Procedures for Implementation of the Fastener Quality Act

SUMMARY: The National Institute of Standards and Technology (NIST) is

today issuing a final rule to implement the Fastener Quality Act (the

Act). The Act protects the public safety by: Requiring that certain

fasteners which are sold in commerce conform to the specifications to

which they are represented to be manufactured, providing for

accreditation of laboratories engaged in fastener testing; and

requiring inspection, testing and certification, in accordance with

standardized methods, of fasteners covered by the Act.

The Secretary of Commerce, acting through the Director of the

National Institute of Standards and Technology (NIST), is implementing

the Act by establishing these procedures, under which: Laboratories in

compliance with the Act may be listed; laboratories may apply to NIST

for accreditation; private laboratory accreditation entities (bodies)

may apply to NIST for approval to accredit laboratories; and foreign

laboratories accredited by their governments or by organizations

recognized by the NIST Director under section 6(a)(1)(C) of the Act can

be deemed to satisfy the laboratory accreditation requirements of the

Act. The regulation also establishes, within the Patent and Trademark

Office (PTO), a recordation system to identify the manufacturers or

distributors of covered fasteners to ensure that the fasteners may be

traced to their manufacturers or private label distributors. In

addition, the regulations contain provisions on enforcement, civil

penalties, and hearing and appeal procedures.

DATES: This rule is effective November 25, 1996.

FOR FURTHER INFORMATION CONTACT: For subpart A: Dr. Subhas Malghan, FQA

Program Manager, Technology Services, National Institute of Standards

and Technology, Building 820, Room 311, Gaithersburg, MD 20899,

telephone number (301) 975-4510; for subparts B and C: James L. Cigler,

Chief, National Voluntary Laboratory Accreditation Program, NIST, (301)

975-4171; for subparts D, E, and F: Robert L. Gladhill, Global

Standards Policy Program, NIST, (301) 975-4273; for subpart G: William

H. Arvin, Special Assistant to the Assistant Secretary for Export

Enforcement, (202) 482-1564; and for subpart H: Lizbeth Kulick,

Trademark Legal Administrator, Patent and Trademark Office, (703) 308-

8900.

SUPPLEMENTARY INFORMATION:

As required by section 13 of the Fastener Quality Act (the Act),

the National Institute of Standards and Technology (NIST) is today

issuing a final rule to implement that Act. The Act protects the public

safety by: (1) Requiring that certain fasteners which are sold in

commerce conform to the specifications to which they are represented to

be manufactured, (2) providing for accreditation of laboratories

engaged in fastener testing; and (3) requiring inspection, testing and

certification, in accordance with standardized methods, of fasteners

covered by the Act.

The Secretary of Commerce, acting through NIST, is implementing the

Act by establishing these procedures, under which: (1) Laboratories in

compliance with the Act may be listed; (2) laboratories may apply to

NIST for accreditation; (3) private laboratory accreditation entities

(bodies) may apply to NIST for approval to accredit laboratories; and

(4) foreign laboratories accredited by their governments or by

organizations recognized by the NIST Director under section 6(a)(1)(C)

of the Act can be deemed to satisfy the laboratory accreditation

requirements of the Act. The regulation also establishes, within the

Patent and Trademark Office (PTO), a recordation system to identify the

manufacturers or distributors of covered fasteners to ensure that the

fasteners may be traced to their manufacturers or private label

distributors. In addition, the regulations contain provisions on

enforcement, civil penalties, and hearing and appeal procedures which

are administered by the Bureau of Export Administration.

Subpart A--``General'' sets out the purpose of the rule, and

presents a general description of the rule. It also contains

definitions that apply throughout the rule and establishes specific

requirements with respect to applicable provisions of the Act.

Subpart B--``Laboratory Accreditation'' provides that all

laboratories that desire to engage in fastener testing covered by the

Act and its implementing regulations must be listed by NIST in the

``Accredited Laboratory List'' established by this subpart. NIST will

prepare and maintain the List, which shall be composed of all

laboratories currently accredited under subparts C, D, and E of these

regulations. Only laboratory test reports prepared by an accredited

laboratory currently listed in the Accredited Laboratory List shall be

deemed to meet the requirements of the Act. Procedures for removing a

fastener testing laboratory from listing and for appeals of listing

decisions are also included.

Subpart C--``NIST Fastener Laboratory Accreditation Procedures,''

sets out the procedures and technical requirements of the National

Voluntary Laboratory Accreditation Program (NVLAP) Fasteners Testing

Program. These procedures are in conformance with ISO/IEC Guide 25-

1990, ``General Requirements for the Competence of Calibration and

Testing Laboratories.''

Subpart D--``NIST Approval of Private Accreditation Programs''

governs NIST approval of accreditation programs operated by private

entities. All private accreditation entities that seek to accredit

fastener testing laboratories must receive recognition under this

subpart. Revocation procedures of such approval are also covered in

subpart D.

Subpart E--``Recognition of Accreditation Programs,'' in accordance

with section 6(a)(1)(C) of the Act, sets forth the conditions under

which the accreditation of foreign laboratories by their governments or

by organizations recognized by the Director shall be deemed to meet the

requirements of section 7 of the Act.

Subpart F--``Requirements for Fastener Laboratory Accreditation

Bodies'' sets out requirements that must be met by all accreditation

bodies approved by NIST under subpart D and recognized under subpart E.

These requirements, based on ISO/IEC Guide 58, are intended to assure

that the approved laboratory accreditation body has the administrative

and technical capability to conduct a fastener accreditation program

which meets all the requirements of the Act. Subpart F also sets out

the requirements against which an approved accreditation body assesses

the technical competence of an applicant's testing laboratory. These

requirements are consistent with those contained in subpart C of the

regulations and all technical requirements established under that

subpart.

Subpart G--``Enforcement'' sets forth the procedures governing the

Commerce Department's administrative procedures for assessment of civil

penalties and remedies.

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Subpart H--``Recordal of Insignia'' contains the conditions and

procedures for manufacturers'' insignias to be recorded by the Patent

and Trademark Office (PTO). The purpose of Section 8 of the Act is to

ensure that fasteners may be traced. The Act effects this purpose by

requiring manufacturers, private label distributors, and persons who

significantly alter fasteners, as defined by the Act, to inscribe any

fastener, required by the standards and specifications to which it was

manufactured to bear a raised or depressed insignia identifying its

manufacturer, private label distributor, or alterer, with insignias

that can be used to trace the fastener to its original manufacturer,

private label distributor, or person who significantly altered the

fastener. However, the Act does not establish any particular

recordation system to effect that purpose. The PTO was charged with

establishing such a system.

Background--Part 1: Summary of the Comment Process from August 1992

Issuance of the Draft Rule and Discussion of the Subsequent Actions

That Lead to the Amendment of the Fastener Quality Act (Pub. L. 101-

592)

On August 17, 1992, NIST published a proposed rule to implement the

Fastener Quality Act in the Federal Register (57 FR 37032). In response

to its request for public comments on the proposed regulation, NIST

received 308 letters. An even 50 percent of the comments, 154, were

submitted by representatives of businesses that distribute fasteners,

and another 69 comments, or 22.4 percent, were submitted by fastener

manufacturers. The remainder of the comments were distributed among

representatives of trade associations: 22 comments received, or 7.1

percent of the total; commenters who identified themselves as users of

fasteners covered by the Act: 16 comments received, or 5.1 percent of

the total; members of the NIST Fastener Advisory Committee: 8 comments

received, or 2.5 percent of the total; representatives of fastener

testing laboratories: 7 comments received, or 2.2 percent of the total;

and 8 letters, or 2.5 percent, were from governmental officials,

including one United States Senator, four agencies of the United States

Government, one state government, and two foreign governments. The

remaining 24 letters, or 8.2 percent, were from individuals or were not

otherwise identifiable as belonging to any group.

The subjects raised by the comments touched on a number of topics,

including some 225 letters that supported legislative changes to the

Fastener Quality Act that had been recommended by a NIST advisory

committee to reduce the cost to the fastener industry of implementing

the Act. In addition, NIST received letters on many topics directly

involving the language of the regulation, such as the need to refine

certain definitions, suggested changes to the procedures governing the

NIST Fastener Laboratory Accreditation Program, suggested changes to

sections of the regulation pertaining to the approval and recognition

by NIST of third parties for the purpose of accrediting fastener

testing laboratories, and other matters. Finally, NIST received a

number of comments on the draft Regulatory Impact Analysis.

The legislative changes recommended by the advisory committee and

supported by the public comments included the following five changes to

the Fastener Quality Act:

* To permit tests of either chemical composition of fasteners to be

carried out upon raw materials or finished fasteners. The effect of

this proposed change would be to greatly reduce the number of tests

needed to verify the chemical composition of fasteners, since many lots

of fasteners are usually manufactured from one ``mill heat.''

* To permit the sale of fasteners which, upon testing under the

Act, are found to have ``minor'' flaws resulting in the fastener not

conforming to the tolerances stated in the standards and specifications

to which they were manufactured. Section 5(a) of the Act expressly

prohibited the sale of fasteners which (1) do not conform to the

standards and specifications to which they were manufactured, and (2)

have not been inspected, tested and certified as provided under the

Act. The Committee felt that many lots of fasteners that could not be

sold under the Act as presently written could be sold, were this

amendment enacted, thus reducing manufacturer costs.

* To permit distributors to commingle fasteners from more than one

lot in the same container, thus reducing warehouse costs for the

distributors, despite the provisions of section 7(e) of the Act.

* To require that any person who significantly alters a fastener be

responsible for retesting that fastener, despite the provisions of

section 7(d) of the Act. And,

* To restrict the availability of test reports to the original

purchaser despite the requirements of section 10 of the Act that such

reports be made available to all subsequent purchasers.

A Hearing before the Subcommittee on Science, Technology, and Space

of the Committee on Commerce, Science, and Transportation, United

States Senate, was held in July 1993 to receive testimony from NIST and

from the fastener industry on the need for amendments to the 1990 Act.

Amendments addressing the issues raised by NIST and the Committee were

introduced in the 102nd Congress and were passed by the U.S. House of

Representatives as part of the National Competitiveness Act of 1994

(H.R. 820). The U.S. Senate passed a slightly different version of the

same bill (S.4). However, the bills did not emerge from the House/

Senate Conference before the 102nd Congress adjourned.

In October 1994 the Industrial Fasteners Institute (IFI), the

National Fastener Distributors Association (NFDA), and the Fastener

Industry Coalition (FIC) formed a bipartisan task force composed of

nine members, nominated from the three organizations, to forge an

industry strategy regarding amendments to the Fastener Quality Act. In

January 1995, the Public Law Task Force (PLTF) submitted its report and

recommendations to Senator Conrad Burns, Chairman, Subcommittee on

Science, Technology and Space, U.S. Senate, and to Congressman Robert

Walker, Chairman, Science Committee, U.S. House of Representatives. At

the request of Senator Burns and Congressman Walker, the Advisory

Committee reviewed the Task Force's report and recommendations and

found them to be consistent with the Committee's recommendations for

amending the Act that were transmitted to NIST and to Congress in 1993.

The Task Force submitted recommendations to Congress for further

simplification and clarification of the Act in early June 1995. Joint

recommendations for amendments from the Fastener Advisory Committee and

the Public Law Task Force were included in legislation introduced as HR

2196 in the U.S. House of Representatives and as S.1164 in the U.S.

Senate. A compromise version was passed in February 1996 as the

National Technology Transfer and Advancement Act, and signed into law

by President Clinton in March 1996 as Pub L. 104-113.

Background--Part 2: Summary of the Fastener Quality Act and Amendments

to the Act as Part of Pub L. 104-113

The Fastener Quality Act requires that certain fasteners sold in

commerce conform to the specifications to which they are represented to

be manufactured; provides for accreditation of laboratories engaged in

[[Page 50540]]

fastener testing; and requires the inspection, testing and

certification (in accordance with standardized methods) of fasteners

covered by the Act.

Section 2 of the Act sets out the findings of Congress with respect

to the Act. Section (a)(4) was deleted, and in section(b) the

references to fasteners used in ``critical applications'' were deleted.

These changes are consistent with the deletion of section 4 of the Act,

assigning the Secretary of Commerce responsibility to determine

categories of fasteners used in ``critical applications'' for purposes

of adding or deleting them from coverage under the Act. The term ``by

lot number'' was deleted from (a)(7) to be consistent with proposed

changes in section 7(e), which allow distributors to voluntarily

commingle two or more certified lots of like fasteners.

Section 3 of the Act provides definitions of terms used in the Act

and in the proposed rule. The following definitions were amended in the

Act:

Definition (1) ``alter'' was amended by deleting the

reference to a minimum tensile strength of 150,000 pounds per square

inch (psi). It was felt that this type of technical requirement did not

belong in the Act and should be covered in implementing regulations.

Accordingly, the issue is dealt with under Sec. 280.2 of this proposed

rule.

Definition (2) ``consensus standards organization'' was

amended by adding the word ``consensus'' in the third line to emphasize

the reliance upon ``consensus standards'' for fasteners covered by the

Act.

Definition (5) ``fastener'' was amended by deleting item

(D) to be consistent with the deletion of section 4 which assigns the

Secretary of Commerce responsibility to add or delete fasteners from

coverage under the Act based upon their use in ``critical

applications.'' In addition, fasteners produced in accordance with ASTM

F432 are exempt from coverage under the Act. ASTM F432 covers rock and

roof bolts and accessories used in the mining industry. This action was

the result of a petition by the American Mining Congress that such

products do not meet the intent of the Act and that they are strictly

regulated by the Mine Safety and Health Administration.

Definition (6) ``grade identification marking'' was

amended by deleting the term ``other person'' and replacing it with

``government agency.'' This change was necessary to be consistent with

the revision of the definition of ``standards and specifications.''

Definition (8) ``Institute'' was amended to correct the

spelling of ``Standards'' in NIST' name.

Definition (11) ``original equipment manufacturer'' was

deleted from the Act to be consistent with the change to section 7(f)

which deletes any reference to OEMs.

Definition (13) ``standards and specifications'' was

amended to resolve two major problems. First, the wording in the

original definition was interpreted by NIST and Commerce attorneys as

prohibiting the sale of any fastener not fully meeting the requirements

of the standards or specifications to which it was manufactured. Such

interpretation does not recognize long-standing industry practice of

disposing of non-conforming fasteners in accordance with defined

procedures contained in consensus standards. The objectionable language

was removed from the definition. Second, the definition as now

constructed makes it clear that for the purposes of the Act only

fasteners which are covered by standards and specifications published

by a consensus standards organization or by a government agency are

subject to the Act.

Definition (14) ``through-harden'' was amended by adding

``* * * for the purpose of achieving a uniform hardness'' to improve

its meaning.

Section 4 of the Act was completely deleted. NIST, with the

assistance of the Fastener Advisory Committee, attempted but was

unsuccessful in establishing guidelines under which the Secretary of

Commerce would add or exempt categories of fasteners from coverage

under the Act. Originally, Congressional intent was that the Act would

cover only ``high strength'' fasteners used in ``critical

applications.'' A figure of 1% of fasteners meeting these categories

was used throughout early Congressional discussions of the Act.

However, upon passage of the Act and further study and interpretation

of its requirements by the Department of Commerce, the Fastener

Advisory Committee, and various industry groups, it became apparent

that the Act applied to a majority of fasteners in the industry.

Further, while it was possible to come to an agreement that a

``critical application'' of a fastener was any application for which it

was reasonably foreseeable that a failure of the fastener would result

in serious personal injury or death, significant property damage, or

significant repair costs, it was not possible to come to agreement a

priori as to which fasteners were used in critical applications. The

problem is that a single type or category of fasteners might be used in

many different applications, some may be critical in terms of having

the potential for causing death or injury if the fastener(s) fails, and

others not. The ultimate user of the fastener determines how fasteners

will be used, and there were many instances cited where ``low

strength'' fasteners were being used in critical applications. Thus,

NIST and the Fastener Advisory Committee concluded that there was no

systematic way in which the Secretary of Commerce could add or exempt

whole categories of fasteners from coverage under the Act, and that to

attempt to do so could be costly in terms of potential litigation, with

no resulting benefit to anyone. Such conclusion was based on evidence

that there is no instance within the industry where one can make a

clear-cut case that a particular fastener category, not currently

covered by the Act, is always used in ``critical applications'' or vice

versa.

Section 5 of the Act prohibits selling (or offering for sale) any

fastener unless it is part of a lot which: (1) Conforms to the

standards and specifications to which the manufacturer represents it

has been manufactured; and (2) has been inspected, tested, and

certified as provided by the Act. An exception to this pre-sale

requirement is provided for certain small lots. These small lots must

be tested as soon as practicable after delivery to the purchaser.

Section 5 also provides that fastener inspection and testing be

performed by a laboratory accredited in accordance with procedures and

conditions specified by the Secretary of Commerce. Sections 5(a)(1)(B)

and 5(a)(2)(B) were amended to add reference to the new section (d)

covering alternative procedures for chemical testing. Section 5(c)(2)

was amended to make it clear that the laboratory report of testing must

include a reference to the standards and specifications the

manufacturer claims the fasteners have been manufactured to. Section

5(c)(3) was amended to remove the examples of fastener markings and

characteristics to be tested. The examples are incomplete and could be

misleading. Section 5(c)(4) was amended to allow the manufacturer to

follow section 5(d) regarding alternative procedures for testing

chemical characteristics of fasteners. A new section 5(d) providing for

an alternative procedure for determining the chemical characteristics

of fasteners was added. This new section recognizes a long-standing

industry practice of manufacturers relying on certificates from the raw

material supplier for assuring that the chemical characteristics of a

mill heat of material conform to specified standards. The section

requires that testing be carried

[[Page 50541]]

out in a laboratory accredited in accordance with the Act.

Section 6 requires the Secretary of Commerce, acting through the

Director of NIST, to issue regulations including: (1) Procedures and

conditions for NIST accreditation of fastener testing laboratories; (2)

conditions (consistent to the extent practicable with requirements of

national or international consensus documents) under which private

entities may apply for approval to directly accredit laboratories in

accordance with the requirements of the Act; and (3) conditions under

which the accreditation of foreign laboratories by their governments or

organizations recognized by the NIST Director will be deemed to satisfy

the requirements of the Act. The Act leaves to the discretion of the

Director the procedures NIST will use to determine the competency of

foreign governments'' (or other organizations') laboratory

accreditation programs. Section 6(a)(1) was amended to delete the

reference to the Secretary's issuance of regulations within 180 days of

enactment of the Act, because that time period is no longer relevant.

Section 7 of the Act covers sales of fasteners subsequent to their

manufacture and establishes requirements which manufacturers,

importers, and private label distributors must meet in the sale of

fasteners. It also requires that any person who significantly alters a

fastener so that it no longer conforms to the description in the

relevant certificate of conformance and offers such fastener for

subsequent sale is to be treated as a manufacturer for purposes of the

Act. Section 7 also governs the commingling of fasteners from different

lots in the same container.

There were several significant amendments to section 7 of the Act.

Section 7(a) was amended to delete reference to section 4 of the Act,

which was deleted. Section 7(a) was also amended to remove the

responsibility from the manufacturer of domestically produced fasteners

of supplying to the purchaser, at the time of delivery, a written

certificate attesting that the fasteners have been manufactured

according to applicable standards and specifications and have been

inspected and tested by an accredited laboratory. Instead, the new

requirement is that the manufacturer maintain on file a manufacturer's

certificate of conformance covering fasteners and that the certificate

be available for inspection. The requirement that the original

laboratory report of test be maintained on file by the manufacturer

remains unchanged. Copies of the manufacturers certificate of

conformance and original test report for a given lot of fasteners may

be requested by purchasers of such fasteners, under an amendment to

section 10 of the Act. This change was made to reduce paperwork burdens

under the Act and to reduce the possibility of fraudulent use of

certificates of conformance or laboratory test reports. It is not the

intent of these changes to deny access to such information to any

person who can demonstrate a legitimate need for the information.

Section 7(b) remains unchanged in terms of requiring delivery of

fasteners of foreign origin to be accompanied by a manufacturer's

certificate of conformance and an original laboratory testing report

for each lot of imported fasteners. Exemptions to these requirements

are provided for products manufactured within a nation which is a party

to a congressionally-approved free trade agreement with the United

States or for Canadian-origin products under the United States-Canada

Automobile Pact for use as original equipment in the manufacture of

motor vehicles. Also, importers or private label distributors may take

delivery of imported fasteners without the original copy of the

laboratory test report if the manufacturer provides a certificate of

conformance indicating that the fasteners have been manufactured

according to the requirements of the applicable standards and

specifications and the importer or private label distributor assumes

responsibility in writing for the inspection and testing of the

fasteners in accordance with the Act.

Section 7(c)(2) was amended by adding several words to improve its

meaning. In section 7(d) the word ``certificate'' was replaced with

``test report'' to make it clear that it is the test report and not the

manufacturer's certificate of conformance that should be referred to in

determining whether or not significant alterations have been made to a

fastener. Section 7(e) on Commingling was amended to permit voluntary

commingling of two or more tested and certified lots by fastener

distributors. There is still a restriction on commingling of more than

two tested and certified lots by manufacturers, importers, or private

label distributors. Section 7(f) on subsequent purchaser was amended to

indicate that any person who purchases fasteners for any reason has the

right to request and receive containers of fasteners with the lot

number from which they were taken conspicuously marked on the

container. Section 7(g) was deleted because the Secretary of Commerce

is provided authority to issue regulations pursuant to the Act in

section 13.

Section 8 prohibits offering fasteners for sale that are required

by an applicable standard or specification to bear a raised or

depressed insignia identifying the manufacturer or distributor unless

the manufacturer or distributor has complied with the requirements of a

program to be established by the Secretary of Commerce for the

registration of such insignias to ensure that the fasteners may be

traced to their manufacturers or private label distributors. However,

the Act does not establish any particular recordation system to effect

that purpose. The Patent and Trademark Office (PTO) was charged with

establishing such a system. These requirements are proposed as subpart

H of this rule.

Section 9(a) of the Act authorizes the Attorney General to bring an

action in U.S. district courts for declaratory and injunctive relief

against persons who violate the Act or implementing regulations.

Section 9(b) requires the Secretary of Commerce to establish ``notice

and opportunity for hearing'' procedures for the assessment of civil

penalties not to exceed $25,000 for each violation of the Act or

implementing regulations, authorizes penalty recovery actions by the

Attorney General, and authorizes the Secretary to issue subpoenas of

witnesses or documents. A ``substantial evidence'' standard of judicial

review is provided. Section 9(c) of the Act provides for criminal

penalties, which are enforced by the Department of Justice. A new

section 9(d) dealing with enforcement was added as an amendment to the

Act at the request of the Bureau of Export Administration within the

Department of Commerce. The Bureau of Export Administration has been

delegated responsibility for enforcement of the Act by the Secretary of

Commerce. This new language provides authority for agents and

investigators from the Bureau of Export Administration to also use

authorities conferred upon them by other laws of the U.S., subject to

policies and procedures approved by the Attorney General to enforce

this Act. Proposed regulations implementing section 9 are contained in

subpart G of this rule.

Section 10 of the Act deals with record keeping requirements. This

section was amended to reduce from 10 years to 5 years, the period

during which records must be kept by persons subject to the Act. In

section 10(b) the word ``any'' has been replaced by the word ``the'' to

limit the responsibility of manufacturers, importers, private label

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distributors, and persons who make significant alterations under the

Act, to supply copies of applicable laboratory testing reports or

manufacturers' certificates only to their purchasers of fasteners. The

intent of the change is to reduce paperwork burdens and to protect

against fraudulent use of test reports and certificates of conformance.

Section 13 provides authority to the Secretary of Commerce to issue

regulations pursuant to the Act. The reference to issuance of

regulations within 180 days of enactment of the Act was deleted because

the time frame is no longer relevant.

Section 14 requires the establishment of an advisory committee to

assist in implementation of the Act. This section was deleted. The

requirements of the section have been met by NIST.

Background--Part 3: Summary of Public Comments Received by NIST in

Response to the 1992 Request for Public Comments, and NIST's Response

to the Comments

As was noted above, on August 17, 1992, NIST published a proposed

rule to implement the Fastener Quality Act in the Federal Register (57

FR 37032). A detailed analysis of the comments follows.

Comments Requesting NIST To Issue Another Proposed Rule

Several commenters requested that in light of amendments made to

the Fastener Quality Act under Pub. L. 104-113, NIST should issue

another proposed rule for public comment. NIST asserts that this final

rule is the logical outgrowth of the 1992 proposed rule and the public

comment process. A majority of the public comments received on the 1992

proposed rule suggested the need for particular amendments to the FQA.

The suggested amendments were enacted as part of Pub. L. 104-113. This

rule contains regulations making final the 1992 proposed rule, as well

as regulations to implement expressly the FQA as amended pursuant to

specific public comments received regarding the 1992 proposed rule.

Therefore, under the Administrative Procedures Act, 5 U.S.C. 553, and

relevant case law, see International Harvester Co. v. Ruckelshaus, 478

F.2d 615 (D.C. CIR. 1973), South Terminal Corp. v. Environmental

Protection Agency, 504 F.2d 646 (1st CIR. 1974), and United Steel

Workers v. Marshall, 647 F.2d 1189 (D.C. CIR. 1980), denied, 101 S.Ct.

3148 (1981), NIST has determined that it has the authority to issue

this final rule without the necessity for issuing another proposed

rule.

Comments Urging Changes to the Regulations Requiring Amendments to the

Fastener Quality Act

NIST received 225 letters (146 from fastener distributors, 50 from

fastener manufacturers, 13 from trade associations, and 13 from

fastener users or importers, and other sources) supporting

recommendations of the Fastener Advisory Committee (the ``Committee''),

which proposed that the following amendments be made to the Fastener

Quality Act:

Comment: Permit tests of the chemical composition of

fasteners to be carried out upon raw materials, rather than upon

finished lots of fasteners as required by the Act.

NIST Response: This legislative change was made in Pub. L. 104-113,

which added a new section 5(d) ``Alternative Procedure for Chemical

Characteristics'' to the Act. New section 5(d) of the Act is

implemented in section 280.15 of the regulations being published today.

Comment: Permit the sale of fasteners which, upon testing

under the Act, are found to have ``minor'' flaws resulting in the

fastener not conforming to the tolerances stated in the standards and

specifications to which they were manufactured. Section 5(a) of the Act

expressly prohibits the sale of fasteners which (1) do not conform to

the standards and specifications to which they were manufactured, and

(2) have not been inspected, tested and certified as provided under the

Act.

NIST Response: This legislative change was made in Pub. L. 104-113,

which amended the definition of ``standards and specifications'' found

in subsection 3(13) of the Fastener Quality Act. The legislative change

recognizes the provisions of numerous commercial and military documents

which provide for a cost effective disposition system for nonconforming

products when a minor nonconformance does not adversely affect the

health and safety, performance, interchangeability, reliability,

maintainability or effective use or operation. The changed definition,

which will permit the sale of fasteners with minor nonconformances is

found in Sec. 280.2 of the regulations being published today.

Comment: Permit distributors to commingle fasteners from

more than one lot in the same container, thus reducing warehouse costs

for the distributors, despite the provisions of section 7(e) of the

Act.

NIST Response: This legislative change was made in Pub. L. 104-113,

which amended section 7(e) of the Fastener Quality Act to permit

commingling of no more than two lots of fasteners under specified

circumstances. The change is implemented in Sec. 280.4 of the

regulations being published today.

Comment: Require that any person who significantly alters a

fastener be responsible for retesting that fastener, despite the

provisions of section 7(d) of the Act.

NIST Response: No legislative changes have been made in response to

this comment. Accordingly, no changes have been made to the regulation.

Comment: Restrict the availability of test reports to the

original purchaser despite the requirements of section 10 of the Act

that such reports be made available to all subsequent purchasers.

NIST Response: In section 10(b) of the Act, the word ``any'' has

been replaced by the word ``the'' to limit the responsibility of

manufacturers, importers, private label distributors, and persons who

make significant alterations under the Act, to supply copies of

applicable laboratory testing reports or manufacturers' certificates

only to their purchasers of fasteners. The intent of the change is to

reduce paperwork burdens and to protect against fraudulent use of test

reports and certificates of conformance.

Subpart A--General

Comments received by NIST pertaining to this subpart are addressed

section by section. If no comments were received pertaining to a

particular section, there is no corresponding entry in this analysis.

Section 280.2 Definitions

As a result of changes made to subparts C and E of these

regulations based on comments described in the relevant sections of

this analysis, several changes have been made to definitions. A

definition has been added for the term ``Accreditation Body,'' to refer

to the National Voluntary Laboratory Accreditation Program, and to

those private entities currently approved by NIST under subpart D of

these regulations and those foreign governments or organizations

currently recognized by NIST under subpart E of these regulations. A

definition has also been added for ``Approved signatory'' to mean an

individual employed by a laboratory accredited under the Act and these

regulations who is recognized by an accreditation body as competent to

sign accredited laboratory test reports. Finally, the definition of

``Certificate of Accreditation'' has been expanded so that it now

refers to a document issued by an accreditation body to a laboratory

that has met the criteria and conditions

[[Page 50543]]

of accreditation, that, together with the assigned code number and

scope of accreditation issued by the accreditation body, may be used as

proof of accredited status.

Various comments suggested that three interrelated definitions, for

``alter,'' ``critical application,'' and ``significantly alter'' should

be revised. These comments came from the Fastener Advisory Committee,

four trade associations, two users, three manufacturers, and one

foreign government. The Fastener Advisory Committee recommended that

the definition of ``alter'' be slightly amended to make clear that

alter pertains to electroplating of fasteners that are ``specified'' as

having a minimum tensile strength of 150,000 psi or greater, otherwise

the requirement could be misinterpreted to mean that electroplated

fasteners that are ``tested'' and found to be greater than 150,000 psi

would have been considered significantly altered even though they were

specified with a minimum tensile strength lower than 150,000 psi.

Definition of Significantly Alter

The Fastener Advisory Committee devoted a great deal of study to

the term ``Significantly Alter'' through its Alteration Working Group.

Public comments stressed the need to be clear about what is or is not a

significant alteration; who is responsible as the alterer of the

fastener; and what tests and markings are required. Consistent with

language found in the Act, the Committee felt it is important to define

a significant alteration as an action which could weaken or otherwise

materially affect the performance or capabilities of the fastener as it

was originally manufactured, grade or property class marked, and

tested. Alterations not considered significant include the application

of adhesives or sealants, locking elements, cutting off, provisions for

lock wires, or coatings and platings of parts below a certain hardness

level to be discussed later in this part. The practice of cutting

threads off a finished fastener is not defined as a significant

alteration. Similarly, the cutting of finished threaded studs, rods,

and bars to produce individual smaller length threaded studs for resale

is not considered a significant alteration. However, the individual

fasteners cut from threaded studs, rods, and bars and offered for

resale shall be individually marked with the grade or property class

identification marking appearing on or accompanying the original

threaded studs, rods, and bars from which the fasteners were cut.

Commenters also asked for clarification on who is responsible as the

alterer of a fastener. NIST and the Committee agree that the person who

owned the fastener at the time the alterations were carried out is

responsible for assuring adherence to the regulations. Accordingly, a

definition of ``Alterer'' has been added to Sec. 280.2, per the

Committee's wishes.

With respect to questions concerning marking and testing of

significantly altered fasteners, the significant alterer will be

responsible for applying a registered insignia to the altered fastener

if so required by the original standards and specifications, and for

assigning a new lot number. A new Sec. 280.11 has been added to the

regulations to spell out these requirements. The significant alterer

will also be responsible for causing the altered fasteners to be

inspected and tested as required under section 5 of the Act, unless the

fastener is delivered to a purchaser accompanied by a written statement

noting the original lot number and the new lot number assigned by the

alterer, disclosing the subsequent alteration, and warning that such

alteration may affect the dimensional or physical characteristics of

the fastener.

If the alteration is not a significant alteration, a new headmark

and new lot number are not required and the only testing requirements

which apply are those required by the specification to which the minor

alteration was performed, such as prevailing torque or salt spray. If

the significant alteration is only electroplating of fasteners above a

certain hardness level or strength level, the requirement for a new

headmark is waived, but a new lot number must be assigned and testing

for hydrogen embrittlement must be performed in addition to those tests

required by the plating specification.

Based upon subsequent input from the Public Law Task Force on the

issue of alteration and significant alteration of fasteners, the Task

Force recommended to Congress that the definition of ``alter'' should

be amended by deleting the reference to a minimum tensile strength of

150,000 pounds per square inch (psi). It was felt that this type of

technical requirement did not belong in the Act and should be covered

in implementing regulations. Pub. L. 104-113 amended section 3(1)(B) of

the Act to remove this requirement.

The Public Law Task Force recommended to the Department that the

Rockwell C Hardness Scale be used in the regulations in lieu of tensile

strength for purposes of determining which fasteners have been

significantly altered through electroplating. It is widely held within

the fastener industry that the process of electroplating fasteners,

particularly high strength fasteners, increases their susceptibility to

hydrogen embrittlement. The intent of the Act and the regulations is to

require that electroplating of high strength fasteners be considered a

significant alteration, and to further require that the manufacturer or

person responsible for the alteration assign a new lot number to the

fasteners and test them in accordance with the plating specification. A

specified Rockwell C value of 32 has been selected as the threshold

hardness for determining when electroplating is a significant

alteration of fasteners. This value has been selected for the following

reasons: (1) It is roughly equivalent to the original threshold of

150,000 psi contained in the 1990 Act (ASTM A370, which provides

approximate hardness conversion numbers for nonaustenitic steels,

indicates that Rockwell C 32 is approximately equivalent to a tensile

strength of 146,000 psi and Rockwell C 33 is approximately equivalent

to a tensile strength of 149,000 psi), thereby covering the same types

and grades of fasteners; and (2) setting the threshold Rockwell C

hardness value at 32 rather than 33 would treat Grade 8 fasteners and

metric 10.9 fasteners (which are substantially equivalent) equally for

purposes of determining when electroplating is a significant

alteration.

Definition of Critical Application

A large number of comments were received on the definition of

``critical application.'' Some of the commenters felt that the

definition did not offer guidance in determining what is meant by

``significant property damage'' or ``significant repair costs.'' Other

commenters felt that the definition should be changed to indicate that

fasteners having minimum tensile strengths of 150,000 psi or greater

should be considered as critical and those below 150,000 psi should be

exempt from coverage under the Act because they are not generally used

in critical applications. The Fastener Advisory Committee and the

Public Law Task Force devoted much time and effort to studying this

issue and recommended to Congress that section 4 of the Act be deleted

in its entirety which would also mean deleting the definition of

``critical application'' as it applies only to section 4. Section 4 of

the Act was repealed by Pub. L. 104-113, and accordingly, the

definition of ``critical application'' has been removed from the

regulations being published today.

NIST, with the assistance of the Fastener Advisory Committee,

attempted but was unsuccessful in

[[Page 50544]]

establishing guidelines under which the Secretary of Commerce would add

or exempt categories of fasteners from coverage under the Act under the

now-repealed section 4 of the Act. Originally, Congressional intent was

that the Act would cover only ``high strength'' fasteners used in

``critical applications.'' A figure of 1% of fasteners meeting these

categories was used throughout early Congressional discussions of the

Act. However, upon passage of the Act and further study and

interpretation of its requirements by the Department of Commerce, the

Fastener Advisory Committee, and various industry groups, it became

apparent that the Act applied to a majority of fasteners in the

industry. Further, while it was possible to come to agreement that a

``critical application'' of a fastener was any application for which it

was reasonably foreseeable that a failure of the fastener would result

in serious personal injury or death, significant property damage, or

significant repair costs, it was not possible to come to agreement a

priori as to which fasteners were used in critical applications. The

problem is that a single type or category of fasteners might be used in

many different applications, some may be critical in terms of having

the potential for causing death or injury if the fastener(s) fails,

others not. The ultimate user of the fastener determines how fasteners

will be used, and there were many instances cited where ``low

strength'' fasteners were being used in critical applications. Thus,

NIST and the Fastener Advisory Committee concluded that there was no

systematic way in which the Secretary of Commerce could add or exempt

whole categories of fasteners from coverage under the Act, and that to

attempt to do so could be costly in terms of potential litigation, with

no resulting benefit to anyone. Such conclusion was based on evidence

that there is no instance within the industry where one can make a

clear-cut case that a particular fastener category, not currently

covered by the Act, is always used in ``critical applications'' or vice

versa.

Definition of Commingling

The Fastener Advisory Committee felt it was important to define

commingling because it is used in the Act. Accordingly, the regulation

has been revised to define ``Commingling'' as meaning the mixing of

fasteners from different lots in the same container.

Definition of Fastener--Washers Subject to the Act

During the joint meeting of the Fastener Advisory Committee and the

Public Law Task Force, held May 15-16, 1996 at the National Institute

of Standards and Technology (NIST), washer manufacturers present at the

meeting commented that there was confusion about which washers were

``fasteners'' under the Act. In particular, they pointed to confusion

among their customers, many of whom were interpreting the Act as

covering any washer that was to be used with a bolt or screw that

itself was covered by the Act.

Congressional intent on this issue is clearly stated in page 10 of

Senate Report 101-388, dated July 23, 1990, which accompanied the

original H.R. 3000 (Fastener Bill). It states as follows:

``Subparagraph (C) of section 3(5), which defines `fastener,' is

intended to cover those washers which standards indicate are associated

with particular fasteners and must be used in order for those fasteners

to conform to those standards. A washer whose use with a particular

fastener is permitted but not required is not covered by this

definition.''

The Advisory Committee and the Task Force concluded that there were

only two U.S. standards and specifications which specifically call out

requirements for washers used in association with covered fasteners

under the Act, and that the regulations should identify such standards

and specifications to make it clear what washers were fasteners within

the meaning of the Act. The standards and specifications are ASTM F959

or F959M pertaining to load indicating washers, and ASTM F436 or F436M

which pertain to washers specified for use with structural bolts or

equivalent high strength bolts. The Advisory Committee and the Task

Force also pointed out that there may be foreign or international

equivalents to these standards and specifications.

The Department believes that the conclusion of the Advisory

Committee and the Task Force, as stated above, is consistent with the

stated Congressional intent of the Act, but feels that it would be

inappropriate to include a specific determination within the

regulations that only washers manufactured to or held out as being

manufactured to the above-mentioned standards and specifications are

fasteners within the meaning of the Act. To do so would unnecessarily

restrict the freedom of consensus standards bodies to significantly

change these standards and specifications in the future, or to propose

new standards and specifications which would have the effect of

including additional washers as ``fasteners'' within the meaning of the

Act. In addition, doing so could exclude washers held out as meeting a

foreign or international standard or specification that requires

certain washers to be used with particular fasteners in order to

conform to that standard or specification.

Definition of ``Fastener''--Referencing of Consensus Standards

During the joint meeting of the Fastener Advisory Committee and the

Public Law Task Force, held May 15-16, 1996 at the National Institute

of Standards and Technology (NIST), comments were received from a

member of the Advisory Committee on that part of the definition of

``fastener'' in Sec. 280.2 of the regulations, which includes the

requirement that: ``A screw, nut, bolt, stud, or washer held out as

being produced according to the requirements of a document other than a

document published by a consensus standards organization is a fastener

within the meaning of the Act and this part if that document

incorporates or references (directly or indirectly) standards and

specifications published by a consensus standards organization or

government agency for purposes of delineating performance or materials

characteristics of the fastener.''

In the view of this Committee member the Congressional intent was

to amend the definition of ``standards and specifications'' in section

3(14) of the Act to remove from coverage under the Act fasteners

produced to standards and specifications published by ``major end-

users,'' and therefore the language proposed in Sec. 280.2 of the

regulations as noted above was not consistent with Congressional

intent. The Committee member proposed an amendment to the definition of

``standards and specifications'' which would have the effect of

exempting from coverage under the Act and regulations fasteners

produced to standards and specifications published by ``major end-

users'' who then purchase such fasteners and install them into a

structure or assembly. The Department agreed to study this matter and

no action was taken on the proposal by the Advisory Committee and the

Task Force.

The Department has studied this issue and concludes that the

definition of fastener as provided in Sec. 280.2 of the regulations

meets Congressional intent. Therefore, the proposal to exempt fasteners

produced to standards and specifications published by ``major end-

users'' is rejected. The reasons are as follows. In the 1990 version of

the Fastener Quality Act, ``standards and specifications'' were defined

as

[[Page 50545]]

documents published by ``consensus standards organizations,''

``government agencies,'' and ``major end-users.'' The Act further

defined ``consensus standards organization'' but did not define ``major

end-user'' of fasteners. NIST, with the assistance of the Fastener

Advisory Committee, defined ``major end-user'' in the draft

implementing regulations issued for public comment in 1992 as ``a

recognized developer and publisher of standards bearing such user's

identification which have characteristics similar to national consensus

standards and which have been developed or modified to fit the specific

needs of such user.''

During the 1992 public comment period, comments were received from

the Fastener Advisory Committee that there are manufacturers and

private label distributors who modify existing standards and

specifications to produce unique fasteners either for marketing

purposes or to satisfy a particular market niche, and that such

manufacturers or private label distributors might not be considered

``major end-users'' for purposes of this definition. The result could

be that fasteners produced this way might be considered ``blueprint

specials'' and, therefore, not subject to the Act. Based upon such

comments, the Department proposed a change to the definition of

``standards and specifications'' to have it read: ``* * * the

provisions of a document published by a consensus standards

organization, a government agency, a manufacturer, a private label

distributor, or a major end-user of fasteners.'' The net effect of the

proposed change would have been to include a much broader population of

fasteners under the Act. For example, fasteners produced to a company's

proprietary standard would have been included under the Act provided

the fastener met all other requirements pertaining to the definition of

a ``fastener.''

In 1995 industry formed the Public Law Task Force to forge a

unified industry position on needed amendments to the Act. The Task

Force was invited by Congress to propose clarifying and substantive

amendments to the Act. NIST was asked to cooperate with the Task Force

in developing such recommendations. The definition of ``standards and

specifications'' was an issue raised by the Task Force, who felt that

the definition was confusing and needed to be simplified. In reviewing

the definition, NIST concluded that the 1992 proposed change had the

effect of including within the meaning of the Act fasteners produced to

standards and specifications published by manufacturers and private

label distributors, and that such extension of the Act was not

supportable after a review of Congressional history of the Act.

Additionally, the definition of ``major end user'' as proposed in the

1992 draft of the regulations was confusing in terms of deciding which

standards of which organizations would apply.

A review of legislative history indicates that the intent was to

cover fasteners produced for use by original equipment manufacturers

(OEMs) in ``aircraft, the space shuttle, motor vehicles of all kinds,

military equipment, highway bridges, and buildings'' (page 2, Senate

Report 101-388, dated July 23, 1990). Additional evidence is contained

in the Act itself by virtue of the definition of OEMs contained in

section 3(11) of the 1990 Act and in examples cited in pp 18-19, of the

Senate Report cited above. Further, in discussions within the Task

Force it was clear that industry practice among companies like General

Motors, Ford, and Chrysler was to reference standards from ASTM, SAE,

and other consensus standards bodies in their standards.

Accordingly, the Task Force proposed an amendment to the definition

of ``standards and specifications'' in section 3(14), which was adopted

by Congress and which bases the Act's coverage of fasteners on those

produced to standards and specifications of consensus standards bodies

and government agencies. Such amendment was proposed with the

understanding that NIST would further specify by regulation that

fasteners produced to documents other than those of consensus standards

organizations or government agencies would be fasteners within the

meaning of the Act if those documents incorporate or reference

(directly or indirectly) standards and specifications published by a

consensus standards organization or a government agency for purposes of

delineating performance or materials characteristics of the fastener.

Therefore, fasteners produced to standards and specifications published

by major end-users are covered by the Act and Regulations, if those

standards and specifications incorporate or reference, directly or

indirectly, standards and specifications published by a consensus

standards organization or a government agency.

Definition of Grade or Property Class Identification Marking

Several comments were received that the definition of ``Grade or

Property Class Identification Marking'' should be clarified to

distinguish between grade or property class marks and ``raw material

marks.'' A grade mark is placed on a fastener to indicate that the

material, strength properties, or performance capabilities of the

fastener conform to a specific standard. A raw material mark indicates

the base material used and is not considered a grade identification

mark for purposes of the Act and Regulations, unless the mark is

required by the fastener standards and specifications to identify

specific conformance.

Definition of Lot Traceability

The Fastener Advisory Committee recommended that ``lot

traceability'' be defined as it is an important term used in the Act

and regulations. A definition has been provided in the regulations. As

part of the definition, it is necessary to make it clear that the

fastener part number, manufacturer's identity, and lot number are

critical elements of information needed to assure lot traceability.

Accordingly, a definition has also been added for ``lot-specific

identification information,'' as meaning information applicable to a

fastener consisting of, at a minimum, (i) the part number (or a part

description if there is no applicable part number), (ii) the identity

of the manufacturer, and (iii) the lot number. A definition has also

been provided for ``Lot number'' as meaning a number assigned by a

manufacturer to the lot.

Definitions Related to ``OEMS''

Eight commenters, five manufacturers and users of fasteners, and

three trade associations suggested that changes should be made in the

definitions contained in the regulations to clarify the meaning of the

terms ``original equipment manufacturer'' (OEM) and ``authorized

dealer.'' Some of the commenters suggested that a definition should be

provided for the term ``authorized dealer'' in order to clarify that

the term ``original equipment manufacturer'' is not limited to the

automobile industry. Other commenters expressed confusion about the

application of the regulation in the context of original equipment

manufacturers who are also importers. Two amendments to the Act have

taken care of this issue. First, section 7(e), commingling was amended

to permit voluntary commingling of fasteners by distributors and the

reference to original equipment manufacturer was removed. Second, the

definition of ``original equipment manufacturer'' in section 3(11) was

deleted.

[[Page 50546]]

Definition of Original Laboratory Testing Report

During the May 1996 joint meeting of the Fastener Advisory

Committee and the Public Law Task Force there was discussion about the

requirement in Sec. 280.5 of the regulations that an ``original

laboratory testing report'' was required to be maintained on file with

the manufacturer, importer, or private label distributor. Questions

arose as to what constituted an original test report. In order to

clarify the intent of the regulations a definition of ``original

laboratory testing report'' has been added which states that it is ``a

laboratory testing report which is originally-signed by an approved

signatory or a copy thereof, certified by the laboratory that conducted

the test''.

Definition of Standards and Specifications

Comments were received from the Fastener Advisory Committee

concerning the definition of ``Standards and Specifications.'' The

Committee noted that there are manufacturers and private label

distributors who modify existing standards and specifications to

produce unique fasteners either for marketing purposes or to satisfy a

particular market niche, and that such manufacturers or private label

distributors might not be considered ``major end-users'' for purposes

of this definition. The definition of ``standards and specifications''

has been amended in the Act to make it clear that for purposes of the

Act only fasteners covered by standards and specifications published by

a consensus standards organization or by a government agency are

subject to the Act.

Definition of Traceability

Four commenters, three manufacturers and one trade association,

suggested that the term ``traceability'' should be revised to

distinguish between traceability of fasteners and traceability as

defined in the context of the standards arena. In response to this

comment, the definition of ``traceability'' contained in the draft

regulations has been replaced by two definitions. The first, ``Lot

traceability,'' defines traceability in the context of fasteners as

meaning the recording and maintenance of lot-specific identification

information sufficient to trace fasteners from a single lot throughout

(i) the manufacturer's fabrication or alteration process, (ii) all

inspection and testing operations, and (iii) the subsequent chain of

distribution in commerce. The second, ``Traceability of Measurements,''

defines measurement traceability as meaning a documented chain of

comparisons connecting the accuracy of a measuring instrument to other

measuring instruments of higher accuracy and, ultimately, to a primary

standard.

In response to a series of comments on laboratory test reports

which are described below in the narrative relevant to that section, a

definition of ``Tamper-resistant system'' has been added to Sec. 280.2.

The phrase is defined to mean the use of special paper, embossing

stamps, or other controls which discourage, prevent, or minimize

alteration of test reports subsequent to manufacturing, inspection, and

testing.

Old Sec. 280.4: Waiver Requirement and Old Sec. 280.5: Inclusion of New

Fasteners

Pub. L. 104-113 repealed section 4 of the Act, rendering these

sections obsolete. Accordingly, they have been removed from the

regulation being published today.

New Sec. 280.4: Commingling

Pub. L. 104-113 amended section 7(e) of the Fastener Quality Act to

permit voluntary commingling of no more than two tested and certified

lots by fastener distributors. There is still a restriction on

commingling of more than two tested and certified lots by

manufacturers, importers, or private label distributors. The change is

implemented in Sec. 280.4 of the regulations being published today.

New Sec. 280.5: Certification of Fasteners

One commenter asked whether the regulation requires distributors to

furnish to their customers a manufacturer's certificate when they make

their sale. NIST notes that distributors are not required to provide

copies of the certificates. A new Sec. 280.5 of the regulation has been

added which specifies information that must appear in the ``certificate

of conformance'' and the responsibility of the manufacturer to maintain

the certificate on file available for inspection. The sale of fasteners

by parties other than the manufacturer without an accompanying

certification is not prohibited.

Section 280.6: Laboratory Test Reports

A wide range of comments were received by NIST on the general topic

of the requirements for laboratory test reports set out in Sec. 280.6

of the regulations. For ease of analysis, those comments are discussed

under the following general categories:

* General Observations and Comments;

* Authorized Signatories;

* Tamper Proof Paper; and

* Test Report Contents.

Each of these topics is discussed below.

General Observations and Comments

NIST received eight general comments on the requirements set out in

Sec. 280.6 for the content of laboratory test reports. Four commenters

(three manufacturers and one importer) stated that the reports were

either burdensome, clumsy, irrelevant or otherwise unpleasant, and

suggested that revisions be made to ``clean up'' Sec. 280.6. NIST's

response to these comments is contained in the following paragraphs.

Another commenter suggested that NIST require that all test reports

include the words ``Certified Fastener Test Report'' in a clear and

prominent position. No change to the regulation has been made based

upon this comment. Three manufacturers and a trade association

suggested that NIST delete the requirement to report on ``test

conditions, test set up'' found in Sec. 280.6(a). This deletion has

been made.

NIST has made a number of changes to the regulation in an effort to

simplify and clarify the required contents of laboratory test reports.

In addition, some of the required elements of laboratory test reports

have been grouped into logical units that NIST hopes will make the test

reports more logical and orderly in presentation. Old Secs. 280.6(a)

(6), (7) and (8) from the proposed regulation have been grouped under

the category ``Sampling Information'' in a renumbered Sec. 280.6(a)(5),

and have been assigned the numbers 280.6(a)(5) (i), (ii) and (iii). In

addition, old Secs. 280.6(a) (9), (10), (12), (14) and (15) from the

proposed regulation have been grouped under the category ``Test

Results'' in a renumbered Sec. 280.6(a)(6), and have been assigned the

numbers 280.6(a)(6) (i), (ii), (iii), (iv), (v) and (vi).

Approved Signatories

NIST received three comments on the requirement contained in

Sec. 280.6(a)of the regulation that all laboratory test reports be

signed by an approved signatory. All three comments were from

manufacturers, and suggested either that the requirement for a

signature be removed completely, or that copies of signatures be

permitted. No changes have been made by NIST to the regulation. An

original test report containing an ``original signature of an approved

signatory'' of the laboratory must be provided to the manufacturer, and

under section 7(a)(2) of the Act the original test report must be

maintained on file with the manufacturer and be available for

inspection. However, copies of such report provided by the manufacturer

on a request basis to

[[Page 50547]]

customers do not have to bear original signatures. A definition of

``approved signatory,'' has been added to Sec. 280.2 of the regulation

to clarify which individuals are empowered to sign test reports on

behalf of accredited laboratories.

Tamper Proof Paper

NIST received twelve comments pertaining to the requirement found

in Sec. 280.6(a) that all laboratory test reports use tamper proof

paper. Seven of the comments urged that the requirement for tamper

proof paper be deleted; these comments came from three manufacturers,

two trade associations and two users of fasteners.

The remaining five comments urged that the requirement for tamper-

proof paper be replaced by a requirement for a system which discourages

tampering, perhaps embossing, because tamper-proof paper is not

generally available. These comments came from four manufacturers and

one trade association. As a result of these comments, NIST has revised

Sec. 280.6(a) of the regulations to provide for the use of a ``tamper-

resistant system'' in the preparation of laboratory test reports. In

addition, a definition has been added to Sec. 280.2 as follows

``Tamper-resistant system'' means the use of special paper or embossing

stamps or other controls which discourage, prevent or minimize

alteration of test reports subsequent to manufacturing, inspection and

testing.

Test Report Contents

NIST received numerous comments pertaining to the specific contents

of laboratory test reports required by Sec. 280.6 of the regulations.

In the following paragraphs these comments are described along with

NIST's response to them.

One comment from an importer stated that Sec. 280.6(a)(3) should be

revised so that ``Name of client'' should apply only to independent

laboratories, and not to in-house laboratories. In order to avoid

creating confusion for parties that may review the laboratory test

report at a later date the regulation has not been changed.

NIST received eleven comments on the provisions of old

Sec. 280.6(a)(5) (now Sec. 280.6(a)(4)), which pertains to the

description of the fastener required in laboratory test reports.

Comments from a manufacturer and an importer raised concern about the

requirement for describing head markings found in old

Sec. 280.6(a)(4)(iii) (now Sec. 280.6(a)(4)(iv)). One commenter

suggested that the requirement should be deleted, and another suggested

that the requirement was too burdensome. NIST has determined that the

requirements of this section are essential to the report, and have

clarified its wording that both the manufacturer's recorded insignia

and grade markings must be reported. Three comments were received about

old Sec. 280.6(a)(4)(iv) (now Sec. 280.6(a)(4)(v)), an importer

observing that the requirement for a listing of thread tolerance on

laboratory test reports was not needed because this information was

specified by a standard; a distributor stated that the section should

refer to ``Nominal Diameter'' instead of ``Diameter''; and an agency of

the United States Government suggested that ``class of fit'' be

replaced with ``dimensional tolerance class'' and add ``thread

application category (safety critical thread, other thread etc.), or

conformance requirements, and the dimensional standard under which the

threads were manufactured.'' The section has been revised to refer to

``nominal dimensions'' as suggested.

Continuing the discussion on old Sec. 280.6(a)(5) (now

Sec. 280.6(a)(4)), one manufacturer suggested that the section be

revised to require inclusion in the test report of information on the

revision level of applicable drawing or standard at the time of

manufacture. Also, a trade association suggested that the same section

be revised to add part numbers. No changes have been made to the

regulation based upon these comments since NIST believes that adequate

information on these matters is already required. Another manufacturer

suggested that old Sec. 280.6(a)(5)(viii) (now Sec. 280.6(a)(4)(viii))

be revised by changing ``specification and grade of material'' to

``grade of material.'' No change was made to the regulation based upon

this comment. A user and a manufacturer each suggested that old

Sec. 280.6(a)(4)(ix) be revised to eliminate ``heat treated to the

requirements of the following specification'' and this change has been

made. The last comment on old Sec. 280.6(a)(5)(now Sec. 280.6(a)(4))

was a suggestion by a user who suggested that it be revised not to

require thickness, baking, and so on. The coating material must be

specified, but the regulation has been changed in the now

Sec. 280.6(a)(4)(ix) to drop any reference to thickness of coating or

baking of fasteners.

Three manufacturers and a trade association suggested that original

Sec. 280.6(a)(8) (now Sec. 280.6(a)(5)(iii)) be revised to delete the

name and affiliation of the person performing lot sampling, and two

manufacturers, a user and an importer suggested that Sec. 280.6(a)(9)

was redundant. NIST has determined that these elements are essential to

the report; accordingly no changes have been made. Five comments were

received pertaining to original Sec. 280.6(a)(10) (now

Sec. 280.6(a)(6)(ii)) of the regulations, divided among two

manufacturers, a user, an importer, and a trade association. The

commenters noted that a clarification was needed of the meaning of

``test results''; that is, whether the results should be given as pass/

fail, as maximum and minimum results, or within the context of actual

specification limits. The ``test results'' to be recorded in the test

report are those specified in the applicable standard, specification,

or test method cited by the manufacturer and/or used by the laboratory.

Hence, no change to the regulation was made based upon these comments.

Three comments from manufacturers questioned the provisions of

original Sec. 280.6(a)(12) (now Sec. 280.6(a)(6)(iii)) pertaining to

reporting on all deviations from the test method, asking whether

deviations from the test method would result in flawed testing/

erroneous test results. Two commenters, a manufacturer and an importer,

suggested that original Sec. 280.6(a)(14) (now Sec. 280.6(a)(6)(iv))

should be revised by deleting ``all other items required by the test

method'' as ambiguous or expanding the section to define that which is

required. No changes have been made to the regulation based upon this

comment. One manufacturer commented that the wording of original

Sec. 280.6(a)(15) (now Sec. 280.6(a)(6)(vi)) appears to suggest

nonconforming products can be sold.

Two manufacturers recommended that old Sec. 280.6(a)(17) (now

Sec. 280.6(a)(8)) be deleted, thus removing the requirement that the

test report relate only to the item(s) tested, and two manufacturers

suggested deleting the requirement found in Sec. 280.6(a)(18) (now

Sec. 280.6(a)(10)) for reporting the name of the body which accredited

the laboratory for the specific tests performed which are the subject

of the report and the current period of accreditation. NIST has

determined that this information is essential to the report, and the

requirements of these two sections have not been removed.

One user commented that current Sec. 280.6(c) should be revised to

require numbering for supplemental reports amending previously issued

reports. No change has been made to the regulation based upon this

comment because the regulation already provides that supplementary

information must be reported on a ``suitably marked'' document.

[[Page 50548]]

Section 280.7: Recordkeeping Requirements

The Department received comments on a variety of issues raised by

Sec. 280.7 of the regulations. A paragraph is devoted below to each of

these issues.

NIST received four comments, two from manufacturers and two from

trade associations, stating that test reports should only be available

to the original purchaser. An amendment to section 10 of the Act

provides for this.

NIST received ten comments suggesting that Sec. 280.7(a) be revised

to permit electronic record storage, five from manufacturers, three

from trade associations, one from a university professor and one from a

consultant. This final rule provides that records may be kept in the

form (whether paper, photographic, electronic or some other form) in

which they are created or received by the regulated person. In

addition, Sec. 280.7 of this final rule permits reproductions

(including paper, photographic, magnetic, or some other form) to be

kept in lieu of originals for all records except for test reports (for

which the Act requires originals). However, it establishes specific

requirements of retrievability and legibility that must be met if the

person required to keep records elects to destroy originals and keep

reproductions in lieu thereof. It also makes clear that the regulated

person must make the records available to NIST or BXA upon request.

A testing laboratory and a government agency noted that the law has

no provisions for the protection of records should a manufacturer or

test laboratory file bankruptcy, be dissolved, or be destroyed by fire

and/or by an act of God. The commenters recommended that this problem

be addressed, and that it be documented as either a waiver to the law

or a requirement to the law as how to protect records for ten years in

the event of a misfortune to the manufacturer and/or test facility. In

response, NIST notes that the Act contains no provision for waiving the

record retention requirement under any circumstance and that 1996

amendments to the Act reduced the record retention requirement to five

years.

Three commenters, two manufacturers and a trade association,

suggested that the wording in Sec. 280.7(a) requiring that the records

be sufficiently detailed to permit duplication of the ``exact test

conditions'' at a later date be relaxed, perhaps to simply require

sufficient information to ``allow the test results to be verified by a

retest if necessary.'' Section 280.7 of this final rule adopts this

change.

Section 280.8: Ownership of Laboratories by Manufacturers

NIST received three comments concerning Sec. 280.8 of the

regulations, one from a user, one from a trade association, and one

from the category ``other.'' One commenter suggested that NIST ban all

ownership of testing laboratories by manufacturers; another commenter

urged that NIST impose no ban on the ownership of testing laboratories

by manufacturers; and the third stated that it was unclear what

conditions might be imposed on accredited laboratories affiliated with

a manufacturer.

Section 280.8 of the regulations repeats the provisions of section

5(b) of the Act, essentially verbatim. As written, Sec. 280.8 creates a

procedural mechanism under which decisions may be made by the Director

of NIST as to whether the public health and safety would be increased

by a ban on the ownership of testing laboratories by manufacturers for

specific types of fasteners and tests. Specifically, any ban would be

the subject of a notice and comment process before taking effect. NIST

believes that its discretion in proposing a particular ban intended to

protect the public health and safety should not be limited in advance

by regulation. Accordingly, no change has been made to this section of

the regulations.

Section 280.9: Subcontracting of Testing

Several commenters appeared to be confused as to whether tests

carried out by subcontractor laboratories under the provisions of

Sec. 280.9 of the regulations would meet the requirements of the Act.

Some expressed confusion as to what entities qualified as

subcontractors. One manufacturer, for example, suggested that suppliers

and manufacturers be permitted to be subcontractors. Two other

manufacturers expressed similar confusion. One distributor suggested

revising Sec. 280.9(b)(2) to eliminate confusion by adding the word

``accredited'' to references to the subcontractor.

NIST believes the regulation is clear as written and no changes are

made to it based upon these comments. However, in order to avoid any

possibility of further confusion, NIST wishes to stress that any and

all subcontracting of testing under the Fastener Quality Act must be to

a laboratory that is accredited under the Act and these regulations.

Any party that meets the conditions set out in this regulation may

apply for such accreditation, regardless of their affiliation with a

manufacturer, distributor or other entity.

In addition to the comments described above, NIST received six

comments, three from trade associations, two from manufacturers and one

from a distributor, urging that the regulations be revised to delete

the requirement found in Sec. 280.9(b)(2) for notification of the

client before the fact that the tests will be subcontracted by the

accredited laboratory to another laboratory. NIST does not agree with

these comments, and takes the view that notification of the client

before the fact is important to allow them to decide if they wish for

all testing to be done in-house.

Section 280.10: Sampling

NIST received six comments, from four manufacturers and two trade

associations, suggesting that the emphasis of the regulations on final

inspection is misplaced and that the industry practice is statistical

process control. These commenters suggested the use of statistical

process control rather than lot sampling in the regulation. They

further suggested that the regulation be revised to include the use of

ANSI/ASME B18.18.3M, and ANSI/ASME B18.18.4M, in addition to ANSI/ASME

B18.18.2M already referenced in Sec. 280.10, for purposes of sample

selection when the standard being used by the fastener manufacturer

does not include a sampling plan. In addition to the above comments,

submitted in response to the August 1992 comment period on the proposed

regulations, the automobile industry submitted comments in August 1996

on the same issue of statistical process control. As part of their

comments, the automobile industry projected costs of between $140

million and $209 million annually if its suppliers of automotive

fasteners are required by the Act and regulations to conduct final

inspection of finished fasteners. The costs projected by the industry

were apparently predicated on two assumptions: (1) That the Act and

regulations require final inspection of finished fasteners in lieu of

in-process inspection and controls; and (2) that the Act and

regulations require the use of ASME B.18 quality assurance standards

for inspection and testing of fasteners in lieu of QS9000 quality

assurance standards, which are currently in-use within the automobile

industry. NIST has concluded that neither of these assumptions are

valid for the following reasons. First, there is nothing in the Act or

implementing regulations that prohibits the in-process inspection and

[[Page 50549]]

testing of a given lot of fasteners based upon quality assurance

programs such as QS9000, so long as the requirements of sections 5 (a),

(b), and (c) of the Act are met. That is: (1) The tests called out by

the applicable fastener standards and specifications have been carried

out; (2) the tests have been carried out by a laboratory accredited in

accordance with section 6 of the Act; and (3) the data are reported on

a test report in accordance with Sec. 280.6 of the implementing

regulations. NIST recognizes that some product standards from the

Society of Automotive Engineers (SAE) and from the American Society of

Testing and Materials (ASTM) used in the automotive industry require

final inspection of fasteners, and that under statistical control

procedures, fastener manufacturers may control influence factors (e.g.,

temperature, pressure, etc. in heating treating operations) as a means

of assuring that a particular physical property such as hardness is

within the stated values of the standard rather than conduct final

inspection. Under these circumstances, supporting data for a test that

may be required by the SAE or ASTM standard, indicating that the

fastener lot had been tested for hardness and providing the test

results would not be available. Hence, the manufacturer may not be able

to meet the requirements of sections 5 (a), (b), and (c) of the Act

because there would be no specific evidence that a hardness test had

been conducted if it is required by the standard. Under the Act this

problem can be easily resolved by having the automobile industry

request that SAE or ASTM change the affected fastener standards so that

the manufacturer has the choice in satisfying the standard, and thus

the Act and regulations, by either providing data that the influence

factors affecting hardness are in control for that lot of fasteners, or

providing data that a discreet hardness test has been conducted. The

Act, in relying on standards and specifications from consensus

standards organizations and from government agencies as the basis for

technical requirements to be met by manufacturers, provides significant

flexibility to these standards developers to determine the inspection

and testing requirements for certification of fasteners under the Act

and regulations. Second, as to the automobile industry's assumption

that the Act requires the use of ASME B18 quality assurance standards,

the Act does not mandate the use of any standard or specification.

Under authority provided by section 5(b)(2)(B) of the Act, and at the

request of the Fastener Advisory Committee, NIST has included

references to ANSI/ASME B18.18.2M, B18.18.3M and B18.18.4M, for sample

selection in the event the standard or specification used by the

manufacturer does not provide for the size, selection, or integrity of

the sample to be selected. NIST does not have the authority to mandate

the use of the ANSI/ASME B18.18.2M, 3M, or 4M standards for all

inspection and testing carried out under section 5 of the Act.

Old Section 280.11: Surplus Fasteners

This section was deleted.

New Section 280.11: Significant Alteration of Fasteners

With respect to questions concerning marking and testing of

significantly altered fasteners, the significant alteror will be

responsible for applying a registered insignia to the altered fastener

if so required by the original standards and specifications, and for

assigning a new lot number. A new Sec. 280.11 has been added to the

regulations to spell out these requirements. The significant alteror

will also be responsible for causing the altered fasteners to be

inspected and tested as required under section 5 of the Act, unless the

fastener is delivered to a purchaser accompanied by a written statement

noting the original lot number and the new lot number assigned by the

alteror, disclosing the subsequent alteration, and warning that such

alteration may affect the dimensional or physical characteristics of

the fastener.

If the alteration is not a significant alteration, a new headmark

and new lot number are not required and the only testing requirements

which apply are those required by the specification to which the minor

alteration was performed, such as prevailing torque or salt spray. If

the significant alteration is only electroplating of fasteners above a

certain hardness level or strength level, the requirement for a new

headmark is waived, but a new lot number must be assigned and testing

for hydrogen embrittlement must be performed in addition to those tests

required by the plating specification. If the alteration involves

cutting of threaded studs, rods, or bars into studs, these cut

fasteners must be marked with the grade or property class

identification marking appearing on the original threaded studs, rods,

and bars.

New Section 280.12: Applicability

Seven commenters expressed concern during the 1992 comment process

that the requirement for the use of accredited laboratories not take

effect until a sufficient number of foreign accreditation bodies and

laboratories have been recognized and accredited. The commenters also

expressed concern as to how NIST would know when the number of

accredited laboratories is sufficient. These comments were received

from two trade associations, two importers, one distributor, one

representative of a foreign government, and one individual.

Except as provided in this section, the regulation will become

effective on November 25, 1996. However, NIST notes that section 15 of

the Act makes the regulation applicable only to fasteners manufactured

180 days after the regulation becomes effective, i.e., May 27, 1997 and

also provides that the Director of NIST may delay the applicability of

the regulations to fasteners manufactured beyond that date if at that

time an insufficient number of laboratories have been accredited to

perform the volume of inspection and testing required. A new

Sec. 280.12 of the regulations has been added in order to clarify this

point.

NIST intends to closely monitor the accreditation of laboratories

under these regulations, and will defer the applicability of the

regulations should circumstances warrant.

Status of Inventory

One commenter during the 1992 comment process asked whether

existing inventories of fasteners will be covered when the regulations

take effect.

NIST notes that section 15 of the Act requires only that the

regulations be applicable to fasteners manufactured 180 days or more

after the regulations become effective (herein after referred to as

implementation date). This issue of applicability of fasteners has been

discussed several times since the 1992 comment process. In its January

10, 1995, report and recommendations for amending the Act, the Public

Law Task Force recommended that fasteners manufactured before the

implementation date not be allowed to be certified as conforming

fasteners under the Act. This recommendation was endorsed by the

Fastener Advisory Committee in letters to Congress dated February 9,

1995. During the joint meeting of the Fastener Advisory Committee and

the Public Law Task Force, held May 15-16, 1996, at the National

Institute of Standards and Technology (NIST), this issue was raised

again. In addition, the Advisory Committee and the Task Force

recommended that language be added to the regulations which would

permit the use of metal manufactured before the implementation date to

be used to manufacture fasteners after that date.

[[Page 50550]]

In order to clarify these points, a new Sec. 280.12 has been added

to the regulations, stating that the requirements of the Fastener

Quality Act and these regulations shall be applicable only to fasteners

fabricated 180 days or more after the effective date of the

regulations. This Act and these regulations do not restrict the sale of

fasteners manufactured prior to the implementation date. Fasteners

manufactured prior to the implementation date may be sold in U.S.

commerce for an indefinite period of time, provided such fasteners are

not offered for sale or sold as being in conformance with the Act and

these regulations. The section also specifies that metal manufactured

prior to the implementation date may not be used to manufacture

fasteners covered by the Act and these regulations after such date,

unless the metal has been tested for chemistry pursuant to Sec. 280.15

of these regulations by a laboratory accredited under the Act and these

regulations.

The Director of NIST may delay the applicability of the regulations

beyond the 180-day time period upon making a determination that an

insufficient number of laboratories have been accredited to perform the

volume of inspection and testing required.

New Section 280.13: Imports of Fasteners and New Section 280.14: Option

for Importers and Private Label Distributors

One commenter questioned whether the draft regulation was

consistent with the Act's treatment of importers. After reviewing the

regulations, NIST has decided to add a new Sec. 280.13 of the

regulations dealing with imports of fasteners, and also a new

Sec. 280.14 dealing with options for importers and private label

distributors. New Sec. 280.13 sets out the rule contained in section

7(b) of the Act that it shall be unlawful for any person to sell to an

importer, and for any importer to purchase any shipment of fasteners or

fastener sets manufactured outside the United States unless such

shipment to an importer is accompanied by a manufacturer's certificate,

an original laboratory testing report with respect to each lot from

which the fasteners are taken, and any other relevant lot

identification information. It then sets out the statutory exceptions

to the general rule, which require that delivery of fasteners to any

importer must be accompanied by an original laboratory testing report

shall not apply:

(1) In the case of fasteners imported into the United States as

products manufactured within a nation which is party to a

congressionally approved free trade agreement with the United States

that is in effect, provided that the Director has published in the

Federal Register a certification that satisfactory arrangements have

been reached by which purchasers within the United States can

readily gain access to an original laboratory test report for such

fasteners. Or,

(2) In the case of fasteners imported into the United States as

Canadian-origin products under the United States-Canada Automobile

Pact for use as original equipment in the manufacture of motor

vehicles.

At the present time, no Federal Register notice is planned by NIST

under exemption (1); accordingly, this exemption is not now available.

New Sec. 280.14 sets out the statutory provisions of section 7(c)

of the Act. Entitled ``Option for Importers and Private Label

Distributors,'' Sec. 280.14 states that notwithstanding the provisions

of Sec. 280.13, delivery of a lot, or portion of a lot, of fasteners

may be made by a manufacturer to an importer or private label

distributor without the required original copy of the laboratory

testing report if the manufacturer provides to the importer or private

label distributor a manufacturer's certificate certifying that the

fasteners have been manufactured according to the requirements of the

applicable standards and specifications; and the importer or private

label distributor assumes responsibility in writing for the inspection

and testing of such lot or portion by an accredited laboratory. The

section also provides that the provisions of section 5(a) and sections

7(a) and 7(b) of the Act shall apply to the importer or private label

distributor in the same manner and extent as to a manufacturer.

New Section 280.15: Alternative Procedure for Chemical Characteristics

Pub. L. 104-113 enacted a new subsection 5(d) of the Fastener

Quality Act entitled ``Alternative Procedure for Chemical

Characteristics.'' The new procedure is implemented in Sec. 280.15 of

the regulations being published today.

New Section 280.16: Subsequent Purchaser

This section reflects changes made to section 7(f) of the Act by

Pub. L. 104-113.

Subpart B--Laboratory Accreditation

NIST received no specific comments on subpart B of the regulations.

Subpart C--NIST Fastener Laboratory Accreditation Procedures

To meet the requests of many commenters that the criteria for

accreditation follow ISO/IEC Guide 25 ``General Requirements for the

Competence of Calibration and Testing Laboratories,'' section 280.201

establishes that the criteria for accrediting laboratories under the

Act will be part 285, title 15, Code of Federal Regulations, which are

NVLAP procedures that conform with the requirements of ISO/IEC Guide

25. Furthermore, since ISO/IEC Guide 25 is the document used

internationally by accreditation bodies to assess the competence of

laboratories, the revised procedures should facilitate interpretation

of the NVLAP criteria at the international level.

Section 280.200--Introduction

One commenter, an agency of the United States Government, requested

that a requirement be added stating ``Standards with similar scopes,

but with different requirements shall not have the same: (a) Title, (b)

standard designation number, (c) product labeling system, or (d)

conformance requirements labeling system.'' The standards organizations

are responsible for controlling these concerns. The regulation has not

been changed. However, the Director of NIST will work with the

standards organizations to resolve any problems of this nature.

A representative for foreign manufacturers requested that

laboratories should be allowed to perform the same kind of test to

comply with standards from different countries. Since the Act provides

that the manufacturer of fasteners certify that the fasteners meet the

requirements of the standards and specifications, the regulation was

not changed.

A laboratory requested the addition of a ``Code of Ethics.'' Many

specific requirements and conditions are mandated for accredited

laboratories and no change was made to this section.

A laboratory accreditation body asked for a clarification as to

whether a laboratory's quality assurance program must assure a required

degree of accuracy and precision beyond that required by standard test

methods used. NVLAP procedures cited in Sec. 280.201 address

measurement traceability and calibration requirements.

A trade association requested a retest be required for foreign

sources at the receiving end. Since this is contrary to the Act's

treatment of foreign products this section was not changed. The trade

association also requested that the regulation ``should include

requirements and methods for notifying customers/users of lots with

latent defects discovered after delivery.'' Existing mechanisms for

notification of users of fasteners with latent defects are

[[Page 50551]]

not preempted by the requirements in this regulation. However,

procedures cited in Sec. 280.201 do require laboratories to notify

clients promptly, in writing, of any event, such as the identification

of defective measuring or test equipment, that casts doubt on the

validity of results.

New Section 280.203--Adding to or modifying the Program

A new Sec. 280.203 was added to reflect the Act's intent that the

program reflect the changing requirements placed upon laboratories by

the industry. This section allows the program to be added to, modified,

or realigned based on either a written request or a need identified by

NIST. Subsequent sections in this subpart have been renumbered

accordingly.

Old Section 280.203 New Section 280.204--NVLAP Program Handbook

A domestic manufacturer, a distributor and a consultant requested

that the handbook follow ISO/IEC Guide 25-1990. This did not require a

change to the regulation, however, the draft handbook is compatible

with the ISO/IEC Guide 25 and contains a general operations checklist

which follows the ISO/IEC Guide 25 technical requirements. The NVLAP

Handbook will supplement this Subpart.

A consultant, an accreditation body, a foreign manufacturer and two

foreign aerospace associations requested distribution of the NVLAP

handbook. This did not require a change to the regulation. However, in

preparation for the February 1993 workshop, over 600 copies of the

draft NVLAP handbook were distributed for public comment.

A foreign manufacturer commented that there were too many test

methods with not enough details, and no instructions for testing core

hardness of \1/4\'' diameter bolts. Since the standards and

specifications determine how fasteners are to be tested, no change in

the regulation was made to address this comment. The commenter should

contact relevant standards organizations with specific concerns.

Old Section 280.204 New Section 280.205--Applying for Accreditation

Additional requirements were added to this section for foreign

laboratories. These requirements were necessary to enable NVLAP to

assess properly foreign laboratories and establish fees to maintain

self-sufficiency. The following language was added. Foreign

laboratories may require:

(1) Translation of laboratory documentation into English; and

(2) Payment of additional traveling expenses for on-site

assessments and proficiency testing.

Old Section 208.206 New Section 280.207--Granting and Renewing

Accreditation

On-site Assessment Interval

A fastener manufacturer and a college professor commented that the

on-site assessment interval was not specified. No change to the

regulation was made. This information is provided in the NVLAP

handbook.

Accreditation by Discipline Rather than by Test Method

Two laboratories suggested that accreditation be offered by

discipline rather than by test method. No change in the regulation was

made. The handbook explains the approach which NVLAP will use to group

together like test methods and accredit laboratories for the entire

group.

Accreditation Period

Six technical societies/trade associations, 7 fastener

manufacturers and 2 consultants requested that accreditation be changed

from 1 year to 3 years. Comments received from an agency of the United

States Government and 3 manufacturers requested a 2-year accreditation.

One automotive manufacturer requested the period be extended beyond one

year. The reference to a one-year accreditation period has been deleted

from this section. However, the NVLAP handbook will provide for a

three-year accreditation period. If experience proves positive, the 3-

year accreditation period will be maintained, otherwise, it will be

reduced to a shorter period. The on-site assessment will be conducted

on a 2-year cycle with additional monitoring visits at random or to

address specific problems called to NVLAP's attention.

Old Section 280.207 New Section 280.214--Conditions for Accreditation

A fastener manufacturer, an automobile manufacturer, and a

consultant requested the accreditation period be extended beyond one

year. The accreditation period will be the same as for all other NVLAP

accreditation programs.

A fastener manufacturer requested removal of the requirement that a

laboratory demonstrate, upon request by NVLAP, that it is able to

perform tests representative of those for which it is seeking

accreditation. This requirement has been maintained.

A laboratory requested a limitation to the cost of accreditation.

No change in the regulation was made. The Act specifies that sufficient

fees be collected to cover the cost of the accreditation process.

A fastener company requested that a laboratory must ``be capable of

performing all tests for which it is accredited according to the latest

version of the test method'' and delete an allowance of up to one year

after publication, or another time limit specified by NVLAP. No change

was made to the regulation.

A laboratory requested that accredited laboratories be permitted to

add tests without additional inspections and audits. No change in the

regulation was made. The handbook describes the process for changing a

laboratory's scope of accreditation. Specific circumstances will

dictate the need for an additional on-site visit.

A fastener manufacturer requested removal of the requirement to

keep ``records of all actions taken in response to testing

complaints,'' because Sec. 280.6 requires 5-year retention of all

records. No change was made to this requirement.

Old Section 280.208 New Section 280.215--Criteria for Accreditation

Eight commenters (an agency of the United States Government, an

automobile manufacturer, a distributor, a consultant, 2 fastener

manufacturers, a laboratory accreditation body and a law firm

representing foreign manufacturers) requested that the criteria for

accreditation follow ISO/IEC Guide 25 ``General Requirements for the

Competence of Calibration and Testing Laboratories.'' NVLAP procedures

cited in Sec. 280.201 are in full accordance with ISO/IEC Guide 25.

A law firm representing foreign companies suggested this section

conform to ISO/IEC Guides 54 and 55. These ISO/IEC documents pertain to

accreditation bodies, not laboratories. Since this section provides

criteria for laboratories and not accreditation bodies, no changes were

made to the regulation.

Several comments dealt with the requirements for a laboratory

quality manual. A fastener manufacturer suggested that old

Sec. 280.208(a)(1)(now Sec. 280.215(c)(1)) be changed to ``the Quality

Manual in conjunction with other approved procedures must include as

appropriate.'' This suggestion is taken care of in the existing NVLAP

procedures.

A laboratory accreditation body requested deletion in old

Sec. 280.208(a) (now Sec. 280.215(c)) of the requirements that the

quality manual contain provisions for meeting NVLAP

[[Page 50552]]

conditions for accreditation, provisions of the Fastener Quality Act,

and quality assurance practices for test methods. This suggestion is

taken care of in the existing NVLAP procedures.

A laboratory accreditation organization requested that old

Sec. 280.208(d)'s requirement (now Sec. 280.215(h)) for a calibration

manual be replaced with section 9 of ISO/IEC Guide 25 and 280.208(e)'s

requirement for a test plan be replaced with section 10 of ISO/IEC

Guide 25. This suggestion is taken care of in the existing NVLAP

procedures.

A trade association requested that old Sec. 280.208(b)(6)(i)'s

statement (now Sec. 280.215(b)(2)(ii)) that staff members are not to be

subjected to undue pressure be deleted. The existing NVLAP procedures

which follow ISO/IEC Guide 25 contain this requirement. ISO/IEC Guide

25 also provides that the laboratory shall have policies to ensure that

its personnel are free from any commercial, financial and other

pressures which might adversely affect the quality and integrity of

their work.

A commenter from an agency of the United States Government

requested that old Sec. 280.208(c) (now Sec. 280.215(f)) on facilities

and equipment be modified to add a statement that: ``Equipment shall be

of contemporary design and capability. The equipment shall be modern

enough to require the minimum amount of operator interpretation or

skill in determining the difference between a pass and fail condition

of the product being tested.'' Existing NVLAP procedures require that

the laboratory shall be furnished with all items of equipment

(including reference materials) required for the correct performance of

tests.

A college professor requested that old Sec. 280.208(c) (3)(vi)'s

requirements (now Sec. 280.215(f)(4)) for equipment records report

variation between working and traceable instruments, and also report

differences due to adjustments of working instrument. Existing NVLAP

procedures require that equipment records be maintained to include

dates and results of calibrations and/or verifications.

A fastener manufacturer requested that old Sec. 280.208(d)(2) (now

Sec. 280.215(h)) be changed to ``have a Calibration Manual, or

equivalent.'' Existing NVLAP procedures require that the quality manual

and related documentation shall contain reference to procedures for

calibration, verification and maintenance of equipment.

A fastener manufacturer requested deletion of provision in old

Sec. 280.208(e) (1) and (2) (now Sec. 280.215(h)) to allow departure

from test methods and procedures when necessary for technical reasons.

This change has not been accepted.

A consultant requested removal of the requirement to retain all

original observations, calculations and derived data. Stating that it

``is an unnecessary burden and serves no useful purpose. The final test

report should stand on its own. If a laboratory has demonstrated

proficiency in its various test procedures, there is no need for the

above requirement.'' Existing NVLAP procedures follow the ISO/IEC Guide

25 requirements on records which requires retention of original data.

A trade association requested old Sec. 280.208(f)(2)'s reference

(now Sec. 280.215(j)) to a ten-year record retention requirement for

all records pertaining to tests, inspections and certifications be

deleted, since it is already specified. This is covered in existing

NVLAP procedures.

A consultant requested that old Sec. 280.208(g)(3) (now

Sec. 280.215(j)) pertaining to retention of supplemental information

collected by a laboratory be deleted. This language has been removed

from the regulation.

Old Section 280.209 New Section 280.208--Denying, Suspending and

Revoking Accreditation

A trade association requested that a specific provision be added to

permit users to notify NVLAP of complaints, failures, etc. Users can

report problems with a laboratory directly to NVLAP.

NVLAP will follow-up with the laboratory to resolve such

complaints.

Section 280.212--Approved Signatory

Two fastener manufacturers and a trade association requested that

authorized reproductions of the original signature of an Approved

Signatory be permitted. The NVLAP handbook will provide guidance in use

of an ``authorized'' signature of an Approved Signatory.

Subpart D--NIST Approval of Private Accreditation Programs

NIST received nine comments stating that the proposed approval

period for accreditation bodies of one year was too short, with

suggested periods ranging from between two to six years or indefinite.

The commenters included four manufacturers, one distributor, one

testing laboratory, and two trade associations, and one individual.

NIST agrees with this recommendation and the Program Handbook on

Private Accreditation Programs now reflects this change. Accordingly,

approvals will now be indefinite and old Sec. 280.305 has been deleted

since renewals are no longer required. Subsequent sections in this

subpart have been renumbered accordingly.

NIST received a comment from a laboratory accreditation body that

the requirement contained in Sec. 280.301(c)(17) was not in accordance

with language contained in ISO/IEC Guide 58 with respect to assuring

that accreditation bodies have formal rules and structures that will

assure that senior executives, staff, and committees are free from any

financial and other pressures which might influence the results of the

accreditation process. NIST has changed the language to be in

accordance with applicable provisions of ISO/IEC Guide 58. The new

language is contained in Secs. 280.501(b)(1)(I) and (J).

In addition, one government agency suggested that other Federal

government agencies should be authorized to accredit laboratories for

the purposes of the act. NIST notes that the Act does not provide for

that authorization.

Subpart E--Recognition of Accreditation Programs

NIST received thirteen comments on the procedures for the

recognition of foreign accreditation bodies for testing under the

Fastener Quality Act. The commenters consisted of five manufacturers,

one user, three trade associations, two testing laboratories, one

importer and one government agency. The common thread throughout the

comments was the concern that foreign entities recognized by NIST

should be held to the same standards demanded of U.S. laboratories and

accreditors, and should not be subsidized by fees paid by domestic

organizations. The suggestion was also made that international

recognition agreements should be published in the Federal Register for

public comment.

In response to these comments, revisions have been made to subpart

E to make clear that the principle of national treatment will apply;

that is, all parties, regardless of country of origin will satisfy the

same requirements and pay equivalent fees. NIST has, however,

determined that publication of proposed international recognition

agreements for comment is neither required by law nor appropriate.

Subpart F--Requirements for Fastener Laboratory Accreditation Bodies

NIST received seven comments, one from a manufacturer, two from

testing laboratories, one from a government agency, one from a foreign

government, one from a trade association and one from an individual,

stating that the

[[Page 50553]]

procedures and criteria contained in this subpart should be based on

the most currently available international guides. In part, the

regulations are based on ISO/IEC guides 54 and 55 which have been

superseded by ISO/IEC Guide 58. In response to these comments, subpart

F has been rewritten and is now based upon ISO/IEC Guide 25 and 58.

Subpart G--Enforcement

This final rule consolidates the provisions of the proposed rule,

subparts G, H and I, into a subpart G. As in the proposed rule, this

final rule defines the conduct that constitutes violations of the Act

and the regulations. However, instead of enumerating an exclusive list

of acts prohibited by the Act and the regulations (as in subpart G of

the proposed rule), this final rule provides that any conduct

prohibited by the Act and regulations would be a violation of the Act

and the regulations. Subpart G of this final rule also sets forth

certain specific and general actions by persons subject to the Act and

the regulations that can give rise to a charge that a violation has

been committed.

As in the proposed rule, this final rule provides an administrative

process by which a person charged with violating the Act and the

regulations is given notice and opportunity for a hearing before a

civil penalty may be imposed. This final rule provides that the Office

of Export Enforcement will initiate administrative enforcement

proceedings and the Office of Chief Counsel for Export Administration

will represent the Department in such proceedings before an

administrative law judge.

In response to the publication of the proposed rule, one commenter

pointed out possible inconsistencies between the Act and the list of

prohibited acts set out in Sec. 280.602 of the proposed rule.

This commenter stated that language in Sec. 280.602(a), (b), (c),

(g), (i) & (m) of the proposed rule would prohibit conduct beyond that

intended by the Act. Language in those paragraphs would have prohibited

the ``introduction (into commerce), delivery for introduction (into

commerce), transportation or causing to be transported in commerce for

the purpose of sale or delivery'' of fasteners that did not meet the

requirements of Sections 5 or 7 of the Act. The commenter pointed out

that, by such language, the regulations could apply to fasteners that a

manufacturer of an end product produced in-house and shipped to a

contractor for fabrication into a subassembly which the contractor then

returned to the manufacturer for incorporation into a finished end

product.

We agree that the Act was not intended to cover such transactions.

Subpart A of the final rule is consistent with sections 5 and 7 of the

Act by making it a violation to do anything prohibited by the Act and

this final rule. (See Sec. 280.602 of the final rule.) However, this

does not mean, that, in all instances, the ``delivery * * *

transportation or causing to be transported in commerce for the purpose

of sale or delivery'' would be permissible. If any of these actions

caused, aided, abetted a violation of the Act or regulations, or

constituted solicitation, attempt or conspiracy to violate the Act or

regulations, such conduct would be prohibited. (See Sec. 280.602(b),

(c) and (d) of the final rule.)

The same commenter pointed out that the language of Sec. 280.602(i)

of the proposed rule omitted a condition required by section 7(b) of

the Act. Section 280.602(i) of the proposed rule excepted imports from

countries with which the United States has a free trade agreement from

the requirement that imports be accompanied by a laboratory test

report. However, Sec. 280.602(i) of the proposed rule failed to include

the following condition contained in section 7(b) of the Act, namely:

(That) the Secretary certif[y] that satisfactory arrangements

have been reached by which purchasers within the United States can

readily gain access to an original laboratory test report * * *.

Section 280.13 of the final rule has corrected this omission by

including the following requirement in paragraph (b)(1):

(That) the Director has published in the Federal Register a

certification that satisfactory arrangements have been reached by

which purchasers within the United States can readily gain access to

an original laboratory test report for such fasteners.

Moreover, Sec. 280.602 of the final rule prohibits conduct that

refrains from doing anything required by the Act and regulations.

Therefore, a failure to provide the proper certificate of conformance

to accompany imports, as required by section 7(b) of the Act and

Sec. 280.13 and 280.602 of the regulations, would be a violation of the

Act and regulations.

The same commenter noted that the proposed rule provided specific

time-periods within which responses to discovery requests must be made.

That commenter recommended adopting the time-periods established in the

Federal Rules of Civil Procedure, rather than the shorter time-periods

set forth in the proposed rule.

This final rule generally does not establish time periods for

responses to discovery requests; rather, this final rule encourages the

parties to engage in voluntary discovery and provides discretion to the

administrative law judge in setting a time-period for responses to

discovery, if formal discovery is requested. This final rule does

require that the service of discovery requests be made at least 20 days

prior to the scheduled date of the hearing, unless the administrative

law judge specifies a shorter time period. This final rule also

provides a minimum of 10 days for responses to requests for admissions

of fact or law, although the administrative law judge may provide

additional time for such responses. The Department believes that the

flexibility for dealing with discovery provided by the final rule is

preferable to the rigid response dates set forth in the Federal Rules

of Civil Procedure.

Old Subpart H--Civil Penalties

This subpart has been revised and consolidated into the new subpart

G. NIST received no specific comments on subpart H of the regulations.

Old Subpart I--Hearing and Appeals Procedures

This subpart has been revised and consolidated into the new subpart

G. NIST received no specific comments on subpart I of the regulations.

Old Subpart J--Recordal of Insignia

Subpart J has been redesignated as subpart H.

New Subpart H--Recordal of Insignia

Two manufacturers suggested that any type of permanent marking,

rather than just a raised or depressed insignia, as required by

Sec. 280.900, be permitted for applying the recorded insignia on the

fastener. Section 8 of the Act applies only to fasteners which by their

standards and specifications must bear the manufacturer's or private

label distributor's mark as a raised or depressed insignia. In those

cases, the Act itself requires use of a raised or depressed insignia.

Six comments were received on Sec. 280.700(b) of the proposed

regulation. Two of these comments were from large end users of

fasteners, one was from a manufacturer's association, one was from a

government agency, and two were from manufacturers. These comments

suggested that there is a conflict between Secs. 280.700(a) and

280.700(b). Subsection 280.700(a) states that ``any fastener which is

required by

[[Page 50554]]

the standards and specifications which it is manufactured to bear a

raised or depressed insignia'' must bear a raised or depressed insignia

identifying its manufacturer. Subsection 280.700(b) states that ``The

manufacturer's, or private label distributor's, insignia must be

applied to * * * any fastener which is sold or offered for sale.'' Thus

the language in Sec. 280.700(b) encompasses a broader class of

fasteners. In response to this comment, the language in

Sec. 280.700(a), which tracks the statutory language, was added to

Sec. 280.700(b).

One professional organization suggested that Sec. 280.700(c) be

amended to state that all insignia required by the Act be readable

without magnification. In response, inasmuch as the Act covers

fasteners which are \1/4\ inch in diameter, the PTO felt it was

necessary to permit markings small enough to require magnification.

One fastener organization, one manufacturer and one distributor

suggested that the time periods for filing the maintenance document for

the certificate of recordal set out in Sec. 280.720(a) be harmonized

with the period for filing the renewal of the registration. In the view

of the Patent and Trademark Office (PTO), a regulation which ensures

that the renewal of the certificate of recordal and the trademark

registration occur at the same time would be unduly complex. PTO would

need to set out three renewal periods for fastener recordals, one for

renewals of recordals based on trademark applications, one for renewals

based on trademark registrations, and one for alphanumeric

designations. In addition, the PTO would need to update its recordals

to show the registration date of applications which mature into

registrations. Accordingly, no change has been made to the regulation

based upon these comments.

The members of the Fastener Advisory Committee suggested that

Sec. 280.723(d) be amended to permit the assignment of alphanumeric

designations. In response, the section was rewritten to permit the

assignment of alphanumeric designations upon notification to the

Commissioner and re-application for the alphanumeric designation. The

inability to assign alphanumeric designation would have created serious

problems with unusable inventory if an ongoing business was purchased.

The requirement that the Commissioner be notified of the assignment of

the alphanumeric designation, and that a new application be filed in

the name of the entity which purchases rights in the alphanumeric

designation, will ensure that the traceability requirement of section 8

of the Act is met.

Two manufacturers and one professional organization suggested that

the PTO recognize the fastener markings in MIL Handbook 57, NATO or

CAGE codes, or the fastener markings listed with ASME, DISC or IFI. In

response, PTO notes that the suggested listings contain identical marks

used by different manufacturers. Therefore these listings do not meet

the traceability requirements of section 8(b) of the Act.

One government agency suggested that recordal of fastener insignia

be permitted only to manufacturers not to private label distributors.

Since the Act requires recordal of insignia both for manufacturers and

private label distributors, no change to the regulation was made based

upon this comment.

One manufacturer suggested that the regulations be amended to

permit sale of nonconforming fasteners, manufactured before the Act

becomes effective, for a period of 5-10 years, to reduce the burden of

imprinting a raised or depressed insignia on the fastener. Section 15

of the Act makes the provisions of the Act applicable only to fasteners

manufactured 180 days after final regulations are issued.

One government agency suggested that the PTO add language to its

regulations to clarify that a manufacturer may have an unlimited number

of insignia recorded with the PTO. Another government department

suggested that the regulations be amended to limit the number of

insignia any private label distributor be allowed to have. The

regulations, as presently written, do not limit the number of recorded

insignia or alphanumeric designations a manufacturer or private label

distributor may have. The PTO felt that each business should make its

own determination as to how many recorded insignias it needed. The PTO

did not feel it had sufficient expertise to determine a limit on the

number of recorded insignias each business should be permitted.

One writer suggested that, when a transfer or assignment includes

the liabilities from previously manufactured products, the regulations

permit the assignee to use the unaltered insignia of the assignor. In

response, PTO notes that the regulations as presently written would

permit the assignee to use the mark of the previous manufacturer or

private label distributor, although the assignee would need a new

certificate of recordal.

Comments on the Regulatory Impact Analysis

NIST received comments on a wide array of issues concerning the

draft Regulatory Impact Analysis (RIA) prepared in 1992, including

comments on the percentage of fasteners that might be covered by the

law, observations on the costs of laboratory testing, recordkeeping

costs, nonconforming product costs, distributor costs, and so on. Each

of these topics is treated in a separate section below. Additionally,

NIST has prepared a final Regulatory Impact Analysis/Regulatory

Flexibility Analysis that takes into account the 1996 amendments to the

Act. Comments received as a result of the 1992 public comment process

on the draft implementing regulations and as a result of subsequent

Fastener Advisory Committee meetings have been taken into account in

the preparation of the final Regulatory Impact Analysis.

Percentage of Fasteners Covered by the Law

All comments received on the percentage of fasteners covered by the

law indicated that coverage would exceed the congressional estimate of

1 percent. One United States Senator, six distributors, three

manufacturers, and two trade associations provided estimates ranging

from 15 to 60 percent coverage with aerospace fastener industry

estimates at the upper end of the range. Results from the Fastener

Industry Coalition (FIC) Survey of distributors estimated the range of

coverage from 5 percent to 100 percent, with an average of 54 percent.

Laboratory Accreditation/Testing Costs

Several commenters suggested that some costs of testing have been

omitted from the analysis. Four manufacturers noted that the economic

impact analysis did not include the purchase cost or continued

calibration cost of spectrographs ($100,000 to $200,000 per unit) or

other equipment needed by many manufacturers who operate their own

laboratories. Two manufacturers indicated that the cost of not allowing

mill heat certifications had to be increased to include increased

inventory costs and delivery/pickup costs to the nearest accredited

lab. One distributor and one manufacturer noted that the cost of

providing original copies of certifications (estimated at $15 to $35

per certificate) should be included in the analysis. One distributor

noted that foreign manufacturers may find it impossible to provide full

certification for small lots of unusual items rushed into the U.S. by

air, forcing companies

[[Page 50555]]

to set up testing laboratories in the United States to certify items.

While two manufacturers agreed with the $35 per lot estimated

spectrochemical testing cost, three manufacturers, one distributor, and

one academician noted that the cost impact for spectrochemical analysis

reflected the cost of only one element. Industry practice is to provide

5 to 13 elements in a chemical analysis to more accurately reflect the

material composition. Cost may therefore be 5 to 13 times higher than

estimated. One distributor, while agreeing with the $35 estimate, noted

that with very large lots, several tests may be required. One

manufacturer estimated that testing costs (excluding spectrochemical

testing) would be ten times the NIST estimate. Section 5 of the Act has

been amended to permit fastener manufacturers to use mill heat

certifications of chemistry supplied by metal producers instead of

testing samples of finished fasteners for chemistry. Before the

amendment to section 5, NIST estimated that it would cost the fastener

industry $100.6 million annually in additional costs to conduct

chemical tests of finished fasteners assuming 25% fastener coverage

under the Act. The Fastener Advisory Committee, through its Cost

Effectiveness Task Group, estimated a maximum range of between $28

million to $1.9 billion in additional annual costs, with a more

probable range of between $100 million to $286 million. With the

amendment to section 5 of the Act, NIST projects that the increased

tests costs to industry under the Act will remain at the $6 million

level as indicated in the Summary of Adjusted Industry Costs provided

below.

One manufacturer estimated that the number of laboratories at the

lower bound of the RIA estimate was too low. An estimate of 298-300

manufacturers laboratories plus an additional 152-200 independent

laboratories for offshore production and to cover manufacturers without

laboratories would result in the need for a minimum of 450-500

accredited laboratories. One manufacturer noted that most modern

processing techniques, such as Just-in-Time, KanBan, etc., heavily

influence the lot size downward, and the number of lots may be

understated.

Production Delay Costs

Four distributors/manufacturers and one auto maker indicated that

because each lot must be tested and some tests are lengthy, ``just-in-

time'' production practices will have to be altered and very costly

lot-by-lot product storage will be required which would increase the

basic production cycle. Under a just-in-time inventory management

policy, assembly operations may have to shutdown pending completion of

testing. NIST has discussed this issue with the fastener industry. It

relates to certain types of testing such as salt spray tests where the

amount of time to conduct the test involves days or weeks. These types

of tests are generally not required by the standards and specifications

to be carried out on every lot of fasteners. Moreover, NIST feels that

prudent inventory control and efficient scheduling of tests by

manufacturers and distributors will alleviate shutdowns in assembly

operations.

Recordkeeping Costs

One manufacturer indicated that the recordkeeping requirements of

the proposed regulations may go beyond what laboratories presently

keep. If records of each inspection, calculations made in the

laboratory, etc., must be maintained in addition to the test

certificate there will be a major increase in costs. The Fastener

Advisory Committee has indicated to NIST that laboratories currently

involved in testing fasteners keep records that are very close to those

required by the regulations.

One manufacturer, one distributor, and one foreign trade

association noted that the time required for signing a test report

should include time for report review. Estimated time ranged from 2-20

minutes. Additional review time will be required if test reports are

reviewed more thoroughly after the regulation is implemented.

Training/Education Costs

Two distributors noted that increased training and supervision of

personnel will be required to insure compliance and that training/

information on the requirements of the Act would also have to be

provided to foreign suppliers. NIST has been working with the fastener

industry to organize a series of public workshops both in the U.S. and

abroad to provide training on the Act and regulations, once the

regulations are issued. Eight such workshops have been planned, and

most will coincide with already planned meetings and conferences within

the fastener industry so as to minimize costs. NIST does not feel that

the cost of training and education needed to assure compliance with the

Act and regulations will be significant.

Imported Assemblies Containing Fasteners

Two manufacturers and one manufacturer/distributor noted the Act

allows foreign competitors to produce fasteners without additional

costs imposed by the Act and put them into automotive and other

products which are then imported by U.S. based firms as final products

or subassemblies. This will put U.S. firms producing similar items at a

competitive disadvantage. NIST accepts the comments that imported

assemblies or final products containing fasteners might have a slight

competitive advantage over U.S. assemblies or final products containing

fasteners manufactured in compliance with the Act and regulations.

However, NIST feels that there are many other influence factors such as

cost of materials, labor, and currency fluctuations that could mitigate

any competitive advantage and that it is not realistic to claim that

the cost of fasteners alone will result in a competitive disadvantage

to U.S. firms.

Nonconforming Product Costs

Eleven manufacturers, four distributors, and one importer commented

on the major economic impact of not allowing minor nonconformances that

do not affect the form, fit or function of a fastener. While no cost

estimates were provided, comments indicated that total manufacturing

cost will be significantly affected and may result in shutdown of a

substantial number of firms. ``Just-in-time'' production practices and

worldwide parts sourcing will also be affected and could cause

temporary plant shutdowns.

The Fastener Advisory Committee at its meeting of December 2, 1992

requested its Subcommittee on Cost Effectiveness to prepare a ``white

paper'' projecting the probable economic consequence of implementing

final regulations without amending the Act per the Committee's

recommendations. The report focused on three issues: (1) Permitting the

sale of fasteners tested and found to contain minor nonconformances

from standards which do not affect form, fit, or function; (2)

permitting the acceptance of mill heat certificates from raw material

suppliers rather than post manufacturing testing of finished fasteners;

and (3) permitting the commingling of like fasteners by distributors. A

report was produced by the Subcommittee and adopted by the full

Committee at its meeting March 3-4, 1993. On the issue of nonconforming

product costs, the Report estimates that fastener lot rejection costs

will range

[[Page 50556]]

from $89 million to $285 million annually unless nonconformances now

recognized in existing standards prevail. The Report further noted that

such rejection costs will double when parts are plated because of the

wide swings in coating thickness present in the existing process.

Section 3 of the Act was amended to permit the sale of fasteners

with minor non-conformances following guidelines established in

applicable standards and specifications. The amendment resolves the

non-conforming fasteners issue and will eliminate the $285 million

worst case projected costs to industry, as estimated above.

Distributor Costs

One distributor noted that there can be no standard cost of impact

developed that would safely apply to each and every distributor.

Factors affecting impact include the size of the distributorship and

whether it's mostly a bulk operation, a prepackaged operation, a

repackaging operation or a combination of the above. Smaller

distributors would probably be harder hit because they tend to be more

combination operations with a lesser quantity but wider variety of

products and with much smaller unit sales, which includes broken kegs,

carton or package sales. Cost impact estimates provided by individual

distributors on their operations ranged from no or minimal additional

cost to increases of several hundred thousand dollars the first year.

The Fastener Industry Coalition (FIC) Cost Survey indicated wide

variations in costs likely to be incurred by specific companies. The

survey noted that 50 percent of respondents will require additional

warehouse space and that first year costs would range from $1,500 to

$500,000 and average=$50,966 with subsequent annual costs ranging from

$1,000 to $78,000 and averaging $16,604. The survey noted that 85

percent of respondents would require additional personnel. Estimated

cost ranged from $4,000 to $170,000 and averaged $36,444. Eighty-one

percent of respondents would require additional computer hardware/

software. Estimated first year cost ranged from $500 to $175,000 and

averaged $24,821. Seventy four percent would require additional

machinery, equipment, pallet racking, shelving, or supplies. Estimated

first year cost ranged from $500 to $150,000 and averaged $15,326. The

FIC Survey also noted other costs including: Labels for boxes; probable

loss of old uncertified stock or certification costs to recertify it;

maintenance and certification of quality control equipment and purchase

of additional equipment and quality control personnel; additional

recordkeeping and storage requiring cabinets and personnel; reduced

efficiency in receiving, shipping, materials handling, etc.; cost of

providing test reports to customers; increased inventory costs;

transportation cost to test lab; test costs; changing vendors because

some will drop out; cost of goods that must be scrapped; loss of stock

due to non-commingling; cost of test reports from vendor ($5-$100 per

lot); and additional attorney fees/insurance premiums.

Section 7(e) of the Act was amended to permit voluntary commingling

of fasteners by distributors only. NIST estimates that approximately

10% of distributors will continue to provide lot traceability at an

estimated annual cost to the industry of $6.5 million instead of the

projected $373.3 million annual cost if all distributors were required

to maintain lot traceability for 25% of their inventory. Note that the

$6.5 million does not necessarily represent new costs since some

distributors had been providing this service prior to the passage of

the Fastener Quality Act.

Reduced Competition

Six distributors, seven manufacturers and two laboratories noted

that compliance/accreditation costs and liability issues are likely to

drive firms out of the market thus reducing competition. NIST's

assessment of economic impact has shown no evidence of burdensome

compliance/accreditation, and liability issue-related costs.

Loss of Good Will

Five distributors and one manufacturer noted that one of the most

important costs will be loss of customer goodwill resulting from firms

not being able to accept customer returns and from customers having to

purchase more product than they actually need because breaking packages

will not be cost effective. This problem can be minimized using normal

industry practice of inventory control. The Act does not prevent the

current practice of return of unused, unbroken boxes of fasteners.

Lack of Enforcement

Three distributors, three manufacturers, and one trade association

indicated that those producing/distributing poor quality fasteners will

continue to do so to the extent that lack of enforcement makes that

risk attractive. Several noted that there were already laws in effect

to deal with the mismarked or counterfeit fasteners, but that they were

not being sufficiently enforced. The Bureau of Export Administration

(BXA) of the Commerce Department has 140 experienced field

investigators who will actively enforce this Act.

Miscellaneous Comments

One distributor noted that the regulatory impact is a non-issue

since costs of product failures are so large. Primarily, this Act

addresses the issue of improving the quality and traceability of

fasteners, thereby decreasing fastener-related failures.

One manufacturer stated that if commingling is allowed what is to

stop someone from mixing good certified product with bogus, uncertified

product in the same container? The Act specifically addresses who can

commingle fasteners and how to label commingled fasteners. See subpart

A, Sec. 280.4 of the regulations.

One distributor noted that if a manufacturer can create bogus

fasteners, creating bogus test reports will not be a problem either.

The Act imposes severe criminal penalties for creating either bogus

fasteners or bogus test reports. See Subpart G, Sec. 280.603 of the

regulations.

One manufacturer noted that expected potential benefit resulting

from decreased buyer inspection and testing cost is not anticipated in

the aerospace industry. The Act is not intended to change the current

practice of buyer inspection and testing in the aerospace industry.

Classification

Administrative Procedure Act

This final rule is the logical outgrowth of the proposed rule and

the public comment process. A majority of the public comment received

on the 1992 proposed rule suggested the need for particular amendments

to the FQA. The suggested amendments were enacted as part of Pub.L.

104-113. This rule contains regulations making final the 1992 proposed

rule, as well as regulations to implement expressly the FQA as amended

pursuant to specific public comment received regarding the 1992

proposed rule.

Executive Order 12866

This rule has been determined to be significant under section 3(f)

of Executive Order 12866. However, it has been determined that this

rule is not an economically significant rule within the meaning of

section 3(f)(1) of Executive Order 12866, or a major rule as defined by

section 804 of Pub.L. 104-121, based upon the adjusted costs to

industry of

[[Page 50557]]

complying with the Fastener Quality Act as amended by Pub.L. 104-113

(Technology Transfer and Advancement Act of 1995). The projected $18.9

million annual costs to industry summarized below are based upon NIST's

estimate that 25% of currently produced fasteners would be covered

under the Act. Assuming that 55% of currently produced fasteners would

be covered under the Act, as is projected in industry studies, the

estimated annual industry costs adjusted by amendments to the Act would

be approximately $38.7 million. NIST has prepared a final Regulatory

Impact Analysis on the expected costs that will be incurred by both

government and industry to implement these regulations, as well as on

the expected benefits to be derived from the rule's implementation.

NIST has transmitted this Analysis to the Office of Management and

Budget.

Summary of Adjusted Industry Costs

The following table summarizes the annual costs to industry for

complying with the Fastener Quality Act, as originally estimated in the

1993 NIST Impact Analysis, and as adjusted based upon the recent

amendments to the Act that were contained in Pub.L. 104-113 (Technology

Transfer and Advancement Act of 1995).

Estimated Industry Costs

[In millions]

------------------------------------------------------------------------

Adjusted

With no by

Activity amendments amendments

to act to act

------------------------------------------------------------------------

Lab Accreditation Costs......................... $6.4 $6.4

Increased Test Costs............................ 6.0 6.0

Nonconforming Fastener Costs*................... N/A 0.0

Spectrochemical Test Costs...................... 100.6 0.0

Distributor Costs............................... 373.7 ** 6.5

-----------------------

Total Annual Industry Cost.................. 486.7 18.9

------------------------------------------------------------------------

* NIST was not able to estimate these costs. However, a task force of

the Fastener Advisory Committee estimated lot rejection costs based

upon not being able to sell fasteners with minor nonconformances as

permitted by standards and specifications at $285 million annually,

worst case.

** The $6.5 million does not necessarily represent all new costs since

some distributors had been providing this service prior to the passage

of the Fastener Quality Act.

Summary of Benefits of the Regulation

The economic costs associated with faulty or substandard fasteners

entering the marketplace are difficult to measure. In the legislative

history of the Act, numerous examples were cited of faulty or

substandard fasteners. The one example that was quantified--the NASA

space shuttle equipment example--included an estimated $11 million

price tag associated with the discovery and removal of substandard

fasteners. It is also clear from the other examples included in the

legislative history, that many (if not most) of them resulted in

economic losses well into the millions of dollars--losses that will be

substantially reduced through implementation of this Act. In addition

to economic losses, the injuries and deaths associated with product

failures resulting from the use of faulty or counterfeit fasteners will

be reduced. Another benefit will be a potential reduction in the

inspection and testing costs incurred by purchasers associated with the

quality control of incoming critical fastener procurements. Similarly,

another benefit, although not quantifiable, is associated with customer

perception of improved product quality for U.S. made fasteners

resulting from the Act. Because the Act applies equally to all

enterprises in the United States, be they domestic or foreign,

implementation of the Act will also help to ``level the playing field''

in domestic sales by making it more difficult for unethical

manufacturers and distributors to substitute substandard or counterfeit

fasteners at ``reduced prices'' thereby being able to undercut the

prices of their competitors. Finally, the Act uses voluntary standards

developed by the private sector to set appropriate fastener

specifications and test methods. This approach, which complies with the

requirements of the Technology Transfer and Advancement Act of 1995,

reduces the degree of regulatory involvement in and control over the

marketplace and leaves the determination of fastener requirements to

those most familiar with fastener technology and use.

Regulatory Flexibility Act

The Department has conducted a final Regulatory Flexibility

Analysis for this final rule. Laboratories, most of which are small

entities, desiring to test fasteners in accordance with the provisions

of the Act will incur costs related to accreditation and recordkeeping.

These costs have been discussed in Section IV of the Regulatory Impact

Analysis under LABORATORY COSTS. Based on estimates provided by the

Fastener Advisory Committee, between 328 and 457 laboratories will

require accreditation to implement Pub. L. 101-592, as amended. Using

the 1 to 25 percent range, between 26 and 639 laboratories will require

accreditation. Accreditation cost per laboratory will vary with the

scope of accreditation sought (the number of test methods for which the

laboratory seeks accreditation); however, the annual accreditation cost

(based on NVLAP's experience) is expected to average $10,000 per

laboratory.

Manufacturers who sell grade-marked fasteners covered by the Act

will incur additional testing and recordkeeping costs. Most of the

approximately 350 U.S. fastener manufacturers are not small entities.

No data is available on how many (if any) small U.S. fastener

manufacturers produce fasteners covered by the Act. Manufacturer costs

for all manufacturers are discussed in Section IV of the Regulatory

Impact Analysis under MANUFACTURER COSTS and in the June 1996 update to

the Analysis.

Distributors that sell grade-marked fasteners covered by the Act

will also incur additional costs in supplying lot traceable fasteners

to those purchasers who request them. These costs are discussed in the

June 1996 update to the original 1993 Regulatory Impact Analysis.

As noted above, to the extent that the Act permitted some

flexibility in the development of the implementing regulations, the

Department has sought and incorporated advice from its Fastener

Advisory Committee, chartered pursuant to the Act, to maximize the cost

effectiveness of the regulations.

Responses to comments are contained elsewhere in this rule and this

is thought to minimize the significant impact of this rulemaking

through enactment of amendments to the Act, as described above.

Paperwork Reduction Act

This rule contains three information collection requirements

subject to the Paperwork Reduction Act. Two collections of information

have been approved by the Office of Management and Budget under Control

Numbers 0693-0003, and 0693-0015. The public reporting burden for

collecting information dealing with the accreditation of fastener

testing laboratories (0651-0003) is estimated to average 1 hour per

response, and an estimated total annual burden of 2400 hours. The

public reporting burden for collecting information dealing with

approving laboratory accreditation bodies (0651-0015) is estimated to

average 4 hours per response, with an estimated total annual burden of

20 hours.

[[Page 50558]]

The final rule contains one information collection provision that

is subject to review by the Office of Management and Budget (OMB) under

the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The title,

description, and respondent description of the information collection

requirements are shown below with the estimate of the annual reporting

and recordkeeping burden. Included in the estimate is the time for

reviewing instruction, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information.

Title: Fastener Quality Act Insignia Recordal Process.

Description: This collection of information is required by section

8 of the Fastener Quality Act. Under section 8, each manufacturer or

private label distributor must apply to PTO for recordal of an insignia

on the Fastener Insignia Register. The PTO has drafted a suggested

application form for use by the public.

Description of Respondents: Fastener manufacturers and private

label distributors.

Estimate of Annual Reporting and Recordkeeping Burden: The

estimated total annual burden of hours is calculated at 100 hours. PTO

estimates that there will be between 300 and 900 respondents, or an

average of 600 respondents per year. The Office estimates that it will

take the applicant 10 minutes to collect the data and complete the

application/renewal form.

Notwithstanding any other provisions of law, no person is required

to respond to nor shall a person be subject to a penalty for failure to

comply with a collection of information subject to the requirements of

the Paperwork Reduction Act unless that collection of information

displays a currently valid OMB Control Number.

List of Subjects in 15 CFR Part 280

Business and industry, Fastener industry, Imports.

Dated: September 13, 1996.

Samuel Kramer,

Associate Director.

For reasons set forth in the preamble, title 15 of the Code of

Federal Regulations is amended by adding part 280 to read as follows:

PART 280--FASTENER QUALITY

Subpart A--General

Sec.

280.1 Purpose/description of rule.

280.2 Definitions.

280.3 Relationship to State laws.

280.4 Commingling of fasteners.

280.5 Certification of fasteners.

280.6 Laboratory test reports.

280.7 Recordkeeping requirements.

280.8 Ownership of laboratories by manufacturers.

280.9 Subcontracting of testing.

280.10 Sampling.

280.11 Significant alterations of fasteners.

280.12 Applicability.

280.13 Imports of fasteners.

280.14 Option for importers and private label distributors.

280.15 Alternative procedure for chemical characteristics.

280.16 Subsequent purchaser.

Subpart B--Laboratory Accreditation

280.100 Introduction.

280.101 Accredited laboratory list.

280.102 Procedures for inclusion in the accredited laboratory list.

280.103 Removal from the accredited laboratory list.

Subpart C--NIST Fastener Laboratory Accreditation Procedures

280.200 Introduction.

280.201 Applicability of part 285, title 15, Code of Federal

Regulations.

280.202 Establishment of the program.

280.203 Adding to or modifying the program.

280.204 NVLAP Program Handbook.

280.205 Applying for accreditation.

280.206 Assessing and evaluating a laboratory.

280.207 Granting and renewing accreditation.

280.208 Denying, suspending and revoking accreditation.

280.209 Voluntary termination of accreditation.

280.210 Change in status of laboratory.

280.211 Authorized representative.

280.212 Approved signatory.

280.213 Application of accreditation conditions and criteria.

280.214 Conditions for accreditation.

280.215 Criteria for accreditation.

Subpart D--NIST Approval of Private Accreditation Programs

280.300 Introduction.

280.301 Application.

280.302 Review and decision process.

280.303 Criteria for approval.

280.304 Maintaining approved status.

280.305 Voluntary termination of approval.

280.306 Involuntary termination of approval by NIST.

Subpart E--Recognition of Foreign Laboratories

280.400 Introduction.

280.401 Recognition of foreign laboratories.

Subpart F--Requirements for Fastener Laboratory Accreditation Bodies

280.500 Introduction.

280.501 Accreditation body.

280.502 Laboratory assessors.

280.503 Accreditation process.

280.504 Relationship between approved/recognized accreditation body

and laboratory.

Subpart G--Enforcement

280.600 Scope.

280.601 Definitions used in this subpart.

280.602 Violations.

280.603 Penalties, remedies and sanctions.

280.604 Administrative enforcement proceedings.

280.605 Institution of administrative enforcement proceedings.

280.606 Representation.

280.607 Filing and service of papers other than charging letter.

280.608 Answer and demand for hearing.

280.609 Default.

280.610 Summary decision.

280.611 Discovery.

280.612 Subpoenas.

280.613 Matter protected against disclosure.

280.614 Prehearing conference.

280.615 Hearings.

280.616 Interlocutory review of rulings.

280.617 Proceeding without a hearing.

280.618 Procedural stipulations; extension of time.

280.619 Decision of the administrative law judge.

280.620 Settlement.

280.621 Reopening.

280.622 Record for decision and availability of documents.

280.623 Appeals.

Subpart H--Recordal of Insignia

280.700 Recorded insignia required prior to offer for sale.

The Written Application

280.710 Applications for insignia.

280.711 Review of the application.

280.712 Certificate of recordal.

280.713 Recordal of additional insignia.

Post-recordal Mainenance

280.720 Maintenance of the certificate of recordal.

280.721 Notification of changes of address.

280.722 Transfer or amendment of the certificate of recordal.

280.723 Transfer or assignment of trademark registration or

recorded insignia.

280.724 Change in status of trademark registration or amendment of

the trademark.

280.725 Cumulative listing of recordal information.

280.726 Records and files of the Patent and Trademark Office.

Authority: Sec. 13 of the Fastener Quality Act (Pub.L. 101-592,

as amended by Pub. L. 104-113).

Subpart A--General

Sec. 280.1 Purpose/description of rule.

The Fastener Quality Act (the Act) (Pub.L. 101-592, as amended by

Pub. L. 104-113) is intended to protect the public safety, to deter the

introduction of nonconforming fasteners into commerce, to improve the

ability to trace fasteners covered by the Act, and generate greater

assurance that fasteners meet stated specifications. The Act:

(a) Requires that certain fasteners which are sold in commerce

conform to the specifications to which they are represented to be

manufactured,

[[Page 50559]]

(b) Provides for accreditation of laboratories engaged in fastener

testing; and

(c) Requires inspection, testing and certification, in accordance

with standardized methods, of fasteners covered by the Act.

Sec. 280.2 Definitions.

Unless the context requires otherwise or unless specifically stated

the terms in this part have the meanings prescribed in the statute. In

addition the following definitions apply.

Accreditation means laboratory accreditation.

Accreditation Body refers to the National Voluntary Laboratory

Accreditation Program and those private entities currently approved by

NIST under subpart D of this part and those foreign governments or

organizations currently recognized by NIST under subpart E of this

part.

Accreditation criteria means a set of requirements used by an

accreditation body which a laboratory must meet to be accredited.

The Act means the Fastener Quality Act (Pub.L. 101-592, as amended

by Pub.L. 104-113).

Alter means to alter by through hardening; by electroplating of

fasteners; or by machining.

Alteror means a person who owns a fastener and causes it to be

altered.

Approved signatory is an individual employed by a laboratory

accredited under the Act and these regulations who is recognized by an

accreditation body as competent to sign accredited laboratory test

reports.

Bureau of Export Administration or (BXA) means the Bureau of Export

Administration of the United States Department of Commerce, including

the Office of Export Enforcement.

Certificate of Accreditation is a document issued by an

accreditation body to a laboratory that has met the criteria and

conditions of accreditation. The certificate, together with the

assigned code number, and scope of accreditation issued by the

accreditation body may be used as proof of accredited status.

Commingling means the mixing of fasteners from different lots in

the same container.

Commissioner means the Commissioner of Patents and Trademarks.

Consensus standards organization means the American Society for

Testing and Materials (ASTM), American National Standards Institute

(ANSI), American Society of Mechanical Engineers (ASME), Society of

Automotive Engineers (SAE), or any other consensus standards setting

organization (domestic or foreign) determined by the Secretary to have

comparable knowledge, expertise, and concern for the health and safety

in the field for which such organization purports to set standards.

Container means any package of fasteners traded in commerce.

Date of manufacture means that date upon which the initial

conversion of material into a fastener takes place.

Director means the Director of the National Institute of Standards

and Technology (NIST).

Fastener means any screw, nut, bolt or stud, washer or other item

included within the definition for fastener contained in section 3(5)

of the Fastener Quality Act. The term ``fastener'' does not include a

screw, nut, bolt, or stud:

(1) That is produced and marked as ASTM A307 Grade A;

(2) That is produced in accordance with ASTM F432; or

(3) That is held out as being produced to other than the provisions

of standards and specifications published by a consensus standards

organization, or a government agency.

A screw, nut, bolt, stud or washer held out as being produced

according to requirements of a document other than a document published

by a consensus standards organization is a fastener within the meaning

of the Act and this part if that document incorporates or references

(directly or indirectly) standards and specifications published by a

consensus standards organization or government agency for purposes of

delineating performance or materials characteristics of the fastener.

Fastener insignia register means the register established at the

U.S. Patent and Trademark Office for the recordal of fastener insignia

to identify the manufacturer or private label distributor.

Fastener set means a collection of small quantities of products,

including fasteners, of varying sizes, collected together and sold as a

package.

Grade or property class identification marking means any symbol

appearing on a fastener purporting to indicate that the fastener's base

material, strength properties, or performance capabilities conform to a

specific standard of a consensus standards organization or government

agency. A raw material mark is not considered as a grade identification

mark for purposes of these regulations unless this mark is required by

the fastener standards and specifications to identify specific

conformance.

Importer means a person located within the United States who

contracts for the initial purchase of fasteners manufactured outside

the United States for resale or such person's use within the United

States.

Laboratory accreditation is the formal recognition that a testing

laboratory is competent to carry out specific test(s) or specific

type(s) of tests.

Laboratory accreditation body means a legal or administrative

entity that accredits laboratories.

Laboratory assessment means the on-site examination of a testing

laboratory to evaluate its compliance with specified criteria.

Laboratory test report means a report prepared by an accredited

laboratory in accord with Sec. 280.6.

Lot means a quantity of fasteners of one part number fabricated by

the same production process from the same coil or heat number of metal

as provided by the metal manufacturer and submitted for inspection and

testing at one time.

Lot number means a number assigned by a manufacturer to the lot.

Lot-specific identification information means information

applicable to a fastener consisting of, at a minimum:

(1) The part number (or a part description if there is no

applicable part number),

(2) The identity of the manufacturer, and

(3) The lot number.

Lot traceability means the recording and maintenance of lot-

specific identification information sufficient to trace fasteners from

a single lot throughout:

(1) The manufacturer's fabrication or alteration process,

(2) All inspection and testing operations, and

(3) The subsequent chain of distribution in commerce.

Manufacturer means a person who fabricates fasteners, who

significantly alters fasteners, or

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