates that implementing H.R. 2733 would cost about $47
million during the 2002-2007 period. The bill would not affect
direct spending or receipts; therefore, pay-as-you-go
procedures would not apply.
H.R. 2733 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2733 is shown in the following table.
The costs of this legislation fall within budget function 370
(commerce and housing credit).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------
2002 2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization level................................. 2 10 15 20 0 0
Estimated outlays................................... 0 10 14 19 4 0
----------------------------------------------------------------------------------------------------------------
Basis of estimate: H.R. 2733 authorizes the appropriation
of $47 million over four years for NIST to undertake a variety
of activities to promote enterprise integration. For this
estimate, CBO assumes that the bill will be enacted before the
end of fiscal year 2002, that funds will be appropriated around
the beginning of each fiscal year, and that funds for 2002 will
be provided in a supplemental appropriation. Based on the
historical spending patterns of similar NIST programs, CBO
estimates that implementing H.R. 2733 would cost about $10
million in 2003 and $47 million over the 2003-2006 period,
assuming the appropriation of the specified amounts.
Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: H.R. 2733
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Federal costs: Ken Johnson; impact on
state, local, and tribal governments: Angela Seitz; impact on
the private sector: Patrice Gordon.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
XI. COMPLIANCE WITH PUBLIC LAW 104-4
H.R. 2733 contains no unfunded mandates.
XII. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS
The Committee on Science's oversight findings and
recommendations are reflected in the body of this report.
XIII. STATEMENT ON GENERAL PERFORMANCE GOALS AND OBJECTIVES
The goals and objectives of this legislation are to enhance
NIST's efforts in support of enterprise integration. They
include the development of roadmaps leading to enterprise
integration of interested manufacturing sectors, to continue to
use the talent both in the government and in the private sector
that has traditionally worked on these problems, to make sure
that international product data exchange standards adequately
reflect U.S. interests, and to increase the involvement of
NIST's Manufacturing Extension Program in aiding the small and
medium sized firms as they acquire the skills they need to
participate in enterprise integration.
XIV. CONSTITUTIONAL AUTHORITY STATEMENT
Article 1, section 8 of the Constitution of the United
States grants Congress the authority to enact H.R. 2733.
XV. FEDERAL ADVISORY COMMITTEE STATEMENT
H.R. 2733 does not establish or authorize the establishment
of an advisory committee.
XVI. CONGRESSIONAL ACCOUNTABILITY ACT
The Committee finds that H.R. 2733 does not relate to the
terms and conditions of employment or access to public services
or accommodations within the meaning of section 102(b)(3) of
the Congressional Accountability Act (Public Law 104-1).
XVII. STATEMENT ON PREEMPTION OF STATE, LOCAL, OR TRIBAL LAW
This bill is not intended to preempt any state, local, or
tribal law.
XVIII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
This legislation does not amend any existing Federal
statute.
XIX. COMMITTEE RECOMMENDATIONS
On May 22, 2002, a quorum being present, the Committee on
Science favorably reported the Enterprise Integration Act of
2002 by a voice vote, and recommended its enactment.