National Technology Transfer Act Standards Luncheon

Good afternoon. I, too, would like to welcome everyone and to express my appreciation to the co-sponsors of this event.

The co-sponsors are all key contributors to the success achieved thus far under the National Technology Transfer and Advancement Act. Voluntary consensus standards developed by these organizations account for more than half of all standards referenced for regulatory use by federal agencies.

Most of the people in this audience are probably involved with standards and understand their importance. But for the newcomers to this field - standards essentially enable greater transaction efficiency. They serve, in effect, as the common language - setting the expectations and operating rules between two parties. They operate as the "grease" in the free market.

And it is becoming increasingly clear that standards can fundamentally impact industrial competitiveness through ensuring interoperability, reliability, and usability.

Standards enable products, systems, and even organizations to work together.

In short, standards can promote competition. They can stimulate innovation. And they can also promote our well-being and improve our quality of life.

Today, I'm going to describe some of the accomplishments made since the Act was passed. But given this is the 10th anniversary of the Act - it is also a good time to step back, be introspective, and to talk candidly about the hard work that remains. So this talk will be both a celebration and a call to further action.

The Act directs federal agencies to use voluntary consensus standards wherever feasible in regulation and procurement activities; and to participate in voluntary standards development activities.

When standards are developed collaboratively in a transparent process open to all interested parties, standards make regulatory compliance more straightforward and less costly for businesses. In acquisitions, it enables the government to purchase state-of-the-art products at lower costs. In other words, cooperation fostered by the Act provides significant benefit to both the public and private sectors.

The Federal government is committed to participating in the private-sector-led standards setting committees. Today, there are literally several thousand federal experts who actively participate. This is a tremendous commitment by several Federal Departments and Agencies -- and it also offers one metric by which to measure progress in achieving the goals of the Act.

NIST reports annually to Congress on progress in implementing the act. The reports clearly show progress in the transition to private sector standards. Let me give you a few highlights indicative of the progress achieved.¹

• Since 1997, the number of private sector standards used during the year increased more than 140 percent.
• Agencies are also substituting voluntary consensus standards for pre-existing government-specific standards. Since the Act came into effect, the cumulative number of substitutions now exceeds 2,000.

These totals do not include the Department of Defense - the largest federal user of standards, and probably the biggest beneficiary of the transition to private sector standards. By the end of 2004, DOD was using almost 9,200 voluntary consensus standards, more than any other agency.

DOD case studies illustrate the substantial benefits that can result - from millions of dollars in annual procurement savings to more reliable supplies of essential equipment.² Several of these examples are described in the excellent publications that ANSI and the Standards Engineering Society prepared to mark this anniversary.

And we are beginning to see more examples of where the government is working with the private sector earlier in the technology life-cycle. For example, government and industry representatives serve on the ANSI-accredited U.S. delegation to the new ISO committee that is developing standards for nanotechnology.

Also consider the President's call for electronic health records and a nationwide health information network. In pursuit of this goal, the Department of Health and Human Services commissioned ANSI to convene the Healthcare Information Technology Standards Panel. The panel is tasked to develop information technology standards necessary to ensure the healthcare system of the future is interoperable, robust, and secure.

Clearly, the Act has been a catalyst for constructive change. After a decade, however, it is not "all over except for the celebrating."

As much as anything else, the Act spurred a change in the culture of the federal government. That change is very much a work in progress.

This is an occasion to look back over the past ten years and ask ourselves what we have learned and what we need to do to take government standards-related activities to the next level.

One thing we have learned is that a number of federal agencies "get it" and are making extensive use of standards in their activities. They have established internal standards management systems and progressed beyond mere counting to more strategic approaches to the development and adoption of standards.

Not all agencies, however, have yet reached this point. And they will only get there if their senior management commits to developing the necessary policies and to allocating adequate resources for agency participation in standards activities.

This situation is exacerbated by tight budgets where senior leaders must prioritize their investments - and the long-term value from standards participation is often poorly understood.

A job for NIST and for the Interagency Committee on Standards Policy is to develop high level rationale that convinces senior management that voluntary consensus standards advance their agency's mission -- and that the benefit is much greater than the cost. The rationale must be supportable by hard data. We must then be relentless in communicating this message to them.

To this end, NIST has held stakeholder meetings to begin to develop the rationale for both procurement and regulatory applications. We are also working to identify the most promising areas in which to focus as well as how best to communicate this information to senior leadership. Still - a work in progress.

A second lesson we have learned is that the ranks of federal standards experts is being depleted due to retirements, reorganizations, and attrition. Losses of veteran staff drain "institutional knowledge" of the merits of using, and the somewhat arcane process involved in developing standards.

To begin to address this issue -- NIST recently developed and is now providing training for federal employees who are engaged in standards. NIST is also creating a handbook for standards executives -- so that they will have the information necessary at their fingertips to help make decisions about the use of standards.

We are also committed to improve information sharing within and among federal agencies as well as with the private sector. To this end, NIST has created an internet portal to provide a one-stop, e-government location for information related to the use of voluntary consensus standards -- standards.gov.

A third lesson is that we need to enhance the type of data we are collecting if we want to get at the real quantitative impact of the standards-related benefits realized by agencies. Today we deal with anecdotes and single case studies. We don't have the data necessary to support sound economic analyses to quantify the benefits of greater use of private sector standards.

NIST is now laying the groundwork necessary so that relevant economic analyses can be conducted across the entire spectrum of government agencies. As a first step, NIST contracted with RTI to assess areas for improvement. We have now begun collecting existing economic analyses of standards impact as a basis for determining the most relevant factors. We are also assigning a full-time analyst to focus on this effort.

Our goal is to have the tools and data in place within 3-5 years so that we can produce the quantitative and objective analyses necessary to demonstrate the utility of voluntary consensus standards for the government.

And finally -- we are only beginning to scratch the surface on standards-related needs, problems, and inconsistencies at the state and local levels. We have learned that, in key technology areas, state and local officials are desperate for federal guidance to help them with key purchasing decisions.

There is still a lot to do! I am challenging both my own agency and other federal agencies to pick up the pace of implementation and be more systematic and strategic in standards-related activities. And I challenge our private sector partners to work with us to make this happen.

If we are successful, then the number of substantive standards-enabled accomplishments across the federal government will have multiplied.

Here are several organizational achievements that I hope we will be celebrating five years from now in 2011:

• First: Every relevant department, agency, and independent commission has a strategic management standards policy and implementation plan in place to ensure that standards are integral to its decision-making process.
• Second: Agencies increase their participation in voluntary consensus standards development efforts and, as a result, increase their effectiveness in meeting national goals.
• Third: Each agency actively coordinates activities related to evaluating conformance to regulatory requirements to eliminate overlap and duplication and to minimize bureaucratic burdens on the private sector.
• Fourth: State and local needs benefit from - and are integrated into the practices of the federal agencies so that the development of voluntary consensus standards better address their technology needs.

We have come a long way in the past ten years in expanding and strengthening the private-public sector standards partnership. Now we need to raise the bar. Our successes should encourage us to do more -- and to become more ambitious in our collaborations. The past 10 years has seen a fundamental shift in how the Federal government develops and deploys standards. Through greater reliance on voluntary consensus standards -- the American public, business, and the government have all benefited. Thank you for your devotion to standards - and let's keep moving the ball forward.

===========

NOTE 1. The annual report for 2005 is in preparation.

NOTE 2. For example, the whole substitution of private-sector standards for the MilSpecs used initially in the manufacture of C-17 cargo plane are credited, in large part, for cutting in half both the time and cost of production for the Boeing-made aircraft. [U.S. Air Force Aeronautical Systems Center - ASC Engineering Fact Sheet - C-17 Advance Quality System (see http://public.ascen.wpafb.af.mil/success/success.asp)]