1998 Winner
Consumer Product Safety Commission
Innovations in American Government Awards
Sponsored By:
Innovations in American Government Awards
Each year, more than 21,400 people die and more than 29 million are injured in incidents related to the 15,000 categories of consumer products under the U.S. Consumer Product Safety Commission's (CPSC) jurisdiction. The CPSC's mission is to help reduce the risk of injury from consumer products. Although it does not have the authority to safety-test products before they are marketed, as soon as CPSC learns of potentially hazardous products it can require their removal from the marketplace. In the early 1990s, however, the agency had lost credibility with the public and with producers. It often took CPSC staff members up to four months to process a report, making it difficult for the agency to keep abreast of the more than 200 reports it received each year. Consumer advocates worried that dangerous products were allowed to linger too long in the marketplace; businesses worried that sluggish recalls would leave them vulnerable to legal action.
In 1994, however, Chairman Ann Brown refocused the Commission's efforts and formulated a core mission concentrated on children and safety in the home. In mid-1994, as part of this effort, CPSC staff began to hold informal brainstorm sessions in an attempt to conceive policies that might encourage industry cooperation and increase agency efficiency and effectiveness. CPSC staff realized that even cooperative companies were sometimes reluctant to report due to certain quirks in traditional recall procedures. The primary industry objection was to the preliminary determination (PD), an early analysis of a product's potential hazard. Firms feared that plaintiffs' attorneys would attempt to use these determinations in product liability actions as an official statement by the federal government that their products were defective. In response to these concerns, the CPSC's Office of Compliance developed a "No PD" program, which later became known as "Fast Track Product Recall." The program was initiated on August 17, 1995, and was made permanent on March 13, 1997.
The program offers a fast-track option for recalls to companies that report a product deficiency and simultaneously propose a satisfactory recall plan that can be implemented within 20 working days. Although the CPSC reviews the plan to ensure adequate correction of the problem and sufficient public notification, the expedited process eliminates many aspects of the traditional staff assessment, including the PD Companies that cannot meet the 20-day deadline or that, for some reason, prefer not to adopt such a fast course of action may still elect to use the traditional recall procedure.
The Fast Track program eliminates adversarial and lawyer-intensive negotiating, and allows the CPSC to concentrate its resources on firms that are relatively more inclined to non-compliance. Between 1995 and 1997, CPSC approved fast-track recall plans for more than 21 million individual items, and on average, these recalls required less than half the time and were three times as effective as a traditional recall. The average time from initial notification to final approval for Fast Track recalls in 1996 and 1997 was 31 business days; for traditional recalls, it was 81 days. The reallocation of resources and man-hours even allowed CPSC to speed up traditional recalls: time to final approval for traditional cases dropped by nearly a third between 1996 and 1997.
The benefits of the Fast Track program reduced legal costs, reduced liability, and faster recalls also provide an incentive for firms to act quickly and decisively. As a result, the program doesn't just identify firms that might be reluctant to comply, it reduces their number. Since the adoption of the fast-track program, companies have chosen this option nearly 50 percent of the time. The Fast Track program has shown that through careful targeting and an incentive structure that encourages cooperation, a regulatory agency can increase both efficiency and effectiveness, without increasing the budget.
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