Legislative and Regulatory Underpinnings of US Government use of Standards in Technical Regulations and Procurements and the development by Government of voluntary standards
George T. Willingmyre, P.E.
Revised, January, 2004
This report presents the underlying legislative and regulatory foundation applicable to government "setting" of standards in the United States. The first portions of the paper discuss use or reference of "standards" as elements of mandatory technical regulations. The treatment of government use or reference to development of "voluntary standards" follows separately.
Certain legislation; regulation and administrative policy applies generally to the setting of regulations. These generic requirements generally focus on openness transparency and due process considerations. Discussed first are The role of the Office of Management & Budget; The Administrative Procedures Act; The Regulatory Flexibility Act, and Executive Order 12866 Regulatory Planning and Review October 1993
Other legislation; regulation and administrative policy applies specifically to the reference and federal use of voluntary standards. Discussed here are The National Technology Transfer and Advancement Act of 1995; US OMB Policy A119 Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities; Circular A-4 September 17, 2003 TO THE HEADS OF EXECUTIVE AGENCIES AND ESTABLISHMENTS Subject: Regulatory Analysis The Presumption Against Economic Regulation and the standards-relevant texts of the Agreement on Technical Barriers to Trade, the Agreement on Government Procurement and the North American Free Trade Agreement
See also Regulatory Adoption by Reference of standards Copyright Considerations and a summary of relevant Anti Trust Law applicable to standards setting activity and the National Cooperative Research and Production Act
John D. Graham, Ph.D., Administrator, Office of Information and Regulatory Affairs Office of Management and Budget presented AN OVERVIEW OF THE U.S. REGULATORY SYSTEM at a Conference on Regulatory Reform in Brussels, Belgium January 15, 2002. The office of OMB exerts a powerful influence on regulatory and procurement agencies development of regulations. Many regulations in the United States "adopt" or "reference" voluntary standards developed in the private sector to become mandatory requirements. In other instances the existence of a voluntary standard addressing a regulatory question may eliminate the need for a mandatory regulations
The responsibility of my office is to oversee and coordinate regulatory policy in our Federal government. The scope of our authority is broad, covering agriculture, energy, transportation, information technology, housing, manufacturing, immigration, food safety, health care, public health, occupational safety and health, environmental protection and criminal justice. Before a new regulation in the U.S. is adopted, it must be:
If a proposed or final regulation is significant, it must be cleared by my office before it is published in the Federal Register.
The Administrative Procedures Act
The Administrative Procedures Act (APA) applies to any process used by an agency to develop a "rule."
§ 551. Definitions ''rule'' means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency ...
Thus the APA applies to many instances of government proposing standards as a technical regulation. The opportunity for public participation and review of "rules" is a key component of the APA.
Section 552 within the APA addresses Public information; agency rules, opinions, orders, records, and proceedings General notice of proposed rule making shall be published in the Federal Register, unless persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law...
Except to the extent that a person has actual and timely notice of the terms thereof, a person may not in any manner be required to resort to, or be adversely affected by, a matter required to be published in the Federal Register and not so published. For the purpose of this paragraph, matter reasonably available to the class of persons affected thereby is deemed published in the Federal Register when incorporated by reference therein with the approval of the Director of the Federal Register...
After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose
Under the Administrative Procedure Act, notice and opportunity for public comment are not required if the Board finds that notice and public comment are unnecessary.
Section 553 within the APA addresses Rule Making 5 U.S.C. 553(b)(3)(B) when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.
The Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA) also sets forth a number of requirements for agency rulemaking. Among other things, the RFA requires that, semiannually, each agency shall publish in the Federal Register a regulatory flexibility agenda, which shall contain: (1) A brief description of the subject area of any rule that the agency expects to propose or promulgate, which is likely to have a significant economic impact on a substantial number of small entities; (2) A summary of the nature of any such rule under consideration for each subject area listed in the agenda pursuant to paragraph (1), the objectives and legal basis for the issuance of the rule, and an approximate schedule for completing action on any rule for which the agency has issued a general notice of proposed rulemaking; and (3) The name and telephone number of an agency official knowledgeable concerning the items listed in paragraph (1).
Executive Order 12866 Regulatory Planning and Review
Executive Order 12866 Regulatory Planning and Review October 1993 is a strategic statement of US Government policy . Federal agencies should promulgate only such regulations as are required by law, are necessary to interpret the law, or are made necessary by compelling public need, such as material failures of private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people. In deciding whether and how to regulate, agencies should assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating.
(a) Agency Responsibilities. (1) Each agency shall (consistent with its own rules, regulations, or procedures) provide the public with meaningful participation in the regulatory process. In particular, before issuing a notice of proposed rulemaking, each agency should, where appropriate, seek the involvement of those who are intended to benefit from and those expected to be burdened by any regulation (including, specifically, State, local, and tribal officials). In addition, each agency should afford the public a meaningful opportunity to comment on any proposed regulation, which in most cases should include a comment period of not less than 60 days. Each agency also is directed to explore and, where appropriate, use consensual mechanisms for developing regulations, including negotiated rulemaking.
Public Law 104-113, the National Technology Transfer and Advancement Act
of 1995, directs federal agencies to use standards developed by voluntary
consensus bodies. The
law adds weight to what has long been government
policy codified in the President’s Office of Management and Budget (OMB)
administrative circular A-119 for US Federal agencies to use consensus
standards. OMB has been the
guardian of the previous policy and is responsible for the more detailed
regulations that all agencies will have to follow to meet the new law. The Department of Commerce’s
National Institute of Standards and Technology (NIST)
plays a coordinating role in standards and conformity assessment
activities between the public and private sectors.
Congress passed and the
President signed Public Law 104-113 on March 7, 1996.
Section 12 of the
“National Technology Transfer and Advancement Act of 1995” addresses standards conformity.
Section 12 (a) gives NIST responsibility to compare private sector
standards with Federally-adopted or recognized standards and to coordinate
Federal agency use of private sector standards, emphasizing those private sector
standards developed by consensus organizations.
Section 12(b) gives NIST the role of coordinating Federal, state and
local technical standards and conformity assessment activities with private
sector activities. Section 12 (d) (See
Figure 1) requires federal agencies and departments to use standards that are
developed or adopted by voluntary consensus bodies except when that would be
inconsistent with applicable law or otherwise impractical.
The rationale for using
other than voluntary consensus standards must be transmitted
to the OMB. Section 12(d)(4)
defines technical standards to include related management system practices.
It has long been administration
policy to substitute private sector standards whenever possible for government
development and promulgation of regulatory or procurement standards.
In the past, some agencies used the relevant OMB Circular A-119 to
justify significant support for voluntary standards activities.
Other agencies largely ignored the policy with no repercussions.
The elevation of the instruction to
use private sector standards from that of an OMB Circular to that of a Public
Law will increase the pressure to comply.
The law requires agencies to submit a performance report each year. There is great pressure on procuring agencies such as GSA and DOD to use voluntary consensus standards for inventory and purchasing cost savings purposes. This law, taken in combination with the Trade Agreements Act of 1995, will also increase pressure on regulatory agencies to use relevant international and national voluntary consensus standards rather than developing their own. This law supports and encourages federal participation in US and international voluntary standards development. But it must be placed in context as just one of many tools the Congress is using to control of costs of US government. The underlying motivation is to encourage standards work outside of government for cost savings purposes.
The NTTA also tasks NIST with coordinating with state and local agencies on standards matters. The Act requires NIST to submit an implementation plan to Congress by June 1996 for work with other government agencies and the private sector, to build workable systems for standards and conformity assessment that meet the needs of U.S. industry in a global market.
Subcommittee House Science Committee Hearing Standards Conformity and the
Federal Governme nt: A Review of Section 12 of Public Law: 104-113 - held March 15, 2000
nt: A Review of Section 12 of Public Law: 104-113 - held March 15, 2000was convened to evaluate the progress of government agency compliance with the NTTA. The testimony of Belinda Collins, Director of the Office of Standards Services presented the NIST view of its role in implementation. NIST is also responsible for coordinating the submission of Agency Annual reports on implementation of the NTTA.
Section 12(b) of the NTAA gives NIST the role of coordinating Federal, state and local technical standards and conformity assessment activities with private sector activities. OMB Circular A-119 also recognized the conformity assessment requirements and obligations defined in the Act and the role of the Department of Commerce in this area. The Circular directed the Secretary of Commerce to issue guidance to the agencies to ensure effective coordination of Federal conformity assessment activities. A November 3, 1999 Federal Register document contains that proposed Conformity Assessment guidance. NIST issued final policy guidance on Federal agency use of conformity assessment activities in August 2000 The provisions are solely intended to be used as guidance for agencies in their conformity assessment activities and do not preempt the agencies' authority and responsibility to make regulatory procurement decisions authorized by statute or required to meet programmatic objectives and requirements.
Circular OMB A-119 Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities
In the February 19, 1998 Federal
Register, The Office of Management and Budget (OMB) issued their Circular
OMB A-119 Federal Participation in the Development and Use of Voluntary Consensus
Standards and in Conformity Assessment Activities.
The OMB Circular A119 interprets
the language of the "National Technology Transfer and Advancement Act of
1995" which in
section 12(d) requires federal agencies and departments to use standards that
are developed or adopted by voluntary consensus standards bodies except where
that would be inconsistent with applicable law or otherwise impractical.
The document defines the nature of standards that government agencies are obligated to consider before developing their own procurement or regulatory standards. The new Policy states:
All federal agencies must use voluntary consensus standards in lieu of government-unique standards in their procurement and regulatory activities, except where inconsistent with law or otherwise impractical. In these circumstances, your agency must submit a report describing the reason(s) for its use of government-unique standards in lieu of voluntary consensus standards to the Office of Management and Budget (OMB) through the National Institute of Standards and Technology (NIST)
A new part of the definition for "voluntary consensus standard" contains the requirement that owners of relevant intellectual property have agreed to make that intellectual property available on a non-discriminatory, royalty-free or reasonable royalty basis to all interested parties.
purposes of this policy, "voluntary consensus standards" are standards
developed or adopted by voluntary consensus standards bodies, both domestic and
international. These standards include provisions requiring that owners of
relevant intellectual property have agreed to make that intellectual property
available on a non-discriminatory, royalty-free or reasonable royalty basis to
all interested parties. For purposes of this Circular, "technical standards
that are developed or adopted by voluntary consensus standard bodies" is an
This definition is generally understood to mean the kind of
standards process that can be accredited in the United States under the
procedures of the American National Standards Institute (ANSI)
While the thrust of the OMB
proposal is to promote "voluntary consensus standards",
a huge escape clause is provided for any agency to justify use of other
than such "voluntary consensus standards,"
Agencies are excused from using voluntary consensus standards when such
use would be inconsistent with applicable law or “otherwise impractical.”
“Impractical” is defined to include circumstances when use of the
“voluntary consensus standard” would be “less useful, than the use of
another standard.” Consider these
excerpts from the Congressional debate on the Bill
Mr. Brown of California: I would assume…a rule of
reason would prevail in the implementation of this section and that new
bureaucratic procedures would be inconsistent with the intent of this section.
Mrs. Morella: That was our intent in beginning the section with the words
“To the extent Practical” For
instance we would expect Government procurements of off-the-shelf commercial
products to be exempted by regulation from any review under the act. We
also do not intend through this section to limit the right of the Government to
write specifications for what it needs to purchase.
Our focus instead is on making sure the Federal government does not
reinvent the wheel. We are merely
asking Federal agencies to make all reasonable efforts to use voluntary, private
sector consensus standards unless there is a significant reason not to do
This OMB Circular impacts all parties touched by government use and reference to standards. Relatively speaking, the proposal makes it more difficult for government agencies to create their own regulatory or procurement standards, if a relevant voluntary consensus standard is available. The policy increases the significance of “voluntary consensus standards” as a practical alternative to government regulation.
Circular A-4 September 17, 2003 TO THE HEADS OF EXECUTIVE AGENCIES AND ESTABLISHMENTS Subject: Regulatory Analysis The Presumption Against Economic Regulation
Circular A-4 September 17, 2003 TO THE HEADS OF EXECUTIVE AGENCIES AND ESTABLISHMENTS Subject: Regulatory Analysis The Presumption Against Economic Regulation contains specific advice in preparing the regulatory analysis required by the circular and provides the Office of Management and Budget’s (OMB’s) guidance to Federal agencies on the development of regulatory analysis as required under Section 6(a)(3)(c) of Executive Order 12866, Regulatory Planning and Review (discussed above)
Government actions can be unintentionally harmful, and even useful regulations can impede market efficiency. For this reason, there is a presumption against certain types of regulatory action. In light of both economic theory and actual experience, a particularly demanding burden of proof is required to demonstrate the need for any of the following types of regulations:
Performance Standards Rather than Design Standards Performance standards express requirements in terms of outcomes rather than specifying the means to those ends. They are generally superior to engineering or design standards because performance standards give the regulated parties the flexibility to achieve regulatory objectives in the most cost-effective way. In general, you should take into account both the cost savings to the regulated parties of the greater flexibility and the costs of assuring compliance through monitoring or some other means.
Informational Measures Rather than Regulation If intervention is contemplated to address a market failure that arises from inadequate or asymmetric information, informational remedies will often be preferred. Measures to improve the availability of information include government establishment of a standardized testing and rating system (the use of which could be mandatory or voluntary), mandatory disclosure requirements (e.g., by advertising, labeling, or enclosures), and government provision of information (e.g., by government publications, telephone hotlines, or public interest broadcast announcements). A regulatory measure to improve the availability of information, particularly about the concealed characteristics of products, provides consumers a greater choice than a mandatory product standard or ban.
Where information on the benefits and costs of alternative
informational measures is insufficient to provide a clear choice
between them, you should consider the least intrusive
informational alternative sufficient to accomplish the regulatory
objective. To correct an informational market failure it may be
sufficient for government to establish a standardized testing and
rating system without mandating its use, because competing firms
that score well according to the system should thereby have an
incentive to publicize the fact.
underlying goal of the The Agreement on Technical
Barriers to Trade (TBT)
(See Figure 2) and the
Agreement on Government Procurement (AGP)
(See Figure 3)
promote trade through international agreements on rules for how the marketplace
should and should not work. A basic principle running throughout the agreements
is that of "National Treatment." "National Treatment" is the
concept that governments and markets should treat products and services produced
or supplied from other parts of the world no differently than products and
services offered to the government or market from local industries. Standards
can be very effective "Non-Tariff Barriers to Trade (NTBTs)."
Bureaucrats can devise laws or regulations more easily met by local producers
than by foreign firms; markets can depend upon "voluntary" standards
that are controlled by the local industries; governments can issue procurement
specifications that favor individual suppliers. The TBT and the AGP are the
international attempts to remove "unfairly discriminatory" standards
as a factor in free trade. These agreements are the results of many years of
multilateral government negotiations known as the "Uruguay Round" of
trade negotiations. The Office of the US Trade Representative has the
responsibility to negotiate these agreements on behalf of the United States and
Congress must vote them "up" or "down" with no changes at
the conclusion of the negotiations.
Both the TBT and AGP encourage governments and private organizations to utilize international standards as the basis for technical rules, marketplace standards and government procurement. As true in the case of the OMB Circular A119 there are of course "escape clauses" for issues of national defense, health, safety and environment, but these exceptions to the general rule must be justified if the requirements are different than those in an agreed-upon international standard. There is an extensive "notification" system whereby governments report any new technical regulations that differ from an international standard and agree to consider comments from other countries on the proposed rules. One of the key new elements in the 1994 TBT is the expansion of certain reporting obligations of the 1979 TBT from just central governments to include regional standards groups such as CEN/CENELEC/ETSI, local governments such as individual states in the US and private organizations such as ANSI.
The Uruguay Round
text included a "Code of Good Practice" (See
Figure 4) for standards developers describes rules for openness,
notification of work in progress, utilization of international standards and
consideration of comments received.
i998 ANSI accepted
the WTO TBT Code of Good Practice on behalf of more than 200 standards
developing organizations in the United States.
Chapter Nine of the North American Free Trade Agreement (NAFTA) (NAFTA) also contains obligations relating to standards Measures. Congress adapted the TBT obligations into US law in the Trade Agreements Act of 1979 and incorporated revisions in the Uruguay Round Agreements Act of 1994. Congress also formally approved NAFTA in 1994. The formal text for the applicable implementation of these agreements in US law is found at United States Code Title 19 Chapter 13 Subchapter 11 Technical Barriers to Trade. The US implementation of the TBT obligation for national treatment may be found in Section 2532 (1). The US implementation for the encouragement of use of international standards is found in Section 2532 (2). See Figure 5