[Senate Report 107-319]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 736
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-319
_______________________________________________________________________

                                     
                      ENTERPRISE INTEGRATION ACT

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                               H.R. 2733



                                     

       DATE deg.October 16, 2002.--Ordered to be printed
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                      one hundred seventh congress
                             second session

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida
                     Kevin D. Kayes, Staff Director
                       Moses Boyd, Chief Counsel
                      Gregg Elias, General Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel
             Ann Begeman, Republican Deputy Staff Director
             Robert W. Chamberlin, Republican Chief Counsel


                                                       Calendar No. 736
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-319

======================================================================



 
                       ENTERPRISE INTEGRATION ACT

                                _______
                                

                October 16, 2002.--Ordered to be printed

                                _______
                                

      Mr. Hollings, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                        [To accompany H.R. 2733]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the Act (H.R. 2733) TITLE deg. 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, reports 
favorably thereon without amendment and recommends that the Act 
do pass.

                          Purpose of the Bill

  The purpose of the Act, the Enterprise Integration Act of 
2001, is to establish an Enterprise Integration Initiative at 
the National Institute of Standards and Technology (NIST). This 
initiative would help companies better coordinate information 
exchange throughout the supply chain.

           Background, Needs, and Summary of Major Provisions

  Manufacturers in today's marketplace must be more flexible, 
efficient, and responsive to changes in customer preference. 
Around the world manufacturers are shifting from the old 
production model, in which a given product changed slowly and 
represented the aggregate preferences of consumers, to a new 
model in which manufacturers can more easily produce customized 
products to satisfy more specialized and changing consumer 
demands.
  Developing a seamless exchange of information without data 
loss or corruption up and down the supply chain would enable 
manufacturers to improve their efficiency and meet these new 
demands. Unfortunately today's software and information 
technology systems frequently lack interoperability--
incompatible applications prevent manufacturers and suppliers 
from easily sharing data and information about design 
specifications, component modifications, etc.
  Seamless electronic integration along the vertical supply 
chain is known as ``enterprise integration''. A February 2001 
report by the National Coalition for Advanced Manufacturing 
identified ways that the Federal government, in addition to 
manufacturing industries and software companies, could help 
promote enterprise integration. H.R. 2733 would address several 
of these recommendations.
  The Act would establish an Enterprise Integration Initiative 
at the NIST. The initiative would help companies better 
coordinate information exchange throughout the supply chain, so 
that information can flow to all companies along the supply 
chain without data loss or corruption. For example, if Ford 
Motor Company 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 would help 
businesses, large and small, reduce costs and design cycle 
times, and increase efficiency when changing a product.
  Under the Act, NIST would work with industry to develop road 
maps that outline the steps a given industry must take to 
become more electronically integrated. NIST would help industry 
develop voluntary consensus standards and agreements on 
protocols for information exchange and provide assistance to 
conduct pilot projects to support the initiative.
  The Act would authorize $2 million for fiscal year (FY) 2002, 
$10 million for FY 2003, $15 million for FY 2004, and $20 
million for FY 2005 for these activities.

                          Legislative History

  The Act passed the House of Representatives by a vote of 397-
22 on July 11, 2002, and it was referred to the Senate 
Committee on Commerce, Science, and Technology. The Committee 
held a hearing on the Department of Commerce's Technology 
Administration, including NIST, on April 16, 2002.
  The Committee met in Executive Session on September 19, 2002, 
and ordered the Act reported, without amendment.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 25, 2002.
Hon. Ernest F. Hollings,
Chairman, Committee on Commerce, Science, and Transportation,     U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2733, the 
Enterprise Integration Act of 2002.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Ken Johnson.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 2733--Enterprise Integration Act of 2002

    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 act would authorize the appropriation 
of $45 million over three years to carry out these activities.
    Assuming the appropriation of the specified amounts, CBO 
estimates that implementing H.R. 2733 would cost about $45 
million during the 2003-2007 period. The act 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 million of dollars--
                                                                    --------------------------------------------
                                                                       2003     2004     2005     2006     2007
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level................................................       10       15       20        0        0
Estimated Outlays..................................................        8       14       19        4        0
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: H.R. 2733 would authorize the 
appropriation of $45 million over three years for NIST to 
undertake a variety of activities to promote enterprise 
integration. For this estimate, CBO assumes that the act will 
be enacted this fall, and that funds will be appropriated 
around the beginning of each fiscal year. Based on the 
historical spending patterns of similar NIST programs, CBO 
estimates that implementing H.R. 2733 would cost about $8 
million in 2003 and $45 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.
    Previous CBO estimate: On June 3, 2002, CBO transmitted a 
cost estimate for H.R. 2733, as ordered reported by the House 
Committee on Science on May 22, 2002. The two versions of the 
legislation are nearly identical, and the estimated costs are 
similar. However, in the previous estimate, CBO assumed that an 
appropriation of $2 million would be enacted to implement the 
new program in 2002, and estimated that those funds would be 
spent in 2003.
    Estimate prepared by: Federal Costs: Ken Johnson; Impact on 
State, Local, and Tribal Governments: Angela Seitz; and Impact 
on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       NUMBER OF PERSONS COVERED

  The Committee believes that the Act would not subject any 
individuals or businesses affected by the legislation to any 
additional regulations.

                            ECONOMIC IMPACT

  The Act would not have an adverse economic impact on the 
Nation. It would authorize funding for the establishment of an 
enterprise integration initiative to increase industry 
efficiency and lower manufacturing costs.

                                PRIVACY

  The Act would not have a negative impact on the personal 
privacy of individuals.

                               PAPERWORK

  The Act would not increase paperwork requirements for private 
individuals or businesses. The Act would require the Director 
of NIST to submit a report on the activities of the enterprise 
integration initiative that would be established under H.R. 
2733.

                      Section-by-Section Analysis


Section 1. Short title

  Section 1 would cite the short title of the reported Act as 
the ``Enterprise Integration Act of 2001.''

Section 2. Findings

  Section 2 would make several findings in support of the 
enterprise integration initiative. Among the findings is a 
declaration that it is in the national interest that NIST 
accelerate its ongoing efforts to help industry develop 
standards and enterprise integration processes to increase 
efficiency and lower costs.

Section 3. Enterprise integration initiative

  Subsection (a) would require the Director of NIST to 
establish an enterprise integration initiative within the 
United States to develop and implement standards and protocols 
to enable major manufacturing industries and businesses, 
including small businesses, to electronically exchange product- 
and standards-related information. The initiative would involve 
the NIST laboratories, the Manufacturing Extension Program 
(MEP), and the Malcolm Baldrige National Quality Program, where 
appropriate. The initiative, involving consortia of Government 
and industry, would build upon ongoing efforts of NIST and the 
private sector.
  Under subsection (b), the Director would be permitted to work 
with industry representatives, trade associations, professional 
societies, and others as appropriate to identify all enterprise 
standardization and implementation activities underway 
affecting that industry. The Director also would be authorized 
to assess the current state of enterprise integration within 
major manufacturing industries and to assist industry 
representatives and organizations in the development of 
roadmaps, based on voluntary consensus standards, that permit 
supply chains to operate as an integrated electronic 
enterprise.
  Subsection (c) would require the Director of NIST to submit 
to the House of Representatives Committee on Science and the 
Senate Committee on Commerce, Science, and Transportation 
within 180 days after the enactment of this legislation, and 
annually thereafter, a report on the activities of the 
initiative.
  Subsection (d) would authorize the Director of NIST to work 
with industry, trade associations, professional societies, and 
others as appropriate, to carry out the following activities in 
support of the legislation:
           Raise awareness of enterprise integration 
        activities, including convening conferences and 
        conducting outreach to businesses that are owned by 
        women or minorities.
           Develop enterprise integration roadmaps.
           Support the development, testing, 
        promulgation, integration, adoption and upgrading of 
        standards relating to enterprise integration, including 
        application protocols.
           Provide technical assistance and, if 
        necessary, financial support to small and medium-sized 
        businesses that set up pilot projects in enterprise 
        integration.
  Subsection (e) would require the Director of NIST to ensure 
that the MEP is prepared to advise small to medium-sized 
businesses on how to acquire the expertise, equipment, and 
training necessary to participate fully in supply chains using 
enterprise integration.

Section 4. Definitions

  Section 4 would define the terms ``automotive'', 
``Director'', ``enterprise integration'', ``major manufacturing 
industry'', and ``road map''.

Section 5. Authorization of appropriations

  Section 5 would authorize appropriations of $2 million for FY 
2002, $10 million for FY 2003, $15 million for FY 2004, and $20 
million for FY 2005 for NIST's Enterprise Integration 
Initiative.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, the Committee states that the Act as 
reported would make no change to existing law.

                                
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