Monday, March 21, 2011

CPSIA - Response to Questions by Nancy Nord (100 ppm Hearing February 16th)

This is my Response for the Record to a supplemental question posed by Commissioner Nancy Nord to the CPSC's February 16th Hearing on the pending 100 ppm Lead Standards:

Response to Commissioner Nancy Nord's Request
for Comment in the Federal Register

1. You stated reduction from 300 ppm in substrate to 100 ppm in substrate removes the margin of error for low tech manufacturers. Would you elaborate on this with some of your own testing experience?

When we consider the impact of the lower standard, we first ask how we would manage a failure. As (presumably) rational business people, we want to allocate our capital to maximize our returns, and thus, risks to those returns must be weighed and addressed as appropriate. We have tried to understand our risks under the new lower lead standard – and the results are not encouraging. Once a failure (failed test) is discovered, it is often incurable. A failed test on a completed item including an integrated failed component (e.g., a zipper) likely means a total loss under the CPSIA. Failures of components already subject to valid passing component tests cannot be ruled out and in fact, are likely to occur. Our inability to solve this problem for even trivial violations introduces a new and significant risk of random (unpredictable and uncontrollable) losses to our business.

The agency’s stance on re-testing is not encouraging either. The draft rules on re-testing in the “15 Month Rule” are best described as unworkable. The doubt raised over the consequences of a failed test under pending rules only elevates our concern over how we might deal with a failed test. At present, there seems to be few options. For this reason alone, the proposed reduction of lead standards to 100 ppm is extremely threatening.

Given the dire consequences of a failed test, we must assess whether we can control our supply chains and raw materials/components to always comply with the new lower standard. In my testimony before the Commission, I noted that 98.3% of our passing test reports in a two-year period (2701 CPSIA test reports) were compliant with the new standard. Unfortunately the 1.7% in the range of 100-300 ppm scatters randomly across our many products and components. Thus, we don’t know how to predict which components are prone to risk of non-compliance and the consequences of finding them at the wrong time can be devastating. [It goes without saying that 2701 tests in a two-year period is a strong demonstration of both the devotion of resources and the huge expenditures required by the CPSIA to obtain passing tests reports – continual clean bills of health, over and over and over again.]

Our testing results reveal two troubling trends. First, we have found a material number of our items with one or more components that fall into the 100-300 ppm zone, sometimes just barely above 100 ppm. For a “miss” of as little as 5 ppm of lead entombed permanently in a substrate, an entire lot can be relegated to the garbage heap. Failed components might be as insignificant as a label or a lens cap. We also know from experience that retesting the same unit or units from the same lot may result in a passing test report but do not anticipate that we will be afforded this option to “comply”. In any event, retesting to obtain a clean passing test report does not change the product. If this law is truly about safety, I fail to see what is being accomplished by piling up the test reports to the profit of the test labs. The occurrence of failures under the new standard for a few ppm of lead will raise our costs significantly.

Second, we have encountered significant variability in our testing results. I have attached three test reports as examples of the variability problem. The first report (submitted with my comments on the 100 ppm standard) shows the test results on a single piece of string from a mesh bag holding dominoes. We cut the string into ten pieces and then tested each segment. The lead content results ranged from 239 – 275 ppm. A representative of the bicycle industry gave similar evidence (wide variability in multiple tests on different parts of a single component) at the 100 ppm hearing on February 16th. In the attached test report on tape measures, we found lead levels in coatings in the same tape measure lot ranging from 79-97 ppm, which is more than a 20% variability range. Finally, I have attached three test reports showing yellow plastic substrate from the same lot of educational products at 23, 88 and 139 ppm lead levels. Our success in obtaining passing test reports will apparently depend on LUCK when lead levels are near the 100 ppm concentration. We don’t have a solution to this problem. In our experience, this problem strikes randomly and often absurdly. We have found, for instance, lead levels between 100-300 ppm on zipper housings on the inside of a sewn bag. Lizard tongues might be able to reach it but fortunately, none of our customers are lizards.

None of this randomness or massive expense can be tied to safety – just to the enrichment of testing companies and lawyers. I am hopeful that the Commission will see that action is needed to stop the reduction of the lead standard to 100 ppm to help preserve the value our company brings to schools and families throughout the United States.

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