Chapter 4: Estimated Costs of Standards

4.1 Overview

The social costs of the section 508 standards include both direct and opportunity costs. Direct costs are the value of the resources society spends to produce accessible electronic and information technology and to deliver these products to the end users. Committing resources to provide accessible electronic and information technology to the Federal government necessitates doing without these resources to produce some other good or service for society's benefit. The value of these foregone goods and services is the opportunity cost of the standards. This chapter quantifies some of the direct costs of the standards and gives a qualitative discussion of the potential opportunity costs.

4.2 Who Is Likely to Experience Increased Costs Due to Standards?

The section 508 standards apply only to Federal agencies. Other Federal agencies may apply the standards to entities that they have relationships with through funding, contracting, or other mechanisms. The costs and benefits associated with other agency decisions to apply the standards to other entities must be justified by those agencies and are, therefore, not included in this economic assessment.

The standards do not directly impose any requirements on businesses selling or leasing electronic and information technology, because they are not required to sell or lease their products to the Federal government. Businesses that choose to market their products to the Federal government must ensure that their products comply with the standards. For many businesses, this may simply involve a review of the product vis a vis the standards to confirm compliance. For others, this could require redesign of a product to add accessible features before it can be sold to the Federal government. Presumably these costs can be passed on to the Federal government (and other consumers) in the form of higher prices. An increase in the price of electronic and information technology can result in a decrease in demand for these products.

Federal agencies may experience increases in their costs for electronic and information technology to cover the costs of redesigning products to comply with the standards. There may also be some incidental cost born by Federal agencies as a result of the standards such as the cost of training employees on new features or evaluating compliance before making a purchase. Due to methodological and data constraints, the magnitude of these incidental costs has not been computed, however they are described in more detail later in this chapter.

4.3 Direct Compliance Costs

Direct costs include the costs to produce accessible electronic and information technology, including software, hardware, and documentation that explains how to use the products. In addition, Federal agencies and manufacturers will have to spend resources to market the accessible products and to train workers to operate them. The sections below discuss the methodology, the data sources, and where possible the quantitative estimates of the costs to provide compliant software, hardware, documentation, and training. The sections also discuss the limitations of the direct cost estimates.

4.3.1 Methodology 4.3.1.1 Software

Software manufacturers have a choice to make their software accessible to all consumers, to make an accessible version for sale to the Federal government, or to not modify their product and cease marketing to the Federal government. This analysis assumes software companies choose the first option. They modify and sell one accessible version to both Federal and non-Federal customers. This assumption is supported by the cost structures of software development. Software manufacturers pay millions of dollars to produce their first working product for sale and then can cheaply produce the next copy for only a few dollars. In other words, companies pay relatively high fixed costs to acquire, design, test, and market innovative intellectual property. The material and equipment costs to manufacture products that are sold - floppy discs and CD-ROMs - are inconsequential. Therefore, software firms profit the more they can spread the fixed costs over as many identical units as possible.

This incentive is reinforced by software's brief shelf life and by consumer demand. Software firms must recoup their fixed cost investment in just a few years before competitors introduce superior products. The resulting high depreciation rate of the product increases the value of the underlying human capital. Further, consumers are not likely to demand separate versions of software since they are likely to be unaffected or unaware of the accessible features. Consumers that do not want the accessible features can turn them off and still get the same value from the product. For most software features, it is not efficient for companies to divert their most valuable resource - human capital - to produce separate versions if consumers do not value the difference. In other words, a software company is not likely to market an accessible word processor to the Federal government and also market a "non-accessible" word processor to the general public.

Given this cost structure of the software market, the analysis estimates that software manufacturers will incorporate accessible features into their products and market them to all of their customers. The major manufacturing cost is the specialized labor that designs and programs the software features. The additional lines of software code impose virtually no material costs. The analysis also assumes that these development costs occur annually and are not tied to a particular software product release. Once each manufacturer invests in obtaining in-house experts on accessible features, the manufacturer will maintain this staff permanently to work on later product upgrades.

The analysis measures the accessibility resources devoted to development costs based on discussions with several industry sources and access engineering experts. The analysis also assumes that the ratio of development costs is the same across all manufacturers and across all software products. Therefore, the proportion of labor resources needed to upgrade one word processing program is the same for all other word processing programs and for all other general office software such as spreadsheets, presentation software, and database management.

4.3.1.2 Hardware

Hardware manufacturers also face the same choice as software manufacturers: make their hardware accessible to all consumers, make an accessible version for sale to the Federal government, or not modify their product and cease marketing to the Federal government. This analysis assumes that hardware manufacturers will in general choose the second option and manufacture accessible versions of their products for the Federal government. Hardware manufacturers have different cost structures than software manufacturers. Extra equipment, such as a handset to privately communicate audio information, raises the unit cost of production. In addition, consumer demand is more likely to be affected by incorporating accessible features in hardware than in software. Consumers that do not need accessible features may not be willing to pay for the extra cost. In addition, complying with the standards may require a redesign or reconfiguration of certain equipment. Certain consumers may notice the accessible design changes and may not want them. Therefore, if consumers will value different designs and if there are significant manufacturing costs, the manufacturer is likely to respond with different hardware products for Federal agencies and for other consumers. If the hardware changes are hidden and inexpensive, hardware manufacturers may simply make one version for all consumers. In addition, non-Federal market signals from institutions such as universities, libraries, and others may welcome accessible hardware systems, thus allowing the costs to be dispersed over a larger sector of the market, similar to software producers.

The analysis puts forth a range to estimate the estimate the increased manufacturing and design costs for hardware to comply with the standards.

4.3.1.3 Training

There are five major categories of training costs that will be incurred as a result of the standards:

  • Training of staff selling products to Federal government. Manufacturers must change their marketing and inform their sales staff to promote their compliance with the new standards. The analysis assumes that this cost is bundled into the price charged to Federal purchasers.
  • Training of Federal procurement officials. This cost is not a direct result of this rule, but a result of revisions to the FAR and other agency procurement regulations.
  • Training of Federal workers on how to use accessible features. When compliant products are provided, Federal workers will have to invest the time and resources to learn how to operate the accessible features. The same workers will benefit from this effort with increased productivity. Therefore, rather than calculate the direct cost of Federal worker training and the total productivity gained, the analysis computes the productivity gains net of training costs in the benefit estimate of the standards. (See Chapter 5.)
  • Training of industry customer service representatives on accessible features . End users may need assistance operating accessible features. Manufacturers either offer technical assistance free or charge separately for the service. In either case, manufacturers will bear direct costs training their customer service staff on the new accessible features. As a simplifying assumption, the analysis assumes this cost is bundled into the purchase price.
  • Training of government support staff on accessible features. In addition to commercial customer support, Federal agencies hire staff to answer workers' questions with Federally-owned or licensed software and hardware. This staff will also have to understand the new accessible features to perform their assigned tasks.

We do not have sufficient information to provide estimates of the training costs associated with the standards. From our discussions with industry, we believe the assumption that the cost of training sales and support staff are included in the price increase of the product to be defensible. We have not attempted to estimate the cost of training Federal support staff. We do not expect these costs to be significant relative to other costs of the standards.

4.3.1.4 Documentation

There are two types of documentation costs that will be incurred as a result of the standards:

  • The standards require that documentation provided with electronic and information technology products (e.g., manuals or other type of instruction) be available in an alternative format upon request. The costs of producing and distributing product documentation in alternative formats may be born exclusively by Federal agencies if they elect to translate any documentation they receives into alternative formats. The more likely scenario is that manufacturers will be called upon to provide documentation in alternative formats along with the product or at a later time. This analysis assumes that the cost of providing this type of documentation is included in the price of the product sold to Federal purchasers. Many software and hardware manufacturers now supply detailed system documentation on some type of electronic format such as disk or CD-ROM rather than the traditional paper manuals. Documentation provided in this format is presumed to be accessible.
  • Federal agencies that claim the undue burden exception must maintain documentation supporting the claim. This analysis assumes that no agencies will claim this exemption, therefore no costs associated with documenting the claims were estimated. This assumption is not intended to imply that the undue burden provision will never be applied, only that an insufficient amount of data is available to derive any useful assumption of the degree to which it would be applied and for which products.
4.3.2 Data Sources

To estimate the costs of the standards data is needed on the quantity of different types of electronic and information purchased by the Federal government that is affected by the standards, and the incremental cost for each product to comply with the standards. The General Services Administration (GSA) Federal Supply Service (FSS) data is used to estimate the quantity of electronic and information technology procured by the Federal government. The FSS organizes products into schedules based on a product classification system. The products assigned to each schedule are further defined by schedule identification numbers (SINs), which are specific to a particular product type (e.g., term software licenses). However, the classification by SINs does not eliminate products and services that would not be affected by the standards. For instance, the SIN for information technology services is very broad in its coverage and may include materials used to build computer network systems such as cables and routers that would not be affected by the standards. Aside from this limitation, the GSA data provide the most detailed level of information on the types of electronic and information technology purchased by the Federal government.

The GSA data provides a bottom-up approach for estimating Federal spending on electronic and information technology. Based on the GSA data, it is estimated that Federal spending on electronic and information technology affected by the standards was $12.4 billion in fiscal year 1999. This figure represents an estimated 33 percent of fiscal year 1999 information technology budget of $37.6 billion. The greatest limitation of this method, however, is that not all purchases of electronic and information technology by Federal agencies are accounted for by the GSA data. Some agencies make purchases directly with product suppliers and therefore the sales will not be represented in the GSA data. This limitation has the effect of underestimating the potential increase in costs due to the standards. As procurement regulations have been reformed in recent years, more and more purchases are being made without using the GSA FSS. However, this downward bias in the overall cost estimate is partially counteracted by the potential overestimation of some projected product cost increases and the inclusion of products such as routers, cables, etc. that will not experience increases in cost as a result of the standards. Overestimation may occur due to the inability to disaggregate products within each SIN that may be exempt under the Clinger-Cohen definitions for national security use, or for which the standards are not applicable.

The effect of using the GSA data is either an overestimation or underestimation of the actual cost of electronic and information technology products affected by the standards. The uncertainty arises from the inability to disaggregate specific brand names from the gross sales figures reported to GSA. Different brands within a category, like word processing software, may have different incremental costs to bring the brands into compliance. Based on the information available, the analysis cannot distinguish and account for these differences.

Recognizing the limitations of the GSA data, the analysis also examined OMB data on the total obligations for information technology in the federal budget for the fiscal years 1994 through 1998, as an alternative top-down approach. OMB ceased collecting this data in the format and categories noted below after fiscal year 1998, thus data for fiscal year 1999 could not be included. The analysis applies two scenarios for estimating the average percentage of the total information technology budget spent on products affected by the standards.

The first scenario includes four primary information technology budget categories to estimate the amount affected by the standards: equipment and capital purchases; other purchases/leases; software capital purchases; and other purchases/leases. During a five year period (fiscal years 1994 through 1998), the expenditures in these four categories represented an average of approximately 25 percent of the total information technology budget. This estimate excludes the following categories based on the assumption that they were unlikely to include any significant expenditures on items affected by the standards: services; support services; supplies; personnel; other (DOD); and intra-government payments and collections. Therefore, scenario one represents the lower bound of Federal spending on information technology affected by the standards.

Scenario 1: Lower Bound of Federal Spending on Information Technology Affected by the Standards (millions of dollars)
  FY 1998 FY 1997 FY 1996 FY 1995 FY 1994
Equipment & Capital Purchases 3,733 3,645 3,582 3,226 3,774
Other Purchases or Leases 1,533 1,717 1,864 1,485 1,082
Software Capital Purchases 1,327 1,212 1,053 1,045 879
Other Purchases or Leases 479 452 482 501 260
Total Estimate for E&IT 7,072 7,027 6,980 6,256 5,996
Total Obligations 28,973 28,623 27,245 25,730 23,457
E&IT in Total Obligation (average 25%) 24% 25% 26% 24% 26%

 

The second scenario is the same except two categories, services and support services, are added to the analysis. These categories were added to capture other areas potentially affected by the standards. However, only 50 percent of each category is carried forward in the analysis since not all of the expenditures in these categories will be affected by the standards. During the same five year period (fiscal years 1994 through 1998), the expenditures in these six areas represented an average of approximately 52 percent of the total information technology budget. Scenario two represents the upper bound of Federal spending on information technology affected by the standards. This upper bound may be significantly overstated since it is not possible to determine from this data what proportion of each category would be affected.

Scenario 2: Upper Bound of Federal Spending on Information Technology Affected by the Standards (millions of dollars)
  FY 1998 FY 1997 FY 1996 FY 1995 FY 1994
Equipment & Capital Purchases 3,733 3,645 3,582 3,226 3,774
Other Purchases or Leases 1,533 1,717 1,864 1,485 1,082
Software Capital Purchases 1,327 1,212 1,053 1,045 879
Other Purchases or Leases 479 452 482 501 260
Services (50%) 2,413 2,398 2,382 2,170 1,778
Support Services (50%) 6,150 5,630 4,847 4,235 3,883
Total Estimate for E&IT 15,635 15,055 14,209 12,661 11,657
Total Obligations 28,973 28,623 27,245 25,730 23,457
E&IT in Total Obligation (average 52%) 54% 53% 52% 49% 50%

 

The top-down approach is limited by the inability to determine what portion of each category under both scenarios would be affected by the standards. This results in a gross overestimation of the total information technology budget that will be affected by the standards. However, the analysis generates a range that includes the analysis based on the GSA data and allows for other purchases of information technology outside the GSA FSS. Due to the limitations of the top-down approach in disaggregating the expenditures for information technology in greater detail, we have chosen to retain the GSA data for computing the estimated costs of the standards. The GSA data provides the assessment with a consistent measurement tool that allows for aggregation of the total expected cost of the standards.

The electronic and information technology products affected by the standards are discussed below.

4.3.3. Software Cost Estimates

Federal government purchases of software can be divided into three major categories: general office software, mission-specific software, and information technology and electronic commerce services. General office software packages that the Federal government typically procures for personnel computer work stations (principally IBM compatible) are programs such as operating systems, word processors, and spreadsheets. Mission-specific software is software that has been commissioned for government purposes such as air traffic control, Federal budget and accounting systems, and environmental policy modeling. The SIN for this software also may include the actual hardware components required to operate the software. For purposes of this assessment, the accessibility costs are included in the software section and not the hardware section based on the assumption that the hardware components will not require a significant modification. This approach potentially underestimates the cost of satisfying the standards if the hardware components require extensive modification. Information technology and electronic commerce services have been classified as software in this assessment because of their software-related component.

Table 4-1 lists the SINs for general office software, mission-specific software, and information technology and electronic commerce services. Operating systems, word processors, spreadsheets, and database programs are included in the "term software license" and "perpetual software license" SINs. Mission-specific software is also included in these SINs. The difference between the SINs is associated with the license agreement that the government chooses to purchase. When software is procured, the buyer is only purchasing the right to use or to operate the software for a predetermined period of time. Thus, for some short term projects that require high expense software licenses, the government opts to purchase the product through a term license agreement. Less expensive license agreements, such as those associated with word processors and spreadsheet programs, are often procured as perpetual licenses where the full life of the license is purchased. This analysis includes software used by the Federal government under all of these categories.

Table 4-1
Software & Related Systems: Schedule/ SIN #/ Description GSA Sales FY 1999 (millions)
70 IV - Info Tech/ 132 32/Term Software License $ 22.4
70 IV - Info Tech/ 132 33/ Perpetual Software License $ 1,309.1
36 IV - Doc Mgt/ 51 407/ Optical Imaging Sys. & Mission Software $ 0.053
36 IV - Doc Mgt/ 51 408/ CD-ROM Info. Ret. Sys. & Mission Software $ -
36 IV - Doc Mgt/ 51 409/ Network Optical Imaging Sys & Mission Software $ 0.14
70 IV - Info Tech/ 132 51/ Information Tech. Services $ 3,863.1
70 IV - Info Tech/ 132 52/ Elec. Commerce Services $ 3.8
Total Expenditures $ 5,198.7

 

For much of the standard software packages procured by the Federal government for personnel computer work stations (principally IBM compatible), there are compliant software packages available that meet the standards. Based on discussions with the GSA, the majority of the personnel computer work stations are loaded with Microsoft Windows (currently Windows 98™) as the operating system. Three major, comparably priced software packages provide the same basic task oriented programs noted above: Microsoft Office, Lotus Notes, and Corel Office Suite. Based on reviews from the EITAAC and industry, many of these products, and products like them, satisfy most of the provisions in the standards.

The software category is split into two major subcategories representing (1) general office software, and (2) mission specific software. For purposes of this analysis, it is assumed that software associated with various internet applications is included in each subcategory. It is further assumed that the general office software category represents approximately 80 percent of all the software purchased by the Federal government, and that the remaining 20 percent represents mission-specific applications. An analysis of each of these subcategories follows, including discussion of the cost assumptions for each.

4.3.3.1 General Office Software

For the purposes of this analysis, it is assumed that 30 percent of general office software procured by the Federal government will satisfy the standards or that accessible alternatives are available. The middle 40 percent of the software will require minor to medium modifications as accessible alternatives may not exist. The remaining 30 percent of the software is likely to require significant modifications to ensure that the standards are satisfied. These assumptions are based on discussions with several EITAAC and industry representatives.

The first 30 percent of the software will not involve any increased costs and therefore are not considered further in this assessment. The cost of modifying the middle 40 percent of the software is estimated to be in the range of 0.4 percent to 1 percent based on discussions with industry experts. This assumption is based on an evaluation of several software companies and the number of employees dedicated to accessibility issues. The methodology uses employee classification as a proxy for cost or expense of accessibility research and development, labor, and design that are all factored into the final product cost. The companies studied have dedicated divisions or groups of employees that specifically address accessibility issues. These employees make up about 0.2 percent to 0.5 percent of these companies total workforce. Typically the accessibility employees act as consultants to others throughout the firm to help identify and address accessibility concerns with each product line. A lower and upper bound cost estimate for the middle 40 percent of general office software is derived by assuming that each employee in the accessibility division leverages their effort with an additional work-year of effort from others in the company. This results in an estimated cost range for modifying and supporting the accessible features of general office software between 0.4 percent and 1percent.

The remaining 30 percent of the software in this category is expected to require significant modifications to comply with the standards. The cost increase for this category of software is assumed to range from 1 percent to 5 percent based on discussions with industry experts.

The cost of modifying general office software is not limited to the software purchased by the Federal government. Because it is assumed that software manufacturers will elect to sell the same product in the private marketplace as they sell to the Federal government, the cost increases will be incurred in the entire $24 billion general office software market. Using the range of the costs for modifying the general office software products discussed above, Table 4-2 shows that the cost of modifying general office software to range from $110 to $456 million per year.

Table 4-2
U.S.P.C. Software Market 1997 Revenue (millions) General Office Applications 80%
Compliance Assumption   30 % 40 % 30%
Cost Increase Assumption   0 % 0.4 % - 1% 1 % - 5%
Total Direct Cost $ 24,000 * $ - $ 38 - $ 96 $ 72 - $360

* Software & Information Industry Association

Assuming that manufacturers distribute these costs across the Federal government and the private marketplace, the Federal government's share of this cost is shown in Table 4-3 and is estimated to range from $19 to $79 million per year.

Table 4-3 General Office Software (80%)
Software & Related Services
(Sched./ SIN#/ Description)
GSA Sales FY 99
(millions)
30 % (0%) 40 %
(0.4 - 1%)
30 %
(1 - 5%)
70 IV/ 132 32/ Term Software License $ 22.4 $ - $ 0.029 -
$ 0.072
$ 0.054 - $0.27
70 IV/ 132 33/ Perpetual Software License $ 1,309.1 $ - $1.676 -
$ 4.189
$3.142 - $15.71
36 IV/ 51 407/ Optical Imaging Sys. & Mission Software $ 0.053 $ - $ - $ - $ - $ -
36 IV/ 51 408/ CD-ROM Info. Ret. Sys. & Mission Software $ - $ - $ - $ - $ - $ -
36 IV/ 51 409/ Network Optical Imaging Sys & Mission Software $ 0.14 $ - $ - $ - $ - $ -
70 IV/ 132 51/ Information Tech. Services $ 3,863.1 $ - $4.945 - $12.362 $9.271- $46.355
70 IV/ 132 52/ Elec. Commerce Services $ 3.8 $ - $0.005 - $0.012 $ 0.009- $0.045
Total Government Cost $ 5,198.7 $ - $ 6.65 -
$ 16.63
$12.48 - $62.38
4.3.3.2 Mission Specific Software

The cost to modify mission-specific software is assumed to be higher than for general office software and ranges from 1 percent to 5 percent. Table 4-4 shows the increased cost to the Federal government of procuring mission-specific software to range from $10.4 million per year to $51.9 million per year. Mission- specific software developed for the Federal agencies has limited distribution outside the government and manufacturers have a diminished opportunity to disperse the increased cost over a larger market.

Table 4-4 Mission Specific Software(20%)
Software & Related Services
(Sched./ SIN#/ Description)
GSA Sales FY 99 ( millions) 1% - 5%
70 IV/ 132 32/ Term Software License $ 22.4 $ 0.044 - $ 0.22
70 IV/ 132 33/ Perpetual Software License $ 1,309.1 $ 2.6 - $ 13.09
36 IV/ 51 407/ Optical Imaging Sys. & Mission Software $ 0.053 $ - $ -
36 IV/ 51 408/ CD-ROM Info. Ret. Sys. & Mission Software $ - $ - $ -
36 IV/ 51 409/ Network Optical Imaging Sys & Mission Software $ 0.14 $ - - $ 0.0013
70 IV/ 132 51/ Information Tech. Services $ 3,863.1 $ 7.73 - $ 38.6
70 IV/ 132 52/ Elec. Commerce Services $ 3.8 $ 0.0076 - $ 0.038
Total Government Cost $ 5,198.7 $ 10.4 - $ 51.9



4.3.4 Hardware Cost Estimates

This analysis divides hardware into two categories: compatible and self-contained. Compatible hardware includes products such as desktop and portable computers to which assistive technology can be easily attached or installed (via USB, parallel, or serial ports). Self-contained hardware includes products such as information kiosks, copiers, and printers to which assistive technology cannot be easily attached or installed.

4.3.4.1 Compatible Hardware Products

This assessment assumes that compatible hardware purchased by the Federal government meets the standards or that alternatives are available to meet the standards. Because a sufficient number of alternatives exist, the Federal government will not pay any incremental cost to buy compatible products in most Federal workplace environments. However, as a sensitivity analysis, the assessment places an upper bound incremental cost increase of 5percent on the purchase price of compatible products to account for additional accessibility costs. Table 4-6 presents the results of this sensitivity analysis.

Table 4-6
Compatible Hardware Products
(Sched./ SIN#/ Description)
GSA Sales FY 99
( millions)
Estimated Cost Range (0 - 5%)
70 IV/ 132 3/ Leasing $ 89.9 $ - - $ 4.5
70 IV/ 132 8/ Purchase of Equipment $ 6,644.9 $ - - $ 332.3
Total Government Cost $ 6,739.7 $ - - $ 337

 

It is unclear whether the Federal government would continue to avoid incremental costs associated with procuring compatible hardware in the future. While the unit cost of compatible hardware is expected to decrease over time as the industry adopts more standardized approaches, hardware may change radically in the foreseeable future. Accessible features may not be incorporated into the first versions of new hardware. If Federal purchasers wait until accessible components become standardized, they may temporarily forgo the productivity improvements that come with the new technologies (see opportunity cost discussion in section 4.7). For the direct cost estimates, the analysis assumes that Federal agencies only purchase hardware that has been in the market for a sufficient period of time so that its components are standardized and made routinely accessible.

4.3.4.2 Self-Contained Hardware

This assessment examines three major categories of self-contained products from the GSA data: document management products, microphotographic equipment, and miscellaneous products. Copiers make up the majority of self-contained hardware purchased by the Federal government, totaling in excess of $1 billion per year. Since self-contained products do not lend themselves to the addition of assistive technology, these products have to be designed to be accessible. The cost range for making self-contained products accessible is based on discussions with accessibility experts and industry. These discussions suggest that a range of 5 percent to 20 percent is a reasonable assumption for estimating the increase in costs associated with making self-contained products accessible. There is a copier currently on the market that claims to be fully accessible, and the cost increase associated with this product is 73 percent. However, this product appears to exceed the standards and was not considered in establishing the upper bound cost of this assessment. Tables 4-7, 4-8, and 4-9 show the results of this analysis. We estimate the cost of modifying self-contained products to range from $56 million per year to $223 million per year.

Table 4-7
Document Management Products
(Sched./ SIN#/ Description)
GSA Sales FY 99
(millions)
Estimated Cost Range
(5-20%)
36 IV/ 51 B362a/ Copiers $ 5.51 $ 0.28 - $ 1.10
36 IV/ 51 B74a/ Offset Duplicating Machines $ 0.004 $ - - $ -
36 IV/ 51 55/ Rental Plans (Copying & Duplicating) $ 148.51 $ 7.43 - $ 29.70
36 IV/ 51 58/ Lease-to-ownership Plans $ 512.60 $ 25.63 - $ 102.52
36 IV/ 51 100/ Photocopying Equipment $ 386.69 $ 19.33 - $ 77.34
36 IV/ 51 100c/ Cost-per-copy Plans (Photocopying) $ 23.48 $ 1.17 - $ 4.70
36 IV/ 51 100f/ Flat-rate Monthly Fee Copying Plans $ 13.76 $ 0.69 - $ 2.75
36 IV/ 51 101 9/ Copy-control Devices & Systems $ - $ - - $ -
36 IV/ 51 103/ Special-application Copying Equip. $ 20.02 $ 1.00 - $ 4.00
36 IV/ 51 200/ Offset Process Presses $ 0.15 $ 0.007 - $ 0.03
36 IV/ 51 229/ Duplicator-Digital Scan-stencil Process $ 0.19 $ 0.009 - $ 0.04
Total Government Cost $ 1,111 $ 55.55 - $ 222.18
Table 4-8
Microphotographic Products (Sched./ SIN#/ Description) GSA Sales FY 99
(millions)
Estimated Cost Range
(5-20%)
36 IV/ 51 402/ Aperture Card Microfilm Readers & Reader-printers $ 1.30 $ 0.064 - $ 0.26
36 IV/ 51 403/ Microfilm Readers & Reader-printers $ 0.34 $ 0.02 - $ 0.067
36 IV/ 51 405/ Portable Microfiche Readers $ 0.002 $ - - $ -
36 IV/ 51 406/ Microfilm Reader-printers & Reader-printer Projectors $ - $ - - $ -
36 IV/ 51 410/ Electronic Reader-scanner Systems $ 0.30 $ 0.015 - $ 0.06
36 IV/ 51 413/ Microphotographic Duplicating Equipment $ 0.036 $ 0.002 - $ 0.007
36 IV/ 51 429/ Rental of Equipment (Microphotographic) $ 0.064 $ 0.003 - $ 0.013
Total Government Cost $ 2.04 $ 0.10 - $ 0.41
Table 4-9
Miscellaneous Products (Sched./ SIN#/ Description) GSA Sales FY 99
(millions)
Estimated Cost Range(5-20%)
75 IV/ 47 145/ Electronic Typewriters $ 3.09 $ 0.15 - $ 0.62
75 IV/ 47 3451/ Dictation Systems $ 0.35 $ 0.017 - $ 0.070
75 IV/ 47 355/ Dictating/Transcribing Machine $ 0.80 $ 0.04 - $ 0.16
75 IV/ 50 281/ Electronic Calculators $ 0.56 $ 0.028 - $ 0.11
Total Government Cost $ 4.8 $ 0.24 - $ 0.96

While not included as an assumption in this analysis, we expect to see the costs for copiers to decrease over time as more digital copying technologies are purchased. The interface between digital copying equipment is the office computer network, making this class of products accessible from any desktop work station. The costs for microphotographic and miscellaneous products may be slightly overstated because many of these products will be exempt from certain provisions of the standards if it results in a fundamental alteration of the nature of a product or its components. For example, cameras not required to be accessible to blind persons.

4.4 Web-Based Information Systems

While Federal web-based information systems are likely to require a minimum amount of accessibility modifications, the fixed labor costs are expected to decrease significantly over the short term. Federal agencies are incorporating accessibility into their web-based information systems programming criteria. The section 508 standards are based on the World Wide Web Consortium's guidelines on internet accessibility. The additional programming steps necessary to comply with the standards are not expected to create significant changes in the overall cost of developing web sites and other internet resources. However, any costs associated with World Wide Web accessibility are reflected in the software category of this assessment.

4.5 Telecommunications

This assessment assumes that any costs associated with telecommunications products will be covered by accessibility guidelines developed under section 255 of the Telecommunications Act of 1996. Excluding the costs attributed to section 255 avoids overestimating the standards' social cost and double-counting the aggregate impact of accessibility standards. However, in some instances, the cost associated with accessibility may be inseparable due to the products' development or design (e.g., certain software applications that may rely on telecommunication features). In such instances, the incremental costs associated are included in the software category of this assessment.

4.6 Video and Multimedia

This assessment assumes that any costs associated with equipping television displays with caption decoder circuitry will be covered by the Federal Communications Commission (FCC) rules, which require the same. The standards also require training and informational video and multimedia that support the agency's mission to be captioned and audio described. The costs of these services incurred by the Federal government have not been evaluated in this assessment because there is an insufficient amount of data to support this analysis. The GSA has recently added these types of services to the FSS and data will be available in the future. Currently, only unit cost estimates are available from industry experts that provide these services as shown in Table 4-10.

Table 4-10
Video Services and Estimated Unit Cost
Captioning Services *

Prerecorded programming - $ 800~$2,500/1 hr.
Live programming - $150~1,200/1 hr.

Audio Description Services **

Full-length programs - $4,000/hr.
Short Pieces (i.e., training tapes or museum video):

5 min $1,460
10 min $1,620
15 min $1,920
20 min $2,080

Source: * Federal Communication Commission, Video Programming Accessibility Report, FCC 96-318, July29, 1996; and ** WGBH Educational Foundation.
4.7 Opportunity Costs

The opportunity costs of the standards include:

  • Delay in procuring new products. It is possible that for some types of electronic and information technology fully compliant products will not be commercially available when the standards are incorporated into the FAR. Confusion over which products comply with the standards may delay decisions to procure new products. Federal agencies may experience a loss of productivity if procurement of new products is unduly delayed.
  • Permanent lag in procuring innovative technology. The standards may lead to a permanent lag in use of innovative technology by Federal agencies. If the first version of a product does not include accessible features, Federal agencies may not procure the product. Federal workers will not benefit from the productivity enhancements of these products until the accessibility features are added into later versions.
  • Delay in the increase of productivity of Federal workers if technology replacement is delayed due to price increases. In this instance, although compliant products are available, price increases due to the standards delay Federal purchasing. The price increases lengthen the software and hardware upgrade cycle, lowering productivity of Federal workers during the incremental period. If a software package's price rises 5 percent due to the standards and an agency therefore delays upgrading for a year, the inability to use the new upgraded features and any software incompatibility during that year is the opportunity cost.
  • Consequences of allowing accessibility to override functionality in procurement process. Accessibility is only one feature of a product. Products have many other attributes which make them valuable for Federal work. The standards elevate accessibility as a necessary component of any Federal product, regardless of how valuable the other attributes of a product are.
4.8 Limitations

This analysis has several important limitations:

  • It assumes no monopolistic pricing practices and that manufacturers will resist the temptation to raise the price to just below the "undue burden" level, knowing that the FAR places a very high value on accessibility features.
  • It does not consider or assume any level of reduction in the aggregate costs or benefits of the standards based on the exception for undue burden. Therefore, this assessment may to some degree overstate the costs and benefits since the value of potential undue burden exception could not be realistically estimated for this assessment.
  • It does not consider the timing of expenditures or the potential for reductions in accessibility costs over time.
  • It may ignore classes of electronic and information technology products that are located in unexpected places on the GSA schedule.