Voluntary Consensus Standards: Agencies' Compliance With the National
Technology Transfer and Advancement Act (Testimony, 03/15/2000,
GAO/T-RCED-00-122).

Pursuant to a congressional request, GAO discussed federal agencies'
compliance with the National Technology Transfer and Advancement Act,
which directs federal agencies to use voluntary consensus standards,
focusing on: (1) the National Institute of Standards and Technology's
(NIST) and the Office of Management and Budget's (OMB) activities in
carrying out their oversight responsibilities under the act; (2) federal
agencies' efforts in reporting their standards activities; and (3)
progress made specifically by the Department of Defense (DOD) and the
Environmental Protection Agency (EPA) in complying with the act.

GAO noted that: (1) NIST and OMB have taken a number of steps to guide
and coordinate federal agencies in their efforts to increase their use
of voluntary consensus standards; (2) NIST has chaired an interagency
committee to coordinate standards policy and activities among federal
agencies, established an internal advisory committee to create a
strategic approach to setting standards for other agencies to model, and
recently proposed guidance on federal conformity assessment activities;
(3) NIST has also worked with the American National Standards Institute,
which coordinates and sanctions voluntary standards, to develop a web
site that helps agencies identify relevant voluntary standards; (4)
since revising OMB Circular A-119, OMB's efforts have focused primarily
on its review and approval of NIST's summary of federal activities on
standards that OMB submits to Congress; (5) the report on federal
agencies' standards activities covering fiscal year 1998 was presented
to Congress in March 2000, 18 months after the close of the fiscal year;
(6) the delay reflected tardiness in each stage of the reporting
process, starting with federal agencies that provided their input to
NIST several months after the date specified in the circular; (7) in
part, NIST's report was late because of the agencies' tardiness in
providing submissions; (8) in addition, NIST did not have a definitive
list of agencies that are required to report, which added to the delay
because it could not determine when all the submissions were in; (9) OMB
provided the report to Congress about 6 months after receiving agencies'
submissions from NIST; (10) OMB stated that this time was necessary
because of revisions it requested from NIST and other demands on its
resources, such as its efforts to help coordinate federal activities to
address year 2000 issues; (11) GAO found that both DOD and EPA have
taken steps to comply with the act; (12) DOD has replaced hundreds of
military specifications with voluntary standards, and EPA has
established a system to keep track of its rules that use voluntary
consensus standards; (13) according to OMB and NIST officials, DOD's and
EPA's efforts are similar to the progress most federal agencies have
been making in complying with the act; and (14) the reporting measures
established in the circular do not assess agencies' efforts in assisting
U.S. competitiveness, so GAO cannot measure the progress being made
against this objective.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-RCED-00-122
     TITLE:  Voluntary Consensus Standards: Agencies' Compliance With
	     the National Technology Transfer and Advancement Act
      DATE:  03/15/2000
   SUBJECT:  Voluntary compliance
	     Standards and standardization
	     Statutory law
	     Noncompliance
	     Technology transfer
	     Interagency relations
	     Reporting requirements
IDENTIFIER:  National Standards Systems Network

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Testimony

Before the Subcommittee on Technology, Committee on Science, House of
Representatives

For Release on Delivery

Expected at

10 a.m. EST

Wednesday

March 15, 2000

VOLUNTARY CONSENSUS STANDARDS

Agencies' Compliance With the National Technology Transfer and Advancement
Act

Statement of Jim Wells,

Director,

Energy, Resources, and Science Issues,

Resources, Community, and Economic

Development Division

GAO/T-RCED-00-122

Madam Chair and Members of the Subcommittee:

We are pleased to be here today to discuss the National Technology Transfer
and Advancement Act, which became law in March 1996. As you know, the
legislative history of the act describes the importance of developing
standards that are appropriate to rapidly changing technology and
acknowledges that federal agencies should be major participants in the U.S.
standards system. Specifically, Section 12 codified existing guidance from
the Office of Management and Budget (OMB) and directed federal agencies to
increase their use of voluntary consensus standards and use them instead of
government-developed standards whenever possible. Voluntary consensus
standards are technical specifications for products or processes that are
developed by standards-setting bodies. The act assigned broad oversight
responsibility to OMB and coordination responsibilities to the National
Institute of Standards and Technology (NIST).

In February 1998, OMB issued revised Circular A-119 (Federal Participation
in the Development and Use of Voluntary Consensus Standards and in
Conformity Assessment Activities) to be consistent with the terminology in
the act and to provide federal agencies with guidance on how to meet the
act's requirements. The circular directs federal agencies to participate in
standards-setting bodies and adopt voluntary consensus standards when
possible in order to reduce duplication in production lines and assist U.S.
competitiveness in trade. The circular directs the agencies, through NIST,
to provide OMB with information on their standards activities for inclusion
in an annual report to the Congress. As agreed with your staff, my statement
today will focus on (1) NIST's and OMB's activities in carrying out their
oversight responsibilities under the act; (2) agencies' efforts in reporting
their standards activities; and (3) progress made specifically by the
Department of Defense (DOD) and the Environmental Protection Agency (EPA) in
complying with the act. My comments are based on information we have
obtained from NIST, OMB, DOD, and EPA.

In summary, Madam Chair, our work showed the following:

? NIST and OMB have taken a number of steps to guide and coordinate federal
agencies in their efforts to increase their use of voluntary consensus
standards. For example, NIST has chaired an interagency committee to
coordinate standards policy and activities among federal agencies,
established an internal advisory committee to create a strategic approach to
setting standards for other agencies to model, and recently proposed
guidance on federal conformity assessment activities. NIST has also worked
with the American National Standards Institute, which coordinates and
sanctions voluntary standards, to develop a web site that helps agencies
identify relevant voluntary standards. Since revising OMB Circular A-119,
OMB's efforts have focused primarily on its review and approval of NIST's
summary of federal activities on standards that OMB submits to the Congress.

? The report on federal agencies' standards activities covering fiscal year
1998 was presented to the Congress this month, 18 months after the close of
the fiscal year. The delay reflected tardiness in each stage of the
reporting process, starting with federal agencies that provided their input
to NIST several months after the date specified in the circular. For
example, 12 agencies--or about half of those reporting--reported their
standards activities after the December 31, 1998 deadline. NIST received the
last submission in March 1999. NIST, in turn, provided OMB with agencies'
submissions in September 1999, about 8 months after the January 31st
deadline established in the circular. In part, NIST's report was late
because of the agencies' tardiness in providing submissions. In addition,
NIST did not have a definitive list of agencies that are required to report,
which added to the delay because it could not determine when all the
submissions were in. Finally, OMB provided the report to the Congress about
6 months after receiving agencies' submissions from NIST. OMB stated that
this time was necessary because of revisions it requested from NIST and
other demands on its resources, such as its efforts to help coordinate
federal activities to address Y2K issues.

? We found that both DOD and EPA--the two agencies you asked us to
review--have taken steps to comply with the act. For example, DOD has
replaced hundreds of military specifications with voluntary standards, and
EPA has established a system to keep track of its rules that use voluntary
consensus standards. According to OMB and NIST officials, DOD's and EPA's
efforts are similar to the progress most federal agencies have been making
in complying with the act. The reporting measures established in the
circular do not assess agencies' efforts in assisting U.S. competitiveness,
so we cannot measure the progress being made against this objective.

Before discussing these issues in more detail, we would like to provide some
background information on the act and reporting requirements for federal
agencies.

Background

Standards are technical specifications that pertain to products and
processes, such as the size, strength, or technical performance of a
product, process, or material. Voluntary consensus standards are standards
developed by standards-setting entities such as the American Society for
Testing and Materials (a non-profit organization formed to develop
standards); these organizations derive consensus through the principles of
due process, openness, and balance of interests. Government standards are
developed by individual federal agencies for their own use. Although unique
government standards sometimes are appropriate, such as standards for
certain specialized military equipment, in other cases, a voluntary standard
would suffice. This creates duplication for industry, which may have to
provide two lines of production to meet both government and private needs,
and can put U.S. companies at a disadvantage in international trade.

To reduce these problems, the act (P.L. 104-113) and the OMB circular direct
federal agencies to use voluntary consensus standards whenever possible. The
circular describes impractical circumstances as those that would fail to
serve the agency's program needs or be inconsistent with the agency mission.
For example, the Navy uses a military standard for the welding of submarine
hulls, in part, because of security considerations. The act also directs
federal agencies to consult with and participate when appropriate in
standards-setting organizations and provide explanations when they do not
use voluntary consensus standards in their procurement or regulatory
activities. The act provides specific direction to NIST concerning its
coordination role. The circular establishes policies to implement the act.

The act and circular also direct federal agencies, NIST, and OMB to report
federal standards-setting activities. The act requires federal agencies to
notify OMB when they choose not to use voluntary consensus standards and
requires OMB to report annually to the Congress summarizing the agencies'
explanations for not using voluntary consensus standards. However, the act
does not specify a deadline for OMB's report. The circular directs the
agencies to report to NIST, by December 31st of each year, agencies'
explanations and other information, including the number of federal
employees participating in voluntary consensus standards organizations, the
number of voluntary standards substituted for government standards, and any
recommendations for changes that OMB should make to the circular. The
circular directs NIST to forward this report to OMB by January 31st of the
following year.

NIST's and OMB's Activities

In the 4 years since the act was passed, NIST and OMB have taken a number of
steps to further the act's implementation by federal agencies. NIST has
initiated several activities to guide federal agencies' use of voluntary
consensus standards. For example, NIST chairs the Interagency Committee on
Standards Policy, which seeks to promote consistent standards policies and
to foster cooperation among the federal government, U.S. industry, and
standards-setting organizations. As chair of the committee, NIST, through
the Secretary of Commerce, asked each federal agency to designate a
Standards Executive to serve on the committee and coordinate the agency's
standards activities and implementation of OMB's circular. NIST has also
established the Standards Advisory Committee as a coordination mechanism
within NIST for matters related to standards and conformity assessment. One
of its tasks is to devise a strategic approach on adopting and using
standards within NIST. According to agency officials, this strategic
approach could then be used as a model by other federal agencies. NIST
recently proposed guidance on federal conformity assessment activities and
has also produced reports designed to guide federal agencies on such issues
as lab accreditation and policies of the International Organization for
Standardization, an international standards writing organization.

NIST has also taken actions to coordinate the identification and use of
standards by federal agencies. For instance, it has worked with the American
National Standards Institute to develop the National Standards Systems
Network, a web site that agencies can use to search for standards
information from many sources, including standards-setting organizations.
NIST has also convened meetings with representatives of federal agencies,
U.S. industry, and standards-setting organizations. According to NIST
officials, the objective of these meetings is to increase federal agencies'
and private industry's understanding of how standards are set as well as
promote dialogue among these groups.

In overseeing agencies' use of voluntary consensus standards, OMB works
directly with agencies only as a member of the Interagency Committee on
Standards Policy. OMB does not direct each agency's day-to-day compliance
with the act. It is NIST's role to inform federal agencies about standards
and help them comply with the act and the circular. However, OMB officials
noted that they would talk to agencies that were not complying. Since
revising the circular, OMB's efforts have focused primarily on its review
and approval of NIST's annual summary of federal activities on standards
that OMB submits to the Congress.

Reporting Deadlines Have Not Been Met

OMB provided its report to the Congress on federal agencies' standards
activities for fiscal year 1998 in March 2000, about 18 months after the
close of the fiscal year. Delays occurred in each stage of the reporting
process. For example, 12 agencies-about one-half of those reporting-provided
their input to NIST for fiscal year 1998 after the December 31st deadline.
Among these were 9 of the 14 Executive Departments, including the
departments of Education, Justice, Labor, Transportation, Health and Human
Services, Housing and Urban Development, State, Agriculture, and Veterans
Affairs. NIST received its last submission-from Veterans Affairs--in March
1999. OMB officials offered three reasons why the agencies have reported
late. First, the agencies have not had an opportunity to fully establish
their process for using, reviewing, and reporting standards. Second, the Y2K
issue required staff resources to be focused on that challenge. Third, the
agencies have not had the resources to report as expeditiously as possible.

NIST, in turn, provided OMB with the agencies' submissions about 8 months
after the January 31st deadline OMB gave NIST in the circular. In part,
NIST's report was late because some of the agencies did not report on time.
NIST officials stated that, after receiving the last agency submission in
March 1999, NIST was directed by OMB to wait for additional submissions from
agencies that had not reported, and NIST did so. However, NIST had not
developed a definitive list of which agencies should report. As a result, it
could not determine when all agencies' submissions were in. According to OMB
officials, several agencies have stated that they should not be required to
report because they are not involved in standards-setting activities but
only one agency, the United States Agency for International Development,
notified NIST in writing of its intention not to file a report. We believe
this lack of clarity contributed to NIST's delay in reporting to OMB. NIST
officials also noted that its reporting time was lengthened by its own
internal review and OMB's request that NIST obtain comments from the
Interagency Committee on Standards Policy.

OMB provided its report to the Congress on standards activities in fiscal
year 1998 about 6 months after receiving NIST's report. OMB stated that this
time was necessary because of revisions it requested from NIST and other
demands on its resources, such as Y2K issues. It should be noted that OMB
provided its fiscal year 1997 report to Congress about 8 months after
receiving NIST's submission. Its fiscal year 1999 report is under
development.

Agencies' Compliance Efforts

DOD and EPA-the two agencies you asked us to specifically address in our
review--have taken steps to comply with the act and circular. These agencies
have differed in their approaches, however. DOD has gradually increased its
use of voluntary consensus standards in procurement, while EPA has increased
its awareness of these standards in its rulemaking activities. According to
officials with OMB and NIST, DOD's and EPA's efforts are similar to the
progress most federal agencies are making. The reporting measures
established in the circular do not assess agencies' efforts in assisting
U.S. competitiveness. As a result, we cannot measure the progress being made
against this objective.

DOD Has Started To Use More Voluntary Consensus Standards

Since the passage of the act, DOD has begun to increase its use of voluntary
consensus standards. However, the effort to do this began prior to the act's
passage. In particular, DOD completed a major review of all military
specifications in 1994. As a result of this review, DOD replaced many
military specifications with voluntary consensus standards. More recently,
according to DOD officials, the Department has developed procedures to (1)
identify outdated specifications and replace them, whenever possible, with
voluntary consensus standards and (2) help ensure that DOD-developed
standards do not proliferate. To eliminate outdated military specifications,
every 5 years, DOD reviews military standards that previously have not had
voluntary consensus counterparts to determine if these standards could be
replaced with new voluntary consensus standards. To reduce the creation of
new standards, DOD's senior executives must approve projects with new
DOD-developed standards. To control use of existing standards, DOD requires
an executive outside of the originating program office to issue a waiver.

DOD's annual reports on its standards activities from fiscal year 1997
through fiscal year 1999 indicate that DOD is gradually increasing its use
of voluntary standards, although the reports do not indicate how many
military standards were adopted or continued to be used during these years.
For example, in fiscal year 1997, DOD reported that it adopted an additional
73 voluntary standards and replaced 58 DOD standards with voluntary
standards. By fiscal year 1999, these numbers had gone up to an additional
627 voluntary standards adopted and 491 DOD standards replaced.

EPA Has Increased Its Consideration but Not Its Use of Voluntary Consensus
Standards

The passage of the act and revisions to OMB's circular, which extended its
directions to regulatory agencies, caused EPA to focus attention on the use
of voluntary consensus standards. EPA had initiated efforts to use voluntary
consensus standards in its rulemaking activities before the act's passage,
but the agency placed greater emphasis after the law's enactment on
obtaining access to voluntary consensus standards and identifying which of
them could replace EPA standards. For example, in 1997 EPA appointed its
first Standards Executive to coordinate the agency's response to the act. To
respond to the reporting directions in the revised circular, EPA established
a system in 1998 to keep track of rule makers' use of voluntary consensus
standards. The agency obtained access to the National Standards Services
Network, which provides information on voluntary consensus standards. EPA
has also set up training sessions for rule makers to learn about using the
network and prepared a draft rule writers' guide that emphasizes
consideration of voluntary standards.

EPA's reports on its standards activities from fiscal years 1997 through
1999 indicate that EPA increased its awareness and consideration of
voluntary consensus standards in regulatory actions and its ability to
report on their use in accordance with the act. For example, in fiscal year
1997, EPA was not able to determine how often it had used
government-developed standards in lieu of voluntary consensus standards.
Over the course of the next year EPA established a database that enabled it
to track this information for each transaction. Thus, in its fiscal year
1998 report, EPA identified three final regulations in which a voluntary
consensus standard was rejected in favor of a government standard. EPA
provided a detailed rationale for each instance. In its fiscal year 1999
report, EPA identified 13 final rules where the agency had rejected more
than 78 existing voluntary consensus standards based on impracticability,
including a lack of validation data and the standard's inability to be
broadly applied.

Despite its increased consideration of voluntary consensus standards, EPA
appears to have used fewer such standards in fiscal year 1999 than it did in
fiscal year 1997. For example, in fiscal year 1997, EPA reported that a
total of 31 final rules used or made reference to various voluntary
consensus standards. In fiscal year 1999, this number had dropped to nine
final rules and six proposed rules adopting voluntary consensus standards or
proposing that they be adopted.

According to OMB and NIST, Other Agencies Are Also Complying

OMB and NIST officials told us that other agencies have also increased their
consideration and use of voluntary consensus standards in compliance with
the act. This performance reflects that many agencies were using voluntary
consensus standards-in compliance with earlier editions of the
circular-before the act's passage. In addition, according to OMB officials,
federal agencies currently develop very few government-specific standards in
lieu of voluntary consensus standards. Furthermore, they believe that
agencies are complying with the act because they have received no complaints
from the private sector about the agencies' practices. The private sector
would have an incentive to voice disagreement if the agencies were
continuing to use government standards unnecessarily.

Observations

While we can document progress by federal agencies in complying with the
National Technology Transfer and Advancement Act, we were unable to make a
qualitative assessment of the effectiveness of agencies' compliance efforts
in assisting U.S. competitiveness. The annual report on agencies'
standards-setting activities includes information on agencies' activities,
not on the impact of these actions on U.S. industry. While we recognize the
value of having agencies report increasing consideration and use of
voluntary consensus standards, for the Congress to determine whether the
agencies' activities are effective, more information is needed on whether
standards used by agencies are reducing duplications in production lines or
assisting U.S. competitiveness in trade.

We conducted our review from February to March 2000 in accordance with
generally accepted government auditing standards. We provided OMB, NIST,
DOD, and EPA with a draft of the testimony for review and incorporated their
suggestions where appropriate.

This concludes my statement. If you or other members of the Subcommittee
have any questions, we will be pleased to respond to them.

----

Contact and Acknowledgments

For additional information, please contact Jim Wells at (202) 512-3841.
Individuals making key contributions to this testimony were Kathy Hale,
Robin Nazzaro, Daren Sweeney, and Mindi Weisenbloom.

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