Standard Interpretations - (Archived) Table of Contents|
December 4, 1992
The Honorable George W. Gekas
Member, U.S. House of Representatives
Herman Schneebeli Federal Building
Post Office Box 606
Williamsport, Pennsylvania 17703
Dear Congressman Gekas:
Your letter of October 27, to former Director Roy Clason, Office of Intragovernmental Affairs, Occupational Safety and Health Administration (OSHA), on behalf of your constituent, Mr. Edmund F. Joella, President of Regulation Scanning, has been referred to this office for reply. Mr. Joella's concern relates to the low cost of the OSHA CD-ROM to the public.
The OSHA produces 500 CD-ROMs each quarter for internal distribution to Federal OSHA offices and State OSHA programs. The OSHA CD-ROM is developed at the OSHA Salt Lake Technical Center (SLTC) from data residing on an on-line database system, the OSHA Computerized Information System, (OCIS). OCIS has been in existence since 1982.
The Government Printing Office (GPO) enclosed a rider to the OSHA CD-ROM order to produce the number of copies identified by the Superintendent of Documents needed for public sales and subscriptions. The U.S. Air Force also "rides" the OSHA order to produce 900 copies for internal distribution.
OSHA currently does not directly provide printed copies of OSHA regulations, CFR Title 29, Parts 1900-1990, to the public. Copies can be purchased from the GPO. The GPO is disseminating the OSHA CD-ROM to the public in the same manner. This technology has made thousands of pages of OSHA regulatory and technical information available to a wide range of employers and employees in the private sector. The GPO disseminates the OSHA CD-ROM to the public in the same manner as any other government publication. The GPO sets the price to cover production and distribution.
A number of other government agencies are also distributing information on CD-ROM through GPO. A review of the many CD-ROM catalogs available indicates that CD-ROMs available through GPO are sold for a price of between $25 - $35 per disk. The National Technical Information Service (NTIS) provides government agencies another alternative for disseminating information on CD-ROM. NTIS Federal Government CD-ROM titles are currently priced at approximately $110 per disk.
Mr. Joella's concern is that OSHA is undercutting the private sector in selling copies of its standards. OSHA's primary goal is to have the materials available to the public at a price as low as possible. The agency has no intention of competing with any company in the private sector. Having these OSHA materials widely available to the public at low cost should encourage compliance and result in a safer and healthful workplace.
Please do not hesitate to have a member of your staff contact me, if there are further questions concerning this matter.
Patricia K. Clark
Directorate of Technical Support
October 27, 1992
Occupational Safety & Health Administration
Office of Intergovernmental Affairs
U. S. Department of Labor
200 Constitution Avenue, NW
Washington, D.C. 20210
Attn: Mr. Roy Clausen, Director
RE: Edmund F. Joella, President Regulation Scanning
Dear Mr. Clausen:
I am in receipt of an inquiry from Regulation Scanning of Williamsport, Pennsylvania, with regard to OSHA's offer to sell CD-ROM containing OSHA standards at substantially reduced, non-competitive pricing.
I have taken the liberty of enclosing a letter from Mr. Edmund F. Joella, President of Regulation Scanning raising serious questions if OSHA is recovering the cost of the CD-ROMS, or is the government subsidizing the costs of this material to eliminate or limit the private sectors ability to compete with the government in the market place. Such a practice would have serious consequences in the private sector and would virtually put them out of business.
Your immediate review and reply to my Williamsport office will be appreciated.
George W. Gekas
Member of Congress GWG/rc
October 21, 1992
Congressman George W. Gekas
PO Box 606
Williamsport, PA 17701
Dear Congressman Gekas,
I am writing to ask for your assistance in combating what I see as unfair competition between private industry and the federal government.
Specifically, Regulation Scanning is now selling its electronic regulatory databases in direct competition with a tax subsidized product published by the Occupational Safety and Health Administration (OSHA).
Earlier this year, OSHA offered for sale a CD-ROM containing the OSHA standards, both workplace and construction, as well as a wide array of supporting information. This CD-ROM contains a vast amount of data - 140 megabytes to be specific. A listing of the included databases is attached. This entire package of information is updated quarterly by OSHA.
It is sold at $28 for a one-time-only purchase or at $88 per year with quarterly updates.
This price point is certainly far below market value. To give you an idea of just how far out of line this is, I checked the CD-ROM HANDBOOK, a comprehensive directory of the most frequently purchased CD-ROM titles, published by EBSCO Subscription Services of Birmingham, AL. Of the 776 titles listed for sale in this directory, the average sale price was $1,411.36! And most of the titles listed in this directory were not updated at all.
While I am not privy to OSHA's cost structure, our experts in CD-ROM publication tell me OSHA would be lucky to be able to cover its incremental sales, production and distribution costs at a price point of $22-28 per disk. If these costs were burdened with a reasonable factor for overhead, I believe we would find this product is being heavily subsidized by tax dollars.
OSHA's Technical Information Center based in Salt Lake City, UT indicates that over 4,000 copies of this product have been sold since the beginning of the year.
This is having a serious and detrimental impact on RegScan sales. As an example, I can identify 3 new sales which were lost to the OSHA CD-ROM within the last 45 days. These sales would have generated over $3,500 in revenue. In addition, I can identify 6 former subscribers who, within the last 60 days, did not renew their RegScan subscriptions and cited the OSHA CD-ROM as their primary reason for not renewing. The value of these lost renewals is $3,000. And the pace of these losses is increasing.
I don't believe we are alone in feeling this type of impact from the OSHA-CD. I have had conversations with the CEOs of two competitive companies, OSHASoft ERM Computer Services, and they indicated their companies are experiencing similar losses.
The final aspect of this situation relates to other federal agencies. I understand that both the Department of Transportation and the Environmental Protection Agency have CD-ROM versions of their regulations in progress. I am not aware of the price points these agencies contemplate, but I, am highly concerned that they will choose artificially low price points as OSHA has done.
RegScan has created 40 jobs in an industry that did not exist five years ago. We now have at least a dozen competitors who each employ similar numbers of people. These jobs, too, were created in the last five years.
I would very much appreciate your thoughts on this matter and your advice on how best I can procede to stop this practice before it puts RegScan and our private industry competitors out of business.
Edmund F. Joella
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