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--> 3 Conformity Assessment In Chapter 1, seven functions of product and process standards were described: fostering commercial communication; diffusing technology; raising productive efficiency; enhancing market competition; ensuring physical and functional compatibility; improving process management; and enhancing public welfare (see Table 1-1). To succeed in these functions, standards must be well designed, based in sound technology, appropriate to the task at hand, and accepted as valid and useful by the population of users. The U.S. system for developing standards that meet these conditions is examined in Chapter 2. A standard that meets these criteria, however, still fails to have the effect its developers intended if products designed to conform to it do not, in practice, conform. Conformity assessment is the comprehensive term for measures taken by manufacturers, their customers, regulatory authorities, and independent, third parties to assess conformity to standards. Conformity assessment and standardization are separate activities. The two are, however, closely related. Conformity assessment depends on the existence of unambiguous standards against which products, processes, and services are assessed. Conformity assessment enhances the value of standards by increasing the confidence of buyers, users, and regulators that products actually conform to claimed standards.1 The United States has an extensive and increasingly complex conformity assessment system.2 Like the standards development system, it has evolved in a decentralized manner. As the needs of industry, government and society have changed and grown, particularly in the past 20 years, new elements and new layers of complexity have become part of the system. While each element has been motivated by specific marketplace or regulatory demands, the overall growth
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--> of the system has been uncoordinated. As discussed in this chapter, the result is the imposition of large costs associated with duplication, redundancy, and unnecessary complexity on testing laboratories, product certifiers, manufacturers, and ultimately, their customers. Conformity assessment comprises four areas (see Figure 3-1). For convenience of discussion, the terms used in this figure focus on manufactured products.3 The same concepts, however, also apply to conformity of processes and services. The first area, manufacturer's declaration of conformity, is assessment by the manufacturer based on internal testing and quality assurance mechanisms. Second is testing of products, parts, and materials performed by independent laboratories as a service to the manufacturer. Independent testing may be of value to the manufacturer as an outside confirmation of in-house test results; it may be required by a customer as a condition of sale; or it may be mandated by a regulatory agency. Independent testing services may also enable small manufacturing firms to operate without the need to maintain an in-house testing capacity. The third area is certification, formal verification by an unbiased third party, through testing and other means, that a product conforms to specific standards. Familiar examples of certification, among many others, are the Underwriters Laboratories product safety certification (the UL mark) and the U.S. Department of Agriculture quality grade for meat and poultry. The final area is quality system registration, the result of independent audit and approval of the manufacturer's quality system. A quality system is a management system, including procedures, training, and documentation, for ensuring consistency in product quality. Quality system registration is not an assurance of product quality; rather, it is a component of broader mechanisms for assessing products. The purpose of these conformity assessment activities is to provide the relevant parties—such as the purchaser of a product or the regulatory agency with authority over a product—with whatever degree of confidence is needed in a particular circumstance. For a purchaser, that circumstance is the decision on whether to buy; for a regulator, it is the decision to approve or disallow the product for use or installation. In the absence of independent assurance of product conformity to standards, a purchaser or regulator must take the manufacturer's word that the product conforms. In most situations, as discussed below, this level of assurance—the manufacturer's declaration of conformity—is entirely sufficient and appropriate. Other elements of the conformity assessment system have evolved to meet the need for additional assurance in specific situations. The uncoordinated manner in which the system has grown and continues to grow, however, has raised costs and created obstacles to both domestic and international commerce. This chapter identifies strengths and weaknesses in the U.S. conformity assessment system. To the extent possible, given the limited availability of economic data about the system, the economic impact of these inefficiencies is also examined. Interconnections between U.S. and international conformity assessment
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--> THIRD—PARTY ACTIVITIES Manufacturer's Declaration of Conformity Product Testing Product Certification Manufacturing Processes: Quality System Registration LEVEL 1: ASSESSMENT Manufacturer's own testing and quality assurance; BY: manufacturer Testing of products, components, materials, etc.; BY: independent laboratory Certification of products against a standard or set of standards; BY: product certifier Audit and registration of manufacturer's quality assurance system (e.g., against ISO 9000 standards); BY: quality system registrar LEVEL 2: ACCREDITATION Acceptance; BY: customer or regulatory authority Accreditation of laboratory's competence; BY: laboratory accreditation program (private or government) Accreditation of certifier; BY: certifier accreditation program (private or government) Accreditation of quality system registrar; BY: registrar accreditation program (private or government) LEVEL 3: RECOGNITION Acceptance; BY: customer or regulatory authority Official recognition of laboratory accreditation program; BY: government* Official recognition of certifier accreditation program; BY: government* Official recognition of registrar accreditation program; BY: government* FIGURE 3-1 Conformity Assessment System Framework (mechanisms for ensuring that products conform to standards). NOTE: ISO = International Organization for Standardization. * Government recognition programs are in very early stages of development.
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--> systems and their effect on U.S. international trade performance are discussed in Chapter 4. Conformity Assessment System Framework The first level of the framework shown in Figure 3-1, assessment, represents the primary level at which the four activities of conformity assessment take place. At level 1, manufacturers, testers, certifiers, and quality system registrars evaluate products, processes, and services. These evaluations are the direct substance of conformity assessment—the comparison of a product to a standard. The second and third levels of the framework, accreditation and recognition, represent activities to evaluate the competence of the assessors operating at levels 1 and 2, respectively. Accreditation (of laboratories, certifiers, and registrars) and recognition (of accreditors) add additional layers of complexity and expense to the system. They have evolved in response to specific commercial and public sector demands. They add cost to the system, however, and have frequently been implemented in an uncoordinated, redundant fashion. This is the case in both the public and the private sectors, discussed below. Manufacturers' internal assessment procedures, leading to a manufacturer's declaration of conformity, are the simplest and oldest form of conformity assessment. The vast majority of commercial transactions take place without third-party assessment of product conformity.4 Most manufacturers, especially large-and medium-sized firms, conduct their own testing and quality assurance to some degree of precision. In the marketplace, the buyer looks at a product, reads the packaging or advertising, and makes a decision. The buyer accepts the manufacturer's statements about the features of a product based on trust—and, to the extent feasible, on inspection of the product before buying it. This trust is, of course, founded on the customer's freedom to switch to a competitor's product if dissatisfied. Success and failure in the marketplace give manufacturers powerful incentives to support claims and maintain consistent quality. Truth-in-advertising laws, which are enforced by the Federal Trade Commission, also motivate manufacturers to ensure that products conform to advertised characteristics.5 The threat of private liability claims related to nonconforming products is also a strong incentive facing manufacturers. Conformity to safety standards—whether voluntary or regulatory—does not necessarily protect manufacturers against damage awards in product liability lawsuits. A finding that a product that harmed someone failed to conform6 to relevant standards, however, is highly likely to result in an award of compensation. It is therefore in the manufacturer's interest to verify compliance with relevant standards. Certification of conformity by a third party does not free the manufacturer from liability. As a result, manufacturers of potentially dangerous products generally maintain internal testing and assurance procedures, even if they also seek third-party assessment.7 In some situations, a purchaser needs a stronger guarantee of product conformity
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--> than is provided by the freedom to change suppliers. This is increasingly true in capital-goods sectors. A case in point is that of manufacturers who purchase large volumes of parts, systems, or materials from suppliers (who, in turn, may purchase from lower-tier suppliers). The purchase contract between manufacturer and supplier provides formal specifications, or standards, that the supplied products must meet. If the purchaser must wait until delivery to inspect the product and send defective parts back to the supplier, the cost of delays in production while waiting for replacement parts—or finding a new supplier—can be very high. The rise of "just-in-time" manufacturing processes, with minimized inventories and requirements for instant supply of defect-free parts from external suppliers, has increased the cost of delays.8 Second-party conformity assessment is an outgrowth of this type of demand for assurance. In second-party assessment, only the two parties, supplier and purchaser, are involved, and the purchaser's own inspectors perform the assessment. By inspecting the supplier's production line, manufacturing processes, and samples or batches of parts before they leave the supplier's factory, a purchaser can gain confidence in the supplied products and reduce the potential for delays in his or her own production line. The benefit of obtaining this assurance, however, must be weighed against the cost of performing assessments.9 Third-party assessment is the sector of the conformity assessment system that has grown most in recent years.10 In most commercial interactions, there is no need for the added expense and complexity of third-party conformity assessment. There are, however, two sets of circumstances in which relying on the manufacturer's declaration and the purchaser's own assessment is inadequate. In these situations, assessment by a neutral third party is necessary or desirable. First, concerns about the safety, health, or environmental impact of a product are sometimes too important to be left to the manufacturer's own assessment and too expensive or technically difficult for the customer to perform. This is true, for example, of products whose failure could lead to injury, illness, property damage, or loss of life. In these cases, it is unacceptable to discover the product's nonconformity after a failure has occurred. Much of the U.S. conformity assessment system exists specifically to address this type of safety, health, and environmental concern. In regulated product sectors, such as aircraft, automobiles, agricultural chemicals, heavy machinery, and drugs, a regulatory authority requires competent, prior assurance of conformity to relevant standards before a product can be accepted and used.11 At lower levels of risk, this assurance may simply be the manufacturer's own declaration of conformity. This level of assurance imposes the least costs on industry and consumers. Many regulations, however, require third-party assessment to verify product safety. Drug safety certification required by the Food and Drug Administration is an example of a federal program of this type.12 Third-party assessment requirements for regulatory enforcement should be limited, ideally, to product
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--> sectors in which serious risk of harm justifies the cost burden of imposing third-party assessment. Unregulated products may also be subject to third-party assessment as a result of marketplace demands. Purchasers may choose to demand independent, private assessment of product safety. They may, for example, buy only products bearing a recognized third-party certification mark, such as the Underwriters Laboratories UL mark or the American Gas Association Laboratories seal. One major retail chain, as a matter of policy, rarely markets electrical appliances not bearing the UL label.13 Many voluntary product safety standards, and the institutional mechanisms that assess conformity to them, were in fact developed to meet needs not covered by government regulations. In some cases, private certification programs are developed by an industry to forestall government regulatory intervention.14 The second category of demand for independent assessment applies primarily to the relationship between manufacturers and their primary, secondary, and tertiary suppliers of parts and materials. As noted previously, purchasers may demand prior assurance that parts will conform to contract specifications, rather than relying on postdelivery inspection. The purchaser may choose to rely on a neutral third party to provide this assurance, rather than performing these assessments directly. Whether assessment is second party or third party, a range of approaches is available. For completeness, every single part could be inspected for conformity to the contract specification. Inspection of 100 percent of the parts is costly, however, and justifiable only if the consequences of a single nonconformity would be severe. An intermediate form of assessment involves inspection of samples of the supplier's product, combined with an assessment of the supplier's overall system for maintaining consistent product quality. In select circumstances, third-party conformity assessment has advantages over second party for meeting the needs of suppliers and manufacturers. In an industry in which each supplier sells to many purchasers, it is redundant for each supplier to be audited and approved by every manufacturer, all performing essentially the same assessment. A single assessment of the supplier by a competent third party can, in this case, replace multiple second-party assessments.15 The remainder of this chapter focuses on third-party conformity assessment, rather than second party or manufacturer's declaration. There are two reasons for this focus. First, the activities of a manufacturer and purchaser to assess conformity are less a matter of public policy than they are the internal, competitive concern of the firm. They are intimately tied to research and development, testing, manufacturing process management, inventory control, and other activities within a firm's operations. As such, they are not directly within the scope of this study. Second, third-party assessment is the portion of the system in which the greatest growth and complexity have appeared, as discussed in the next two sections.
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--> Testing And Certification Product Testing Independent laboratories that perform testing services for clients comprise the largest share of the U.S. conformity assessment system. The Bureau of the Census publishes an annual survey of U.S. service industries. This survey provides an indication of the size and rapid rate of growth of the independent testing industry. Testing laboratories (Standard Industrial Classification Code 8734) that are subject to federal taxes accounted for a total revenue of more than $5.1 billion in 1992, an increase of 6.8 percent over 1991 (see Table 3-1). An average annual growth of 13.5 percent from 1985 to 1992 indicates a very high rate of expansion in this sector, mirroring the overall rapid growth in third-party conformity assessment in the United States.16 More detailed data are available in the TABLE 3-1 —U.S. Independent Laboratory Testing Services—Total Revenues (millions of dollars) YEAR TOTALa FOR-PROFIT FIRMS NOT-FOR-PROFIT FIRMSa 1985 2,324 2,121 203 1986 2,370 2,163 207 1987 2,624 2,395 229 1988 3,438 3,138 300 1989 4,180 3,815 365 1990 4,977 4,543 434 1991 5,330 4,817 460 1992 5,637 5,145 492 a Estimated, except 1987. SOURCES: U.S. Bureau of the Census. Census of Service Industries: Subject Series, Miscellaneous Subjects. Summary pp. 4-9 and 4-11. Washington, D.C.: U.S. Government Printing Office, 1987. U.S. Bureau of the Census. Service Annual Survey: 1992. P. 18. Washington, D.C.: U.S. Government Printing Office, 1994. U.S. Bureau of the Census. Service Annual Survey: 1991. P. 25. Washington, D.C.: U.S. Government Printing Office, 1993.
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--> Census of Service Industries, published every five years. The most recent edition, for 1987, divides revenues in the industry between firms subject to federal income tax (91 percent of the total) and tax-exempt, or not-for-profit, institutions (9 percent).17 These data do not, however, capture the full scale of third-party testing. Many of the more than 400 members of the American Council of Independent Laboratories (ACIL), the industry association for testing laboratories, are classified as engineering services firms rather than laboratories.18 These firms are members of ACIL because a significant share of their business consists of testing services. Their revenues from testing are not, however, separately identified in the Census Bureau data.19 Engineering services totaled $61.5 billion in revenue in 1992.20 When the number and size of ACIL members that identify themselves as engineering services firms are taken into account, and the Census data are scaled accordingly, independent laboratory services in the United States are estimated to be a $10.5 billion industry. Testing services encompass a broad spectrum of technical activities and competencies. The International Organization for Standardization (ISO) definition of a test, in the context of conformity assessment, is a "technical operation that consists of the determination of one or more characteristics of a given product, process or service according to a specified procedure."21 Materials, parts, and completed products may all be tested for their physical properties, such as strength and durability; physical dimensions; electrical characteristics, including interference with other electrical devices; acoustical properties; chemical composition; presence of toxic contaminants; and multitudes of other features. Testing laboratories serve several categories of clients. The 1987 Census of Service Industries separates the receipts of independent testing laboratories, by class of client, into 8.7 percent federal government, 4.9 percent state and local governments, and 86.4 percent other clients—mainly private industry. Manufacturers rely on independent testing as a check against their own tests. Testing against specific standards provides independent data to support manufacturer's declarations of conformity to purchaser specifications or government regulations. Purchasers—including large manufacturers and government procurement agencies—rely on third-party testing to verify the conformity of parts and products to their stated specifications. Regulations frequently require manufacturers to show compliance through results of independent testing. The Occupational Safety and Health Administration (OSHA), for example, requires equipment used in the workplace to be tested by an independent laboratory accredited under OSHA's Nationally Recognized Testing Laboratory (NRTL) program.22 Product Certification Certification is a form of conformity assessment that involves determining whether a product, process, or service meets a specific standard or set of standards.
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--> Certification is a ''procedure by which a third party gives written assurance that a product, process or service conforms to specified requirements."23 It is, by definition, exclusively a third-party activity. In the past, the manufacturer's declaration of conformity was sometimes referred to as "self-certification." The term caused confusion, however, and has been dropped both internationally and by the American National Standards Institute (ANSI) accredited committee for writing certification procedural standards, Committee Z34.24 Certification usually requires performance of product tests. The testing component of U.S. certification activities is included in the industry revenues data in Table 3-1; however, aggregate data on revenues from certification as a whole are not available. Certification is distinguished from testing by three key features. Certification always measures a product (or process or service) against one or more specific standards, whether mandatory, voluntary, or de facto. Testing, by contrast, does not necessarily measure against any specific standard. Second, certification is always performed by a third party, independent of either the supplier or the purchaser. Finally, certification results in a formal statement of conformity—a certificate—that can be used by the manufacturer to show compliance with regulations, meet purchasing specifications, and enhance the product's marketability. The certifier often licenses the manufacturer to print a certification mark on the product or its packaging, potentially increasing its acceptability to the buying public. Certification marks are the property of the certifier and are registered with the U.S. Patent and Trademark Office.25 Certification may encompass many different levels of complexity and expense, depending on the characteristics of the product and the degree of need for confidence in the product's conformity to standards. The more complex and intrusive the certification program is, the greater is its cost.26 In sectors with high demands for safety and reliability, certifiers may require a relatively intensive certification process, involving multiple tests, one or more factor inspections, and testing of large numbers of product samples. Lower levels of need for assurance may be satisfied by type testing—the testing of one or a few samples as typical of all products with the same design and materials. Some certification programs require follow-up testing of additional samples obtained at the factory or on the open market in order to maintain certified status. Evaluation of the manufacturer's quality assurance system is part of some certification schemes, as discussed in the next section. Private and Public Certification Programs in the United States There are more than 110 private-sector product certifiers in the United States.27 Many private-sector certifiers are also independent testing laboratories. Some certifiers, mainly those operating smaller programs, certify products on the basis of tests performed by other facilities. These tests must be performed by laboratories that are independent of the manufacturer. Whether testing is performed
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--> by the certifier or an independent laboratory, the certifier's role is to interpret the standard and judge whether the test results justify declaring the product to be in conformance.28 The majority of third-party certifiers in the United States are private, for-profit testing laboratories. As discussed in the previous section, these represent a large and growing service industry. In addition to providing testing services, many of these laboratories take the additional step of certifying products as meeting particular standards. Members of the ACIL that test and certify products include, among many others, ETL Testing Laboratories, for consumer appliances, sports equipment, safety glass, and other areas; United States Testing Company, for areas such as toy safety and toxicology; and MET Electrical Testing Company, for workplace safety, telecommunications equipment, and others.29 A number of broadly familiar certification programs, many of which incorporate their own certification marks, are conducted by private, not-for-profit organizations. Underwriters Laboratories (UL), founded in 1894, is one of the oldest certifiers in this country. UL is a major standards developer in the consumer product safety area, with more than 600 published safety standards.30 It is also a leading tester and certifier of products, devices, and materials. UL certification of product safety—known as "listing" the product—authorizes the manufacturer to print UL's certification mark on the product or its packaging. Another not-for-profit testing and certification organization is the Factory Mutual Research Corporation. Factory Mutual tests and lists approved products as part of a series of activities to reduce industrial property damage.31 NSF International is a private, not-for-profit certifier in the areas of public health and the environment. NSF, like UL, is also a developer of ANSI-approved consensus standards. NSF's product standards and certification activities include, for example, a drinking water additives program initiated in 1985 under a cooperative agreement with the U.S. Environmental Protection Agency (EPA). NSF certifies products for compliance with ANSI/NSF Standards 60 and 61, for drinking water treatment chemicals and water system components. These certifications are accepted for regulatory purposes by the EPA and state regulators.32 The American Gas Association (AGA) certification program has been in operation since 1925. AGA tests in its own laboratories and certifies gas appliances and accessories, including furnaces and cooking appliances. Requirements for AGA certification, besides testing, include a review of design information and construction parameters, as well as factory and quality control inspections.33 Other industry association-operated certification programs include those of the Air Conditioning and Refrigeration Institute, for air conditioners and water coolers, and the Association of Home Appliance Manufacturers, for refrigerators, air conditioners, and dehumidifiers. The National Board of Boiler and Pressure Vessel Inspectors certifies boilers and components, water heaters, and nuclear reactor installations for compliance
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--> with the American Society of Mechanical Engineers' Boiler and Pressure Vessel Code. A professional association-operated program that is likely familiar to many consumers is that of the American Dental Association (ADA), whose certification mark is printed on toothpaste tubes. The ADA assesses product specifications provided by the manufacturer and tests samples purchased on the open market.34 Construction and building materials certification is an area of great activity and complexity in the U.S. system that overlaps the public and private sectors. As noted in the previous chapter, state and local governments are responsible for establishing safe building codes. To meet this responsibility, hundreds of these agencies have established mandatory requirements by reference to private certification programs. Private programs are operated by a variety of model building code organizations. These include the Building Officials and Code Administrators International, the International Conference of Building Officials, and the Southern Building Code Congress International.35 These organizations compete with one another for certification business. In the absence of reciprocal recognition among these programs, manufacturers of building products and materials must seek multiple, redundant certifications to sell in multiple jurisdictions.36 States are active in other areas of product certification in addition to building materials. The most recent comprehensive directory of such programs, compiled by NIST in 1987, identifies states with regulations in products sectors ranging from agriculture and alcoholic beverages to consumer goods, machinery, and transportation.37 Some of the sectors with the broadest coverage among states are agricultural commodities, regulated by 43 states; plant nursery stock, 47 states; road and bridge construction materials, 49 states; and measuring and weighing devices, all 50 states. Requirements for certification in most product sectors vary by state. Activities to harmonize these requirements on a nationwide basis, however, are limited. One exception is in the area of weighing and measuring devices. These devices are required to be certified in order to ensure accurate, reliable measurement of commodities for sale. Under the leadership of the National Institute of Standards and Technology (NIST), the National Conference on Weights and Measures has worked to foster mutual recognition among more than 3,000 state and local weights and measures authorities throughout the United States. Through a network of agreements among these authorities, products may be weighed, measured, and packaged in one jurisdiction without having to be remeasured when shipped elsewhere in the United States.38 Although specific estimates of U.S. economic benefit from this program do not exist, it is clear that the economies of scale created by this country's large domestic market would be reduced if the free flow of domestic commerce were interrupted for reweighing of packaged products at state lines. A 1988 directory published by NIST lists 84 certification programs run by federal agencies. These draw their authority from a range of federal laws and
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--> AGENCY TITLE OF PROGRAM PURPOSE City of Atlanta, Ga. Department of Planning and Development Code Compliance Office To approve agencies that provide an identification symbol or label as a recognized testing laboratory City of Chicago, III. Electrical Inspection Section Accreditation as a Recognized, Independent Electrical Testing Laboratory To accredit as nationally recognized standards testing laboratories, organizations whose testing and listing services are acceptable City of New Orleans, La. Department of Safety and Permits Recognized Safety Testing Laboratory Evaluation of laboratories for recognition as safety testing laboratory City of New York, N.Y. Department of Buildings Acceptance of Testing Service or Laboratory Determination of acceptability of testing and inspection laboratories and firms to provide data on compliance of products on installation
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--> City of Cleveland, Oh. Board of Building Standards and Building Appeals Approved Testing Laboratory Listing To list approved testing laboratories for energy, electrical safety, and gas-fired appliances City of Portland, Oreg. Bureau of Buildings Electrical Testing Laboratory Approval Program Approval of laboratories that are permitted to test and certify or label electrical equipment for sale or use in the city City of Richmond, Va. Electrical Department Laboratory Acceptance Program Acceptance of laboratory judged to be a recognized testing lab for the inspection and approval of appliance, devices, or materials in accordance with the National Electrical Code SOURCE: Hyer, Charles W. ed. Directory of State and Local Government Laboratory Accreditation/Designation Programs. NIST Special Publication 815. U.S. Department of Commerce. Gaithersburg, Md.: NIST, 1991.
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--> TABLE 3-4 —U.S. Private Sector Testing Laboratory Accreditors ORGANIZATION FIELDS OF TESTING Air Movement and Control Association Acoustic/vibration measurement, construction materials, electrical, mechanical, and thermal American Architectural Manufacturers Association Construction materials, mechanical, and thermal American Association for Laboratory Accreditation Acoustic/vibration, biological, chemical, construction materials, electrical, geotechnical, mechanical, medical, metrology, nondestructive, optics and photometry, and thermal American Association of Motor Vehicle Administration Acoustic/vibration, chemical, electrical, mechanical, and optics and photometry American Association of State Highway and Transportation Officials Construction materials American Institute of Steel Construction Chemical, construction materials, and mechanical American Society for Testing and Materials Chemical and mechanical ASTM and NIST Cement and Concrete Reference Laboratory Construction materials American Society of Mechanical Engineers Biological, chemical, electrical, mechanical, metrology, and thermal American Wood Preservers Bureau Chemical, construction materials, and mechanical Associated Laboratories, Inc. Chemical and construction materials Association of American Railroads Acoustic/vibration measurement, chemical, mechanical, nondestructive Board of Accreditation of Concrete Testing Laboratories, Inc. of North Carolina Chemical, construction materials, mechanical Building Officials and Code Administrations International Chemical, construction materials, electrical, mechanical, nondestructive, and thermal Cellulose Industry Standards Enforcement Program Construction materials Corporation for Open Systems International Electrical, mechanical, and ionizing radiation Council of American Building Officials / National Evaluation Service Chemical, construction materials, electrical, mechanical, nondestructive, and thermal ETL Testing Laboratories, Inc. Mechanical and thermal Insulating Glass Certification Council Chemical and mechanical International Association of Plumbing and Mechanical Officials Chemical, construction materials, mechanical, and thermal International Conference of Building Officials Chemical, construction materials, electrical, mechanical, nondestructive, and thermal
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--> ORGANIZATION FIELDS OF TESTING International Electrotechnical Commission Quality Assessment System for Electronic Components Acoustic/vibration measurement, electrical, mechanical, metrology, and thermal Kitchen Cabinet Manufacturers Association Mechanical MET Electrical Testing Company, Inc. Acoustic/vibration measurement, chemical, construction, electrical, mechanical, metrology, and thermal MTL Certification Services Co., Inc. Mechanical National Association of Independent Laboratories for Protective Equipment Testing Chemical, electrical, and mechanical National Board of Boiler and Pressure Vessel Inspectors Construction materials, mechanical, and thermal National Certified Testing Laboratories Mechanical and thermal National Electrical Testing Association Construction materials and electrical National Environmental Balancing Bureau Acoustic/vibration measurement, mechanical, and metrology National Marine Manufacturers Association Acoustic/vibration measurement, chemical, electrical, mechanical, and optics and photometry National Safe Transit Association Mechanical National Wood Window and Door Association Construction materials, mechanical, and thermal Performance Review Institute / NADCAP Acoustic/vibration, chemical, electrical, mechanical, metrology, nondestructive, optics and photometry, and thermal Precast/Prestressed Concrete Institute Construction materials Safety Glazing Certification Council Chemical and mechanical Solar Rating and Certification Program Construction materials, electrical, mechanical, optics and photometry, and thermal Southern Building Code Congress International Acoustic/vibration, chemical, construction materials, mechanical, nondestructive, and thermal U.S. National Electronic Components Quality Assessment System Acoustic/vibration measurement, electrical, mechanical, metrology, and thermal SOURCE: Hyer, Charles W. ed. Directory of Professional/Trade Organization Laboratory Accreditation/Designation Programs. NIST Special Publication 831. U.S. Department of Commerce. Gaithersburg, Md.: NIST, 1992.
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--> Another example of multiple accreditation requirements imposed at the federal level is associated with American Society for Testing and Materials (ASTM) standard testing methods in many product sectors. For example, the standard test method for radiant panels used in lighting is ASTM E648. NVLAP accredits labs for testing to E648. The NRTL program operated by OSHA, however, does not accept NVLAP accreditation in this area, requiring laboratories to obtain a second accreditation. In fact, the GSA Furniture Center; DoD's Defense Electronics Supply Center and Defense Logistics Agency; the U.S. Coast Guard; and the Federal Aviation Administration also require E648 accreditation. In addition, state and local governments may impose their own requirements and are under no obligation to accept any of these federal accreditations—with the exception of NRTL accreditation, which states are required to accept as a result of regulatory preemption by the Department of Labor. The ASTM standard for radiant panel testing is only one of many standard test methods subject to this degree of multiple accreditation.74 Data from three private, independent testing laboratories illustrate the cost burden of multiple accreditation in the U.S. system. Accreditation costs for these laboratories, all of which have average annual revenues from testing of less than $1 million, range from $12,900 to $87,000 per year.75 To meet multiple accreditation requirements, one laboratory is accredited in a single area of testing, electromagnetic interference, by all of the following: NVLAP; the FCC; the U.S. Coast Guard Laboratory Approval Program; DoD's Defense Electronics Supply Center; and a European organization, Interference Technology International. The president of a second laboratory reports that accreditation costs ''could double or triple within the next 3-5 years" because of "unnecessary duplicative costs." Economic data on the aggregate costs to the U.S. economy of multiple accreditation in product testing are unavailable. A 1993 study in a related area, however, provides compelling evidence of potential savings from consolidating redundant accreditation programs. The EPA commissioned a study in 1992 by a special advisory Committee on National Accreditation of Environmental Laboratories (CNAEL).76 Among other key findings, CNAEL concluded that environmental laboratories operating in multiple states face accreditation for the same tests by each state, often with arbitrarily differing criteria. CNAEL performed a detailed cost analysis and identified accreditation costs of $1,400 for small laboratories and between $10,773 and $21,546 for large laboratories. These costs include on-site audit costs, accrediting fees, and performance evaluation sample testing. Aggregating these costs over the environmental testing industry, the CNAEL study found that replacing multiple state accreditation programs with a single, national program would significantly reduce costs. From a current, total cost estimated at between $17 million and $28 million per year, a streamlined system would reduce costs to between $13.5 million and $15.5 million, including a significant administrative fee charged by the national program.77 This reduction
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--> of approximately 28 percent in national economic costs of accreditation would be highly significant if they could be replicated in the much larger sphere of product testing and certification. Accreditation costs and patterns of redundant accreditation requirements, of course, may vary considerably between environmental testing and the wide range of product testing fields. Nevertheless, the findings of the CNAEL study provide important guidance—particularly, in the absence of similar, detailed estimates for the product testing sphere. Government Recognition of Accreditation Services Recognition is the most recent layer to be added to the U.S. conformity assessment system. Recognition involves assessment of the competence of programs that accredit conformity assessment organizations, such as laboratories, certifiers, and quality system registrars.78 Government recognition has the effect of conferring official acceptance, for example, of testing and certification performed by any laboratory accredited by a government-recognized accreditor. By relying on competent, private accreditation services to evaluate testing laboratories, instead of performing those evaluations directly, government agencies can reduce costs while continuing to meet their need for confidence in the reliability of product testing data. Recognition programs, as indicated in Table 1-1, are in an early stage of development. Two U.S. government programs, both operated by NIST, currently involve recognition-level activities. These are the National Voluntary Conformity Assessment System Evaluation (NVCASE) program and NIST conformity assessment activities mandated by Congress under the Fastener Quality Act (P.L. 101-592). The NVCASE program was established by NIST in early 1994. Its goal is to provide for increased access of U.S. products to foreign markets. NVCASE provides a basis for the U.S. government to give assurance to foreign governments of the technical competence of U.S. conformity assessment organizations. This assurance is intended to encourage foreign government acceptance of conformity assessment services performed by U.S. organizations—such as product testing and certification—as meeting foreign regulatory requirements.79 In the absence of foreign government acceptance, U.S. products must be retested for conformity with product regulations in export markets, even when they have been tested and certified within the United States. Issues related to international acceptance of conformity assessment procedures are examined in detail in Chapter 4. NVCASE is a voluntary program. U.S. conformity assessment organizations are not required to seek recognition. Once fully implemented, NVCASE will evaluate U.S. conformity assessment organizations at their request, on a fee-for-service basis, in accordance with internationally accepted standards for conformity
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--> assessment procedures.80 NIST will list approved organizations in a register of recognized U.S. conformity assessment programs. NIST has stated that in order to limit expansion of the government's role in conformity assessment, NVCASE will operate principally at the level of recognition of accreditors and will recognize laboratories and product certifiers in a given product sector or field of testing only if no accreditation program exists in that area.81 In contrast to NVCASE, which applies only to exported products, NIST's activities under the Fastener Quality Act apply to conformity assessment associated with domestic regulatory requirements. The purpose of the act is to regulate the quality of fasteners for private commerce and public procurement.82 The act requires NIST to establish programs both to accredit the competence of laboratories to test fasteners, and to recognize private accreditors of testing laboratories. This program creates a new precedent for U.S. government reliance on recognition of private accreditors to meet the needs of federal regulatory enforcement. As NIST identifies and recognizes private-sector accreditors, NIST-operated accreditation programs in this area will become duplicative and unnecessary. To the extent that recognized, competitive private-sector accreditation services take the place of government-operated programs, such as those under the Fastener Quality Act and others identified in Table 3-2, there is the potential for significant reduction in government costs. Recognition-level activities are likely to increase in importance, for three reasons. First, government recognition has the potential to promote U.S. exports by enabling negotiation of government-to-government agreements for mutual recognition of conformity assessment systems. It was for this purpose that NVCASE was created. Prospects for mutual recognition agreement negotiations with U.S. trading partners, as well as the role of NVCASE in such agreements, are discussed in detail in the next chapter. Second, recognition can support streamlining of the U.S. domestic conformity assessment system. Government recognition of private-sector accreditors will enable both regulatory and procurement agencies to eliminate the costs associated with operating federal accreditation, certification, and other conformity assessment programs while maintaining responsible oversight of regulatory and procurement enforcement. NIST recognition of private accreditors under the Fastener Quality Act provides a clear precedent for reliance on private-sector accreditors in regulatory enforcement. Transferring federal conformity assessment activities to the private sector will eliminate duplication between public and private programs and will increase the efficiency of the U.S. conformity assessment system. Specific mechanisms by which these goals may be achieved are elaborated in Chapter 5. Finally, federal government recognition of private-sector conformity assessment programs has the strong potential to promote acceptance of conformity assessment among states and cities within the United States. As this chapter has noted, redundancy in testing and certification requirements is an acute problem at
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--> these levels. Federal recognition will increase the acceptability of conformity assessment procedures throughout the United States, reducing inefficiency and raising the level of competition in product testing and certification services. Summary And Conclusions This chapter has examined the growing size and complexity of the U.S. system for ensuring that products conform to standards. The procedures for carrying out this function are known collectively as conformity assessment. Product testing, certification, and laboratory accreditation services are key elements of the U.S. conformity assessment system. Testing and certification services provided by independent laboratories represent a $10.5 billion industry in the United States. Evaluation and registration of manufacturers' quality management systems is a new, rapidly expanding component of the system. A growing number of public and private programs independently accredit testing laboratories, certifiers, and quality system registrars. This chapter documents serious waste and inefficiency in the U.S. conformity assessment system. The system's growing complexity, as well as the lack of coordination among federal, state, and local authorities, have serious, adverse consequences for U.S. economic performance. Measures must be taken in both the public and the private sectors to address these problems, including the gathering and analysis of additional data on the economic costs of redundant certification, registration, and accreditation, and other sources of inefficiency in the system. Raising the efficiency of the U.S. conformity assessment system will lower costs for private firms, government agencies, and consumers. It will increase the competitiveness of U.S. firms in both domestic and foreign markets. Chapter 5 presents specific recommendations to achieve these goals. The next chapter places issues concerning standards development and conformity assessment systems into the context of international trade. It examines the increasingly close links between domestic and international standards, testing, and certification and the performance of U.S. manufacturers in global markets. Recent developments in U.S. multilateral and bilateral trade relationships are assessed, as well as U.S. policy measures that have the potential to improve U.S. export performance. Notes 1. International Organization for Standardization (ISO), Certification and Related Activities, 22-23. 2. Breitenberg, The ABC's of Certification Activities in the United States, 15. 3. For internationally accepted definitions of conformity assessment terms, see International Organization for Standardization, Compendium of Conformity Assessment Documents, 153-160. See also Breitenberg, The ABC's of Certification Activities in the United States. 4. ISO, Certification and Related Activities, 14.
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--> 5. See Breitenberg, The ABC's of Certification Activities in the United States, 2; and Robert B. Toth, ed., Standards Activities of Organizations in the United States, 597-598. 6. For a discussion stressing the impact of product liability on corporate decisions regarding product safety, see George Eads and Peter Reuter, Designing Safer Products. 7. ISO, Certification and Related Activities, 141-145. 8. For an overview of the evolution of the U.S. conformity assessment system framework, and its link to changes in manufacturing and business practices, see Locke, Conformity Assessment—At What Level? 9. For discussion, see ISO, Certification and Related Activities, 41-50. 10. For discussion, see Locke, Conformity Assessment—At What Level? 11. For an overview of areas regulated through federal conformity assessment programs, see Breitenberg, ed., Directory of Federal Government Certification Programs. 12. Breitenberg, Directory of Federal Government Certification Programs, 145-148. 13. Cheit, Setting Safety Standards, 9. 14. Eads and Reuter, Designing Safer Products, 41. 15. For a discussion of circumstances in which third-party conformity assessment in place of second-party is justified, Keith Mowry, Conformity Assessment: An Extra Benefit from Standards. 16. U.S. Bureau of the Census, Current Business Reports BS/92, Service Annual Survey: 1992, 18. 17. U.S. Bureau of the Census, 1987 Census of Service Industries: Miscellaneous Subjects, Summary 4-9, 4-11. 18. In 1994, ACIL changed its name to reflect more accurately the range of services provided by its members. It is now known formally as ACIL: The Association of Independent Scientific, Engineering and Testing Firms. ACIL Newsletter (June 1994), p. 1. 19. Personal communication with Jack Moody, Chief, Service Census Branch, U.S. Bureau of the Census, June 6, 1994. 20. U.S. Bureau of the Census, Current Business Reports BS/92, Service Annual Survey: 1992, 18. 21. ISO, Compendium of Conformity Assessment Documents, 154. 22. Breitenberg, ed., Directory of Federal government Laboratory Accreditation/Designation Programs, 52-53. 23. ISO, Compendium of Conformity Assessment Documents, 155. 24. ANSI, American National Standards for Certification Z34.1. 25. Breitenberg, The ABC's of Certification Activities in the United States, 4-5, 12-13. 26. For a discussion of types of product certification programs and factors influencing choice of methods to be used, see ISO, Certification and Related Activities, 21-50. 27. Breitenberg, The ABC's of Certification Activities in the United States, 7. 28. ISO, Certification and Related Activities, 21-36. 29. American Council of Independent Laboratories, Inc., Directory (22nd ed., 1992-1993), 1992. 30. Underwriters Laboratories, An Overview of Underwriters Laboratories: Testing for Public Safety, brochure, 1993. 31. Breitenberg, ed., Directory of U.S. Private Sector Certification Programs, 75. 32. Nina I. McClelland, David A. Gregorka, and Betsy D. Carlton, "The Drinking Water Additives Program," Environmental Science & Technology 23, no. 1 (1989), 14-18; and NSF International, "NSF International," brochure, n.d. 33. Breitenberg, The ABC's of Certification Activities in the United States, 6. 34. Breitenberg, The ABC's of Certification Activities in the United States, 7. 35. Breitenberg, The ABC's of Certification Activities in the United States, 7. 36. See Breitenberg, ed., Directory of Private-Sector Certification Programs, 46, 167; and Cheit, Setting Safety Standards, 22, 27-28.
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--> 37. Breitenberg, Index of Products Regulated by Each State. 38. NIST, "Weights and Measures," in Guide to NIST, November 1993, available through Internet at gopher://gopher-server.nist.gov. 39. Breitenberg, The ABC's of Certification Activities in the United States, 8. 40. Breitenberg, The ABC's of Certification Activities in the United States, 8. 41. Cheit, Setting Safety Standards, 14; and Charles Hyer, Publisher, TMO Update, personal communication, June 22, 1994. 42. For the most recent available directory, see Breitenberg, Directory of Federal Government Certification Programs. 43. U.S. Department of Defense, pamphlet, Qualified Manufacturers List (QML): Capturing Commercial Technology for Microelectronics. 44. Information provided by staff of Office of Standards Services, NIST, May 1994. 45. Deloitte & Touche Management Consulting, ISO 9000 Survey. 46. Quality Systems Update: Special Supplement 4, no. 5 (May 1994): 4. 47. See Breitenberg, More Questions and Answers about the ISO 9000 Standard Series and Related Issues. 48. See, for example, Reimann and Hertz, The Malcolm Baldrige National Quality Award and ISO 9000 Registration, 42-53. 49. Michael Barrier and Amy Zuckerman, Quality Standards the World Agrees On, 71-73. 50. Because the ISO 9000 standards are relevant only to the manufacturing process and not the product itself, a poor product design could be produced with a high degree of consistency by a high-quality, ISO 9000-compliant manufacturing plant. A ridiculous example that serves to illustrate the concept is a hypothetical, ISO 9000-registered manufacturing plant producing "high-quality" concrete life preservers. For further discussion, see Barrier and Zuckerman, Quality Standards the World Agrees On. 51. Unlike ISO 9000, the Malcolm Baldrige National Quality Award (MBNQA) criteria include measures of customer satisfaction. Although very few firms can win the MBNQA in a given year, widespread dissemination of information about the award criteria for firms to follow voluntarily can be an effective means of promoting quality in U.S. industry. See Reimann and Hertz, The Malcolm Baldrige National Quality Award and ISO 9000 Registration. 52. ISO, Certification and Related Activities, 65-75. 53. For a discussion of the role of quality system registration as part of a comprehensive conformity assessment scheme, see ISO, Certification and Related Activities, 24-26, 77-80. 54. Breitenberg, Q&A on ISO 9000; and Performance Review Institute, National Aerospace and Defense Contractors Accreditation Program, brochure, n.d. 55. Greg Saunders, et al. Working Group on Military Specifications and Standards, Road Map for Milspec Reform, 32-33. 56. This standard overlaps closely with ISO 9000 and other quality management system standards. The lack of a mechanism for the Nuclear Regulatory Commission to accept ISO 9000 registration as a substitute for 10 C.F.R. 50, Appendix B, forces parts suppliers to the nuclear industry to undergo duplicate registration procedures. As a result, the supplier base in the industry has been reduced in size and competitiveness. Electric Power Research Institute, "Comparison of ISO 9000 Requirements to Those of 10 C.F.R. 50 Appendix B: Task Sheet", April 8, 1992; and data provided by Lonnie Dunn, Procurement Quality Assurance Office, Illinois Power Company, 1994. 57. "Big Three Standards to be Rolled Out This Month," Quality Systems Update, CEEM Information Services newsletter July 1994): 1. 58. Data provided by Lawrence L. Wills, IBM Director of Standards, October, 1993. 59. The survey was sent to all 1,679 U.S. and Canadian firms registered as of the date of the survey. 37 percent of the survey population responded, representing a statistically valid sample of firms in all major industry sectors and a wide range of firm sizes. Foster Finley and Don Swann, ISO 9000 Survey Results, Deloitte & Touche Management Consulting, January 1994.
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--> 60. The survey found that companies with comprehensive quality management systems already in place in advance of seeking ISO 9000 registration were no more or less likely than other firms to anticipate recovering the expense of registration through cost savings. Foster Finley, Deloitte & Touche Management Consulting, ISO 9000: Investment or Expense?, 1993. 61. "GSA Clarifies Stance on ISO 9000 Registration", Quality Systems Update 4, no. 5 (May 1994), 9; and "DoD, NASA Officials: Thumbs Up on ISO 9000," Quality Systems Update 4, no. 2 (February 1994), 1. 62. Joe Cascio, presentation at 1994 ANSI Annual Public Conference. 63. See Locke, Conformity Assessment—At What Level? 64. Locke, Conformity Assessment—At What Level?, 5-6. 65. Performance Review Institute, National Aerospace and Defense Contractors Accreditation Program; and Charles Hyer, "Performance Review Institute," TMO Update, May 20, 1994, 6. 66. Breitenberg, Laboratory Accreditation in the United States 5-8; and Charles Hyer ed., Directory of Professional/Trade Organization Laboratory Accreditation/Designation Programs, 3-5. 67. See NIST, National Voluntary Laboratory Accreditation Program: Procedures and General Requirements. 68. NIST, National Voluntary Laboratory Accreditation Program: Fee Schedule and Worksheets. 69. A2LA, 1993 Annual Report. 70. A2LA, "Application for Accreditation", 1994. 71. See Locke, Conformity Assessment—At What Level?, 1-4. 72. Breitenberg, Laboratory Accreditation in the United States, 15. 73. U.S. General Accounting Office, Laboratory Accreditation: Requirements Vary Throughout the Federal Government, 26-28. 74. Data supplied by Charles Hyer, Executive Vice President, The Marley Organization, August 1994. 75. Kim Phillipi, Entela, Inc. to Joseph O'Neil, ACIL, memorandum, 19 August 1994, Accreditation Costs (Grand Rapids, Mich., 1994); David Krashes, MMR, Inc. to Joseph O'Neil, ACIL, West Boylston, Mass., 11 August 1994, letter; and Walter Poggi, Retlif Testing Laboratories to Joseph O'Neil, ACIL, memorandum, n.d., Retlif Testing Laboratories' Yearly Accreditation Costs. 76. See U.S. Environmental Protection Agency, Jeanne Hankins, ed., Final Report of the Committee on National Accreditation of Environmental Laboratories. 77. For details of results and methodology, see U.S. Environmental Protection Agency, Final Report of the Committee on National Accreditation of Environmental Laboratories. 78. NIST, "Establishment of the National Voluntary Conformity Assessment System Evaluation Program." In Federal Register, 19129-19133. 79. See NIST, Establishment of the National Voluntary Conformity Assessment System Evaluation Program. 80. Internationally accepted standards for conformity assessment services, such as testing, certification, and accreditation, are outlined in a series of guides published by the ISO Council Committee on Conformity Assessment (CASCO). See ISO, Information on CASCO. 81. NIST, "Establishment of the National Voluntary Conformity Assessment System Evaluation Program," 19131-19132. 82. Fastener Quality Act, 101st Congress, 2nd session, H.R. 3000.
Representative terms from entire chapter: