ORAL REMARKS BY JOHN O’BRIEN

FEDERAL SCREW WORKS, INC.

BEFORE THE U. S. HOUSE OF REPRESENATIVES COMMITTEE ON SCIENCE, TECHNOLOGY

SUBCOMMITTEE

FEBRUARY 25, 1999

Madam Chairwoman and members of the Committee, my name is John O’Brien. I

am Vice President of Sales and Marketing for Federal Screw Works, a $110

million fastener manufacturer in Detroit, Michigan. I am also the current

Vice Chairman and the incoming Chairman of the Industrial Fasteners

Institute, the leading trade organization for our industry representing 105

fastener manufacturers employing approximately 45,000 workers throughout

America, and 50 suppliers of raw material and other services.

Thank you for the opportunity to address you today on behalf of IFI and the

Fastener Quality Act Reform Coalition, of which IFI is a leading member.

This Coalition consists of approximately 30 companies and associations,

representing manufacturers and distributors of fasteners as well as their

major customers in the automotive, aerospace, heavy equipment and general

industry. In fact, two of those groups—automotive and fastener distributors

are part of today’s hearing.

Thank you as well for your continued interest in this issue and for your

substantial efforts toward finding workable solutions to the problems faced

by fastener manufacturers and their customers.

The title of this hearing, Unscrewing the Fastener Quality Act, couldn’t be

more appropriate. Thirteen years ago, Congress was apprised of a situation

that caused great concern about the safety of products using fasteners.

Mismarked, substandard and fraudulently manufactured fasteners were finding

their way into American commerce and potentially placing our armed services,

our families and our citizens at risk. After an investigation, Congress

issued its own report on the subject in 1988, entitled Is America Losing its

Grip? This report was seen as an indication that the alleged instances of

fastener problems were only the proverbial tip of the iceberg, and Congress

concluded that it must act to head off a perceived rising tide of accidents.

America’s fastener industry, in an effort to assure its customers of its

commitment to quality, stood shoulder to shoulder with you and supported the

enactment of PL 101-592, the Fastener Quality Act. We genuinely believed

that the FQA would resolve the problems of mismarked, substandard and

fraudulently sold fasteners, and that it would not place an undue burden on

our industry.

If only we had known then what we know today! Despite the best intentions

of those involved, within Congress and the Department of Commerce as well as

within the fastener industry, the ensuing 9 years since the passage of the

FQA in 1990 have been extremely frustrating for us. I’m sure they have been

equally frustrating for Members of Congress who were attempting to respond

to concerns expressed to them, as well as for those who were charged with

writing regulations to implement the law.

In the eight years following the passage of the FQA, fastener manufacturers,

distributors, importers, and users attempted to provide input to NIST

regarding definitions, processes, fastener uses, and globalization. Each

time draft regulations were proposed, they proved unworkable, potentially

exposing industry hundreds of millions of dollars of increased costs for

duplicative testing procedures that did nothing to improve fastener quality

and nothing to stop the sale of mismarked, substandard or counterfeit

products. At the same time, technology and manufacturing practices outpaced

the consensus standards that were the basis of the law and implementing

regulations.

As a result, the FQA as it currently exists is fatally flawed, because it

forces reliance on testing procedures and protocols that have been eclipsed

by technology and improved practices. In addition, many of the original

reasons for the law have either been discredited or become faded memories.

We came to the realization last year that a complete reexamination of this

issue was warranted. Fortunately, you agreed and passed PL 105-234,

postponing the implementation of the FQA and requiring a full study of the

condition of today’s fastener manufacturing industry as well as

recommendations for legislative changes that may be appropriate as a result.

With the passage of PL 105-234, the Department of Commerce began a thorough

review of today’s fastener industry, and you have heard (or will hear) from

NIST today with regard to their findings. In that regard, I would commend

to you, Madam Chairwoman and to your Committee, the effort, integrity and

thoroughness brought to this discussion by Dr. James Hill of NIST.

Regrettably, however, the final report was not available to us prior to this

hearing, and we therefore cannot comment on its conclusions or

recommendations.

As part of the review conducted by Dr. Hill in preparation for writing the

report, the American Society of Mechanical Engineers (ASME) conducted a

three-day workshop in Chicago last November under contract to NIST. Every

segment of our industry was provided ample opportunity to comment on its

role in fastener specification, manufacturing, purchasing, and use. In

preparation for our comments to Dr. Hill, the IFI commissioned former NIST

director David Edgerly to conduct a separate review of the 1988 report by

Congress. Following this hearing, we will submit Mr. Edgerly’s report as

well as the proceedings of the Chicago workshop to the committee for your

review.

At the Chicago workshop, many of my colleagues were struck by several themes

that were repeated time and time again during that exhaustive three-day

event. First, the dramatic advances in manufacturing technology and the

implementation of quality assurance systems that have reduced defect rates

in this industry from the 60,000ppm allowable under the historic consensus

standards developed in previous years, to 300ppm or less today.

Second, it is clear that purchasers of fasteners in today’s marketplace have

taken on the responsibility of ensuring the quality of the products they buy

at the beginning of the transaction--before the fastener reaches the

assembly line. The 1988 report, you may recall, focused ultimately on the

purchase of mismarked fasteners by government agencies. You will find in

the ASME proceedings a presentation by a government panel. I would call

your attention to the presentations made by Messrs. Harry Frost of DISC and

Will Harkin of NASA.

Mr. Frost informed the audience that DISC now employs a Qualified Suppliers

List of Manufacturers (QSLM) and distributors (QSLD) who are pre-approved

in its purchasing process. Mr. Harkin, in his comments, said that NASA

today relies on Performance Based Contracting. That is, both agencies only

buy from proven suppliers and ensure that the product purchased meets

specifications before a lot of fasteners reaches the assembly line. This is

a significant change from the 1980s when DISC and other government agencies

bought fasteners based on Mil Specs and price alone.

Today’s global automotive, aerospace, heavy equipment, appliance, electronic

and defense industries pre-approve suppliers based on experience, a proven

track record of deliverable quality or adherence to a customer

created/designed quality assurance system. As an example of the

effectiveness of these practices, it is important to note the point made by

Mr. Tom Cooper of NHTSA, who stated that none of the 1,464 automobile safety

recalls since 1994 were attributed to fraudulent or mislabeled fasteners!

Based on these circumstances and on our own knowledge of our business, we

question why there is a need for any law regulating the sale of fasteners.

But we recognize that laws are not made for the reputable manufacturers who

follow good management and business practices, but for the few unscrupulous

operators who intentionally produce mismarked, substandard or counterfeit

parts.

More importantly, we do not sit in your chairs. We do not bear the

responsibility of representing the families in your districts who deserve to

know that their government cares about them and their wellbeing. With those

thoughts in mind, we offer a few recommendations for your consideration.

First and foremost, we suggest that the thrust of the FQA should be toward

preventing the intentional sale or offering for sale of mismarked,

substandard or counterfeit fasteners—not toward the regulation of

manufacturing and testing procedures.

Second, we agree with the proposed requirement that manufacturers register

the copyrighted insignia they imprint on fasteners. We believe that

registration of copyrighted insignia provides an important means of tracing

fasteners to their producers.

Third, every legitimate producer currently maintains adequate documentation

in his files that verifies the processes employed to produce a fastener to

the specifications intended. This documentation is available to the

customer upon request, and should the customer determine that a fastener or

lot of fasteners does not match the specifications, the insignia and the

manufacturer’s documentation provide traceability and verification. This

also provides a means for prosecution of those who willfully and knowingly

sell mismarked, substandard or counterfeit fasteners.

At the same time, we would encourage customers and commercial users to

develop or adopt systems that qualify their suppliers. Such systems need not

be legislated, but when developed voluntarily can offer assurances to both

manufacturers and end-users that the fasteners being produced are suited for

the application for which they are intended.

Finally, we would urge this Subcommittee and the full Science Committee of

the House of Representatives to work with us and other interested parties to

develop a law that will ensure the continued safety of fasteners used in

commerce, but without imposing unnecessary and costly burdens on fastener

manufacturers or their customers. The IFI and its members pledge our full

support for such an effort.

This concludes my oral comments, Madam Chair. I am prepared to attempt to

answer any questions you or the Committee may have for me. Thank you for

your time and consideration.