Billions of fasteners are used in safety-critical applications such as buildings, nuclear power plants, bridges, motor vehicles, airplanes, and other products or equipment each year. For example, an automobile may have as many as 3,000 fasteners. In 1988, the House Committee on Energy and Commerce’s Subcommittee on Oversight and Investigations issued a report on counterfeit and substandard fasteners that, along with hearings held by the House Science Committee, led to the enactment of FQA on November 16, 1990. The subcommittee reported that failures of substandard and often counterfeit fasteners may have been responsible for deaths and injuries, reduced defense readiness, and that they potentially threatened the safety of every American. According to the subcommittee report, the Defense Industrial Supply Center, which supplies fasteners to the armed services, found that its inventory contained over 30 million counterfeit fasteners and that Army depots contained another 2.6 million. Similarly, the National Aeronautics and Space Administration (NASA) reported that it found substandard fasteners in space shuttle equipment, and six of its fastener vendors were found to have inadequate quality-control systems. The Air Force likewise discovered substandard flight safety-critical aerospace fasteners in its inventory. FQA covers certain threaded, metallic, heat-treated fasteners of one- quarter inch diameter or greater for use in safety-critical applications. As originally enacted in 1990, FQA required manufacturers and importers to submit all lots of fasteners with significant safety applications to accredited laboratories for testing; established a laboratory accreditation program at the Commerce Department’s National Institute of Standards and Technology (NIST); required original test certificates to accompany the fasteners throughout the sale process; established requirements for manufacturers’ insignias to ensure traceability of fasteners to manufacturers and distributors; and provided for civil and criminal penalties for violations of the act. Since its passage, FQA has been amended several times. Concerns over the regulatory burden of FQA on aviation manufacturers led Congress, in August 1998, to amend the act to exempt certain fasteners approved by the Federal Aviation Administration for use in aircraft. The 1998 amendments also delayed implementation of NIST’s regulations for accrediting testing laboratories. FQA was amended again on June 8, 1999,to make it less burdensome: Fasteners that are part of an assembly or that are ordered for use as a spare, substitute, service, or replacement part in a package containing 75 or fewer parts at the time of sale or are contained in an assembly kit (i.e., the small-lot exemption) were exempted from coverage. Fasteners manufactured in a facility using quality-assurance systems were exempted from coverage. The amendment required accredited laboratory testing only of fasteners manufactured to consensus standards requiring testing, and postponed that requirement until June 2001. Companies were allowed to transmit and store electronically all records on fastener quality provided that reasonable means of authentication of the source of the document existed. The Commerce Department was required to establish and maintain a hotline for reporting alleged violations of the law. All credible allegations would then be forwarded to the Attorney General. The amendment also made it unlawful to knowingly misrepresent or falsify the fastener’s record of conformance or identification, characteristics, properties, mechanical or performance marks, chemistry, or strength. Although FQA does not mention Customs, Customs is authorized by 15 U.S.C. § 1125(b) to identify and detain imported goods marked or labeled with a false description or representation. Under this authority, Customs has conducted spot checks of imported fasteners since 1987 to determine if fasteners’ descriptions or representations are accurate. It has seven laboratories located around the country that provide scientific support to all Customs officers, other government agencies, and foreign governments as part of international assistance programs. Customs laboratories tested samples from randomly selected shipments of graded boltsimported from January through April 1998 in various sized lots and again in March and April 2001. These included one or more of the following tests: carbon, sulfur, phosphorous, alloying elements (chemical tests); or tensile strength and hardness (mechanical tests). Customs’ Chicago laboratory tested 66 randomly selected shipments of graded bolts (12 in small lots) imported during March and April 2001 and found that none were substandard. As discussed below, this is a decrease from results of tests that Customs did before December 1999. Customs’ laboratories also tested a random sample of 77 shipments of graded bolts imported in various sized lots from January 12 to April 12, 1998, and found three (not in small lots) to be substandard. The bolts failed either the tensile or hardness test and were imported through Chicago from Korea or Taiwan. On the basis of these sample results, the Customs study estimated that 5 percent of the 3,097 shipments of the same type of bolts that entered U.S. ports during the 3-month test period were substandard. In addition to testing graded fasteners imported in March and April 2001, Customs’ Chicago laboratory tested, at our request, samples of graded bolts from 15 small lotsthat DSCP had purchased between January 1998 and February 2001, and found that none were defective. Three lots were from contracts for purchases after December 1999and the remainder were before this time. According to a DSCP official, there is no way to determine if the contractors used foreign or domestic materials. Because of the small number of lots tested, the results, by themselves, cannot be used to make any conclusions about industry changes in manufacturing small lots. These results are, however, the best data available on fasteners that DSCP purchased in small lots. None of the 14 responses to our Federal Register notice stated that the fastener industry had changed any practices as a result of the small-lot exemption, as shown in the examples below. The Industrial Fasteners Institute and the National Fastener Distributors Association said they believe that there will be no evidence of significant changes in industry practice because most fasteners sold under the small- lot exemption are produced under quality-assurance systems and are therefore not subject to the act. They further stated that since fastener manufacturers can comply with the test requirements in the amended act in a cost-efficient manner, it is doubtful that industry members would attempt to avoid these costs by marketing fasteners in small-lot packages. The Canadian Fasteners Institute said that in the last decade, the fastener industry has made great advances and investments in product quality control and assurance. It said that the concern with the small-lot exemption stems from its potential for creating a public safety hazard and that the opportunity for the emergence of substandard products in commerce is too great a risk with the small-lot exemption in place. It suggested that, in lieu of any exemptions, FQA be amended to say that the manufacturer, distributor, or importer that sells fasteners as having certain mechanical and physical properties must be capable of substantiating those properties. That is, promises a seller makes to a buyer must be verifiable with objective evidence. The Alliance of Automobile Manufacturers and the Association of International Automobile Manufacturers (AIAM) said that their members produce virtually all the passenger cars and light trucks sold in the United States and use 300 billion fasteners annually. They reported that Congress exempted most automotive fasteners from FQA because strong incentives exist to enhance fastener quality, given the potential impact of faulty fasteners on customer satisfaction, product liability, and regulatory liability. They said that manufacturers have developed various measures, as follows, to assure the quality of the fasteners that they purchase: Proprietary standards—Vehicle manufacturers have developed their own fastener standards to assure that their fasteners are appropriate for specific applications. Quality-assurance systems—Vehicle manufacturers generally require that their fastener suppliers be certified under fastener quality-assurance systems to minimize the occurrence of nonconforming fasteners. Closed-loop acquisition—Vehicle manufacturers generally purchase their fasteners from approved suppliers to assure quality and accountability, and rarely purchase generic fasteners on the open market. The Alliance and AIAM said that they surveyed their members to obtain responses to the questions contained in our Federal Register notice. They said that the responses they received represented over 90 percent of U.S. light vehicle sales in calendar year 1999. None of the respondents reported any significant changes in procurement and packaging practices that involved a reduction in units per package to below 75 units, or an increase in the use of assembly kits as a means of complying with the FQA requirements through the small-lot exemption. The Alliance and AIAM said that on the basis of these survey results, virtually all of the fasteners produced to assemble or service members’ products are either manufactured to internal company proprietary standards or are produced under a qualifying fastener quality-assurance system, or both. As a result, they said much less than 1 percent of fasteners purchased are exempt from FQA solely through the small-lot exemption. These groups reported that the small-lot exemption still serves a very important purpose: to allow the continued availability, at an affordable price, of many spare-part fasteners required to service their members’ products in a safe manner. The majority of these small package/assembly kit fasteners are used to service older models that typically have very low annual sales of spare parts. Without this vital exemption, they report, the costs of such parts would become prohibitive, forcing their members to remove many of these products from the market. In such a case, they believe, the customer desiring to service his or her car would typically be forced to substitute the correct-specification fastener with a generic hardware store look-alike fastener, one that in all likelihood was manufactured to different specifications and uncertain quality standards. The Equipment Manufacturers Institute, an association of companies that manufacture agricultural, construction, forestry, materials-handling, and utility equipment, reported that its members want the small-lot exemption to remain in law.