Filed at 6:09 p.m. ET

NEW YORK (Reuters) - Software bugs are not just annoying or inconvenient. They're expensive.

According to a study by the U.S. Department of Commerce's National Institute of Standards and Technology (NIST), the bugs and glitches cost the U.S. economy about $59.5 billion a year.

``The impact of software errors is enormous because virtually every business in the United States now depends on software for the development, production, distribution, and after-sales support of products and services,'' NIST Director Arden Bement said in a statement on Friday.

Software users contribute about half the problem, while developers and vendors are to blame for the rest, the study said. The study also found that better testing could expose the bugs and remove bugs at the early development stage could reduce about $22.2 billion of the cost.

``Currently, over half of all errors are not found until 'downstream' in the development process or during post-sale software use,'' the study said.

The study, conducted by the Research Triangle Institute in North Carolina and the software industry was conducted to identify and assess technical needs to improve software-testing capabilities.

Software is error-ridden, in part because of the complexity inherent in millions of lines of code. About 80 percent of the cost of developing software programs goes to identifying and correcting defects. Yet, few products of any type other than software are shipped with such high levels of errors, the study found.

Other factors contributing the problem include marketing strategies, limited liability by software vendors, and decreasing returns on testing and debugging, according to

the study.

In January, the National Academy of Sciences issued a report urging lawmakers to consider adopting legislation to hold software vendors liable for security breaches.

If software makers were held liable, the cost to consumers would rise dramatically, said Marc E. Brown, a partner at the Los Angeles law firm of McDermott, Will & Emery.

However, Europe already has begun addressing the issue.

A Dutch judge in September convicted Exact Holding of malpractice for selling buggy software, rejecting the argument that early versions of software are traditionally unstable.