H.R.812—4

year, along with its recommendations for improvement of the
process.

“(e). INFORMATION AND TECHNOLOGY TRANSFER ProcRaM.—The
Director of the National Bureau of Standards shall ensure that all
program participants receive the complete results of their audits as
well as detailed explanations of all suggestions for improvements.
The Director shall also provide information about the awards and
the successful quality improvement strategies and programs of the
award-winning participants to all participants and other appro-
priate groups.

“() Funpinc.—The Secretary is authorized to seek and accept
gifts from public and private sources to carry out the program under
this section. If additional sums are needed to cover the full cost of.
the program, the Secretary shall impose fees upon the organizations
applying for the award in amounts sufficient to provide such addi-
tional sums.

“(g) Report.—The Secretary shall prepare and submit to. the
President and the Congress, within 3 years after the date of the
enactment of this section, a report on the progress, findings, and
conclusions of activities conducted pursuant to this section along
with recommendations for possible modifications thereof.”.

(b) ConrorMInG AMENDMENT.—Section 9(d) of such Act (15 U.S.C.
8708(@)) is amended by striking “or 16” and inserting in lieu thereof

“16, or 17”.

‘ker off he House of Repeesentatives.

}

Vice Presidént of the United States and
President of the Senate.

APPROVED ,
AUG 2.0 1987

C cnndd (Gogo


" HR812

One Hundredth Congress of the Wnited States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday, the sixth day of January,
one thousand nine hundred and eighty-seven

An Act

‘To amend the Stevenson-Wydler Technology Innovation Act of 1980 to establish the
Malcolm Baldrige National Quality Award, with the objective of encouraging
American business and other organizations to practice effective quality control in
the provision of their goods and services.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Malcolm Baldrige National Quality
Improvement Act of 1987”.

SEC. 2. FINDINGS AND PURPOSES.

(a) Finpavcs.—The Congress finds and declares that—

(1) the leadership of the United States in product and process
quality has been challenged strongly (and sometimes success-
fully) by foreign competition, and our Nation’s productivity
growth has improved less than our competitors over the last two

lecades;

(2) American business and industry are beginning to under-
stand that poor quality costs companies as much as 20 percent
of sales revenues nationally, and that improved quality of goods
and services goes hand in hand with improved productivity,
lower costs, and increased profitability;

(8) strategic planning for quality and quality improvement
programs, through a commitment to excellence in manufactur-
ing and services, are becoming more and more essential to the
well-being of our Nation’s economy and our ability to compete
effectively in the global marketplace;

(4) improved management understanding of the factory floor,
worker involvement in quality, and greater emphasis on statis-
tical process control can lead to dramatic improvements in the
cost and quality of manufactured products;

(5) the concept of quality improvement is directly applicable
to small companies as well as large, to service industries as well
as manufacturing, and to the public sector as well as private
enterprise;

(6) in order to be successful, quality improvement programs
must be management-led and customer-oriented and this may
require fundamental changes in the way companies and agen-
cies do business;

(7) several major industrial nations have successfully coupled
rigorous private sector quality audits with national awards
giving special recognition to those enterprises the audits iden-
tify as the very best; and

(8) a national quality award program of this kind in the
United States would help improve quality and productivity by—


H.R.812—2

(A) helping to stimulate American companies to improve
quality and productivity for the pride of recognition while
obtaining a competitive edge through increased profits,

(B) recognizing the achievements of those companies
which improve the quality of their goods and services and
providing an example to others,

(©) establishing guidelines and criteria that can be used
by business, industrial, governmental, and other organiza-
tions in evaluating their own quality improvement efforts,
ant

@) providing specific guidance for other American
organizations that wish to learn how to manage for high
quality by making available detailed information on how
winning organizations were able to change their cultures
and achieve eminence.

(b) Purpose.—It is the purpose of this Act to provide for the
establishment and conduct of a national quality improvement pro-
gram under which (1) awards are given to selected companies and
other organizations in the United States that practice effective
quality management and as a result make significant improvements
in the quality of their goods and services, and (2) information is
disseminated about the successful strategies and programs.

SEC. 8. ESTABLISHMENT OF THE MALCOLM BALDRIGE NATIONAL
QUALITY AWARD PROGRAM.

(a) In Generat.—The Stevenson-Wydler Technology Innovation
Act of 1980 (15 U.S.C. 3701 et seq.) is amended by redesignating
sections 16, 17, and 18 as sections 17, 18, and 19, respectively, and by
inserting after section 15 the following new section:

“SEC. 16. MALCOLM BALDRIGE NATIONAL QUALITY AWARD.

“(@) EsTaBLisHMENT.—There is hereby established the Malcolm
Baldrige National Quality Award, which shall be evidenced by a
medal ing the inscriptions ‘Malcolm Baldrige National Quality
Award’ and ‘The Quest for Excellence’. The medal shall be of such
design and materials and bear such additional inscriptions as the
Secretary may prescribe.

“(b) MAKING AND PRESENTATION oF AWARD.—(1) The President (on
the basis of recommendations received from the Secretary), or the
Secretary, shall periodically make the award to companies and
other organizations which in the judgment of the President or the
Secretary have substantially benefited the economic or social well-
being of the United States through improvements in the quality of
their goods or services resulting from the effective practice of qual-
ity management, and which as a consequence are deserving of
special recognition.

“(2) The presentation of the award shall be made by the President
or the Secretary with such ceremonies as the President or the
Secretary may deem proper.

“(8) An organization to which an award is made under this
section, and which agrees to help other American organizations
improve their quality management, may publicize its receipt of such
award and use the award in its advertising, but it shall be ineligible
to receive another such award in the same category for a period of 5
years.


H.R.812—3

“(©) Catecortes In Wace Awarp May se Grven.—(1) Subject to
paragraph (2), separate awards shall be made to qualifying organiza-
tions in each of the following categories—

“(A) Small businesses.
“(B) Companies or their subsidiaries.
“<S) Companies which primarily provide services,

“(2) The Secretary may at any time expand, subdivide, or other-
wise modify the list of categories within which awards may be made
as initially in effect under paragraph (1), and may establish separate.
awards for other organizations in luding units of government, upon
a determination that the objectives of this section would be better
served thereby; except that any such e: ion, subdivision, modi-
fication, or establishment shall not be effective unless and:until the
Secretary has submitted a detailed description thereof to the Con-
gress ‘and a period of 30 days has elapsed since that submission.

“(8) Not more than two awards may be made within any sub-
category in any-year (and no award shall be made within any
category or subcategory if there are no qualifying enterprises in that

category or subcategory).

“@ ‘Carrenta FOR QUALIFICATION.—(1) An organization may qual-

ify for an award under this section only if it—
“(A) applies to the Director of the National Bureau of Stand-
ards in writing, for the award, .
“(B) permits a rigorous evaluation of the way in which its
usiness and other operations have contributed to improve-
ments in the quality of goods and services, and
“(C) meets such requirements and specifications as the Sec-
retary, after receiving recommendations from the Board of
Overseers established under paragraph (2B) and the Director
of the National Bureau of Standards, determines to be appro-
In Priate to 1 {ichieve the objectives of this section. th to
applying the provisions of subparagrap with respect to an’
organization, the Director of the National Bureau of Standards shall
rely upon an intensive evaluation by a competent board of examin-
ers which shall review the evidence submitted by the organization
and, through a site visit, verify the accuracy of the quality improve-
ments claimed. The examination should encompass all aspects of the
organization's current practice of quality management, as well as
the organization’s provision for quality management in its future
goals. The award shall be given only to organizations which have
made outstanding improvements in the quality of their goods or
services (or both) and which demonstrate effective quality manage-
ment through the training and involvement of all levels of person-
nel in quality improvement.

“(2XA) The Director of the National Bureau of Standards shall,
under appropriate contractual arrangements, carry out the Direc-
tor’s responsibilities under subparagraphs (A) and (B) of paragraph
(1) through one or more broad-based nonprofit entities which are
leaders in the field of quality management and which have a history
of service to society.

“(B) The Secretary shall appoint a board of overseers for the
award, consisting of at least five persons selected for their pre-
eminence in the field of quality management. This board shall meet
annually to review the work of the contractor or contractors and
make such suggestions for the improvement of the award process as
they deem necessary. The board shall report the results of the award
activities to the Director of the National Bureau of Standards each