April 20, 1998

Mr. Raymond Kammer
Director
National Institute of Standards and Technology
U.S. Department of Commerce
Building 820, Room 306
Gaithersburg, MD 20899

Dear Mr. Kammer:

On April 14, 1998, the National Institute of Standards and Technology through the Department of Commerce issued a final rule under the Fastener Quality Act to allow for the use of quality assurance systems as a permissible alternative to NIST's and the Department's overall product testing and accreditation system for the fastener industry. It is our understanding that the purpose of this regulation was to provide a second option for compliance with the implementing regulations which were published as final on September 26, 1996.

Advocacy recognizes that the process for developing the regulations implementing the Fastener Quality Act (P.L. 101-592 as amended by P.L. 104-113) has been long and arduous. The process, which began in 1990 with the passage of the FQA has resulted in two final rules and a legislative amendment. (See attached chronology for further clarification.) This office is also aware of and appreciates the accommodations the agency made to the April 14, 1998 final rule. These include:

• further delay in the implementation date to allow more accredited laboratories to come on line;
• accommodation for product manufactured prior to the implementation date to claim compliance with the FQA under certain circumstances, which should relieve some backlog pressures on laboratory certification;
• permission for QAS facilities to self-certify and to be included in the requisite facilities list if certain information is provided to NIST within 210 days, with the full registration process to be completed by May 25, 1999.

The Office of Advocacy, however, continues to hear from small businesses concerned about the sweeping impact of the Act and the implementing rules. Some of the small business comments reflect a misunderstanding of the law,

the implementing regulations and the Small Business Regulatory Enforcement Fairness Act (SBREFA). We are also hearing from small business that NIST allegedly is not responding to inquiries for clarification and interpretation of the rules. Concerns being raised include:

• Small businesses believe that the number of approved laboratories continues to be insufficient to meet demand. Some companies are finding that laboratories are not geographically distributed to meet demand and that the approved laboratories may fail to provide for a full range of services needed to accommodate fastener manufacturers;
• Some manufacturers believe that their entire production of fasteners must be tested, which is extremely costly, and even more so if the testing laboratory in not nearby; and
• Limited information has been provided to industry regarding applicability, interpretation and enforcement of the regulations.

Many of these issues stem from the regulation finalized on September 26, 1996. However, it is our perception that there is a general sense of confusion and frustration among the small businesses which comprise the fastener industry.

With implementation scheduled to commence on July 26, 1998 we strongly encourage the Department through NIST and/or other appropriate offices to increase its educational and outreach efforts to small businesses. The Small Business Regulatory Enforcement Fairness Act requires agencies to provide compliance assistance to small businesses. Specifically, SBREFA (Pub. L. No. 104-121, §212-§213, 110 Stat. 858 (1996)) requires agencies to:

1. develop small entity compliance guides for rules published after June 28, 1996 for which an agency was required to prepare a final regulatory flexibility analysis (this provision applies to NIST's September 26, 1996 rule);
2. establish a program to answer inquiries from small entities concerning information and advice about compliance with statutes and regulations, and interpretation of the law; and
3. report to Congress by approximately June 28, 1998 on the scope of the agency's small business program, including the number of small entities using the program, and the achievement of the program to assist small entities comply with agency regulations.

Again, Advocacy recognizes the strides NIST took to accommodate small businesses when finalizing the quality assurance rule on April 14, 1998. At the same time, we continue to receive calls from small businesses concerned about how to comply with the overall regulatory and statutory scheme of the fastener quality program. To the extent that confusion remains widespread, if it does, the effectiveness of the Act and the rules will be undermined. Small businesses may over test and incur unnecessary costs. This can only further undermine NIST's efforts. Therefore, we strongly urge the Department of Commerce and NIST to ensure that comprehensive compliance assistance is available to small entities.

Sincerely,

Jere W. Glover
Chief Counsel for Advocacy

enclosure: as stated

cc: Dan Cohen, Attorney Advisor
Department of Commerce