Third-Party Programs to
Assess Regulatory
Compliance

Lesley K. McAllister
University of San Diego School of Law
October 22, 2012
This report was prepared for the consideration of the Administrative Conference of the United States. The views
expressed are those of the author and do not necessarily reflect those of the members of the Conference or its
committees.

ADMINISTRATIVE CONFERENCE
OF THE UNITED STATES

Report Prepared for the Administrative Conference of the United States *
Lesley K. McAllister 1
Table of Contents
I. Introduction ................................................................................................................................. 1
II. Conformity Assessment in a Regulatory Context ...................................................................... 2
III. Review of Federal Third-Party Programs ................................................................................. 7
A. Programs for Mandatory Standards ..................................................................................... 10
1. FDA, Imported Food Programs ........................................................................................ 10
2. CPSC, Children’s Product Safety Rule ............................................................................. 15
3. FDA, Medical Device Inspections .................................................................................... 21
4. FCC, Telecommunication Certification Body Program ................................................... 28
B. Programs for Voluntary Standards ....................................................................................... 31
1. OSHA, National Recognized Testing Laboratories Program ........................................... 31
2. AMS, National Organic Program ..................................................................................... 33
3. EPA/DOE, Energy Star Program ...................................................................................... 35
4. EPA, WaterSense Program ............................................................................................... 38
IV. Evaluating Third-Party Programs ........................................................................................... 40
A. Metrics of Success ............................................................................................................... 40
1. Reliability of Third-Party Determinations ........................................................................ 40
2. Rates of Compliance ......................................................................................................... 44
3. Agency Capacity to Administer the Third-Party Program................................................ 45
4. Public Acceptance ............................................................................................................. 48
5. Industry Acceptance.......................................................................................................... 49
B. Incentives to Participate When Use of Third Parties is Voluntary ...................................... 52
V. Recommendations to Federal Agencies ................................................................................... 54
A. Deciding Whether to Use a Third-Party Program................................................................ 55
1. Consult governmental and non-governmental resources relating to third-party conformity
assessment ............................................................................................................................. 55
2. Consider the characteristics of the regulatory standards and the regulatory target .......... 57
3. Compare the benefits and drawbacks of third-party programs with other approaches ..... 59
4. If the use of third parties will be voluntary, evaluate whether sufficient incentives exist to
attract participation ............................................................................................................... 62
B. Establishing a Third-Party Program ..................................................................................... 62
1. Calibrate the third-party program to the level of risks associated with noncompliance ... 62
2. Incorporate existing conformity assessment standards and activities when possible ....... 63
3. Ensure that the agency and the public have appropriate access to information ................ 66
*

This draft report was prepared for consideration of the Administrative Conference of the United States. The views
expressed are those of the author and do not necessarily reflect those of the members of the Conference or its
committees.
1
Stanley Legro Professor in Environmental Law, University of San Diego School of Law; Associate Adjunct
Professor, University of California San Diego, School of International Relations & Pacific Studies. J.D., Stanford
Law School, 2000; Ph.D., University of California Berkeley, 2004. The author may be contacted at
mcallister@sandiego.edu or (619) 260-7999.

i

4. Commit to undertaking appropriate oversight activities ................................................... 68
Appendix A: Interviews by Phone and Email............................................................................. A-1
Appendix B: ISO Standards for Conformity Assessment Activities .......................................... A-3
Appendix C: List of Abbreviations ............................................................................................. A-4
Tables
Table 1: Federal Regulatory Third-Party Programs with Selected Program Attributes ................. 9
Figures
Figure 1: General Structure of Third-Party Programs to Assess Regulatory Compliance ............ 7
Figure 2: Structure of Third-Party Program for Imported Food Certifications ........................... 12
Figure 3: Structure of Third-Party Program for Food Safety Testing ......................................... 13
Figure 4: Structure of Third-Party Program for Children’s Product Testing................................ 16
Figure 5: Structure of Third-Party Program for Medical Device Facilities .................................. 24
Figure 6: Structure of Third-Party Program for Telecommunication Equipment ........................ 30
Figure 7: Structure of Third-Party Program for Workplace Product Safety................................. 32
Figure 8: Structure of Third-Party Program for Organic Food Label ........................................... 35
Figure 9: Structure of Third-Party Program for Energy Star Product Label ................................ 36
Figure 10: Structure of Third-Party Program for WaterSense Product Label .............................. 38

ii

I. Introduction
Federal agencies in diverse areas of regulation are using private third parties to carry out
inspections and verify that regulated entities are in compliance with federal standards and other
requirements. With oversight by the responsible federal agency, third parties are charged with
assessing the safety of imported food, children’s products, medical devices, cell phones and other
telecommunications equipment, and electrical equipment used in workplaces. Third parties also
ensure that products labeled as organic, energy-efficient, and water-efficient meet applicable
federal standards. In these regulatory third-party programs, third parties carry out product
testing, facility inspections, and other regulatory compliance activities in the place of regulatory
agencies. Regulatory agencies take on new roles in coordinating and overseeing these private
actors.
Third-party programs operated by federal agencies for regulatory purposes vary in important
ways. In many cases, Congress provided legislative authority for the third-party program and set
forth certain design elements in statute. In other cases, agencies have implemented third-party
programs under existing statutory authority. Several programs are a decade or two old, but most
have been established more recently. Depending on the program, third parties assess compliance
with mandatory or voluntary regulatory standards, and regulated entities may either be required
or may have the option to contract with third parties for such assessment.
There are several reasons why third-party programs are being increasingly incorporated into
regulation. Some regulatory problems are difficult to address using traditional regulatory
approaches such as ensuring the safety or correct labeling of food and other products
manufactured in complex international chains of production. Third-party programs may extend
the reach of regulators by enabling third parties around the globe to participate in compliance
assessment. Another motivating factor is that agency resources are often inadequate to address
the ever-growing number of problems and entities subject to regulation. Third-party programs
may have the effect of shifting some regulatory costs to private parties and thereby conserving
governmental resources.
Regulatory third-party programs raise a host of significant theoretical and practical questions.
Representing a partial privatization of the public function of implementing and enforcing
regulatory law, they are a form of “public-private governance,” in which private actors play roles
that are traditionally viewed as governmental in nature. 2 While they may enable innovation,
efficiency, and quality in the provision of governmental services, third-party programs may also
jeopardize the fulfillment of public purposes and commitments. Difficult issues are presented
regarding considerations such as the competence and independence of third-party actors, the
extent of governmental control and oversight, and the management and coverage of third-party
2

Jody Freeman, Private Parties, Public Functions and the New Administrative Law, in RECRAFTING THE RULE OF
LAW: THE LIMITS OF LEGAL ORDER 331 (David Dyzenhaus ed., Hart, 1999); Martha Minow, Public and Private
Partnerships: Accounting for the New Religion, 116 HARV. L. REV. 1229, 1230 (2002-2003); Jody Freeman,
Extending Public Law Norms through Privatization, 116 HARV. L. REV. 1285, 1286-87 (2002-2003); William J.
Novak, Public-Private Governance: A Historical Introduction, in GOVERNMENT BY CONTRACT: OUTSOURCING AND
AMERICAN DEMOCRACY (Freeman and Minow, eds., Harvard University Press, 2009).

1

Third-Party Programs to Assess Regulatory Compliance
program costs.
A variety of sources inform this paper. Information about particular programs was gathered
primarily from relevant statutes, regulations, agency guidance documents, and agency reports.
The author also conducted twenty phone interviews, mostly with agency staff responsible for, or
otherwise very knowledgeable about, third-party programs (see Appendix A). The paper also
draws from relevant academic literature. 3
The rest of the paper is divided into four sections. Section II introduces the language of
conformity assessment. Many regulatory third-party programs, particularly newer ones,
explicitly incorporate terminology and concepts from private-sector conformity assessment
systems. Older programs do not as much, but the vocabulary of conformity assessment remains
helpful in understanding their structure.
Section III surveys eight programs in which federal agencies rely on private third parties to
provide information about the compliance of regulated entities. The programs are diverse. They
are operated by six different regulatory agencies. Half assess compliance with mandatory
standards, and the other half assesses compliance with voluntary standards. The use of third
parties is required in six and optional in two.
Section IV identifies five metrics to assess the success of third-party programs. These
metrics include the reliability of third-party determinations, the rate of compliance , agency
capacity to administer the third-party program, public acceptance, and industry acceptance. They
are discussed with examples drawn from the surveyed programs.
In the final section, recommendations are made to federal agencies. The first set of
recommendations regards how an agency should consider whether or not to establish a thirdparty program. The second set of recommendations is directed towards agencies that have
decided to establish such a program.
II. Conformity Assessment in a Regulatory Context
Regulatory third-party programs are often built using the terminology and practices of a
broad “conformity assessment” framework that has been developed by standards bodies in the
private sector. Conformity assessment is defined as “demonstration that specified requirements
relating to a product, process, system, person, or body are fulfilled.” 4 It is commonly used in the
private sector by purchasers who want to verify that a potential supplier’s product or service

3

See especially Lesley K. McAllister, Regulation by Third-Party Verification, 53 B.C. L. REV. 1 (2012); Friederike
Albersmeier et al., The Reliability of Third-Party Certification in the Food Chain: From Checklists to Risk-Oriented
Auditing, 20 FOOD CONTROL 927, 930 (2009); Stepan Wood, Voluntary Environmental Codes and Sustainability, in
ENVIRONMENTAL LAW FOR SUSTAINABILITY 229, 230 (2006); Errol E. Meidinger, The New Environmental Law:
Forest Certification, 10 BUFF. ENVTL. L.J. 211, 284 (2002).
4
American National Standards Institute (ANSI), National Conformity Assessment Principles for the United States,
3, available at http://publicaa.ansi.org/sites/apdl/Documents/News%20and%20Publications/Brochures/
NCAP%20second%20edition.pdf.

2

Third-Party Programs to Assess Regulatory Compliance
conform to their requirements. 5
Given the importance of conformity assessment to business transactions, the International
Organization for Standardization (ISO) and International Electrotechnical Commission (IEC)
have published a series of standards relating to conformity assessment. Also, a large number of
private organizations have been established to perform conformity assessment-related services.
As federal agencies have recognized that verifying compliance with regulatory requirements can
be viewed as a form of conformity assessment, they have built relevant international standards
and the work of related organizations into their compliance programs.
The vocabulary of conformity assessment has thus become essential to understanding thirdparty programs operated by federal agencies. Indeed, the term “third party” is part of that
vocabulary. International standards divide conformity assessment into three major types. 6 Firstparty conformity assessment is performed by the manufacturer or supplier itself and is also
referred to as “supplier’s declaration of conformity” (SDoC). 7 Second-party conformity
assessment is performed by the purchaser or customer. Third-party conformity assessment is
performed by an independent entity, which may (in this general terminology) be a government
agency or a private party. 8 This report is concerned with third-party conformity assessment
conducted by private parties under the direction of federal agencies for regulatory purposes.
Definitions of the various types of activities and organizations related to conformity
assessment are also set forth in international standards. 9 “Testing” means the “determination of
one or more characteristics of an object of conformity assessment, according to a procedure.” 10
“Certification” means “third party attestation related to products, processes or persons that
conveys assurance that specified requirements have been demonstrated.” 11 Testing is usually
conducted by laboratories (which may also be referred to as testing bodies), while certifications
are conducted by certification bodies (which may also be laboratories). Both testing bodies and
certification bodies are referred to as conformity assessment bodies. 12

5

Margaret M. Blair et al., The New Role for Assurance Services in Global Commerce, 33 J. CORP. L. 325, 329-30
(2008) (tracing the origins of the third-party assurance industry and many of its most important firms back to the
1800s when marine insurance companies hired private inspectors to make sure that ships carrying insured goods
were seaworthy).
6
Christopher Johnson, U.S. International Trade Commission, Technical Barriers to Trade: Reducing the Impact of
Conformity Assessment Measures 4 (2008), available at http://www.usitc.gov/publications/332/working_papers/cadft-rev-final082008.pdf.
7
Id. (defining SDoC as a procedure by which a manufacturer (or other supplier) provides written assurance of the
conformity of its products to specified requirements.)
8
Id. at 7.
9
ISO/IEC 17000 sets out standard definitions of conformity assessment terms.
10
ISO/UNIDO, Building Trust: The Conformity Assessment Toolbox 34 (2010),
http://www.iso.org/iso/casco_building-trust.pdf.
11
ANSI, supra note 4, at 5.
12
Another type of conformity assessment body that could be relevant to third-party programs for regulatory
purposes is an inspection body. ISO/IEC 17000 defines inspection as an “Examination of a product design, product,
process or installation and determination of its conformity with specific requirements or, on the basis of professional
judgment, with general requirements.” ISO/UNIDO, supra note 10, at 35. The international standard for inspection
bodies is ISO/IEC 17020, General criteria for the operation of various bodies performing inspection. None of the
third-party programs surveyed in this report have incorporated the standard for inspection bodies.

3

Third-Party Programs to Assess Regulatory Compliance
In the language of conformity assessment, testing is often necessary for certification but it is
distinct. Unlike testing, certification is always performed by a third party, and it requires that the
third party conduct not just initial testing but also the surveillance necessary to attest to the
continuing conformity of a product, process, system, or person. 13 “Surveillance” is defined by
ISO as a “systematic iteration of conformity assessment activities as a basis for maintaining the
validity of the statement of conformity.” 14 Market surveillance is a particular form of
surveillance used in some certification schemes where samples of certified products in the
marketplace are tested to determine whether they conform to specified requirements. 15
Accreditation is another important element of private conformity assessment systems.
“Accreditation” is defined as “third party attestation related to a conformity assessment body
conveying formal demonstration of its competence to carry out specific conformity assessment
tasks.” 16 Accreditation bodies decide whether to accredit conformity assessment bodies by using
auditing techniques to assess their organizational and technical capabilities. 17 They are often
appointed by national governments, but not all countries have a national accreditation body and
some countries have one or more private accreditation bodies in addition to or instead of a
national accreditation body. 18
Accreditation bodies are often members of an international association of accreditation
bodies, such as the International Accreditation Forum (IAF) or the International Laboratory
Accreditation Cooperation (ILAC). 19 IAF is comprised of accreditation bodies that accredit
certification bodies whereas ILAC is comprised of accreditation bodies that accredit laboratories.
Both IAF and ILAC have established voluntary agreements through which member accreditation
bodies agree to adhere to international standards when accrediting testing and certification
bodies: the IAF Multilateral Recognition Agreement (MLA) and the ILAC Mutual Recognition
Agreement (MRA). 20 IAF and ILAC use a system of peer evaluation to assess accreditation
bodies for membership and to perform reassessments every four years. 21 Their objective is that
conformity assessment bodies accredited by member accreditation bodies would be recognized

13

Interview (by phone), Gordon Gillerman, Chief, Standards Services Division, National Institute of Standards and
Technology, Aug. 15, 2012. See also IAF FAQ, http://www.iaf.nu/articles/FAQ/288 (last visited Sept. 11, 2012)
(stating that ISO/IEC defines certification as a “third-party attestation related to products, processes, systems or
persons”); ISO/UNIDO, supra note 10, at 52-55 (setting forth various systems that include surveillance and meet the
definition of product certification).
14
ISO/UNIDO, supra note 10, at 44.
15
Id. at 45.
16
ANSI, supra note 4, at 5; ISO/UNIDO, supra note 10, at 24.
17
ISO/UNIDO, supra note 10, at 44.
18
ISO/UNIDO, supra note 10, at 25, 86-88.
19
See e.g., International Laboratory Accreditation Cooperation, https://www.ilac.org/.
20
Office of the United States Trade Representative (USTR), Technical Barriers to Trade (TBT Report) 28 (2012),
http://www.ustr.gov/about-us/press-office/reports-and-publications/2012/technical-barriers-trade-tbt-report (last
visited Sept. 11, 2012). See also IAF/ILAC Multi-Lateral Mutual Recognition Arrangements (Arrangements):
Narrative Framework for Reporting on the Performance of an Accreditation Body (AB) A Tool for the Evaluation
Process, IAF/ILAC-A3:07/2011 (2011), http://www.compad.com.au/cms/iafnu/workstation/upFiles/
IAFILACA3072011.pdf (last visited Sept. 11, 2012).
21
Id.

4

Third-Party Programs to Assess Regulatory Compliance
as competent in multiple jurisdictions and markets. 22 In the words of the accreditation industry,
“tested or certified once - accepted everywhere.” 23
It is useful to understand that private conformity assessment encompasses a spectrum of rigor
and independence. 24 Depending on the level of confidence or assurance required, the technical
activities of conformity assessment may be more or less rigorous, and the organizations that
conduct conformity may be more or less independent. When the user of a conformity assessment
system—for example a purchaser—needs just a basic level of assurance, an SDoC based on the
manufacturer’s own inspection or testing may be adequate. When the purchaser needs more
assurance, it may require an SDoC supported by testing in an accredited third-party laboratory.
When the purchaser needs much more assurance, it may require certification by an accredited
third party, perhaps with testing conducted in an accredited third-party laboratory.
Importantly, conformity assessment imposes costs on a manufacturer or other entities that are
subject to conformity assessment requirements. 25 These costs tend to be higher in conformity
assessment systems that are more rigorous and independent. 26 In other words, a conformity
assessment system that requires third-party certification will tend to be more costly to the entities
that must show conformity than a system that only requires sDoC. 27 Redundancy in
accreditation has also been observed to add costs to conformity assessment: a laboratory or
certification body may need to get different accreditations to perform similar assessment in
different localities, states and countries. 28 These costs may then result in higher market prices
for products and services subject to conformity assessment requirements. Also, differences in
conformity assessment requirements across global markets can act as non-tariff barriers, a type
of technical barrier to trade. 29 The Agreement on Technical Barriers to Trade requires that

22

ISO/UNIDO, supra note 10, at 89. See also USTR, supra note 20, at 28 (explaining that by demonstrating the
equivalence of the accreditation bodies that accredit testing and certification bodies, they aim to “provide
governments, as well as suppliers, assurances that a body – regardless of its location – is competent to test and
certify products for relevant markets.”).
23
United Kingdom Accreditation Service, IAF: What is the International Accreditation Forum, INC.?,
http://www.ukas.com/technical-information/international-role/iaf.asp (last visited Sept. 11, 2012); see also
http://www.iaf.nu/ (showing the slogan “certified once, accepted everywhere” in the bottom right hand corner of the
page).
24
Interview (by phone), Gordon Gillerman, Chief, Standards Services Division, National Institute of Standards and
Technology, Aug. 15, 2012.
25
ISO/UNIDO, supra note 10, at 48.
26
Interview (by phone), Gordon Gillerman, Chief, Standards Services Division, National Institute of Standards and
Technology, Aug. 15, 2012.
27
In contrast, a conformity assessment system based on sDoC may be more costly to the party that seeks to rely on
the conformity assessment determination (for example a purchaser or a regulatory agency) because that party may
need to conduct its own inspections or other surveillance to assure conformity. See especially OSHA, Notice:
Nationally Recognized Testing Laboratories; Supplier’s Declaration of Conformity, 75 Fed. Reg. 79035, 79047
(Dec. 17, 2010) (stating, “OSHA estimated that implementing an SDoC system in the U.S. could cost the Agency
approximately $360 million annually. In contrast, the current budget associated with operating the NRTL Program is
approximately $1 million per year. Based on this estimate, operating an effective SDoC program would require
OSHA to incur substantial additional costs.”).
28
National Research Council, Standards, Conformity Assessment, and Trade: Into the 21st Century (1995, National
Academy Press), available at http://www.nap.edu/openbook.php?record_id=4921.
29
Johnson, supra note 6.

5

Third-Party Programs to Assess Regulatory Compliance
conformity assessment procedures adopted by the US and other member governments be nondiscriminatory and avoid creating unnecessary obstacles to international trade. 30
Federal agencies have often incorporated ISO standards and terminology relating to
conformity assessment into their third-party programs. Agencies have most often relied on
international standards that concern how testing bodies should conduct testing (ISO/IEC 17025);
how certification bodies should conduct certifications (ISO/IEC Guide 65, to be replaced by
ISO/IEC 17065); and how accreditation bodies should conduct accreditations (ISO/IEC 17011)
(see Appendix B). 31 Agencies have also tapped into the international networks of accreditation
bodies, certification bodies, and testing bodies that seek to operate in conformity with these
standards and do the work of conformity assessment.
In regulatory third-party programs, third parties determine whether the products or
production processes of regulated entities conform to certain standards. Most often these
standards are established by the responsible governmental agencies, referred to as “governmentunique” standards. In other regulatory programs, agencies have required compliance with
privately-established “voluntary consensus standards.” Voluntary consensus standards are
standards developed or adopted by domestic or international voluntary consensus standardsetting bodies, such as the American Society for Testing and Materials (ASTM) or ISO. 32
Pursuant to the National Technology Transfer and Advancement Act of 1995 and OMB Circular
A-119, federal agencies are required to adopt voluntary consensus standards instead of
government-unique standards when available and appropriate. 33 Also, since the passage of the
NTTAA, federal employees have become much more involved in the private sector
organizations that establish voluntary consensus standards. In FY2010, more than 2,800 federal
agency staff participated in more than 500 private-sector standards organizations. 34
In most of the programs reviewed below, regulatory agencies rely on third parties that serve
the function of certification bodies. Regulatory agencies have used a variety of names for these
third parties, such as Third-Party Auditors, Telecommunication Certification Bodies, and
Accredited Persons. The programs tend to share the same basic structure (see Figure 1).
Regulated entities contract with a third-party certification body to assess and certify whether they
are in conformity with an applicable regulatory standard. The certification bodies are generally
private entities that have been accredited to perform this task by an accreditation body that has
been approved or recognized by the regulatory agency. The applicable standard may be a
mandatory standard, such as a product safety rule, or a voluntary standard, as for an organic
30

Agreement on Technical Barriers to Trade, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade
Organization, Annex 1A, Legal Instruments--Results of the Uruguay Round, available at
http://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm .
31
See Appendix A.
32
OMB Circular No A-119-Revised (Feb. 10, 1998), available at http://www.whitehouse.gov/omb/circulars_a119.
33
Id.; National Technology Transfer and Advancement Act of 1995, Pub. L. No. 104-113, 110 Stat. 775 (1996)
(codified in scattered sections of 15 U.S.C.).
34
First Responder Technologies - Ensuring a Prioritized Approach for Homeland Security Research and
Development: Hearing Before the Subcomms. on Emergency Preparedness, Response and Communications
& Cybersecurity, Infrastructure Protection, and Security Technologies of the H. Comm. on Homeland Security,
112th Cong. (May 9, 2012) (testimony of Mary H. Saunders, Director, Standards Coordination Office, National
Institute of Standards and Technology), http://homeland.house.gov/sites/homeland.house.gov/files/TestimonySaunder.pdf (last visited Sept. 11, 2012).

6

Third-Party Programs to Assess Regulatory Compliance
labeling scheme. In some programs, regulated entities are required to contract with a third party;
in others, they have an option to do so.
However, this general structure varies. In some programs, for example, the regulatory
agency itself accredits the certification bodies directly, without reliance on an accreditation body.
Or the regulatory agency may require the certification body to be accredited by an accreditation
body, but the agency may not explicitly approve or recognize accreditation bodies. Also, several
of the programs rely on a combination of certification bodies and testing bodies.
Figure 1: General Structure of Third-Party Programs to Assess Regulatory Compliance
A Regulatory Agency
approves
Accreditation Bodies
that accredit
Conformity Assessment Bodies
that assess whether
Regulated Entities or Regulated Products
are in conformity with
A Regulatory Standard
III. Review of Federal Third-Party Programs
This paper surveys the most significant regulatory third-party programs implemented by
federal agencies. 35 In these programs, federal agencies directly rely on private third parties to
provide information about regulatory compliance with mandatory or voluntary standards.
Several types of programs that share some similarities but do not meet this description are
outside the scope of this report. Examples include: (1) where a federal agency places
responsibility for inspecting and providing information about compliance directly on regulated
entities; 36 (2) where a federal agency relies on state agency personnel to inspect and provide
information about compliance; 37 (3) where a federal agency takes into account whether a
35

A significant program is one that is large, long-standing, well-documented, or some combination thereof. Several
other programs implemented by the EPA may fall within the scope of this report but are relatively small and/or very
recent. These include EPA’s requirement of attest engagements in its regulation of fuels (see
http://www.epa.gov/otaq/fuels/reporting/attestengage.htm); EPA’s program regarding formaldehyde in wood (see
http://www.epa.gov/opptintr/chemtest/formaldehyde/); and its Design for Environment label (DfE)
(http://www.epa.gov/dfe/ ).
36
See, e.g., USDA’s proposed rule, Modernization of Poultry Slaughter Inspection, 77 Fed. Reg. 4408 (Jan. 27,
2012).
37
An example is provided by USDA’s Good Agricultural Practices/Good Handling Practices (GAP/GHP) Audit
Program, in which auditors from USDA and related state agencies certify on a fee-for-service basis the compliance

7

Third-Party Programs to Assess Regulatory Compliance
regulated entity is certified as meeting an ISO/IEC standard or another similar privatelyestablished standard in determining its inspection priorities; 38 and (4) where an agency uses
private third parties to assess compliance with its own procurement or federal assistance
policies. 39
The eight third-party programs that are surveyed have been implemented by six different
federal agencies (see Table 1). In four of the programs, third parties are called upon by
regulatory agencies to assess compliance with mandatory regulatory standards. In the other four,
third parties assess compliance with voluntary regulatory standards. In two of the eight
programs, regulated entities have a choice about whether or not to use third parties to assess their
compliance. In the others, the regulated entity has no choice but to contract with a third party if it
wants to show compliance with the mandatory or voluntary standard. Four of the third-party
programs were established before 2003 (with one dating to the late 1980s), and four others have
been established since 2008.
The reviewed programs are discussed with attention to the following questions: What is the
overall purpose of the third-party program and the nature of the standard applied (voluntary or
mandatory, governmentally-set or privately-set)? What is the authorizing law for the program?
Who are the regulated entities that are subject to the third-party program? Who are the third
parties and how are they accredited? What measures are in place to prevent conflicts of interest
between third parties and regulated entities? How does the agency exercise oversight? And what
funding exists for the administration of the third-party program? For each program, Table 1
summarizes program attributes such as the assessment activities that third parties perform;
whether the applicable standard is set by the government or privately (i.e. a voluntary consensus
standard); and whether the agency directly accredits the third parties or relies on private
accreditation bodies.

of farms and food facilities with voluntary standards set by FDA. See USDA, Fresh Fruit and Vegetable Audit
Programs, http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=
TemplateN&page=GAPGHPAuditVerificationProgram (last visited Sept. 11, 2012).
38
An example is provided by a program in which FDA intends to use the results of a voluntary ISO 13485 audit as
part of its risk assessment to determine whether that establishment can be removed from FDA’s routine inspection
work plan for one year from the last day of the audit. See FDA, Guidance for Industry, Third Parties and Food and
Drug Administration Staff, Medical Device ISO 13485:2003 Voluntary Audit Report Submission Pilot Program
(March 19, 2012),
http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM212798.
pdf [hereafter “FDA 13485 Program Guidance”]. The program is authorized by statute at 21 U.S.C. § 374(g)(7)(F)
(providing that “For the purpose of setting risk-based inspectional priorities, the Secretary shall accept voluntary
submissions of reports of audits assessing conformance with appropriate quality system standards set by the
International Organization for Standardization (ISO) and identified by the Secretary in public notice.”)
39
Since 1965, the Department of Health and Human Services has relied on third parties such as the Joint
Commission on Accreditation of Hospitals (now the Joint Commission) to certify that hospitals meet the Medicare
Conditions of Participation (CoP) and are thus eligible to receive providing Medicare-funded services. See generally
Eleanor D. Kinney, Private Accreditation as a Substitute for Direct Government Regulation in Public Health
Insurance Programs: When Is It Appropriate? 57 LAW & CONTEMP. PROBS. 47 (1994); Timothy Stoltzfus Jost,
Medicare and the Joint Commission on Accreditation of Healthcare Organizations: A Healthy Relationship? 57
LAW & CONTEMP. PROBS. 15 (1994); Jody Freeman, The Private Role in Public Governance, 75 N.Y.U. L. REV. 543
(2000).

8

Third-Party Programs to Assess Regulatory Compliance
Table 1: Federal Regulatory Third-Party Programs with Selected Program Attributes

Federal Agency

Program Name

Authorizing
Legislation and/or
Year Established

Regulated
Product or
Activity

Third-Party Assessment
Activities

Use of Third
Parties:
Required or
Voluntary

Standard-setting
Entity:
Government or
Private

Accreditation Entity:
Agency or Accreditation
Bodies

Imported Food

- Certification of foreign
food facilities;
- Laboratory testing of
imported food products

Required

Government

Accreditation Bodies (for
both certification bodies
and laboratories)

Children’s
Products

- Laboratory testing of
children’s products

Required

Government and
Private

Accreditation Bodies (for
laboratories)

Medical Devices

- Review of premarket
notifications/
- Inspection of medical
device production
facilities

Voluntary

Government

Agency

Telecommunication
Equipment

- Certification of telecom
products

Voluntary

Government

Accreditation bodies (for
certification bodies)

- Certification of
equipment
- Inspection of equipment
production facilities

Required

Private

Agency

Programs to Assess Compliance with Mandatory Standards
Food & Drug
Administration
(FDA)

Import Certification
Program and Voluntary
Qualified Importer
Program (VQIP)

Consumer Product
Safety Commission
(CPSC)

Third Party Testing
and Certification

FDA

Premarket Notification
510(k) Third Party
Review Program/
Inspections by
Accredited Persons
(AP) Program

Federal
Communications
Commission (FCC)

Telecommunication
Certification Body
(TCB) Program

Food Safety
Modernization Act of
2011
Consumer Product
Safety Improvement
Act of 2008
FDA Modernization
Act of 1997
(premarket program)/
Medical Device User
Fee and Modernization
Act of 2002
(inspection program)
N/A (established by
regulation in 1999)

Programs to Assess Compliance with Voluntary Standards
Occupational Safety
& Health
Administration
(OSHA)

National Recognized
Testing Laboratory
(NRTL) Program

N/A (established by
regulation in 1988)

Labeling of
electrical and
other types of
equipment in
workplaces

Agricultural
Marketing Service
(USDA AMS)

National Organic
Program (NOP)

Organic Foods
Production Act of
1990 (implemented by
regulation in 2000)

Labeling of
Organic Products

- Inspection and
certification of organic
production facilities

Required

Government

Agency

Environmental
Protection Agency
(EPA)/ Department
of Energy (DOE)

Energy Star

N/A (established
through agency
guidance in 2011)

Labeling of
Energy Efficient
Products

- Certification of products
- Laboratory testing of
products

Required

Government

Accreditation Bodies (for
both certification bodies
and laboratories)

WaterSense

N/A (established
through agency
guidance in 2009)

Labeling of
Water
Conservation
Products

- Certification of products

Required

Government

Accreditation Bodies (for
certification bodies)

EPA

9

Third-Party Programs to Assess Regulatory Compliance

A. Programs for Mandatory Standards
Several federal laws enable regulatory agencies to rely on third parties to assess compliance
with mandatory standards. Mandatory standards must be complied with in order for a regulated
entity to legally operate or sell a regulated product. In two of the programs—imported food
programs administered by the Food & Drug Administration’s (FDA) and children’s product
safety rules administered by the Consumer Product Safety Commission’s (CPSC)—the thirdparty certifier is an obligatory part of the compliance process: the regulated company is required
to contract with the third party for compliance assessment. In FDA’s programs for medical
devices, in contrast, the use of a third party is optional: companies have the choice of hiring a
third party or having the agency conduct the review or inspection instead. In the FCC’s program
for telecommunications equipment, the use of a third party is optional for most types of
equipment.
1. FDA, Imported Food Programs
As amended by the Food Safety Modernization Act of 2011 (FSMA), the Federal Food,
Drug, and Cosmetic Act (FDCA) enables the FDA to rely on third-party audits in its regulation
of imported foods. 40 Overall, the FDA is responsible for ensuring the safety of about 80% of US
food supply. 41 Increasingly, much of this food supply is imported, including 80% of seafood,
50% of fresh fruits, and 20% of fresh vegetables. 42
FSMA significantly strengthened FDA’s authority to regulate imported food, 43 and it relies
on accredited third-party auditors in two different ways. First, the law requires FDA to create a
Voluntary Qualified Importer Program (VQIP) through which participating importers may
receive expedited importation if the facility from which the imported food comes is certified by a
third-party auditor. 44 Second, the law provides that the FDA may require that an importer
present a certification from a third-party auditor in order to import food into the United States. 45
The third-party auditors that issue these certifications have to be accredited by either an
accreditation body recognized by FDA or by the FDA directly. 46
In both programs, the third-party auditors would be responsible for performing an audit to
assess and certify compliance with the mandatory requirements of the law. 47 While VQIP is a
voluntary program in the sense that importers are not required to participate, it is likely that for

40

See FDA Food Safety Modernization Act (FSMA), Pub. L. No. 111-353, 124 Stat. 3885 (2011).
Silliker, Inc., FDA Food Safety Modernization Act: Marking a New Era in U.S. Food Safety, available at
http://www.foodsafetymagazine.com/article.asp?id=4005&sub=sub2.
42
Dina ElBoghdady, Taking New Look at Food Inspection, WASH. POST, March 5, 2012, at A1.
43
Id.
44
21 U.S.C. § 384b (also known as FDCA § 806 and FSMA §302).
45
21 U.S.C. § 381(q) (also known as FDCA § 801(q) and FSMA § 303).
46
21 U.S.C. § 384d (also known as FDCA § 808 and FSMA § 307).
47
In the case of the import certification program, certification involves an assessment of whether a food satisfies the
requirements of section 801(q) [21 U.S.C. § 381(q)]. See 21 U.S.C. § 384d(c)(2)(B)(i). In the case of the VQIP
program, certification involves an assessment of whether a facility is eligible to be part of the program. See 21
U.S.C. § 384d (c)(2)(B)(ii).
41

10

Third-Party Programs to Assess Regulatory Compliance
an importer to participate, it will be required to contract with a third-party auditor. 48 Similarly, it
is likely that the import certification program will also require the participation of a third party,
which in this case may be the government of the country from which the food originated. 49
The structure of the third-party program contemplated by FSMA is shown in Figure 2. The
law provides that the FDA will recognize accreditation bodies that will, in turn, accredit thirdparty auditors to audit and certify foreign food facilities or imports. 50 Under the law, an
accreditation body is “an authority that performs accreditation of third-party auditors,” and a
third-party auditor refers to a foreign government (or an agency thereof), a foreign cooperative,
or any other third party as deemed appropriate by the FDA in its regulations.” 51 Private thirdparty auditors can be single individuals, but are more likely to be companies that employ “audit
agents.” 52 FDA is required by law to establish the system for the recognition of accreditation
bodies by January 4, 2013 (two years after the enactment of the law). 53 If the FDA has not
recognized any accreditation bodies within two years of the establishment of such system, it may
directly accredit third-party auditors. 54
The law directs FDA to develop model standards for becoming an accredited third-party
auditor and for preparing audit reports by July 4, 2012 (18 months after the enactment of the
law). 55 The statute itself contains several relevant requirements, including that the FDA should
look to standards already in place (existing voluntary consensus standards, for example) 56 and an
audit report should be submitted within 45 days of conducting an audit. 57 As of May 2012, FDA
was in the process of drafting such regulations. 58

48

The law provides that the FDA may provide the certification, 21 U.S.C. § 384d(c)(2)(C)(ii), but based on the
experience of other federal third-party programs it seems likely that forthcoming regulations will generally require
the use of an accredited third-party auditor.
49
21 U.S.C. § 381(q)(3). It should be noted that the law also allows the FDA to provide the certification, per 21
U.S.C. § 384d (c)(2)(C)(ii), but it seems likely that forthcoming regulations will generally require the use of a third
party.
50
21 U.S.C. § 384d(b)(1)(A)(i).
51
Id. § 384d(a)(3).
52
The law provides that a third-party auditor may be a single individual. 21 U.S.C. § 384d (a)(3).The law also states
that third-party auditors may employ “audit agents,” defined as “an individual who is an employee or agent of an
accredited third-party auditor and, although not individually accredited, is qualified to conduct food safety audits on
behalf of an accredited third-party auditor.” 21 U.S.C. § 384d(a)(1).
53
21 U.S.C. § 384d(b)(1)(A)(i).
54
Id. § 384d(b)(1)(A)(ii).
55
Id. § 384d(b)(2).
56
Id. § 384d(b)(2).
57
Id. § 384d(c)(3)(A).
58
Interview (by phone), Charlotte Christen, U.S. Food and Drug Administration, May 16, 2012.

11

Third-Party Programs to Assess Regulatory Compliance
Figure 2: Structure of Third-Party Program for Imported Food Certifications
FDA
recognizes
Accreditation Bodies
that accredit
Third-Party Auditors
that audit and certify
Foreign Food Facilities or Imports
are in conformity with
Requirements of the FDCA

It is also important to note that FSMA also requires the establishment of a system for the
accreditation of laboratories to conduct food safety tests. 59 Figure 3 illustrates the third-party
structure for laboratories. Accredited labs must be used to satisfy a variety of testing
requirements, such as testing required by FDA to address an identified or suspected food safety
problem and testing to support admission of an imported food. 60 The law directs FDA to
establish a program for the testing of food by accredited laboratories and a public registry of
accreditation bodies and accredited laboratories by January 4, 2013. 61 The law also states that
the FDA shall develop model accreditation standards that include, for example, appropriate
sampling methods, quality system requirements, and employee training requirements. 62
Importers may choose to seek certification from a third-party auditor in order to participate in
the VQIP program, or they may be required to seek certification because FDA imposes an import
certification requirement on the food they import. Under the statute, the audits for such
certifications are termed “regulatory audits.” 63 Importers and other regulated entities may also
contract with an accredited third-party auditor to conduct a “consultative audit,” defined in the
law to be for internal purposes only. 64

59

21 U.S.C. § 350k.
Id. § 350k(b)(1).
61
Id. §350k(a)(1).
62
Id. § 350k(a)(6).
63
Id. § 384d (a)(7).
64
Id. § 384d (a)(5).
60

12

Third-Party Programs to Assess Regulatory Compliance
Figure 3: Structure of Third-Party Program for Food Safety Testing
FDA
recognizes
Accreditation Bodies
that accredit
Laboratories
that test whether
Food Products
are in conformity with
Food Safety Standards
Importers that import foods from facilities that have received certification from a third-party
auditor may request to have that food become part of the VQIP. 65 The law directs the FDA to
consider a range of factors to make a determination on whether the food should receive
expedited review and importation through the VQIP, including the safety risks of the food, the
compliance history of the suppliers used by the importer, and the capability of the exporting
country’s regulatory system. 66
With its import certification authority, the FDA may require that certain food imports be
accompanied by a certification that they comply with the requirements of U.S. food safety law. 67
To determine that a food import requires certification, the law instructs FDA to consider factors
such as the safety risks of the food and its place of origin, and to make a scientifically-supported
finding that the “food safety programs, systems, and standards in the country, territory, or region
of origin of the food are inadequate to ensure that the article of food is as safe as a similar article
of food that is manufactured, processed, packed, or held in the United States in accordance with
the requirements of this Act.” 68
Recognized accreditation bodies ensure that third-party auditors and their audit agents meet
the accreditation standards. 69 The law defines the types of entities that can become third-party
auditors and sets forth certain requirements for their accreditation. In particular, the law states
that foreign governments may be accredited based on a review of their food safety programs to

65

An importer “means the person that brings food, or causes food to be brought, from a foreign country into the
customs territory of the United States.” 21 U.S.C. § 384b (g). Elsewhere the law defines an importer as “the US
owner or consignee of the food article at the time of entry,” or if none, “the US agent of a foreign owner or
consignee at the time of entry.” 21 U.S.C. § 384a.
66
21 U.S.C. § 384b(d). See also Silliker, supra note 41.
67
See generally 21 U.S.C. § 381(q).
68
21 U.S.C. § 381(q) (2).
69
Id. § 384d (b)(2).

13

Third-Party Programs to Assess Regulatory Compliance
ensure that the foreign government is capable of determining that U.S. requirements are met. 70
Foreign cooperatives and other third parties may be accredited based on a review of internal
systems and the training and qualifications of their audit agents to ensure conformity with the
model standards to be issued by the FDA. 71
The law addresses the potential of conflicts of interest between accredited third-party
auditors and the companies that contract with them to perform audits. It sets forth several
specific provisions and also requires FDA promulgate regulations to further protect against
conflicts of interest. The law directly provides that third-party auditors may not perform a
regulatory audit of an entity for which it has performed a consultative audit or a regulatory audit
in the previous 13 months. 72 It also states that third-party auditors cannot be owned or operated
by the same person as the entities they certify, must have procedures to protect against financial
conflicts of interest, and must annually disclose to the FDA how they have complied with
conflicts-of-interest rules and procedures. 73 Similarly, audit agents cannot own or operate the
entity they certify, must have procedures to protect against financial conflicts of interest, and
must make an annual disclosure. 74
According to the statute, FDA’s conflict of interest regulations shall require that audits
performed by accredited third-party auditors be unannounced and shall place limits on the extent
to which there may be financial affiliations between auditors and audit agents and the entities
they certify. 75 The regulations must also establish timing, disclosure, fee payment and other
rules that decrease the potential for conflicts of interest. 76
The law contains several specific provisions regarding how the FDA should oversee
accreditation bodies and accredited third-party auditors and what audit information must be made
available to the agency and to the public. Accreditation bodies are required to provide a list of
all third-party auditors they have accredited and their audit agents, 77 and the FDA is required to
establish a public registry of all accreditation bodies and accredited third-party auditors. 78 FDA
must reevaluate accreditation bodies at least once every four years 79 and must revoke the
recognition of an accreditation body that is out of compliance with its rules. 80
Accredited third-party auditors are directly answerable to FDA in a variety of ways. The
FDA may at any time require an accredited auditor to submit an onsite audit report from a
regulatory audit and any related reports or documents. 81 In contrast, the FDA may not directly
require an auditor to submit the reports from a consultative audit, but can still access the results
of such audits based on its general authority to inspect records when FDA has a reasonable belief
70

Id. § 384d (c)(1)(A).
Id. § 384d (c)(1)(B).
72
Id. § 384d (c)(4)(C)(i).
73
Id. § 384d(c)(5)(A).
74
Id. § 384d(c)(5)(B).
75
Id. § 384d(c)(5)(C)(i) and (iii).
76
Id. § 384d(c)(5)(C)(ii).
77
Id. § 384d(b)(1)(B).
78
Id. § 384d (g).
79
Id. § 384d (f)(1)
80
Id. § 384d(b)(1)(C).
81
Id. § 384d(c)(3)(B).
71

14

Third-Party Programs to Assess Regulatory Compliance
that an article of food “presents a threat of serious adverse health consequences or death to
humans or animals.” 82 Also, an accredited auditor must immediately notify the FDA if it
“discovers a condition that could cause or contribute to a serious risk to the public health” during
either a regulatory or a consultative audit. 83
In addition, FDA is required to evaluate the performance of each accredited third-party
auditor at least once every four years, which should include the review of its regulatory audit
reports and the compliance history of its certified entities. 84 The FDA may also conduct its own
onsite audit of any certified entity whether or not the certifying third-party auditor is present. 85
The FDA may withdraw accreditation from an auditor if food from a facility it has certified is
linked to a serious outbreak of foodborne illness, if FDA evaluates it and finds it to be out of
compliance with accreditation requirements, if it refuses to allow the government to conduct
necessary audits and investigations, or if FDA revokes the recognition of the accreditation bodies
which accredited it. 86 Also, false statements or representations made to an accredited third-party
auditor by a regulated entity or to the FDA by an accredited third-party auditor are subject to
criminal penalties. 87
The law provides that FDA will establish a user-fee program to make operating the
accredited third-party auditor program revenue neutral. 88 With the user fees, accredited thirdparty auditors and audit agents are to reimburse the FDA for “the work performed to establish
and administer the accreditation system.” 89
2. CPSC, Children’s Product Safety Rule
Pursuant to the Consumer Product Safety Improvement Act of 2008 (CPSIA), the CPSC
requires manufacturers and importers of children’s products to demonstrate that they meet
mandatory product safety standards through third-party testing. 90 Testing must be conducted by
a ‘‘Third Party Conformity Assessment Body” (TPCAB), defined by regulation as “a testing
laboratory whose accreditation has been accepted by the CPSC to conduct certification testing on
children’s products.” 91 Based on the results of the third-party testing, the manufacturer or
82

21 U.S.C. § 384d(c)(3)(C) (referring to FDA’s authority to inspect records at 21 U.S.C. § 350c).
Id. § 384d(c)(4)(A); see also FDA, Imports, http://www.fda.gov/Food/FoodSafety/FSMA/ucm257980.htm (last
visited Sept. 11, 2012) (answering in the affirmative the question, “I.4.2 Is the accredited auditor required to notify
the FDA if a condition of concern is found during a consultative audit?”).
84
21 U.S.C. § 384d(f)(2).
85
Id. § 384d(f)(3).
86
Id. § 384d(c)(6)(A) and (B).
87
Id. § 384d(e). See also Charles F. Woodhouse, Imported Food Provisions of the Food Safety Modernization Act,
2001, http://www.food-label-compliance.com/Sites/5/Downloads/White-Paper-FSMA-IMPORT-PROVISIONSWoodhouse-Nov-8-2011.pdf (last visited Sept. 11, 2012) (a white paper emphasizing the significance of specific
inclusion of provisions relating to False Statements).
88
21 U.S.C. § 384d(c)(8).
89
Id.
90
Pub. L. No. 110-314, 122 Stat. 3016 (2008); 15 U.S.C. § 2063(a)(2). The law defines a “children’s product” as a
consumer product designed or intended primarily for children 12 years of age or younger. 15 U.S.C. § 2052(a)(2).
91
Testing and Labeling Pertaining to Product Certification, 76 Fed. Reg. 69482 (Nov. 8, 2011) (codified at 16
C.F.R. Part 1107); see also 15 U.S.C. § 2063(f)(2)(A) (defining a “third party conformity assessment body” to mean
a conformity assessment body that is not owned, managed, or controlled by the manufacturer or private labeler of a
product assessed by the laboratory, unless such a laboratory has satisfied certain statutory criteria.”) It is worth
83

15

Third-Party Programs to Assess Regulatory Compliance
importer submits a Children’s Product Certificate indicating compliance. 92 Under the law, thirdparty testing is mandatory; manufacturers cannot opt-out of the third-party testing system and
rely instead on CPSC to assess compliance. The structure of this third-party program is shown in
Figure 4.
Different rules and standards apply depending on the product. For example, the CPSC has
promulgated safety rules with standards for products such as bicycle helmets, 93 bunk beds, 94
infant bath seats, 95 and electrically operated toys or articles. 96 CPSC product safety rules
containing standards for flammability, 97 small parts, 98 and lead content 99 may also apply. In
addition, CPSC has mandated compliance with a variety of toy safety standards established by
the ASTM regarding, for example, toy chests, stuffing materials, and sound producing toys. 100
Figure 4: Structure of Third-Party Program for Children’s Product Testing
CPSC
Accepts the accreditation of

Accreditation Bodies
accredit

Third Party Conformity Assessment Bodies (laboratories)
that test whether
Children’s Products
are in conformity with
CPSC safety rules and/or ASTM standards
The CPSIA established a schedule for implementing third-party testing and included a
timeline for the accreditation of third party conformity assessment bodies. 101 The law specifies
that third-party testing requirements apply to any children’s product manufactured more than 90
days after the CPSC has published requirements for accreditation of third-party testing

noting that while the statute uses the term certification, the third-party program that it requires is a third-party testing
program rather than a certification program under the definitions of international standards.
92
15 U.S.C. § 2063(a)(2). See also Certificates of Compliance, 73 Fed. Reg. 68328 (Nov. 18, 2008); 16 C.F.R. Part
1110, Certificates of Compliance.
93
16 C.F.R. pt. 1203, Bicycle Helmets (effective date Feb. 10, 2010).
94
Id. pt. 1513, Bunk Beds (effective date Feb. 10, 2010).
95
Id. pt. 1216, Infant Walkers (effective date Dec. 21, 2010).
96
Id. pt. 1505, Electrically Operated Toys or Articles (effective date Jul. 29, 2010).
97
Id. pts. 1610, 1611, 1615, 1616, 1630, 1631, 1632, and 1633.
98
Id. pt. 1501.
99
Test Method CPSC-CH-E1001-08 and/or CPSC-CH-E1001-08.1
100
ASTM F963 Standard Consumer Safety Specifications for Toy Safety, http://www.cpsc.gov/cgibin/labsearch/Default.aspx (last visited Sept. 11, 2012) (list of rules that require third-party testing and certification).
101
15 U.S.C. § 2063(a)(3).

16

Third-Party Programs to Assess Regulatory Compliance
laboratories to assess conformity with a children’s product safety rule. 102 For example, the CPSC
published such a notice of requirements for the lead paint rule on September 22, 2008 and the
third-party testing requirement for lead paint became effective December 22, 2008 for products
manufactured on or after that date. 103 In total, CPSC published 19 notices of requirements
between August 14, 2008 and August 14, 2011. 104 However, there have been delays and stays of
enforcement that have led to departures from the statutory schedule. For example, the CPSC
stayed the enforcement of testing and certification requirements that would have gone into effect
on February 10, 2009 for new total lead content limits, phthalates limits for certain products, and
mandatory toy standards, among other things. 105 As of January 1, 2012, almost all stays had
been lifted, and third-party certification and testing was required for nearly all the children’s
product safety rules. 106
Rulemaking for the CPSC third-party program has also progressed. On November 8, 2011,
the CPSC issued a final rule establishing protocols and standards for certification and testing of
children’s products and also detailing requirements for the labeling of certified products. 107 The
final rule applies to products manufactured after February 8, 2013. 108 On May 24, 2012, the
CPSC published its final rule, “Audit Requirements for Third Party Conformity Assessment
Bodies.” Also on May 24, 2012, the CPSC published a proposed rule, “Requirements Pertaining
to Third Party Conformity Assessment Bodies.” 109 The proposed rule, if finalized, would
establish the requirements related to CPSC acceptance of the accreditation of laboratories for
purposes of testing children’s products. 110 The proposed requirements are largely the same as
the requirements that the CPSC has set forth in the various notices of requirements that it has
published since August 2008.
Nearly all children’s products are required to undergo third-party testing. 111 In 2011,
Congress enacted amendments to the CPSIA that, among other things, provided an exemption
from third-party testing for “small batch manufacturers.” 112 Small batch manufacturers are those
that produced fewer than 7500 units and collected less than $1 million in consumer products
102

15 U.S.C. § 2063(a)(3)(A) (stating that the third-party testing requirement does not commence “more than 90
days” after the Commission publishes a notice of requirements pertaining to the regulation or standard to which the
children’s product is subject.).
103
In brief at http://www.cpsc.gov/library/foia/foia10/brief/102testing.pdf .
104
In brief at http://www.cpsc.gov/library/foia/foia12/brief/tprequirements.pdf at 6.
105
Press release at http://www.cpsc.gov/cpscpub/prerel/prhtml09/09115.html; see Notice of Stay of Enforcement of
Testing and Certification Requirements, 74 Fed. Reg. 6396 (staying the enforcement of certain provisions of section
14(a) of the CPSA); 74 Fed. Reg. 68588 (Dec. 28, 2009) (revising the terms of stay of enforcement); Consumer
Product Safety Act: Notice of Commission Action on the Stay of Enforcement of Testing and Certification
Requirements, 76 Fed. Reg. 6765 (Feb. 8, 2011) (continuing the stay of enforcement for testing and certification of
children’s products for which a notice of requirements for accreditation of laboratories had not yet been published).
106
CPSC, FAQs: Certification and Third Party Testing, http://www.cpsc.gov/info/toysafety/3ptfaq.html#foot1 (last
visited Sept. 11, 2012).
107
Testing and Labeling Pertaining to Product Certification, 76 Fed. Reg. 69482 (Nov. 8, 2011) (codified at 16
C.F.R. pt. 1107).
108
Id. at 69482.
109
Requirements Pertaining to Third Party Conformity Assessment Bodies, 77 Fed. Reg. 31086, 31087-88 (May 24,
2012), available at http://www.gpo.gov/fdsys/pkg/FR-2012-05-24/pdf/2012-10923.pdf.
110
Id.
111
Id.
112
Pub. L. No. 112-28, § 2(a)(4), 125 Stat. 273 (2011) (codified at 15 U.S.C. 2063(d)).

17

Third-Party Programs to Assess Regulatory Compliance
revenues in the previous year. According to CPSC, small batch manufacturers are still required
to third-party test for compliance with some children’s product safety rules but not others. 113 An
exemption was also provided for ordinary books for children aged 4 to 12. 114
There are three types of third-party testing: (1) initial certification testing (2) material change
testing; and (3) periodic testing. 115 Initially, each children’s product must be third-party tested
by a CPSC-accepted laboratory for compliance with all applicable children’s product safety
rules. Material change testing by a third-party CPSC-accepted laboratory is required if a material
change is subsequently made to any component part of that children’s product. Periodic testing
applies to continuing production of a children’s product. If a children’s product initially is
certified, and then additional production continues, periodic testing is required for all the
applicable children’s product safety rules, even if there are no material changes. The
requirements to test children’s product when there is a material change and to undertake periodic
testing become effective on February 8, 2013. 116
The law provides that accreditation of TPCABs may be conducted either by the CPSC or by
a designated accreditation body. 117 Three types of TPCABs are contemplated by the law: (1)
those that are not owned, managed, or controlled by a manufacturer or private labeler of a
children’s product to be tested for certification purposes (“independent” laboratories); (2) those
that are owned, managed, or controlled by a manufacturer or private labeler of the children’s
product (“firewalled conformity assessment bodies”) 118; and (3) those owned or controlled, in
whole or in part, by a government (“governmental laboratories”). 119
For a TPCAB to be accepted to test children’s products for conformity with children’s
product safety rules, it must be accredited by an accreditation body that is a signatory to the
ILAC MRA. 120 To be an ILAC-MRA signatory, an accreditation body must, inter alia, operate
in accordance with ISO/ IEC 17011. 121 To make an accreditation determination, the
accreditation body assesses the laboratory’s conformity with ISO/IEC 17025. As described by
CPSC, ISO/IEC 17025 includes technical requirements relating to the competence of laboratory
staff, suitability and maintenance of test equipment, and quality assurance of test data. 122 It also
includes management requirements relating to organization, management systems, document

113

CPSC, Small Batch Manufacturers and Third Party Testing, http://www.cpsc.gov/info/toysafety/smallbatch.html
(last visited Sept. 11, 2012).
114
15 U.S.C. § 2063(i)(5)(A)(i).
115
CPSC, FAQs: Certification and Third Party Testing, http://www.cpsc.gov/info/toysafety/3ptfaq.html#foot1 (last
visited Sept. 11, 2012).
116
Id.
117
15 U.S.C. § 2063(a)(3)(C).
118
See infra notes 130 - 132 and accompanying text.
119
Requirements Pertaining to Third Party Conformity Assessment Bodies, 77 Fed. Reg. 31086, 31087-88 (May 24,
2012); see also 15 U.S.C. § 2063(f)(2).
120
Third Party Conformity Assessment Body Accreditation Requirements for Testing Compliance with 16 C.F.R.
pt. 1501 (Small Parts Regulations), 73 Fed. Reg. 54564 (Sept. 22, 2008), available in unpublished form at
http://www.cpsc.gov/library/foia/foia09/brief/smallparts.pdf; see also Requirements Pertaining to Third Party
Conformity Assessment Bodies, 77 Fed. Reg. 31086, 31088 (May 24, 2012).
121
ILAC, ILAC MRA and Signatories, http://www.ilac.org/ilacarrangement.html (last visited Sept. 11, 2012).
122
Id.

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Third-Party Programs to Assess Regulatory Compliance
controls, audits, and management reviews. 123
Laboratories are accredited with a defined “scope of accreditation,” which indicates the
children’s product safety rules and/or test methods for which it is accredited to test. 124 As
required by the CPSIA, the commission maintains an online listing of accredited TCPABs and
their scopes of accreditation. 125 The current list includes hundreds of laboratories in about 35
countries. 126 For example, the U.S.-based laboratory NSF International is accredited by
International Accreditation Services Inc. (IAS) and its scope of accreditation includes about 45
different product safety rules and ASTM standards. 127
Several measures exist to address conflicts of interest that might raise doubt about the
impartiality of product certifications. As part of being accredited to ISO/IEC 17025, laboratories
must “have policies and procedures to avoid involvement in any activities that would diminish
confidence in its competence, impartiality, judgment, or operational integrity.” 128 A laboratory
must “demonstrate that it is impartial and that its personnel are free from any undue commercial,
financial, and other pressures that might influence their technical judgment.” CPSC has also
stated in its Notices of Requirements that accredited laboratories are subject to either an on-site
surveillance or a full reassessment every two years to ensure that they maintain their standards of
independence and technical expertise. 129
In addition to the baseline accreditation requirements, firewalled laboratories and
governmental laboratories seeking CPSC approval must meet additional requirements that relate
to their impartiality and independence. The CPSIA specifies that the CPSC may approve a
firewalled laboratory if the laboratory has established procedures to ensure that
(I) its test results are protected from undue influence by the manufacturer, private labeler
or other interested party;
(II) the Commission is notified immediately of any attempt by the manufacturer, private
labeler or other interested party to hide or exert undue influence over test results; and
(III) allegations of undue influence may be reported confidentially to the Commission. 130
In CPSC’s published Notices of Requirements, the CPSC has required that firewalled labs
seeking approval submit copies, in English, of their training documents showing how employees
are trained to notify the CPSC immediately and confidentially of any attempt by the
123

Id.
See CPSC, CPSC Form 223 - Lab Accreditation, http://www.cpsc.gov/cgibin/labregentry/ (last visited Sept. 11,
2012).
125
15 U.S.C. § 2063(a)(3)(E) (requiring that the Commission maintain on its website an up-to-date list of entities
that have been accredited to assess conformity with children’s product safety rules.)
126
CPSC, List of CPSC-Accepted Testing Laboratories, http://www.cpsc.gov/cgi-bin/labsearch/ (last visited Sept.
11, 2012).
127
Id. (detailed information displayed by highlighting the laboratory name and clicking “submit”).
128
Requirements Pertaining to Third Party Conformity Assessment Bodies, 77 Fed. Reg. 31086, 31093 (May 24,
2012).
129
See, e.g., Third Party Conformity Assessment Body Accreditation Requirements for Testing Compliance with 16
C.F.R. Part 1501 (Small Parts Regulations), 73 Fed. Reg. 54564 (Sept. 22, 2008), available in unpublished form at
http://www.cpsc.gov/library/foia/foia09/brief/smallparts.pdf
130
15 U.S.C. § 2063(f)(2)(D)(ii).
124

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Third-Party Programs to Assess Regulatory Compliance
manufacturer, private labeler, or other interested party to hide or exert undue influence over the
TCPAB’s test results. 131 This additional requirement applies to any laboratory in which a
manufacturer or private labeler of a children’s product to be tested by it owns an interest of ten
percent or more. 132
Similarly, the CPSIA contains five criteria that a governmental laboratory must satisfy for its
accreditation to be accepted by the CPSC.133 The CPSC must determine that to the extent
practicable, manufacturers located in any nation are permitted to choose a laboratory that is not
owned or controlled by the government of that nation; that the testing results are not subject to
undue influence by any other person; that the governmental laboratory and its testing results do
not receive more favorable treatment than other accredited laboratories in the same nation; and
that the governmental laboratory does not exercise undue influence on the decisions of other
governmental authorities that make decisions affecting its operation or controlling distribution of
products. 134 The CPSC’s proposed rule requires governmental labs seeking CPSC acceptance to
submit a variety of relevant information to assist it in making these determinations. 135
The CPSIA requires the CPSC to establish “requirements for the periodic audit of third party
conformity assessment bodies as a condition for the continuing accreditation of such conformity
assessment bodies.” 136 CPSC’s final rule, “Audit Requirements for Third Party Conformity
Assessment Bodies,” implements this provision. 137 It provides that the periodic audit of
TCPABs consists of two parts. 138 The first part is a reassessment by the same accreditation body
that it received its initial accreditation from to determine whether it continues to meet
accreditation criteria. The second part is the resubmission to the CPSC of the CPSC’s
“Consumer Product Conformity Assessment Body Acceptance Registration Form” and its review
by the CPSC. The rule does not specify the frequency of the periodic audit but rather says that it
must occur at a minimum “at the frequency established by its accreditation body.” 139 CPSC
observes that according to ISO/IEC 17011 a full reassessment must occur at least every two
years, unless an accreditation body undertakes less comprehensive surveillance visits every six
months. 140 In this case, the time between reassessments must be no more than 5 years. 141

131

Third Party Conformity Assessment Body Accreditation Requirements for Testing Compliance with 16 C.F.R.
Part 1501 (Small Parts Regulations), 73 Fed. Reg. 54564 (Sept. 22, 2008), available in unpublished form at
http://www.cpsc.gov/library/foia/foia09/brief/smallparts.pdf ; see also Requirements Pertaining to Third Party
Conformity Assessment Bodies, 77 Fed. Reg. 31086, 31088, 31133 (May 24, 2012) (stating that the requirement is
that the laboratory “train employees that they may notify the CPSC immediately, and that a report to the CPSC may
be confidential.”)
132
Id.
133
15 U.S.C. § 2063(f)(2)(B); summarized in Requirements Pertaining to Third Party Conformity Assessment
Bodies, 77 Fed. Reg. 31086, 31088, 31133 (May 24, 2012).
134
Id.
135
Requirements Pertaining to Third Party Conformity Assessment Bodies, 77 Fed. Reg. 31086, 31133-34 (May 24,
2012).
136
15 U.S.C. § 2063(i)(1) (before amendments in H.R. 2715, this provision was located instead at 15 U.S.C.
§ 2063(d)(1)).
137
Audit Requirements for Third Party Conformity Assessment Bodies, 77 Fed. Reg. 31074 (May 24, 2012).
138
Id. at 31083.
139
Id. at 31085.
140
Id. at 31083.
141
Id.

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Third-Party Programs to Assess Regulatory Compliance
The law provides that the CPSC may withdraw its acceptance of a TPCAB if it finds that
“(A) a manufacturer, private labeler, or governmental entity has exerted undue influence on such
conformity assessment body or otherwise interfered with or compromised the integrity of the
testing process with respect to the certification of a children’s product under this section; or (B)
such conformity assessment body failed to comply with an applicable protocol, standard, or
requirement established by the Commission….” 142 The law also provides that the CPSC may
suspend a laboratory’s accreditation if it fails to cooperate with the CPSC in an investigation
regarding its certification activities. 143 In May 2012, CPSC published a proposed rule,
“Requirements Pertaining to Third Party Conformity Assessment Bodies,” which would
implement these provisions. 144 The rule would establish whether, when and how the CPSC may
deny a TCPAB’s application; suspend accreditation; and withdraw accreditation. 145 It would
also establish how a person may submit to the CPSC information alleging a ground for denial,
suspension, or withdrawal. 146
The CPSC’s third-party program has been funded with appropriated funds. The statute
contains no provisions regarding the assessment of user fees to cover the costs of program
development and implementation.
3. FDA, Medical Device Inspections
In fulfillment of statutory requirements, the FDA has developed two programs through which
regulated entities can opt to have third parties perform compliance assessment tasks related to
medical devices that the regulatory agency would otherwise perform. Through the first program,
manufacturers of certain medical devices may have third parties review their 510(k) premarket
notifications. Through the second program, third parties may conduct inspections of facilities
that manufacture certain medical devices. In both, third-party organizations recognized by FDA
evaluate a manufacturer’s compliance with mandatory standards in the Federal Food, Drug, and
Cosmetic Act (FDCA). 147
Premarket Notification 510(k) Third Party Review Program
The FDA Modernization Act of 1997 (FDAMA) directed the FDA to accredit third parties
(referred to as either Accredited Persons or Recognized Third Parties) in the private sector to
conduct the 510(k) pre-market review for low risk (Class I) and certain moderate risk (Class II)
devices. 148 Pursuant to this authorization, the FDA established accreditation criteria (including
142

15 U.S.C. § 2063(e)(1). See also 15 U.S.C. § 2063(e)(2) (setting forth procedures for accreditation withdrawals).
15 U.S.C. § 2063(e)(3).
144
Requirements Pertaining to Third Party Conformity Assessment Bodies, 77 Fed. Reg. 31086 (May 24, 2012).
145
Id. at 31119.
146
Id.
147
As used in the program, the term “Persons” refers to organizations. See GAO, Report to Congressional
Committees, Medical Devices: Status of FDA’s Program for Inspections by Accredited Organizations 3 (January
2007) [hereinafter “Status of FDA’s Program”].
148
See generally FDA, Guidance for Third Parties and FDA Staff; Third Party Review of Premarket Notifications,
(Sept. 28, 2004), http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/
GuidanceDocuments/ucm082191.htm; FDA, Implementation of Third Party Programs under the FDA
Modernization Act of 1997; Final Guidance for Staff, Industry and Third Parties (February 2, 2001),
http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/
143

21

Third-Party Programs to Assess Regulatory Compliance
criteria to prevent conflicts of interest) and conducted accreditations, 149 published a list of
Accredited Persons, 150 and conducted a training program for Accredited Persons. 151 By creating
this option for device manufacturers, Congress intended “to enable FDA to use its scientific
review resources for higher-risk devices, while maintaining a high degree of confidence in the
review of low-to-moderate risk devices by Accredited Persons, and to provide manufacturers of
eligible devices an alternative review process that may yield more rapid 510(k) decisions.” 152
Post-Market Inspections by Accredited Persons Program
The rest of this section provides an in depth discussion of the post-market Inspections by APs
Program, in part because it involves facility inspections in addition to document review, and in
part because information was more readily about this program. The overall structure of the thirdparty program for medical device facility inspections is shown in Figure 5.
The Medical Device User Fee and Modernization Act of 2002 (MDUFMA) authorized FDA
to establish the “Inspection by Accredited Persons” program (AP Program). 153 Under the AP
Program, certain manufacturers of Class II (medium-risk) and Class III (high-risk) medical
devices may voluntarily contract with an AP to conduct a “Third-Party Inspection” of their
facility. FDA considers an inspection by an AP to be “an alternative to the traditional inspection
by an FDA official.” 154 With the AP Program, accredited third parties may conduct these
inspections “in lieu” of the FDA. 155 In requiring its establishment, Congress sought to address
the FDA’s inability to meet its inspection burden. 156 The program also purported to offer an
advantage to manufacturers that produce for both the US market and foreign markets by
providing the opportunity to undergo a single inspection process that satisfies multiple
jurisdictions. 157
ucm094459.pdf (noting that FDA’s policy permitted third party review of class II devices only if device-specific
guidance or recognized consensus standards existed) [hereinafter Implementation of Third Party Programs]; see also
21 U.S.C. §360m (containing the statutory requirement).
149
Medical Devices; Implementation of Third Party Review Under the Food and Drug Administration
Modernization Act of 1997; Emergency Processing Request Under OMB Review, 63 Fed. Reg. 28388 (May 22,
1998) (publishing these criteria); Implementation of Third Party Programs Under the FDA Modernization Act of
1997 - Final Guidance for Staff, Industry and Third Parties (Feb. 2, 2001),
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/ucm094450.htm (last
visited Sept. 9, 2012).
150
Current List of Accredited Persons for 510(k) Review under the FDA Modernization Act of 1997 (updated Sept.
5, 2012), http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfthirdparty/accredit.cfm (last visited Sept. 9, 2012).
151
Implementation of Third Party Programs, supra note 148.
152
Id.
153
Medical Device User Fee and Modernization Act of 2002, Pub. L. No. 107–250, § 201, 116 Stat. 1588 (2002)
(codified at 21 U.S.C. § 374 (g)) (amended section 704 of the Federal Food, Drug, and Cosmetic Act by adding
subsection (g)).
154
See FDA, Medical Devices, Accredited Persons Inspection Program,
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/PostmarketRequirements/ThirdPartyInspection/
ucm125410.htm (last visited Sept. 11, 2012).
155
Id.
156
Medical Devices - Challenges for FDA in Conducting Manufacturer Inspections: Hearing Before the Subcomm.
on Oversight and Investigations of the H. Comm. on Energy and Commerce, 110th Cong. (Jan. 29, 2008) (statement
of Marcia Crosse, Director, Health Care, United States General Accountability Office) (citing H.R. Rep. No. 107728, pt. 1, at 35-36 (2002)) [hereinafter “Challenges for FDA”].
157
Id.

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Third-Party Programs to Assess Regulatory Compliance

The mandatory standard that applies in such inspections is the Quality System (QS)
regulation and other device requirements in the FDCA and its regulations. 158 The QS regulation
requires that domestic and foreign manufacturers establish a quality system that implements
current good manufacturing practices relevant to the “design, manufacture, packaging, labeling,
storage, installation, and servicing of finished medical devices intended for human use” in the
United States. 159 In a QS inspection, FDA inspectors examine manufacturing controls,
processes, and records. 160 When a manufacturer participates in the AP program, the AP prepares
and submits its reports to FDA, which remains responsible for making a final compliance
assessment. 161
FDA has also implemented the MDUFMA’s third-party inspection provisions through its
Pilot Multi-purpose Audit Program (PMAP). 162 PMAP was established in 2006 in partnership
with FDA’s Canadian counterpart Health Canada, which also had a third-party certification and
inspection program for medical devices. 163 PMAP aimed to include 10 inspections in which
manufacturers would hire a single accredited third party to conduct an audit that would serve the
regulatory purposes of both FDA and Health Canada. 164 In total, eleven such inspections were
conducted, and the agencies produced a final joint report to summarize lessons learned. 165
Importantly, the AP by Inspections program is completely voluntary. Eligible manufacturers
may choose to utilize an AP to conduct an inspection or they may continue to have FDA perform
inspections. 166 If a manufacturer is inspected by an AP, FDA removes the manufacturer from its
routine inspection work plan for two years. 167 In effect, the manufacturer receives a two-year
158

21 C.F.R. pt. 820 (2007).
Id. § 820.1(a)(1).
160
Status of FDA’s Program, supra note 147, at 1.
161
See FDA, Medical Devices, Accredited Persons Inspection Program,
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/PostmarketRequirements/ThirdPartyInspection/
ucm125410.htm (last visited Sept. 11, 2012). See also 21 U.S.C. § 374(g)(7)(A) (stating that APs shall prepare an
inspection report and that “any official classification of the inspection shall be determined by the Secretary.”)
162
FDA, Pilot Multi-Purpose Audit Program (PMAP) - Questions and Answers Related to the Pilot,
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/PostmarketRequirements/ThirdPartyInspection/
ucm125453.htm (last visited Sept. 11, 2012) [hereinafter PMAP Q&A]; see also Challenges for FDA, supra note
156, at 9, 19-21.
163
Pilot Multi-Purpose Audit Program, supra note 162 (stating that Health Canada’s CMDCAS was established
several years before FDA established the AP Program).
164
On international cooperation in regulation, see Administrative Conference of the United States, Recommendation
2011-6, International Regulatory Cooperation (Dec. 8, 2011), available at http://www.acus.gov/acusrecommendations/international-regulatorycooperation/.
165
FDA, Medical Devices, Final Joint Report of the Pilot Multipurpose Audit Program (PMAP),
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/PostmarketRequirements/ThirdPartyInspection/
ucm232806.htm (also available in PDF format at http://www.hc-sc.gc.ca/dhp-mps/alt_formats/pdf/mdim/activit/int/md_pmap_rep_im_ppafm_rap-eng.pdf ) [hereinafter PMAP report]; Interview (by phone), Kim
Trautman, Associate Director, International Affairs, Office of the Center Director, Center for Devices and
Radiological Health, U.S. Food and Drug Administration, Jun. 5, 2012 (reporting that eleven PMAP inspections
were conducted).
166
See FDA, Medical Devices, Accredited Persons Inspection Program,
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/PostmarketRequirements/ThirdPartyInspection/
ucm125410.htm (last visited Sept. 9, 2012).
167
Interview (by phone), David Kalins, Office of Compliance, CDRH, FDA, July 31, 2012.
159

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Third-Party Programs to Assess Regulatory Compliance
“inspection holiday” from regular FDA inspections unless FDA receives a complaint or has other
cause to inspect.
Figure 5: Structure of Third-Party Program for Medical Device Facilities
FDA (Third Party Recognition Board)
accredits
Accredited Persons (APs)
that inspect
Medical Device Facilities
to assess conformity with
Quality System (QS) regulation and other requirements
Only certain manufacturers are eligible to participate in the program. The manufacturer must
manufacture a Class II or Class III device. 168 Further, it must market at least one of these
medical devices in the United States and also market or plan to market at least one of these
medical devices in a foreign country that certifies, accredits, or otherwise recognizes the chosen
AP as having the authority to conduct device inspections. 169 Also, the program was “limited to
establishments whose most recent inspection was classified by FDA as either ‘No Action
Indicated’ or ‘Voluntary Action Indicated.’” 170 The Food and Drug Administration
Amendments Act (FDAAA) of 2007 streamlined the Accredited Person for Inspection Program
by eliminating the requirement that a device establishment must seek prior FDA approval for a
Third-Party Inspection and by eliminating the limit of two consecutive Third-Party Inspections
unless FDA granted a waiver. 171 After the amendments, eligible manufacturers may simply
submit notification of their intent to use the program. 172
168

FDA, Guidance for Industry, FDA Staff, and FDA-Accredited Third Parties - Manufacturer's Notification of the
Intent to Use an Accredited Person under the Accredited Persons Inspection Program Authorized by Section 228 of
the Food and Drug Administration Amendments Act of 2007 (FDAAA), 4 (Mar. 2, 2009),
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/ucm085187.htm ,
169
Id. (stating “At least one foreign country where you market or intend to market your class II or class III device
must certify, accredit, or otherwise recognize the AP you have chosen as a person authorized to conduct device
inspections.” Id. at 6). See also 21 U.S.C. § 374(g)(6)(A)(ii)(IV)(bb).
170
21 U.S.C. § 347(g)(6)(A)(i). See also Status of FDA’s Program, supra note 147, at 6 (stating “Based upon its
findings during inspection, FDA classifies completed inspections into one of three categories based on the extent to
which the establishment deviates from applicable requirements of the quality system regulation: No action indicated
(which indicates no deviations or only minor deviations), voluntary action indicated (which indicates minor to
significant deviations), or official action indicated (which indicates significant deviations and warnings).”); FDA,
Guidance for Industry, FDA Staff, and Third Parties - Inspection by Accredited Persons Under The Medical Device
User Fee and Modernization Act of 2002 and the FDA Amendments Act of 2007; Accreditation Criteria (Aug. 6,
2009), http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/ucm089702.htm
(last visited Sept. 9, 2012) [hereinafter “Guidance for Industry”].
171
Guidance for Industry, supra note 170, at 4.
172
Agency Information Collection Activities; Proposed Collection; Comment Request; Manufacturer’s Notification
of the Intent To Use an Accredited Person Under the Accredited Persons Inspection Program Authorized by Section

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Third-Party Programs to Assess Regulatory Compliance

Unlike the two programs reviewed above, FDA does not utilize independent accreditation
bodies in this program. Rather, accreditation determinations are made by FDA’s Third Party
Recognition Board (TPRB), which was established in 1998 to make accreditation determinations
for the 510(k) pre-market review program. 173 MDUFMA required FDA to establish criteria for
the accreditation of Accredited Persons and to conduct further activities to approve their
employees to conduct inspections. 174 Under the law, an applicant for accreditation must not be a
federal government employee and must be a legally-constituted independent entity with no
organizational, material or financial affiliation with a manufacturer, supplier or vendor of articles
regulated under the act. 175
According to FDA guidance, the applicant must agree to operate in accordance with
generally accepted professional and ethical business practices and agree in writing to, inter alia,
limiting its work to that for which competence and capacity are available; promptly responding
and attempting to resolve complaints regarding accredited activities; and protecting against
officer and employee financial conflicts of interest. 176 FDA also requires that APs have
sufficiently trained personnel, including at least one individual with supervisory capability and
authority, and the necessary infrastructure to interface with FDA’s electronic data systems and to
protect confidential information. 177
After an organization is approved as an AP, its employees must complete classroom training
conducted by the Association for the Advancement of Medical Instrumentation (AAMI) and the
FDA. 178 Upon successfully completing the classroom training, AP employees must then
successfully complete three joint inspections with FDA including a collaborative inspection (in
which the trainee acts primarily as an observer of the FDA inspector); a modified performance
inspection (in which the trainee conducts the inspection with the assistance of an FDA
inspector); and a full performance inspection (in which the trainee independently performs an
228 of the Food and Drug Administration 76 Fed. Reg. 29764 (May 23, 2011); see also Guidance for Industry,
supra note 170, at 4 (noting the specific information that the notice must include).
173
Guidance for Industry, supra note 170, at 5. The Third Party Recognition Board is situated within the FDA’s
Center for Devices and Radiological Health and chaired by William Sutton. Id. at 22. On how the TPRB interacts
with applicants and reviews applications, see Implementation of the Inspection by Accredited Persons Program
Under the Medical Device User Fee and Modernization Act of 2002; Accreditation Criteria: Guidance for Industry,
FDA Staff, and Third Parties; Availability, 68 Fed. Reg. 22400, 22402-03 (Apr. 28, 2003). On the 510(k) program
generally, see supra notes 148 - 151 and accompanying text.
174
21 U.S.C. § 374(g)(2). These criteria were published at 68 Fed. Reg. 22400 (Apr. 28, 2003). On October 4,
2004, FDA published revised accreditation criteria at 69 Fed. Reg. 59250 to incorporate changes to MDUFMA
made by the Medical Devices Technical Corrections Act (MDTCA), Pub. L. No. 108-214, signed into law on April
1, 2004.
175
21 U.S.C. § 374(g)(3); see also Guidance for Industry, supra note 170.
176
Guidance for Industry, supra note 170, at 6-8.
177
Id.; see also 21 U.S.C. § 374(g)(2); Guidance for Industry, Food and Drug Administration Staff, and Third
Parties; Implementation of the Inspection by Accredited Persons Program Under the Medical Device User Fee and
Modernization Act of 2002; Accreditation Criteria; Availability, 69 Fed. Reg. 59250 (Oct. 4, 2004) (providing that
the qualifications for APs’ personnel will be equivalent to that of FDA personnel); see also 21 U.S.C.
§ 374(g)(3)(E)(iii) (providing that an AP must protect from public disclosure trade secret, confidential commercial
or financial information, and private personal identifier information in records, except that such information may be
made available to FDA).
178
Guidance for Industry, supra note170, at 9-10.

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Third-Party Programs to Assess Regulatory Compliance
inspection that is observed and evaluated by an FDA inspector). 179
FDA instructs APs to prepare an inspection report to be submitted to both the manufacturer
and the FDA using the format defined in its Investigations Operations Manual (IOM). 180 The
report must describe in detail each significant non-conformity found and identify any other
matters that relate or that may influence compliance with the Act. 181 The report must also
describe any recommendations made by the AP to the manufacturer during the inspection or at
the closing meeting and describe any promised corrective actions or other discussions with the
manufacturer at the conclusion of the inspection. 182 APs are required to maintain certain records
regarding their initial and continuing qualifications to be APs and regarding each inspection. 183
The law requires also an AP that discovers a condition that it believes could cause or contribute
to an unreasonable risk to public health to report the problem to FDA immediately. 184
Since 2003, the FDA has accredited 16 organizations as APs and conducted classroom
training for the AP auditors. 185 FDA maintains a list of Accredited Persons with contact
information online. 186 For example, US-based organizations that have been recognized as APs
include: Intertek Testing Services; Lloyd’s Register Quality Assurance, Inc.; TUV Rheinland of
North America, Inc.; and Underwriters Laboratories, Inc. (UL). 187 Some of the recognized firms
based outside the U.S. include AMTAC Certification Services Limited, in the United Kingdom;
Center for Measurement Standards/Industrial Technology Research Institute (CMS/ITRI), in
China; and Quality Management Institute (QMI), in Canada. 188 The list sets forth the types of
device manufacturing facilities that each AP is recognized to inspect (often “all medical
devices”) and the foreign countries that certify, accredit, or otherwise recognize the AP as having
the authority to conduct device inspections. 189
MDUFMA and its regulations require that APs and their employees (including contract
employees) be free from conflicts of interest and the appearance of conflicts of interest that could

179

Id. See also 21 U.S.C. § 347(g)(2); Guidance for Industry, Food and Drug Administration Staff, and Third
Parties; Implementation of the Inspection by Accredited Persons Program Under the Medical Device User Fee and
Modernization Act of 2002; Accreditation Criteria; Availability, 69 Fed. Reg. 59250, 59291 (providing that APs are
not eligible to conduct independent inspections until they successfully complete FDA’s training program and
perform a satisfactory inspection under FDA’s observation).
180
See FDA, Inspections, Compliance, Enforcement, and Criminal Investigations, Investigations Operation Manual,
http://www.fda.gov/ora/inspect_ref/iom/ (last updated March 2, 2012); see also 21 U.S.C. § 374(g)(7)(A) (stating
that APs are required to prepare inspection reports in the form and manner designated by FDA).
181
Guidance for Industry, supra note 170, at 12-13.
182
Id.
183
Id. at 13-14.
184
21 U.S.C. § 374(g)(7)(E).
185
Guidance for Industry, supra note 170, at 3-4 (noting that the law required that no more than 15 firms be
accredited during the first year of the AP Program).
186
See FDA, Medical Devices, Accredited Persons Inspection Program,
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/PostmarketRequirements/ThirdPartyInspection/
ucm125410.htm (last visited Sept. 9, 2012).
187
Id.
188
Id.
189
Id.

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Third-Party Programs to Assess Regulatory Compliance
affect the inspection process or the preparation of reports. 190 APs may not be owned, operated or
controlled by a manufacturer, supplier or vendor of any article regulated under the Act, and no
personnel of an AP involved in inspections, nor their spouses or minor children, may have
ownership of or other financial interest in any product, manufacturer, supplier or vendor
regulated under the Act. 191 Potential conflicts of interest are also present if the AP or any of its
inspection personnel provides consultative services to any manufacturer, supplier, or vendor of
products regulated under the Act; if inspection personnel participate in an inspection of a firm
they were employed by within the last 12 months; or if the fees charged or accepted are
contingent or based upon the observations in the report made by the AP. 192
When applying to become APs, organizations are required to submit a copy of the written
policies, procedures and sample certification/compliance statements established to prevent
conflicts of interest. FDA uses a rating criteria checklist to evaluate whether APs have
established, documented, and executed policies and procedures to prevent individual and
organizational conflicts of interest. 193 FDA states that APs should either adopt the conflict of
interest standards that apply to federal agency employees, 194 use the Model Conflict of Interest
Policy that it provides in guidance, 195 or “explain alternative equivalent procedures” to safeguard
against conflicts of interest.
FDA is also required by statute to monitor manufacturers’ requests to use a particular AP,
and it can stop inspections by APs who may have developed inappropriate business relationships
with manufacturers. 196 As described by FDA, business relationships that may undermine the
independence or objectivity of an AP include contracts between a manufacturer and an AP that
represent a significant share of the AP’s income such that continuation or termination of the
contract may create undue financial influence or at least the appearance of such influence. 197
Evidence of a financial conflict of interest between the AP and the owner or operator of the
inspected device establishment may constitute cause for withdrawal of the AP’s accreditation. 198
Finally, the statute requires each AP to annually make available to the public the extent to which
the AP complies with conflict of interest requirements. 199
The Act sets forth several prohibited acts including the knowing failure of an AP to
190

See 21 U.S.C. § 374(g)(2) and (3); Guidance for Industry, Food and Drug Administration Staff, and Third
Parties; Implementation of the Inspection by Accredited Persons Program Under the Medical Device User Fee and
Modernization Act of 2002; Accreditation Criteria; Availability, 69 Fed. Reg. 59250, 59252 (Oct. 4, 2004).
191
21 U.S.C. § 374(g)(2); Guidance for Industry, Food and Drug Administration Staff, and Third Parties;
Implementation of the Inspection by Accredited Persons Program Under the Medical Device User Fee and
Modernization Act of 2002; Accreditation Criteria; Availability, 69 Fed. Reg. 59250, 59252 (Oct. 4, 2004).
192
Guidance for Industry, supra note170.
193
Id. (see especially the checklist contained in Appendix 3.)
194
See “Standards of Ethical Conduct for Employees of the Executive Branch,” available at
http://www.oge.gov/Laws-and-Regulations/Employee-Standards-of-Conduct/Standards-of-Ethical-Conduct-forEmployees-of-the-Executive-Branch-(PDF)/ (last visited Sept. 11, 2012) (compiling ethics standards codified in 5
C.F.R. pt. 2635 as amended at 76 Fed. Reg. 38547 (July 1, 2011)).
195
Guidance for Industry, supra note 170 (see especially the Model Conflict of Interest Policy contained in
Appendix 2).
196
Guidance for Industry, supra note 170.
197
Id.
198
21 U.S.C. § 374(g)(5).
199
Id. § 374(g)(3)(E).

27

Third-Party Programs to Assess Regulatory Compliance
immediately notify FDA of a condition noted during an inspection that could cause or contribute
to an unreasonable risk to the public health, the knowing inclusion by an AP of false information
in an inspection report, and the knowing failure of an AP to include material facts in such a
report. 200 With respect to public disclosure, FDA states that inspection records and information
collected from the manufacturer and submitted to FDA by APs will generally be available for
disclosure after the agency issues a compliance decision, unless such information is exempt from
disclosure by law. 201 The law provides that FDA will audit APs on a periodic basis, and the
FDA states in guidance that it will make onsite visits on a periodic basis to each AP to audit
performance and inspect records, correspondence, and other materials relating to AP Program
inspections. 202
FDA may withdraw accreditation when an AP is substantially not in compliance with the
standards of accreditation, poses a threat to the public health, or fails to act in a manner
consistent with the Act. 203 FDA may also withdraw accreditation where FDA determines that
there is a financial conflict of interest between the AP and the owner or operator of a device
establishment that the AP has inspected. 204 Before FDA withdraws an AP’s accreditation, it
notifies the AP and provides an opportunity for an informal hearing. 205
The FDA’s design and implementation of the AP program has been funded with appropriated
funds. The statute contains no provisions regarding the assessment of user fees to cover the costs
of program development and implementation. As of 2012, the program was largely inactive and
a single FDA employee administered the program as a collateral duty. 206 Also as of 2012, the
510(k) premarket review program had no full-time positions committed to it. Administrative
responsibilities are spread over three employees as part of their other workload. 207
4. FCC, Telecommunication Certification Body Program
In 1998, the FCC adopted rules for the establishment of Telecommunication Certification
Bodies (TCBs) that have the authority to certify that equipment meets the FCC’s requirements
and issue a written grant of equipment authorization. 208 FCC requirements generally apply to all
200

21 U.S.C. § 331(gg). See also 21 U.S.C. § 374(g)(7)(E); Guidance for Industry, supra note 170, at 13 (providing
that “If at any time during an inspection the AP discovers a condition that it believes could cause or contribute to an
unreasonable risk to public health, the AP must report the problem to FDA immediately”).
201
Guidance for Industry, supra note 170, at 13. Applicable disclosure laws include the Freedom of Information Act
(5 U.S.C. § 552) , the Trade Secrets Act (18 U.S.C. § 1905), relevant provisions of the FDCA (21 U.S.C. § 331(j))
and FDA regulations implementing these statutes (see e.g., the FDA regulations implementing the Freedom of
Information Act in 21 C.F.R. pt. 20 and FDA’s FOIA web page at http://www.fda.gov/RegulatoryInformation/foi/
default.htm).
202
21 U.S.C. § 374 (g)(5)(A)(i); Guidance for Industry, supra note 170, at 5, 11 (further stating that it audits APs on
a periodic and “for cause” basis).
203
21 U.S.C. § 374(g)(5); Guidance for Industry, supra note 170, at 14.
204
Id.
205
Guidance for Industry, supra note 170, at 14.
206
Email from Jean Cooper, Senior Staff Fellow, U.S. Food and Drug Administration, July 17, 2012 (on file with
author).
207
Id.
208
64 Fed. Reg. 4995 (Feb. 2, 1999); 47 C.F.R. §§ 2.960-2.962 & 68.160-68.162. The applicable
telecommunications equipment regulations are at 47 CFR pts. 0 through 101. The requirements for
Telecommunication Certification Bodies (TCBs) were specified in the Commission’s Report and Order (R&O) in

28

Third-Party Programs to Assess Regulatory Compliance
devices that generate radio frequency (RF) energy to ensure that they operate effectively without
causing harmful interference to radio communications. Certain devices must also be evaluated
for radiofrequency radiation exposure to protect human health. 209
Only certain types of equipment require certification, and often the certification can be
conducted by either a TCB or the FCC. 210 Examples of devices which may be submitted to
either include, but are not limited to cell phones, RF lights, microwave ovens, RC transmitters,
family radios, telemetry transmitters, wireless phones, and walkie talkies. 211 Some devices may
only be submitted to the FCC (such as certain new technologies) or TCBs (all computers and
computer peripherals). When a manufacturer seeks certification directly from the FCC,
equipment authorization fees apply. 212
Figure 6 shows the third-party structure of the TCB program. TCBs are required to be
accredited as operating in accordance with ISO/IEC Guide 65 (1996), General Requirements for
Bodies Operating Product Certification Systems and FCC’s technical requirements for TCBs. 213
Under its National Voluntary Conformity Assessment Evaluation (NVCASE) program, National
Institute of Standards and Technology (NIST) is responsible for recognizing the private
accreditation bodies that accredit TCBs in the United States. The two recognized accreditation
bodies are American National Standards Institute (ANSI) and the American Association for
Laboratory Accreditation (A2LA). 214 Certification bodies located outside the US may be
recognized by the FCC as a TCB when there is a government to government Mutual Recognition
Agreement between the country they are located in and the US. In that case, the TCB is
accredited by appropriate authorities in that country. 215 An online list of recognized TCBs is
maintained by FCC. 216 The TCB program went into effect in June 2000 with 13 recognized
TCBs, and as of 2012, there are 34 recognized TCBs. 217
The task of the TCB has two steps: first, to evaluate the product (which involves laboratory
testing or reliance on testing conducted by the manufacturer); and second, to make the
certification decision. 218 TCBs are accredited with certain scopes, which indicate the product
types they may approve (e.g., Scope A: Unlicensed Radio Frequency Devices; Scope B:
GEN Docket 98-68 (FCC 98-338), adopted on December 17, 1998. Further guidance on the requirements for TCBs
was given in Public Notice DA 99-1640, FCC Provides Further Information on the Accreditation Requirements for
Telecommunication Certification Bodies GEN Docket 98-68, released on August 17, 1999.
209
47 CFR §§ 2.1091, 2.1093; see also http://transition.fcc.gov/oet/rfsafety/ (last visited Sept. 11, 2012).
210
See 47 CFR § 2.907 (on “certification”). Equipment with a low risk of causing harmful interference may
generally satisfy FCC requirements through a manufacturer’s “verification,” 47 CFR § 2.902, or “Declaration of
Conformity,” 47 CFR § 2.906.
211
See http://transition.fcc.gov/oet/ea/procedures.html (last visited Sept. 11, 2012).
212
See http://apps.fcc.gov/oetcf/kdb/forms/FTSSearchResultPage.cfm?id=41712&switch=P (last visited Sept. 11,
2012) (showing fees ranging from $490-$1265 for certification of devices).
213
TCB Program Rules and Responsibilities, FCC Office of Engineering and Technology (OET) Laboratory
Division, (Jan. 6, 2011). See also 47 CFR § 68.160(b).
214
Id.
215
Id. See also 47 CFR § 68.160(b).
216
See https://apps.fcc.gov/tcb/index.html (last visited Sept. 11, 2012).
217
David A. Case & William Graff, Approval Options: A Look at the FCC and TCB Approval Processes (2001),
http://www.ce-mag.com/archive/01/09/case.html (for 2001 number); Interview (by phone), George Tannahill, FCC
Office of Engineering and Technology, August 27, 2012 (for 2012 number).
218
TCB Program Rules, supra note 213, at 3; see also 47 C.F.R. § 68.162(b)(2).

29

Third-Party Programs to Assess Regulatory Compliance
Licensed Radio Service Equipment). For accreditation, TCBs must demonstrate expert
knowledge of the regulations for the product types in each of their scopes. Also, the TCB must
have the technical expertise and capability to test the equipment it will certify and shall also be
accredited in accordance with ISO/IEC 17025 to demonstrate it is competent to perform such
tests. 219 Testing of products may be performed by subcontractors of TCBs, but the TCB must
maintain oversight and remains responsible for the test results. 220 The FCC has not established
conflict-of-interest rules for TCBs beyond what is required for accreditation to ISO Guide 65. 221
Figure 6: Structure of Third-Party Program for Telecommunication Equipment
FCC

NVCASE
recognizes

recognizes

Accreditation Bodies
that accredit

Telecommunication Certification Bodies (TCBs)
that certify
Products
are in conformity with
FCC requirements
Before a TCB can grant an equipment authorization, it must submit all required information
to the FCC’s online system. 222 After the system automatically performs certain validity checks,
it can be used to grant the authorization. FCC reserves to itself 30 days to review the completed
action and set aside the authorization if necessary. Much of the information that is uploaded
such as pictures of the product, pictures of the label and certain testing data becomes publicly
available. Other information entered into the system may be considered proprietary and kept
confidential.
Also, the FCC requires TCBs to conduct certain surveillance testing of equipment they
certify. 223 TCBs must test additional equipment samples for at least 5% of the grants they issue

219

47 C.F.R. § 68.162(b)(3), TCB Program Rules, supra note 213, at 2.
Id. § 68.162(d).
221
Guide 65 states that a certification body should “ensure that activities of related bodies do not affect the
confidentiality, objectivity and impartiality of its certifications, and it shall not 1) supply or design products of the
type it certifies, 2) give advice or provide consultancy services to the applicant as to methods of dealing with matters
which are barriers to the certification requested, 3) provide any other products or services which could compromise
the confidentiality, objectivity or impartiality of its certification process and decisions.”
222
Interview (by phone), George Tannahill, FCC Office of Engineering and Technology, August 27, 2012.
223
47 C.F.R § 2.962(g)(2); see Federal Communications Commission, Office of Engineering and Technology
Laboratory Division, TCB Post-Market Surveillance, 1 610077 D01 TCB Post Market Surveillance v05r03
220

30

Third-Party Programs to Assess Regulatory Compliance
and electronically submit an annual surveillance report. If a TCB finds that a certified product
fails to comply, it must notify FCC and the manufacturer, which will be asked to take actions to
correct the situation. 224 Subject to certain procedural requirements, the FCC retains authority to
withdraw its recognition of TCBs and revoke the certification of products by TCBs. 225 FCC
itself also conducts market surveillance activities that may include pre-grant testing, post-grant
testing, and off-the-shelf product testing. Upon receiving a complaint from a TCB or the public
about a problem with another TCB or certified equipment, FCC may pursue the complaint itself,
request an assessment by the relevant accreditation body, or require further testing by the
relevant TCB. 226
B. Programs for Voluntary Standards
In four programs, federal agencies rely on third parties to assess and certify compliance with
voluntary standards established or endorsed by the agency. All these programs offer companies
the opportunity to display a label on their products attesting to their compliance. In all of them,
the use of third parties is obligatory: to participate in the program, the company that sells the
labeled product has to contract with a third party.
1. OSHA, National Recognized Testing Laboratories Program
Since 1988, the Occupational Safety & Health Administration (OSHA) has operated a thirdparty program through which it ascertains that specified equipment and materials (products) used
in OSHA-regulated workplaces meet safety standards. 227 The program’s structure is illustrated
in Figure 7. Under OSHA’s Nationally Recognized Testing Laboratory (NRTL) Program,
private sector organizations approved by OSHA are hired by manufacturers of specified products
to test and certify them. The NRTL then authorizes the manufacturer to affix a label (or mark) on
the products, which is visible to the OSHA workplace inspector.
The standards that the products must meet to be certified by a NRTL are voluntary consensus
standards, rather than government-unique OSHA standards. 228 OSHA requires NRTL
certification for many different types of products, such as printers and copiers, electric heater and
air conditioners, alarm systems, fire extinguishers, acetylene torches, and liquefied petroleum gas
ovens. 229 These standards are set by national standards-producing organizations such as
(Oct. 25, 2011), http://apps.fcc.gov/oetcf/kdb/forms/FTSSearchResultPage.cfm?id=20540&switch=P (last visited
Sept. 11, 2012).
224
47 C.F.R § 68.162(g)(3).
225
Id. § 68.162(f)(6).
226
Interview (by phone), George Tannahill, FCC Office of Engineering and Technology, August 27, 2012.
227
53 Fed. Reg. 12102 (Apr. 12, 1988); 29 CFR § 1910, subpart S. See also Bernard Pasquet, OSHA Requirements
for Nationally Recognized Testing Laboratory Approval of Products,
http://www.osha.gov/dts/otpca/nrtl/NRTLarticle.html (last visited Sept. 11, 2012) (stating that workplaces subject to
OSHA’s jurisdiction include the “vast majority” of private employers in the United States and its territories; most
federal government places of employment; and state and local government places of employment in states that have
received OSHA approval to administer their own occupational safety and health program).
228
See 29 C.F.R. § 1910.7(c) (defining the test standards used in the NRTL program).
229
See Pasquet, supra note 227; OSHA, Type of Products Requiring NRTL Approval,
http://www.osha.gov/dts/otpca/nrtl/prodcatg.html (setting forth 37 product categories, of which electrical equipment
is the largest, and citing to General Industry Standards, 29 C.F.R. pt. 1910).

31

Third-Party Programs to Assess Regulatory Compliance
American National Standards Institute (ANSI), American Society for Testing and Materials
(ASTM), Factory Mutual Research Corporation (FMRC), and UL. 230 In effect, manufacturers
are not required by law to meet these standards to market their products, but workplaces that are
regulated by OSHA are required to utilize certified products.
Figure 7: Structure of Third-Party Program for Workplace Product Safety
OSHA
recognizes
National Recognized Testing Laboratories (NRTLs)
that test and certify
Certain products used in OSHA-regulated workplaces
are in conformity with
Voluntary Consensus Standards for Product Safety
(i.e. ASTM standards)
NRTLs are private organizations that are recognized by OSHA to be qualified to perform
safety testing and product certification. 231 OSHA regulations set forth the requirements for
NRTLs. 232 NRTLs must be capable of performing the proper testing, meaning that they must
have the proper equipment and facilities, staff, procedures, and quality control programs. 233 They
shall, as necessary, implement control procedures; inspect the production of items at factories;
and conduct field inspections to monitor the proper use of their marks on products. 234 They must
be “completely independent” of both the manufacturers and vendors of equipment subject to
testing and the employers subject to the tested equipment requirements. 235 NRTLs must maintain
effective procedures for producing objective and unbiased reports and for fairly handling
complaints and disputes. 236
If its application is approved by OSHA, a NRTL’s initial recognition is valid for five
years. 237 OSHA approves NRTLs with certain “scopes of recognition” by specifying the test
230

Occupational Safety & Health Administration, Nationally Recognized Testing Laboratory Program
Application Guidelines, at 1, http://www.osha.gov/dts/otpca/nrtl/applguid.pdf (last visited Sept. 11, 2012)
[hereinafter “OSHA Application Guidelines”]. A list of standards recognized by OSHA is at
http://www.osha.gov/dts/otpca/nrtl/allstds.html.
231
See OSHA, Frequently Asked Questions (FAQs), http://www.osha.gov/dts/otpca/nrtl/faq_nrtl.html#1 (last visited
Sept. 11, 2012) (stating that “OSHA’s recognition is not a government license or position, or a delegation or grant of
government authority. Instead, the recognition is an acknowledgment that an organization has necessary
qualifications to perform safety testing and certification of the specific products covered within its scope of
recognition).
232
29 C.F.R. § 1910.7.
233
Id. § 1910.7(b)(1).
234
Id. § 1910.7(b)(2).
235
Id. § 1910.7(b)(3).
236
Id. §§ 1910.7(b)(4)(i) & (ii).
237
OSHA Application Guidelines, supra note 230 at 1.

32

Third-Party Programs to Assess Regulatory Compliance
standards with which they can certify conformity. OSHA maintains an online registry of NRTLs
and their scopes of recognition. 238 Currently, 15 NRTLs are recognized by OSHA. 239 Twelve
are headquartered in the United States, and three NRTLs are headquartered in other countries. 240
Some NRTLs are based in one country but also have offices in others. For example, CSA
International is based in Toronto, Canada and also has offices in Ohio and California, and UL is
based in Illinois and also has offices in four other U.S. states and 10 foreign countries.
NRTLs and applicants for NRTL recognition must pay fees. 241 OSHA assesses fees for
processing applications for “initial recognition, expansion of recognition, or renewal of
recognition, including on-site reviews; review and evaluation of the applications; and preparation
of reports, evaluations and Federal Register notices; and audits of sites.” 242 Fees first went into
effect on October 1, 2000. 243 They were revised in 2002, 2007 and 2011. 244 A current listing of
the applicable fees is maintained online. 245 For example, currently, total fees to become
recognized as a NRTL amount to over $40,000 (including an initial application review fee of
$17,750; an assessment fee of $4,440 plus travel expenses; and a final report and Federal
Register notice fee of $19,520). 246 Substantial fees also apply when a NRTL expands or renews
its recognition. For the audits that OSHA requires of recognized NRTLs, OSHA charges at least
$4,400 plus travel expenses for an on-site audit and $1,120 for an office audit. 247 Audit fees are
significantly higher if non-conformances are found or if more than one day is required.
2. AMS, National Organic Program
The National Organic Program (NOP), administered by the United States Department of
Agriculture’s Agricultural Marketing Service (AMS), relies on a system of third-party
certification. The Organic Foods Production Act of 1990, the authorizing legislation for the
NOP, states that the “Secretary shall implement the program . . . through certifying agents.” 248
In regulations promulgated in 2000, AMS set the organic standards that cover the production,
postharvest handling, and processing of organic foods and specified the third-party certification

238

List of NRTLs is available at http://www.osha.gov/dts/otpca/nrtl/ (last visited Sept. 11, 2012).
Email from Kevin Robinson, Occupational Safety & Health Administration, U.S. Department of Labor, October
11, 2012.
240
Id.
241
29 C.F.R. § 1910.7(f).
242
Id. § 1910.7(f)(1)(i) & (ii) (describing how fees are determined and stating that the fees reflect the full cost of
performing the listed activities).
243
OSHA, Fee Payment Instructions and Information, http://www.osha.gov/dts/otpca/nrtl/nrtlfees.html; see also
Nationally Recognized Testing Laboratories -- Fees; Public Comment Period on Recognition Notices, 65 Fed. Reg.
46798 (July 31, 2000), available at
http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=FEDERAL_REGISTER&p_id=15480.
244
Nationally Recognized Testing Laboratories Fees, 76 Fed. Reg. 10500 (Feb. 25, 2011)
http://www.gpo.gov/fdsys/pkg/FR-2011-02-25/html/2011-3937.htm (last visited Sept. 11, 2012) (revising the fee
regulations).
245
OSHA, Fee Schedule (effective March 28, 2011), http://www.osha.gov/dts/otpca/nrtl/nrtlschedule.html (last
visited Sept. 11, 2012).
246
Id.
247
Id.
248
7 U.S.C. § 6503(d).
239

33

Third-Party Programs to Assess Regulatory Compliance
system that would determine whether a certain product met those standards. 249
These regulatory standards are voluntary in that food producers or handlers are only required
to conform to them if they label their products as organic. However, if food producers or
handlers label their products as organic, it is mandatory that they use an accredited third party to
provide the required certification. 250 The certifying agents are responsible for all aspects of the
certification process: conducting inspection as necessary to verify compliance with regulatory
requirements, issuing certification decisions, issuing notices of noncompliance, and suspending
or revoking the certification of clients that are out of compliance. 251
As shown in Figure 8, third-party certifying agents are directly accredited by the AMS. They
may be private or governmental entities, and under certain circumstances, the agency may accept
a foreign government’s accreditation of foreign certifying agents. 252 To be accredited, the entity
must have sufficient expertise and adequately trained personnel to comply with the terms of the
organic certification program. 253 Certifying agents must also conduct an annual program review
of their certification activities and correct any noncompliances, 254 and they must maintain
records of certification processes and make them available for inspection upon request. 255 As of
2012, 91 entities – 51 domestic and 40 foreign – were accredited by the NOP to act as certifying
agents. 256 Examples of domestic certifying agents include private organizations like Global
Organic Alliance, Inc., based in Ohio, and the Idaho State Department of Agriculture’s Division
of Plant Industries. 257 Overall, state agencies constituted 17 of the 51 domestic organic
certifiers. 258 Examples of foreign domestic certifying agents include Argencert S.A., based in
Argentina, and CAAE Certification Service, based in Spain. 259
The NOP regulations include several provisions to avoid potential conflicts of interest. 260
Certifying agents are required to prevent conflicts of interest by not certifying operations that
they have any commercial interest in, excluding the participation of employees or contractors
that have any such commercial interests, not permitting employees or contractors to accept any
payment or gifts other than prescribed fees for certification, not providing consultation services
to certified operations, requiring employees and contractors to complete annual conflict of
interest disclosure reports, and requiring that the decision to certify be made by someone
249

The final organic rule was published on December 21, 2000, and the regulations implementing the NOP became
effective October 21, 2002. See 7 C.F.R. pt. 205.
250
USDA, National Organic Program, Organic Certification & Accreditation,
http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&navID=NationalOrganicPro
gram&leftNav=NationalOrganicProgram&page=NOPAccreditationandCertification&description=Accreditation%20
and%20Certification&acct=nopgeninfo (last visited Sept. 11, 2012).
251
7 C.F.R §§ 205.403 - 205.406.
252
Id. § 205.500(c)
253
Id. § 205.501(a)(1)-(6).
254
Id. § 205.501(a)(7).
255
Id. § 205.501(a)(9).
256
USDA, National Organic Program, Organic Certification & Accreditation, supra note 250.
257
See the list of domestic certifying agents at
http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5074486 (last visited Sept. 11, 2012).
258
Id.
259
See the list of foreign certifying agents at
http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5074487 (last visited Sept. 11, 2012).
260
7 C.F.R. § 205.501(a)(11).

34

Third-Party Programs to Assess Regulatory Compliance
different from those conducting prior certification activities. 261
Figure 8: Structure of Third-Party Program for Organic Food Label
AMS
accredits
Third-Party Certifying Agents
that certify
Food Products marketed as Organic
are in conformity with
Organic Standards
The regulations provide that AMS will conduct on-site reviews of accredited certifying
agents. Such reviews encompass “the certifying agent’s certification procedures, decisions,
facilities, administrative and management systems, and production or handling operations
certified by the certifying agent.” 262 Such reviews should occur before or soon after initial
accreditation, before renewal of accreditation, and one or more times during the five year period
of accreditation. 263 NOP reports that 56 such onsite reviews or inspections occurred in 2012. 264
The authorizing legislation stated that the NOP should provide for the “collection of
reasonable fees from producers, certifying agents and handlers who participate in such
program.” 265 The NOP regulations specify that the cost of the program’s accreditation services
will be collected from applicants for initial accreditation and accredited certifying agents for
review of annual reports and accreditation renewal. 266 In 2010, the average cost to a domestic
certifying agent applicant was $4,428, and the average cost to a foreign certifying agent was
$24,082. 267
3. EPA/DOE, Energy Star Program
The Energy Star Program was established by the Environmental Protection Agency (EPA) in
261

Id.
Id. § 205.508(a).
263
See 7 C.F.R. §§ 205.508 (b), 205.500 (specifying that the duration of accreditation is five years)
264
Interview (by phone), Cheri Courtney, Acting Director, Accreditation and International Activities Division, NOP
(August 16, 2012). Some audit reports and corrective action reports can be found on the NOP website at
http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateJ&page=NOPReadingRoomHo
me (last visited Sept. 9, 2012).
265
7 U.S.C. § 6506(a)(10).
266
7 C.F.R. § 205.640.
267
USDA, National Organic Program, FAQ: Becoming a Certifying Agent,
http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&navID=NOPFAQsHowAccr
edited&topNav=&leftNav=NationalOrganicProgram&page=NOPFAQsHowAccredited&description=FAQ:%20%2
0Becoming%20a%20Certifying%20Agent&acct=nopgeninfo (last visited Sept. 9, 2012).
262

35

Third-Party Programs to Assess Regulatory Compliance
1992 to provide a labeling system for products that voluntarily meet certain energy efficiency
standards. The Department of Energy (DOE) has jointly administered the program since 1995,
when labeled products expanded from computers and monitors to additional office equipment
and residential heating, ventilation, and cooling (HVAC) equipment. 268 Over 60 product
categories may now carry the Energy Star label including major appliances, office equipment,
lighting, home electronics, new homes, and commercial and industrial buildings. 269 As of 2010,
more than 40,000 individual product models made by over 1,600 manufacturers had earned the
Energy Star label. 270
Effective in 2011, after a critical report by the Government Accountability Office, Energy
Star was significantly restructured by EPA to require that products carrying the label be certified
by third parties. 271 The new third-party structure for the program is shown in Figure 9.
Previously, manufacturers self-declared that their products met the Energy Star requirements.
With the new third-party certification requirement, product testing must be conducted in an EPArecognized laboratory and the results have to be certified and submitted to EPA by an EPArecognized certification body. EPA recognition, in turn, generally depends on accreditation to an
appropriate ISO standard by an EPA-recognized accreditation body.
Figure 9: Structure of Third-Party Program for Energy Star Product Label
EPA
recognizes
Accreditation Bodies

recognizes

that accredit

recognizes

Accreditation Bodies
accredit

Laboratories
that test

Certification Bodies

Products
for conformity with

Products
are in conformity with

Energy Star Label Requirements

Energy Star Label Requirements

that certify

Accreditation bodies play the role of providing the accreditation that certification and
268

US Government Accountability Office (GAO), ENERGY STAR PROGRAM: COVERT TESTING SHOWS THE ENERGY
STAR PROGRAM CERTIFICATION PROCESS IS VULNERABLE TO FRAUD AND ABUSE, 3 GAO-10-470 (March 2010),
available at http://www.gao.gov/products/GAO-10-470.
269
For general information see Energy Star, History of Energy Star,
http://www.energystar.gov/index.cfm?c=about.ab_history (last visited Sept. 11, 2012) (noting that labeled products
include major appliances, office equipment, lighting and home electronics, among others).
270
USEPA, ENERGY STAR® and Other Climate Protection Partnerships 2010 Annual Report 4, available at
http://www.energystar.gov/ia/partners/publications/pubdocs/2010%20CPPD%204pgr.pdf.
271
See GAO, supra note 268; see generally EPA Energy Star, Third-Party Certification,
http://www.energystar.gov/index.cfm?c=third_party_certification.tpc_index.

36

Third-Party Programs to Assess Regulatory Compliance
laboratories require to become EPA-recognized. To accredit certification bodies, an
accreditation body must be a signatory to the IAF MLA. 272 As of April 2012, there were 54
signatories to the IAF MLA based in about 50 different countries. 273 In the U.S., there are four
IAF MLA signatories, including A2LA, IAS and ANSI.
To accredit laboratories, an accreditation body must be itself recognized by the EPA. For
recognition, the accreditation body must operate its accreditation program in accordance with
ISO/IEC 17011 and maintain an affiliation with ILAC. 274 By May 2012, EPA had recognized 27
accreditation bodies around the world, including A2LA, IAS, and three others in the U.S. 275
EPA-recognized certification bodies (CBs) play the role of certifying that eligible products
meet the requirements of the Energy Star label. A key requirement for recognition is
accreditation to ISO/IEC Guide 65 by an accreditation body that is an IAF MLA signatory.
ISO/IEC Guide 65 requires, for example, that the CB make certification decisions impartially
and based on information gathered during the evaluation process. 276 EPA also imposes a variety
of other requirements regarding how CBs determine whether a product qualifies for the Energy
Star label and how CBs must conduct a verification testing program to verify that their certified
products continue to meet Energy Star requirements. 277 More specifically, CBs are required to
annually select and test at least 10% of all models they have certified, with half the models being
randomly selected and half selected based on EPA referrals. As of August 2012, Energy Star had
recognized 21 certification bodies around the world. 278
In general, Energy Star qualifying products should be tested in an EPA-recognized
laboratory. For recognition, laboratories must be accredited to ISO/IEC 17025 by an EPArecognized accreditation body. ISO/IEC 17025 requires, for example, that a laboratory employ
experienced personnel with adequate training; have adequate physical plant facilities and test
equipment; and ensure that measuring equipment is accurate. 279 Recognized labs must also agree
to a variety of other requirements such as reporting to EPA and otherwise enabling EPA
oversight. 280 Recognized labs need not be independent; they may be owned by the
manufacturers of the products they test.

272

Energy Star, Accreditation Body Resources,
http://www.energystar.gov/index.cfm?c=third_party_certification.tpc_accred_bodies (last visited Sept. 11, 2012).
273
See full list at http://www.iaf.nu/articles/IAF_MEM_USA__all/112, accessible from IAF, IAF MLA,
http://www.iaf.nu/articles/IAF_MLA/14 (last visited Sept. 9, 2012).
274
See EPA, Conditions and Criteria for Recognition of Accreditation Bodies for ENERGY STAR® Laboratory
Recognition, http://www.energystar.gov/ia/partners/downloads/mou/Criteria_Accreditation_Bodies_Labs.pdf?e75eee91 (last visited Sept. 11, 2012).
275
See Energy Star, EPA-Recognized Accreditation Bodies,
http://www.energystar.gov/index.cfm?c=partners.epa_recognized_accreditation_bodies (last visited Sept. 9, 2012).
276
See EPA, Conditions and Criteria for Recognition of Certification Bodies for the ENERGY STAR program,
http://www.energystar.gov/ia/partners/downloads/mou/Conditions_and_Criteria_for_Recognition_of_Certification_
Bodies.pdf (last visited Sept. 11, 2012).
277
Id.
278
Interview (by phone), Eamon Monahan, EPA Energy Star Program, August 6, 2012.
279
EPA, Conditions and Criteria for Recognition of Laboratories for the ENERGY STAR program, at
http://www.energystar.gov/ia/partners/downloads/mou/Criteria_Laboratories.pdf (last visited Sept. 9, 2012).
280
Id.

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Third-Party Programs to Assess Regulatory Compliance
Manufacturers’ laboratories that are not accredited may also be used for testing under the
Energy Star’s Witnessed Manufacturers’ Testing Laboratory (WMTL) or Supervised
Manufacturers’ Testing Laboratory (SMTL) programs. 281 Under these programs, a CB may
operate a testing program to accept test data from such a lab if the CB commits to exercising and
documenting a high degree of oversight, including on-site assessment and monitoring to ensure
the laboratory’s compliance with ISO 17025 and applicable test methods. As of August 2012,
Energy Star testing was being conducted in 463 laboratories: 224 accredited labs; 180 supervised
labs; and 59 witnessed labs. 282 About 200 of these labs were located in the Asia-Pacific region,
most of which were fully accredited. 283
EPA does not assess any user fees for participation in the Energy Star program. Funding for
its development and maintenance has come from appropriated funds.
4. EPA, WaterSense Program
EPA’s WaterSense product certification program, which provides a label for highperforming, water-efficient products, also relies on third-party certification as shown in Figure
10. Modeled after Energy Star, WaterSense was launched in 2006 and has required third-party
certification since 2009. 284 All products bearing the WaterSense label must be assessed for
conformity with the WaterSense product specification by an accredited third-party certifying
body. The certifying bodies, in turn, are accredited by an accreditation body approved by EPA.
Figure 10: Structure of Third-Party Program for WaterSense Product Label
EPA
approves
Accreditation Bodies
that accredit
Third-Party Certifying Body
that certify
Products
are in conformity with
WaterSense Product Specifications
281

Id. at 6-7.
Interview (by phone), Eamon Monahan, EPA Energy Star Program, August 6, 2012.
283
Id.
284
See EPA WaterSense, Comprehensive List of all Frequent Questions,
http://www.epa.gov/watersense/full_list.html (last visited Sept. 11, 2012). EPA issued the first WaterSense product
certification system in 2009. WaterSense Product Certification System (March 23, 2009),
http://www.epa.gov/watersense/docs/cert_system_revised508.pdf. EPA issued a revised version in 2009. EPA
WaterSense, WaterSense®, Version 2.0 Product Certification System (Sep. 29, 2011),
http://www.epa.gov/watersense/docs/cert_system_508.pdf [hereinafter “WaterSense 2.0”].
282

38

Third-Party Programs to Assess Regulatory Compliance

The applicable standards in WaterSense are EPA’s “product specifications,” which are
currently finalized for five product categories: Tank-Type Toilets, Lavatory Faucets, Flushing
Urinals, Showerheads, and Weather-Based Irrigation Controllers. 285 Manufacturers seeking to
use the WaterSense label on products in these categories first enter into a WaterSense partnership
agreement with EPA and then have their product(s) certified for conformance to the WaterSense
specification by an EPA-licensed certifying body. 286 Manufacturers apply directly to the licensed
certifying body for certification and to obtain the WaterSense label. 287
To be approved by EPA, an accreditation body must be domiciled in the U.S. and show that
it operates in accordance with the requirements of ISO/IEC 17011. 288 Also it must offer
accreditation services to ISO/IEC Guide 65 and the IAF Guidance on the Application of ISO/IEC
Guide 65 and be an IAF-MLA signatory for products. 289 As of 2012, EPA had approved three
accreditation bodies: A2LA, ANSI, and IAS. 290
Product certifying bodies must be accredited by an approved accreditation body in
accordance with ISO/IEC Guide 65 and the IAF Guidance on the Application of ISO/IEC Guide
65 to operate the WaterSense product certification system and certify products to the relevant
WaterSense product specifications. The accreditation body determines the certifying body’s
scope of accreditation by accrediting it for any or all of the WaterSense product specifications
established by EPA. Accredited certifying bodies also sign a licensing agreement with EPA to
certify and label products for WaterSense. 291 As of May 2012, EPA had licensed seven
certification bodies to provide product certifications for one or more of the five product
categories. 292 Examples of licensed certification bodies include Intertek, NSF International, and
UL, based in the U.S.; and CSA International, based in Canada.
In addition, certifying bodies must have procedures in place to ensure that the testing data
that they rely on is reliable. Independent testing labs that are used by certifying bodies must
demonstrate compliance with ISO/IEC 17025 and the relevant WaterSense product
specification. 293 If a certifying body relies on testing data from a manufacturer’s laboratory,
285

WaterSense, Compendium of Product & Program Specifications,
http://www.epa.gov/watersense/partners/product_program_specs.html#final (last visited Sept. 9, 2012).
286
WaterSense, Product Certification & Labeling,
http://www.epa.gov/watersense/about_us/product_certification_labeling.html (last visited Sept. 9, 2012).
287
Id.
288
WaterSense 2.0, supra note 284, at 4. The requirement that the accreditation body be domiciled in the U.S. is not
present in EPA’s Energy Star program or other programs included in this review.
289
Id. (noting that references to ISO/IEC Guide 65 will be superseded by ISO/IEC 17065 once ISO/IEC 17065 is
published.)
290
WaterSense, Accreditation & Licensed Certifying Bodies,
http://www.epa.gov/watersense/about_us/cert_bodies.html#accreditation (last visited Sept. 9, 2012).
291
WaterSense 2.0, supra note 284, at 4-5.
292
WaterSense, Accreditation & Licensed Certifying Bodies,
http://www.epa.gov/watersense/about_us/cert_bodies.html (last visited Sept. 9, 2012).
293
WaterSense 2.0, supra note 284, at 8. See also EPA, Response to Public Comments Received on June 2011
WaterSense Draft Revised Product Certification System (September 29, 2011) (clarifying that WaterSense does not
require ISO/IEC 17025 accreditation for testing laboratories; it only requires that labs “demonstrate compliance
with” ISO/IEC 17025”).

39

Third-Party Programs to Assess Regulatory Compliance
additional requirements are imposed. 294 To the extent that a certification body outsources its
evaluation process to contractors, it must have “documented policies and procedures for
qualifying, assessing, and monitoring” them, and it must make a list of them available to the
EPA or accreditation body to review. 295
EPA does not assess any user fees for participation in the WaterSense program. Funding for
its development and maintenance has come from appropriated funds.

IV. Evaluating Third-Party Programs
Given the growing prevalence of third-party programs in regulatory contexts, it is important
to evaluate which work well and why. This section first sets forth five metrics to assess success.
They include the reliability of third-party determinations; compliance rates; agency capacity to
administer the third-party system; public acceptance; and industry acceptance. The second part
discusses the incentives that are necessary to attract participation in programs where regulated
entities may choose whether to contract with a third party or rely on regulatory agency for
verification of regulatory compliance.
A. Metrics of Success
1. Reliability of Third-Party Determinations
A key metric of success of third-party programs is whether the third-party assessment
produces determinations that are sufficiently reliable and accurate for the regulatory purpose at
hand. This metric allows for some variation. It may be acceptable to the agency, for example,
for the reliability of third-party determinations regarding conformity with voluntary standards to
be lower than the reliability of those regarding conformity with mandatory standards. Similar to
private conformity assessment systems that may vary depending on the needs of the purchaser,
regulatory third-party systems may also be allowed to vary depending on regulatory needs. 296
To a large degree, the reliability of determinations made by third parties will depend on their
competence and independence. Generally, third parties must be competent to perform the
required assessment tasks and independent (or unbiased) in their assessment. In addition,
programs should be designed to enhance the consistency of third-party determinations and avoid
problems that have undermined the reliability of similar assessments in non-regulatory contexts.
In some areas of regulation in which regulatory third-party programs are being constructed,
third parties have been used by private parties to assess conformity for many years. However,
these private systems have sometimes suffered from a lack of reliability. For example, in the
food safety area, corporate purchasers have required suppliers to conduct independent third-party
audits of their facilities. Newsworthy failures in these systems have suggested problems with the
294

Id. at 8-10.
Id.
296
Cf. infra notes 437 to 438 and accompanying text (recommending that agencies calibrate the design of third-party
programs to the level of risks associated with noncompliance).
295

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Third-Party Programs to Assess Regulatory Compliance
reliability of these audit determinations. In the case of the Peanut Corporation of America and
the salmonella outbreak with which it is associated, third-party auditors had given the
manufacturer a “superior rating” but later investigation by FDA showed that product testing had
revealed instances of salmonella contamination. 297 In cases like this, questions have been raised
about both the competence and the independence of third-party auditors.
To ensure competence, an agency may have to give serious attention to the training of third
parties. Two recent pilot programs undertaken by FDA have underscored the importance of such
training. In a pilot program conducted by the FDA in which certification bodies (CBs) were
selected to inspect establishments in the aquacultured shrimp industry for compliance with US
food safety standards, the agency’s audits of the CBs found that some were not using the correct
standards in their inspections even though they had been instructed to do so. 298 Rather, they
were using standards of other countries, which they had presumably used in other audits. 299
FDA concluded that it would have to conduct additional training to implement a full-scale thirdparty program. 300 Similarly, in PMAP, FDA’s pilot program with Canada for medical device
facility inspections, FDA found that training was needed to ensure that “additional regulatory
requirements outside of the ISO 13485:2003 standard and the QS regulation are adequately
covered during audits/inspections.” 301
Despite the training issues, however, the FDA concluded in PMAP that the use of third-party
auditors held promise. FDA gave an overall vote of confidence in its workability, stating that
“Health Canada and FDA have confidence in the ability of a qualified and competent auditing
organization to plan, carry out, and report on the audit/inspection according to basic Health
Canada and FDA requirements.” 302 In a similar vein, an FDA staffer who has worked with the
AP Inspections program indicated that he perceived AP inspectors to be very competent,
particularly in performing ISO 13485 facility inspections. 303 He noted, however, that because
they do not usually do AP inspections, the information provided to the FDA through such
inspection is generally not adequate to support an enforcement action. He opined that if the AP
inspectors conducted a lot of inspections – for example, if the program were mandatory or
otherwise attracted high participation by regulated entities – an entire industry of competent
inspectors could emerge.
In the shrimp aquaculture pilot, in contrast, the FDA’s conclusions were more pessimistic. It
found that the agency needed “to more fully explore communication, logistic, administration,
and training options for conducting future third-party programs.” 304 Indeed, FDA noted
significant deficiencies when it observed and assessed third parties to see if they met eleven
297

Andrew Martin, Peanut Plant says Audits Declared it in Top Shape, New York Times (Feb. 4, 2009), available
at http://www.nytimes.com/2009/02/05/business/05peanuts.html?_r=1&ref=peanutcorporationofamerica.
298
FDA, Assessment of the Third-Party Certification Pilot for Aquacultured Shrimp (July 2011). See also 73 Fed.
Reg. 39704 (Jul. 10, 2008) (announcing the pilot program and calling for applications from certification bodies).
299
Id. at 7.
300
Id. at 26.
301
PMAP report, supra note 165, at 2. Note that Canada and many other countries rely directly on “ISO 13485:
Medical devices -- Quality management systems -- Requirements for regulatory purposes” in their regulation of
medical devices. The QS regulation of the US is similar, but not the same.
302
Id. at 4.
303
Interview (by phone), David Kalins, Office of Compliance, CDRH, FDA, July 31, 2012.
304
FDA, supra note 298, at 26.

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Third-Party Programs to Assess Regulatory Compliance
“critical audit performance elements.” These critical audit performance elements were defined as
“key knowledge, skills, and abilities that, if not demonstrated by the auditor, could result in the
failure of the auditor to detect the processing of potentially unsafe food.” 305 FDA conducted 28
audits and found that only 3 out of 11 of its critical elements were met in the majority of the
audits and only one was met in all of the audits. For example, only 4 out of the 28 audits met
such critical elements as: “Did the auditor demonstrate an understanding of how to identify,
evaluate and control the food safety hazards associated with the product and process being
audited?” and “Did the auditor recognize, through in-plant observations, deficiencies in the
identification and control of hazards?” 306
Another prevalent concern about third-party auditors relates to their independence. When an
auditor is paid by a regulated entity to assess that entity’s compliance, concerns about the
objectivity of the third party arise. As discussed in the literature on financial auditing, in addition
to potentially conscious motivations, a variety of unconscious biases can affect an auditor’s
judgment. 307 For example, the standards with which the auditor must assess conformity may have
ambiguities, and “[b]ias thrives wherever there is the possibility of interpreting information in
different ways.” 308 Also, an “attachment bias” results from the fact that the auditor has strong
business reasons to please the client and equates his own interests with those of the client. 309 Also,
the certain and immediate beneficial consequences of giving a positive audit opinion may outweigh
the uncertain and distant negative consequences of not doing so. 310 Another threat to
independence occurs when auditors provide their clients with additional “non-audit” consulting
and tax services. 311 In this case, an auditor that renders a negative audit opinion risks losing not just
the audit engagement but the additional business as well.
Similar issues of auditor independence can be expected to appear in third-party programs for
regulatory purposes. An example of an issue involving third-party independence is provided by the
NRTL program. Curtis Straus LLC (CSL) was recognized as a NRTL in 1999 and applied to
have its recognition renewed in 2004. 312 In 2007, OSHA informed Curtis Straus by letter that it
did not appear to meet the NRTL program policy on independence because of a change in its
ownership in 2005. 313 After the change in ownership, the investment firm (Wendel) owned 58%
of CSL as well as 32% of Legrand, a manufacturer of electrical products that require NRTL
testing and certification.
Over the next several years, CSL sought OSHA approval by providing more information and
making some changes to its business structure. For example, it sought to convince OSHA that a
firewall existed to assure the independence of its certification process and that it would use
305

Id.
Id. at 31, app. B.
307
Max H. Bazerman et al., Why Good Accountants Do Bad Audits, HARV. BUS. REV. 97-98 (Nov. 2002).
308
Id. at 98.
309
Id. at 99; see also Amy Shapiro, Who Pays the Auditor Calls the Tune?: Auditing Regulation and Clients’
Incentives, 35 SETON HALL L. REV. 1029, 1040 (2005) (discussing the attachment bias and explaining that working
for a client creates a tendency for an auditor to make judgment calls that favor a client).
310
Id.
311
Keith A. Houghton & Christine A. Jubb, The Market for Financial Report Audits: Regulation of and Competition
for Auditor Independence, 25 L. & POL’Y 299, 308–09 (2003).
312
OSHA, Curtis-Straus LLC, Application for renewal of Recognition, 76 Fed. Reg. 62850 (Oct. 11, 2011).
313
Id.
306

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Third-Party Programs to Assess Regulatory Compliance
external and internal audits to ensure its independence. 314 In 2010, however, OSHA made a
negative finding of renewal based in part on concerns that OSHA would not be able to
effectively monitor CSL’s efforts, given the extent and complexity of Wendel’s and Legrand’s
business operations. 315 In its continued efforts to persuade OSHA to renew, Wendel decreased
its ownership stake in Legrand to11% in 2011.
In 2011, OSHA published notice of its preliminary finding to deny renewal, and a final
finding is expected to be published in September 2012. 316 In the preliminary finding, OSHA
explains that the NRTL program requires “complete independence,” meaning that NRTLs “must
be free from commercial, financial and other pressures that could compromise” its testing and
certification. 317 CSL’s substantial relationship with Legrand deriving from Wendel’s partial
ownership of both violates this independence requirement. OSHA’s final determination on
CSL’s renewal has still not been published, suggesting that a lengthy process is required when an
agency seeks to terminate the accreditation of a certification body.
In addition to questions of competence and independence, agencies should be concerned
about the consistency of third-party determinations. If third-party firms and individuals are able
to conduct the required assessment tasks in different ways, their determinations may be less
consistent than governmental determinations, particularly if the latter would be centralized. For
example, when the Environmental Protection Agency decided to verify greenhouse gas
emissions data itself rather than require emitters to contract with a third-party verifier, it
suggested that this would allow it to comprehensively review the data and provide the necessary
consistency and quality. 318 If EPA had opted to incorporate third-party verification, it “would
still need to review and perform consistency checks after the third party verification was
complete.” 319
Aside from competence and independence, there are other characteristics common in
auditing that may also be preventing reliable and accurate results. One scholar of private thirdparty systems in the food sector found that auditors focus their review on the records kept by
companies rather than actual company practices. In a study of audits performed to check the
compliance of agricultural suppliers with buyers’ standards, the scholar observes that “what are
mostly audited are not the practices of suppliers, but their records. Put differently, auditors
largely rely on proxy measures to verify compliance.” 320 As such, the audit may verify that there
is documentation showing that a certain standard was met but not actually verify that the
standard was met.
Other scholars have pointed out that audits may verify compliance with many detailed
performance specifications while failing to assess true risks. 321 To standardize their task,
314

Id.
Id.
316
Id.; Interview (by phone), Robert Biersner, Department of Labor, Office of the Solicitor (Aug. 10, 2012).
317
Id.
318
Mandatory Reporting of Greenhouse Gases; Final Rule, 74 Fed. Reg. 56260, 56282 (Oct. 30, 2009).
319
Id. at 56283.
320
Maki Hatanaka, Certification, Partnership, and Morality in an Organic Shrimp Network: Rethinking
Transnational Alternative Agrifood Networks, 38(5) World Development 706, 710 (2010).
321
Albersmeier et al., supra note 3, at 930-933.
315

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Third-Party Programs to Assess Regulatory Compliance
auditing organizations may develop detailed checklists, so there is lots of “ticking the boxes” but
“crucial quality risks can go unnoticed at the same time because they are not specifically
provided for on the checklist of technical requirements.” 322 Moreover, there are reasons that the
checklists may be favored in third-party programs run by federal agencies. Namely, it removes
discretion from the auditor, and it may be perceived as more standardized and fair. 323
When constructing third-party programs to serve regulatory purposes, agencies have many
ways to respond to these various concerns and increase the reliability of third-party
determinations. 324 With rules regarding how third parties are accredited and how regulated
entities select third parties, the agency can create a high bar for third-party competence and
independence. With rules regarding how assessment tasks are performed, an agency can further
enhance the reliability and consistency of third-party determinations. Importantly, agencies can
also employ a variety of oversights mechanisms to make sure that third parties comply with
program rules.
2. Rates of Compliance
Another metric to assess third-party programs for regulatory purposes can be found in the
extent to which a program ensures and enhances regulatory compliance. When third-party
programs are used for regulatory purposes, they should increase– not reduce– rates of
compliance. A third-party program that enables a greater degree of noncompliance, and thereby
eviscerates or dilutes valuable regulatory protections, cannot be considered a success.
In many existing regulatory programs, compliance inspections occur infrequently and
compliance rates are hard to determine. For example, in 2011, about 254,000 foreign food
facilities and 167,000 domestic food facilities were registered with the FDA. 325 With limited
inspectorial resources (about 1,000 inspectors), FDA inspected only 6% of the 421,000
registered facilities in 2010. 326 Also, according to the FDCA, domestic manufacturers of a class
II or III medical device shall be inspected by the FDA at least once in every two-year period. 327
However, with limited resources, FDA had not satisfied this biennial inspection mandate. As
reported by the U.S. General Accountability Office (GAO) in 2008, domestic high-risk facilities
receive inspections only once every three years and medium-risk facilities only once every five
years. 328 While the law does not impose an inspection frequency for foreign manufacturers, those
that are high-risk are reportedly inspected only once every six years and medium-risk only once
every 27 years. 329
Third-party programs designed for regulatory purposes can enable more frequent inspections
and more complete data about compliance. A program may be designed, for example, to require
322

Id. at 933.
Id.
324
Cf. McAllister, supra note 3.
325
Kathy Gombas & Howard Seltzer, Regulatory Report, The Reportable Food Registry: A Valuable New Tool for
Preventing Foodborne Illness, FOOD SAFETY MAGAZINE (June/July 2011), available at
http://www.foodsafetymagazine.com/article.asp?id=4117&sub=sub1.
326
ElBoghdady, supra note 42.
327
Guidance for Industry, supra note 170. See also 21 U.S.C §360(h) (containing the statutory requirement).
328
Challenges for FDA, supra note 156, at 1st page (unnumbered).
329
Id.
323

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Third-Party Programs to Assess Regulatory Compliance
an assessment of the compliance status of all regulated entities or products each year or every few
years. Importantly, the mere knowledge that a third party will inspect their activities can change
the behavior of regulated firms. Evidence suggests that when managers expect outside observers,
they tend to change how they perform their jobs and how they relate to other managers in ways
that favor adherence. 330 As such, the performance of an individual or group improves when it is
singled out for observation and study by an outsider. 331 Also in third-party assessment processes,
there may be opportunities for third parties to educate and persuade the regulated entity to comply.
Indeed, many third-party programs have been implemented by federal agencies in response
to a perceived deficit in the agency’s ability to inspect regulated entities. The low inspection
rates of foreign food facilities by FDA led to the new third-party programs for imported food in
FSMA. A decade earlier, Congress mandated the AP program due to concern about FDA’s
inability to conduct inspections every three or five years as legally required. Also, EPA
introduced its third-party program for Energy Star in 2011 after a GAO inspection revealed the
possibility of fraud and abuse in the previous system of self-declaration. In these programs and
others, legislators and regulators appear to hope that third-party programs will lead to higher
compliance rates, and ultimately better regulatory outcomes.
3. Agency Capacity to Administer the Third-Party Program
Another metric for evaluating third party programs in regulatory contexts is the sufficiency
of agency resources for establishing and maintaining a program. Judging from existing
programs, a great deal of agency resources may be required to set up a program. Also, without
effective governmental oversight, third-party programs may lack transparency and accountability
and ultimately erode public confidence in regulation and compromise public welfare. Although
private actors may carry out many tasks in a third-party program, the agency must have the
strength and resources to ensure that the program is effectively serving regulatory purposes.
Depending to some extent on how a third-party program is designed, a large investment of
time and resources may be necessary to get it up and running. In particular, if an agency
approves certification bodies itself instead of delegating this to an accreditation organization, it
will need to do all the work of establishing the relevant rules and implementing them to verify
the qualifications of the third parties. Even if an accreditation organization is used, the agency
will have to establish the relevant rules and oversee the accreditation organization’s
implementation of them.
Several existing programs illustrate the challenges involved in accrediting certification
bodies. In the FDA AP Inspections program, selection and training of APs took many years to
complete. FDA’s aquacultured shrimp pilot further demonstrates the resource requirements of
verifying the qualifications of third-parties, particularly when they are outside the US. As part of
the application process, FDA asked candidate certification bodies (CBs) to assess their own
conformity with certain attributes that FDA determined were necessary for CB certification
programs. 332 These included, for example, that auditors should understand the food safety issues
330

See ASEEM PRAKASH & MATTHEW POTOSKI, THE VOLUNTARY ENVIRONMENTALISTS: GREEN CLUBS, ISO 14001,
AND VOLUNTARY REGULATIONS 60 (2006) (explaining that third-party inspections “mitigate shirking by creating
incentives for managers within the firm to adhere to program obligations”).
331
Id. at 61–62, 181.
332
Assessment of Pilot for Aquacultured Shrimp, supra note 298.

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Third-Party Programs to Assess Regulatory Compliance
related to the processes and products they audit; the CB should have a quality assurance program
that monitors its auditors and audits; and the CB should have sufficient resources, such as
equipment and infrastructure. The FDA developed self-assessment checklists, and participants
reported with few exceptions that they met most of the attributes. However, when FDA
performed its onsite certification program assessments, it found the information in the checklist
responses was often unsupported by source documents and that the self-assessment checklists
themselves were not sufficient to assure attainment of the attributes. Ultimately, FDA found that
most CBs did not fully meet the majority of attributes. 333 The FDA concluded that the onsite
program assessments and associated discussions with CB personnel were critical to FDA’s
evaluation of the CB programs. 334
Through this pilot, moreover, the FDA realized the difficulty of performing such onsite
assessments. FDA reports that onsite assessments required at least four people to spend three to
five days at the headquarters of each of the six CBs, four of which were outside the US. 335 It also
found that not all supporting documentation and relevant personnel were available at the
headquarters and, in this situation, “FDA’s ability to make a full assessment of one or more of
the program attributes was limited.” 336 For the CBs located outside the US, the overseas travel
and need for translation services further complicated FDA’s assessment efforts. 337
In the final phase of the pilot, FDA observed CBs conducting audits of shrimp processors and
farms and conducted its own audits of the laboratories CBs used. Spread across seven foreign
countries, FDA confronted problems in coordinating the schedules of multiple stakeholders (i.e.
FDA, the CB, the competent authorities in foreign countries, and the processors, farms, and labs
being audited) and in receiving permission to observe some processors, farms and labs. 338 In
addition, some changes in FDA’s plans were necessitated by international crises and civil unrest
in countries where audits had been planned. 339 Given the difficulties, some CBs conducted
“mock audits” to accommodate the FDA. FDA concluded that the “coordination among multiple
stakeholders demanded significant time and resources.” 340
Finally, the pilot made clear that agencies that implement third-parties program are likely to
need to provide training to their own personnel and develop new information technology (IT)
systems. FDA concluded that operationalizing a third-party certification program in the future
would require “establishing robust formal training for Agency personnel involved in on-site
program assessments and performance audits of CB auditors and supporting laboratories.” 341 The
pilot, which involved only six CBs, taxed existing FDA infrastructure and indicated “that an
operating program in the future would need additional resources to be successful, as well as a
333

Id. at 13, tbl. 3
Id. at 11.
335
Id. at 11, 6 tbl. 1
336
Id. at 12.
337
Id. at 25 (“Language barriers and different operating models and paradigms (i.e. industry vs. regulatory) made
understanding between FDA and the CBs challenging and clear communication even more critical” and “It should
be noted that the number of interpreters needed for a full-scale third-party certification program are likely to be
substantial.”)
338
Id. at 16.
339
Id. at 16
340
Id. at 24.
341
Id. at 25.
334

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Third-Party Programs to Assess Regulatory Compliance
central coordinating point within the Agency.” 342 Moreover, FDA reported that “current IT
systems and databases were not designed to accommodate third-party certification audits” and
“more in-depth evaluation, updating, and the potential development of new systems and
databases” would be required for FDA to operationalize a third-party certification program. 343
Energy Star provides an example of a program in which the agency delegates accreditation to
private accreditation bodies. The accreditation bodies that accredit laboratories must themselves
be approved by EPA. EPA relies extensively on that accreditation and does little oversight of
accredited labs. The accreditation bodies that accredit CBs do not need specific EPA approval;
any accreditation body that is a signatory to the IAF MLA may accredit Energy Star CBs. The
accreditation bodies are responsible for conducting periodic assessments of the CBs they
accredit, and the Energy Star program itself conducts additional oversight including audits of
product certifications. 344
Existing programs show that agencies may have difficulty maintaining the resources needed
to provide adequate oversight. In 2010, the USDA Office of Inspector General (OIG) found
deficiencies in AMS’s oversight of NOP certifying agents and organic operations. 345 OIG also
found that NOP officials did not make required onsite assessments and did not identify
inconsistencies in implementation of NOP regulations. 346 Lacking sufficiently specific rules and
adequate oversight, certification agents developed different criteria for determining whether noncompliances were present and whether they were major or minor. 347 OIG concluded that “AMS
did not ensure consistent oversight of organic operations by its certifying agents.” 348 This lack of
oversight, in turn, undermined the overarching goal of NOP “to assure consumers that products
meet consistent, uniform standards.” 349
The OIG found even more serious deficiencies in AMS’s oversight of foreign certifying
agents. 350 AMS is required to make onsite reviews of foreign certifying agents, but 5 of 44 never
received such a review and 24 of 44 received reviews more than two years after receiving their
conditional accreditation. The NOP had underestimated the number of applications they would
receive when the program began in 2002 and had failed to develop a policy to handle the review
of certifying agents located in countries with travel warnings issued by the Department of
State. 351 When NOP reviews were performed, NOP officials often found that certifying agents

342

Id. at 23.
Id. at 24-25.
344
See EPA, Conditions and Criteria for Recognition of Certification Bodies, supra note 276, at 1(i) (authorizing
EPA to conduct audits at its discretion); Interview (by phone), Eamon Monahan, EPA Energy Star Program, August
6, 2012 (mentioning that Energy Star picked at random some product categories and had CBs send all related
certification files).
345
USDA Office of the Inspector General (OIG), Oversight of the National Organic Program, Audit Report 0160103-Hy (March 2010), at 29-30.
346
USDA OIG, supra note 345, at 3.
347
Id. at 21-27 (describing how NOP lacked clear and sufficiently focused rules and did not oversee their
implementation).
348
Id. at 21.
349
Id.
350
Id. at 28-29.
351
Id.
343

47

Third-Party Programs to Assess Regulatory Compliance
committed major noncompliances such as failing to identify mislabeled products, maintain
complete certification files, and complete annual conflict of interest disclosures. 352
The response of AMS to the OIG report indicates that the root of the problem was that the
NOP program lacked sufficient resources. AMS stated that the NOP budget had increased in
2009 to $3.87 million and its staff to 16, and that a 3.1 million dollar budget increase in 2010
would enable the program to grow to 31 staff members. 353 In 2007, the NOP had just nine staff
members and an annual budget of $1.5 million. 354
It is worth noting that the international scope of many third-party programs interacts with the
issue of governmental oversight. The international dimensions of certain regulatory objectives
like food safety may make third-party programs particularly attractive, but these same
international dimensions complicate oversight. Not only may effective oversight be more costly,
but the agency may not have the authority in foreign jurisdiction to do the kinds of oversight it
would do in a domestic context.
4. Public Acceptance
Another metric of success is the support and acceptance that the third-party program receives
from stakeholders. The most relevant stakeholders are the concerned public (the beneficiaries of
regulation) and the regulated industry (the target of regulation). Issues relevant to the industry’s
acceptance of a program are discussed in the section that follows.
One gauge of public support for regulatory change consists of the comments received by
agencies in response to rulemaking processes and other requests for comments. The public is
often represented by non-governmental organizations. While most third-party programs
described in this report have garnered little public attention, there are a couple exceptions.
First, NGOs concerned with food safety have been very wary of the introduction of thirdparty auditors into the FDA’s regulatory framework. In comments to the agency, one NGO
acknowledged that FSMA authorizes third-party certification for imported food, but emphasizes
that “the law does not permit it for domestic facilities.” 355 The commenter then stresses the need
for the agency to rigorously apply conflict-of-interest requirements and otherwise conduct
oversight of third-party auditors. Another NGO criticizes the legislative decision to allow FDA
to rely on third-party auditors for regulatory audits, regretting that FDA will “expend precious
resources” developing conflict-of-interest standards and overseeing third parties. It cites failures
in the National Organic Program 356 and private food safety audits 357 to support its conclusion
352

Id.
Id. at appended back pages (AMS response).
354
Uncle Matt’s Organic Blog, http://unclematts.com/dev/how-to-add-oomph-to-organic/ (last visited Sept. 11,
2012).
355
Comment of Make Our Food Safe and Safe Food Coalition, Docket Nos. FDA-2011-N-0145, § 303, Authority to
require import certifications for food & FDA-2011-N-0146, § 307, Accreditation of Third-Party
Auditors (Apr. 29, 2011).
356
Cf. USDA OIG, supra note 345 (finding that AMS fails to adequately oversee NOP third parties).
357
A prominent such failure involved the salmonella outbreak caused by peanuts processed by Peanut Corporation
of America in a facility that had received a superior rating in a private food safety audit required by a buyer, Kellogg
353

48

Third-Party Programs to Assess Regulatory Compliance
that FDA “should invest its resources into doing as many as the imported food inspections itself
and should avoid at all costs a reliance on a privatized inspection system.” 358
In the product safety arena, NGOs have been more supportive of third-party testing. Major
consumer NGOs such as the Consumer Federation of America and US PIRG expressed strong
support for “a CPSC-administered, third party safety certification program for monitoring the
safety of all products” before the passage of the CPSIA in 2008. 359 In the aftermath of its
passage, they have participated in the regulatory process to voice support for a strong third-party
testing system. 360
A common concern of NGOs regarding the use of third-party inspection and certification
systems is that they will weaken governmental accountability and transparency. A food-safety
NGO, for example, expresses a preference for inspections performed by FDA, other US
agencies, or foreign governments (in that order) over inspections by third-party auditors, as the
latter “may not have the same public health objective or may not be supported by the same level
of expertise, training, resources, and accountability as are FDA inspectors.” 361 When the Energy
Star program announced its intention to establish a third-party verification and testing program,
an environmental NGO expressed strong support but stressed the need for “complete
transparency of the program’s procedures and testing results.” 362
5. Industry Acceptance
The other major group of stakeholders consists of the regulated entities. A very common
reaction to an agency’s announcement that it is implementing a third-party verification program
is industry concern about costs. Indeed, a third-party program will often shift some of the costs
of inspection and compliance assessment from the government to industry. 363 To augment
industry support, third-party programs should reduce the burden on industry as much as possible
while still achieving regulatory objectives. Third-party programs may also be able to provide
benefits to industry, for example, by reducing the processing times of product approvals

Corp. See Jim Prevor’s Perishable Pundit, Lessons From The Peanut Salmonella Outbreak: Audit System Broken,
http://www.perishablepundit.com/index.php?date=02/19/09&pundit=1 (last visited Sept. 11, 2012).
358
Comment of Food & Water Watch, Docket Nos. FDA-2011-N-0145, § 303, Authority to require import
certifications for food & FDA-2011-N-0146, § 307, Accreditation of Third-Party
Auditors (Apr. 29, 2011).
359
Letter from Consumers Union to The Honorable Daniel K. Inouye (Oct. 26, 2007), available at
http://www.consumersunion.org/pub/2007/10/005073print.html (last visited Sept. 11, 2012).
360
Comments of Consumers Union, Consumer Federation of America, Kids in Danger, and the U.S. Public Interest
Research Group to the U.S. Consumer Product Safety Commission on “Notice of Requirements for Accreditation of
Third Party Conformity Assessment Bodies to Assess Conformity with Part 1215 of Title 16, Code of Federal
Regulations” (July 6, 2010), available at
http://www.consumerfed.org/elements/www.consumerfed.org/file/Comments%20on%203PT%20Bath%20Seats%2
0(Final)%20(2).pdf (last visited Sept. 11, 2012).
361
Comment of Make Our Food Safe and Safe Food Coalition, supra note 355.
362
Comment of Natural Resources Defense Council, NRDC’s Comments on Energy Star’s Proposed Enhanced
Testing and Verification Program 4 (April 30, 2010) (emphasis on “complete transparency” removed from original),
available at
http://www.energystar.gov/ia/partners/downloads/mou/Natural_Resources_Defense_Council_Comments.pdf.
363
See McAllister, supra note 3, at 27.

49

Third-Party Programs to Assess Regulatory Compliance
applications and by creating a single approval process that satisfies various national jurisdictions.
Notably, third-party programs raise special concerns about costs for small businesses.
One important way to contain costs in a third-party program is to ensure that there are a
sufficient number of third parties to create competition among them. 364 A representative of the
Energy Star program stated that the primary way that the program responded to industry
concerns about third-party certification was by encouraging the rapid development of a strong
market of certification bodies and laboratories. 365 In contrast, in the FDA’s AP program, it took
the agency many years to get APs through all required training and cleared to conduct
independent inspections. By May 2008, four years after the program was established, only 8 APs
out of 16 had completed all training. 366 Because of the delays, few APs were available to
conduct independent inspections in the early years of the program.
As an agency seeks to encourage a competitive market, however, certain precautions need to
be taken. First, an agency should not unduly lower its requirements for competence and
independence in order to accredit more third parties. In the AP program, for example, the
training that was given may have been essential for APs to adequately carry out their tasks.
Second, an agency should establish program rules to ensure that third parties cannot compete in
ways that compromise the quality of the assessment. The agency can require in its program
rules, for example, that third parties inspect a certain number of product samples or make a
certain number of site visits to a manufacturing facility.
The CPSC’s third-party program for the testing of children’s products has provoked
substantial industry resistance. As the CPSC has developed regulations, product manufacturers
have repeatedly expressed concerns about the cost of the required third-parting testing. It was
clear that these concerns had reached Congress when it amended the CPSIA in August 2011. 367
The amendments gave the CPSC new authority to exempt qualifying small batch manufacturers
(mostly small businesses) from third-party testing. They also required the CPSC to issue a
request for public comments on opportunities to reduce the cost of third-party testing
requirements.
Manufacturers expressed many concerns about the costs of third-party testing in their
comments. 368 They recommended for example that CPSC exempt more individual products and
categories of products by regulation; that CPSC make additional attempts to reduce testing
requirements based on the actual likelihood of exposure; and that CPSC increase efforts to
364

Cf. Interview (by phone), Eamon Monahan, EPA Energy Star Program, August 6, 2012 (discussing that Energy
Star sought to keep costs low for regulated entities by encouraging the participation of a sufficient number of CBs
and labs to create the possibility for competition among them).
365
Interview (by phone), Eamon Monahan, EPA Energy Star Program, August 6, 2012.
366
U.S. Gov’t Accountability Office, GAO-08-780T, Medical Devices: FDA Faces Challenges in Conducting
Inspections of Foreign Manufacturing Establishments 19 (May 14, 2008), available at
http://www.gao.gov/products/GAO-08-780T.
367
H.R. 2715, Pub. L. No. 112-28 (Aug. 12, 2011) (creating a new section 14(i)(3)(A) of the CPSA); 15 U.S.C.
§ 2063(i)(3); Application of Third Party Testing Requirements; Reducing Third Party Testing Burdens, 76 Fed.
Reg. 69596 (Nov. 8, 2011); Public Comments in response are available at regulations.gov, Docket No. CPSC–20110081 (listing 22 comments).
368
Comments on Application of Third Party Testing Requirements; Reducing Third Party Testing Burdens, COSC
Docket No. CPSC-2011-0081; available at www.regulations.gov.

50

Third-Party Programs to Assess Regulatory Compliance
harmonize federal, international and state laws applicable to consumer products. Other
suggestions included decreasing the frequency of retesting and allowing more retesting to be
done by the manufacturers themselves rather than a third-party lab. 369
Small manufacturers have been most concerned about the new third-party testing
requirements. A trade association of small jewelry makers complains of the unreasonable cost
burdens imposed by the CPSIA. 370 It reports that almost one quarter of its members “have
reduced their children’s products offerings, and 16% have exited the children’s jewelry market
entirely.” 371 A European maker of heirloom quality toys calls third-party testing of its small
batches “prohibitive and impossible” and warns that “specialized toys with high playing value
will disappear from the US market” if the CPSIA is not amended. 372 This manufacturer and
others small manufacturers from Europe request that the CPSA exempt products tested to the
European safety standards from CPSIA’s third-party testing requirements. 373 Also, a
manufacturer that describes itself as “medium-sized” expressed that the exemption for smallbatch manufacturers does not cover all low-volume manufacturers, even though they too are
considerably different from large volume manufacturers. 374
In Energy Star, manufacturers also voiced concerns about the cost of third-party certification.
As reported in a 2011 study of Energy Star by the GAO, “Almost all the manufacturing partners
we spoke with stated the cost to participate in the program had increased. Some manufacturing
partners—particularly small manufacturers or manufacturers with few Energy Star products—
also told us the increasing costs could discourage their participation.” 375 Energy Star program
staff, however, perceive widespread acceptance of the new rules and have not noticed a drop in
applications for the Energy Star label. 376
As in the case of the CPSC rule, small businesses have been particularly concerned about the
new costs of certification. If they are not able to afford certification for their products, their
consumer base may be reduced. Also delays in getting products to market may be more
prejudicial to small than large companies. As stated by one commenter on the Watersense
program, “High cost will discourage manufacturers, especially small ones, from participating in
the process at all.” 377 In effect, the costs of third-party certification may benefit larger
companies at the expense of smaller ones.

369

Id. (see especially comments submitted by the Society of the Plastics Industry, Inc.; the Toy Industry
Association; and Libbey).
370
Id. (see comments submitted by the Fashion Jewelry and Accessories Trade Association).
371
Id. at 11.
372
Id. (see comments of Glueckskaefer).
373
Id. (see comments of Fagus and Grimm’s).
374
Id. (see comments of Orbit Baby, Inc.).
375
Comment, McGowan to Vokes (April 28, 2010) (in which the American Lighting Association reported that it had
surveyed its members and 3/19 said the changes would cause them to end their participation in Energy Star and
15/19 said the changes would cause them to limit the number of fixtures they submit for certification).
376
Interview (by phone), Eamon Monahan, EPA Energy Star Program, August 6, 2012.
377
EPA Watersense, Comments on the May 2007 Draft WaterSense Certification Scheme 19 (Nov. 2007), available
at http://www.epa.gov/WaterSense/docs/cert_scheme_comments508.pdf.

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The Small Business Administration’s Office of Advocacy has been concerned about thirdparty programs. 378 One concern is that once agencies shift the costs of inspection to industry, the
government will not be as limited in imposing regulatory requirements. Also, whereas many
governmental programs establish a lower fee for small businesses, third parties are not as likely
to be as concerned with the affordability to small businesses. The Office of Advocacy suggests
that when agencies establish third-party programs, they should consider mechanisms to help
reduce the burden on small businesses.
While a third-party program is likely to impose costs, it may also impart benefits that were
not available without the program. The TCB program, for example, cut the approval time of
telecommunications equipment from 30 to 90 days in the late 1990s to often just a few days. 379
In addition, a program may be designed such that a third-party assessment satisfies the regulatory
requirements of both the US and other countries. FDA reports that it is currently developing a
“single audit program” for medical devices that would result in “a saving of audit/inspection time
in person days (and associated costs) and less disruption of the manufacturer’s day-to-day
operations; and greater control over the scheduling of regulatory audits/inspections.” 380
Factors aside from costs and benefits may also play a role in how industry reacts to a thirdparty program. A third-party program may be well-explained and well-implemented by an
agency, or it may not be. In the latter case, industry is more likely to find the program to be
overly complex and objectionable.
B. Incentives to Participate When Use of Third Parties is Voluntary
Programs in which regulated entities have a choice as to whether to contract with a third
party have an additional metric of success: the rate of regulated entity participation. If regulated
entities do not use a program, then the resources an agency used to create it may seem wasted.
Differences in participation in three programs described in this paper illustrate the situation:
FDA’s AP Inspections program for medical device production facilities; FDA’s 510(k) ThirdParty Review program for medical devices; and FCC’s TCB program.
The FDA’s Inspections by AP program has had a very low rate of participation. Despite an
estimated 8,000 manufacturers that could use the program, 381 only 80 independent inspections
(i.e. unaccompanied by FDA inspectors) have been conducted by APs in eight years of program
operation. 382 The FDA had hoped that manufacturers would be attracted by the possibility that a
single AP inspection might satisfy regulatory requirements in multiple jurisdictions. 383
378

Interview (by phone), David Rostker, Assistant Chief Counsel, Office of Advocacy, U.S. Small Business
Administration, Aug. 17, 2012.
379
Interview (by phone), George Tannahill, FCC Office of Engineering and Technology, August 27, 2012.
380
PMAP report, supra note 165, at 4.
381
Agency Information Collection Activities; Proposed Collection; Comment Request; Manufacturer’s Notification
of the Intent To Use an Accredited Person Under the Accredited Persons Inspection Program Authorized by Section
228 of the Food and Drug Administration Amendments Act of 2007, 76 Fed. Reg. 29764, 29765 (May 23, 2011)
(reporting FDA’s estimate that there are 4,000 domestic manufacturers and 4,000 foreign manufacturers that are
eligible for inclusion in the AP program).
382
Interview (by phone), David Kalins, Office of Compliance, CDRH, FDA, July 31, 2012.
383
Status of FDA’s Program, supra note 147, at 13. This could occur if the same inspection could serve to both
verify the manufacturer’s compliance with the FDA’s QS regulation and the manufacturer’s conformity with “ISO

52

Third-Party Programs to Assess Regulatory Compliance
However, the effect of this incentive has been limited because manufacturers have had doubts
that APs could cover the multiple requirements of various standards in a single inspection. 384
Also, the program allows manufacturer to control the scheduling of inspections 385 and offers a
two-year inspection holiday from regular FDA inspections.
Many disincentives to participation also exist. Under the AP Program, manufacturers have to
bear the cost of the inspection, whereas FDA inspections are free. Moreover, the manufacturer
may not think an FDA inspection will occur in the near future, and an AP inspection may result
in further regulatory action. 386 As reported by the GAO, “one industry representative questioned
why manufacturers would ask for—and pay for—inspections when the result could be that FDA
closes them down.” 387 Manufacturers expressed concern that, because FDA makes the final
determination of compliance with its requirements, FDA might want to conduct an additional
inspection after reading the report prepared by the third-party inspector. 388 Observing the very
small number of AP inspections in 2008, the GAO stated it raised “questions about the
practicality and effectiveness of establishing similar programs that rely on third parties to help
FDA fulfill other responsibilities” 389
The FDA’s 510(k) pre-market third-party review program has attracted more participation
than the AP Inspections program. As described above, this program enables certain
manufacturers to contract with third parties to certify that products they intend to market. The
FDA reported in July 2012 that about 8% of all 510(k) submissions are received from third
parties, which is close to 300 submissions annually. 390 One difference between the AP
inspection and pre-market programs is that in the latter, device manufacturers pay FDA a user
fee if they do not go through an AP. In FY 2012, the fee is $4,049 ($2,024 for qualified small
businesses). 391 However, it is likely that the user fee is lower than the amount that the
manufacturer pays to a private third party. 392
Another incentive that is present in the premarket program but not in the AP inspections
program is that manufacturers want this review to happen expeditiously in order to get their
products to market more quickly. According to the FDA, 510(k)s reviewed by APs in 2002
received FDA marketing clearance 29% faster compared to 510(k)s reviewed entirely by

13485: Medical devices -- Quality management systems -- Requirements for regulatory purposes,” which many
other countries use as their standard. See also infra note 434 and accompanying text.
384
Id. By being able to schedule inspections, they are able to minimize facility disruptions and ensure that the
necessary personnel and documentation is on hand at the right time. Also, FDA may only give a week of notice of
an inspection, but AP inspections can be scheduled months in advance. See Interview (by phone), David Kalins,
Office of Compliance, CDRH, FDA, July 31, 2012.
385
Status of FDA’s Program, supra note 147, at 13.
386
Id. at 15.
387
Id. at 16.
388
Id.
389
Challenges for FDA, supra note 156, at 6-7 (reporting 7 inspections between Mar. 2004 and Jan. 2008).
390
Email from Jean Cooper, Senior Staff Fellow, U.S. Food and Drug Administration, July 17, 2012.
391
FDA, Premarket Notification [510(k)] Review Fees,
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/HowtoMarketYourDevice/PremarketSubmissio
ns/PremarketNotification510k/ucm134566.htm (last visited Sept. 11, 2012). MDUFMA, enacted in 2002, gave
FDA authorization to charge manufacturers fees for premarket review. See id.
392
Interview (by phone), David Kalins, Office of Compliance, CDRH, FDA, July 31, 2012.

53

Third-Party Programs to Assess Regulatory Compliance
FDA. 393 FDA also highlights that the APs generally “have specialized expertise in areas that
may be helpful to 510(k) submitters, such as device testing, standards, or foreign regulatory
requirements” and that they have locations throughout the world “so they often can provide local
service.” 394
In the FCC’s TCB program, there is a very high participation rate for eligible products and
third-party review has become the norm. In 2011, 98.5% of equipment authorization
certifications (13,427 out of 13,645) were issued by TCBs rather than the FCC. 395 FCC staff
explains that companies prefer going to TCBs because their products are approved more quickly
and they can get to market faster. 396 In the late 1990s, product certifications were all conducted
by the FCC and processing times tended to range from 30 to 90 days. Presently, certifications
conducted by TCBs may take just a few days. The 1.5% of certifications that continue to be
conducted by FCC tend to involve new technology that the FCC excludes from TCB approval
until it published a measurement procedure. 397 Also, given that the FCC charges fees for
certifications, the costs of using a TCB may be lower. In 2011, the FCC’s device certification
fees ranged from $490 to $1265. 398
In sum, voluntary programs have varied greatly in terms of the costs and benefits of
participation, and participation rates have reflected this variation. As illustrated by the AP
Program, if the costs to participate are high and the offsetting benefits are not clear, firms will
not participate. On the other hand, the TCB program shows that in different circumstances,
optional third-party certification may become the industry’s preference.
V. Recommendations to Federal Agencies
This section sets forth recommendations to federal agencies regarding the use of private third
parties for regulatory purposes. Regulatory third-party programs pose risks. If third party
programs are not well-conceived and well-operated, they may both undermine the achievement
of regulatory goals and impose high costs on regulated entities. Yet, third-party programs also
offer benefits. By harnessing conformity assessment expertise in the private sector, they may
extend the reach of regulatory agencies in ways that increase regulatory compliance and
otherwise improve the performance of regulated entities and products. The recommendations
discussed below seek to help agencies minimize the risks and maximize the benefits of thirdparty programs.
The first important question that agencies face may be whether or not to establish a thirdparty program. Alternatively, Congress may have directed the agency to develop a third-party
program. Of the eight programs surveyed in this report, four were explicitly required by
393

FDA, Medical Devices, Third-Party Review, http://www.fda.gov/MedicalDevices/Device
RegulationandGuidance/HowtoMarketYourDevice/PremarketSubmissions/ThirdParyReview/default.htm#3 (last
visited Sept. 11, 2012).
394
Id.
395
Interview (by phone), George Tannahill, FCC Office of Engineering and Technology, August 27, 2012 (data on
file with author).
396
Interview (by phone), George Tannahill, FCC Office of Engineering and Technology, August 27, 2012.
397
Id.; see also TCB Program Rules, supra note 213, at 4.
398
Interview (by phone), George Tannahill, FCC Office of Engineering and Technology, August 27, 2012; see also
http://apps.fcc.gov/oetcf/kdb/forms/FTSSearchResultPage.cfm?id=41712&switch=P.

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Third-Party Programs to Assess Regulatory Compliance
Congress. 399 The first set of recommendations below is targeted to situations in which agencies
are themselves deciding whether to establish a third-party program. However, aspects of the
recommendations will also be useful when agencies are required to do so.
Agencies that are charged with or make the choice to establish a third-party program will
need to write the rules by which the program will operate. The key rules of a third-party program
can be categorized into several types: accreditation rules, which determine who may be approved
as a third party; selection rules, which govern how regulated entities select third parties;
performance rules, which specify how third-party testing and certification should be performed;
and reporting rules, which set forth what information is provided to the regulatory agency by
various program actors. 400 Moreover, the agency must make decisions about how it will conduct
oversight and enforce these rules. 401
When a third-party program is required by statute, certain characteristics of the third-party
program may already be determined. Yet, within the constraints of the statute, agencies are still
likely to have many options regarding program design. The second set of recommendations
regards how to establish a third-party program, with most relevance to program aspects that have
not been statutorily determined.
A. Deciding Whether to Use a Third-Party Program
1. Consult governmental and non-governmental resources relating to third-party conformity
assessment
There are several important governmental and nongovernmental resources available to
agencies considering third-party programs. The federal government has developed expertise in
conformity assessment since the passage of the National Technology Transfer and Advancement
Act of 1995 (NTTAA). Most importantly, the NTTAA directed NIST to coordinate the
conformity assessment activities of governmental and private sector entities with the goal of
eliminating unnecessary duplication and complexity. 402 Also, in 1998, the Office and
Management and Budget’s Circular A-119 instructed NIST to write guidance for agencies to
ensure effective coordination of governmental and private conformity assessment activities. 403
NIST published this guidance in 2000. 404
The Standards Services Division of NIST is available to consult with agencies interested in
incorporating third-party conformity assessment processes into their regulatory processes. Upon
the request of an agency, NIST staff can become involved in helping an agency design a thirdparty program. For example, in the WaterSense program, the chief of the Standards Services
Division essentially functioned as part of WaterSense staff for a few months to explain the
399

The four that were required explicitly by Congress are the FDA programs for food imports, the CPSC program
for children’s products, the FDA programs for medical devices, and the USDA National Organic Program.
400
Cf. McAllister, supra note 3, at 47-59.
401
Id. at 59-61.
402
P.L. 104-113, § 12(d)(1) (codified at 15 U.S.C. § 272); see also NIST, Guidance on Federal Conformity
Assessment Activities, 65 Fed. Reg. 48894 (Aug. 10, 2000).
403
OMB Circular A-119 Revised §§ 8, 13(e) (Feb. 10, 1998).
404
NIST Guidance, supra note 402.

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Third-Party Programs to Assess Regulatory Compliance
relevant ISO standards and help establish the third-party program. 405 NIST coordinates the
Interagency Committee on Standards Policy (ICSP), which consists of one principal
representative from each federal executive agency, who is referred to as the “agency standards
executive.” According to NIST’s guidance, agency standards executives are responsible for,
inter alia, promoting the development of agency positions on conformity assessment related
issues that are in the public interest; ensuring that agency participation in conformity assessment
related activities is consistent with agency missions, authorities, priorities, and budgets; and
establishing an ongoing process for identifying efficiencies that can be achieved through
coordination with other agency and private sector conformity assessment activities. 406
NIST also runs the NVCASE program, which has responsibility for recognizing the private
accreditation bodies that accredit TCBs for the FCC. To confer recognition, NVCASE performs
an initial assessment of the accreditation body and then performs a reassessment every two years
to ensure that it continues to operate in accordance with ISO/IEC 17011. 407 Under its
regulations, NIST accepts requests to perform these functions only in certain situations. 408
Otherwise, private accreditation bodies can be recognized directly by federal agencies, and the
assessment role played by NVCASE may be performed instead by an international organization
like the IAF (for certification bodies) or ILAC (for laboratories). 409
OMB and NIST are both currently considering revising their guidance to agencies regarding
conformity assessment. In March 2012, OMB issued a request for information and notice of
public workshop regarding, inter alia, whether A-119 should be revised to set out relevant
principles on conformity assessment. 410 NIST has also expressed an interest in revising its 2000
guidance. 411
Agencies can also tap into expertise about conformity assessment that exists in private
standards organizations. Most significantly, agencies should become familiar with ISO’s

405

Interview (by phone), Stephanie Tanner, WaterSense Program, U.S. Environmental Protection Agency, Aug. 10,
2012.
406
NIST Guidance, supra note 402, § 287.5. See also OMB Circular A-119, supra note 403, § 15 (setting forth the
roles of the ICSP and standards executives).
407
Interview, Ramona Saar (by phone), Standards Services Division, National Institute of Standards and
Technology, Aug. 24, 2012 (explaining that NVCASE ensures that the accreditation bodies operate in accordance
with ISO/IEC17011 in accrediting TCBs to ISO/IEC Guide 65 and the FCC’s technical requirements for TCBs).
408
15 C.F.R. § 286.2, available at http://gsi.nist.gov/global/docs/NVCASE_CFR.pdf (stating that NIST accepts
requests for recognition of accreditation bodies “when (i) directed by U.S. law; (ii) requested by another U.S.
government agency; or (iii) requested to respond to a specific U.S. industrial or technical need, relative to a
mandatory foreign technical requirement, if it has been determined after public consultation that (A) there is no
satisfactory accreditation alternative available and the private sector has declined to make acceptable accreditation
available, and (B) there is evidence that significant public disadvantage would result from the absence of any
alternative”).
409
Interview (by phone), Ramona Saar, Standards Services Division, National Institute of Standards and
Technology, Aug. 24, 2012 (explaining that NVCASE does a reassessment every two years whereas the IAF and
ILAC do a reassessment every 4 years). See also supra notes 19 - 21 and accompanying text.
410
77 Fed. Reg. 19357 (Mar. 30, 2012).
411
Id.

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conformity assessment standards and guides, referred to collectively as the conformity
assessment (or CASCO) toolbox.412
It is important to note, however, that ISO standards and guides are ordinarily subject to
copyright restrictions. Some have suggested that this could potentially present a barrier to wider
use of standardized conformity assessment in regulatory programs if the cost of purchasing
copyrighted standards is high and other reasonable means of accessing the materials are not
available to regulated entities and other stakeholders. 413 Several documents that provide context
for and explain these standards are publicly available. 414
2. Consider the characteristics of the regulatory standards and the regulatory target
Different types of regulatory standards and environments entail different considerations
about the suitability of a third-party program. While particular characteristics may not preclude
or determine suitability, they may weigh in favor or against.
The regulatory standards used in a third-party program should facilitate the objective
assessment of conformity. When possible, standards should be quantitative and the qualities of
interest should be measurable. 415 In the absence of objective standards, the risk of unreliability
and inconsistency in the determinations of third parties becomes higher. Notably, the majority of
programs surveyed above involve product standards that lend themselves to objective
measurement (e.g. the CPSC program, FDA’s premarket program, the FCC Program, the OSHA
program, and the EPA Energy Star and WaterSense programs).
When noncompliance with the regulatory standard implies significant risks to health, safety
or other highly valued regulatory interests, a third-party program may also be less suitable.
Inherently, reliance on third parties reduces the agency’s control over regulatory implementation.
412

ISO/UNIDO, supra note 10, at 170-174 (providing a chart of all standards and guides related to conformity
assessment).
413
See Administrative Conference of the United States, Recommendation 2011-5, Incorporation by Reference, 77
Fed. Reg. 2,257 (Jan. 17, 2011), available at http://www.acus.gov/research/the-conference-currentprojects/incorporation-by-reference/ (recommending best practices for federal agencies that incorporate by reference
extrinsic materials, including voluntary consensus standards, into regulations); see also Emily S. Bremer,
Incorporation by Reference in Federal Regulations, Report to the Administrative Conference 26-32 (Oct. 19, 2011)
(discussing ways agencies have increased public access to copyrighted standards); Comments of Scott Rafferty in
Response to Request for Information OMB-2012-0003 at 10-11 (posted May 18, 2012) (noting high cost of ISO
standards and suggesting that “lack of meaningful access is a particularly serious barrier to wider use of standardized
conformity assessment in federal regulatory programs… Agencies can be reluctant to delegate inspection or audit
functions if the procedural and operational principles are not openly posted on the internet.”).
414
See especially ISO/UNIDO, supra note 10; ANSI, National Conformity Assessment Principles for the United
States (2007), available at
http://publicaa.ansi.org/sites/apdl/Documents/News%20and%20Publications/Brochures/NCAP%20second%20editio
n.pdf; USTR, supra note 20; Johnson, supra note 6; Gordon Gillerman, Making the Confidence Connection:
Conformity Assessment System Design, ASTM Standardization News (December 2004), available at
http://www.astm.org/SNEWS/DECEMBER_2004/gillerman_dec04.html; Maureen A. Breitenberg, NIST, The
ABC’s of the U.S. Conformity Assessment System (April 1997), available at
http://gsi.nist.gov/global/docs/pubs/NISTIR_6014.pdf; National Research Council, supra note 28.
415
Hatanaka, supra note 320, at 708 (emphasizing the importance of measurability and stating that “that which is
being audited must be clearly identifiable, that is, it must be objective in the sense that it is (at least in principle)
independently verifiable”).

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If it is of paramount importance that a certain negative regulatory outcome be prevented, then the
agency should retain full regulatory control. Moreover, if the risks associated with
noncompliance are high, a more complete and costly conformity assessment system is warranted.
At some point, the costs of operating and overseeing the third-party program may be so high as
to exceed the costs of direct regulatory implementation and enforcement. As explained by a
NIST official, the more control that is needed, the greater the resources that are required. 416
Along these lines, voluntary regulatory standards established to confer a marketing label may
be more suited to a third-party program than mandatory standards that directly protect public
health and safety. Among the programs surveyed, the NOP, Energy Star, and WaterSense are
the best examples of the former. 417 When a program confers a marketing label, a failure in the
compliance assessment system has a more limited impact than when a program is established
directly to protect health and safety. Of course, the impact may still be significant and there is an
important governmental interest in the integrity of the marketing labels that agencies establish.
The CPSC program and the various FDA programs, in contrast, involve mandatory standards
designed to protect public health and safety. In some ways, this represents the most difficult case
for third-party compliance assessment. Notably, these programs were all created directly by
Congress in response to perceived deficiencies in the ability of the responsible agencies to
conduct an adequate level of testing or inspections directly.
Relatedly, a third-party program may be more suitable when the standard is a voluntary
consensus standard (VCS) rather than a governmental-unique standard. In the NRTL program,
the standards are all VCSs; in the CPSC program, some of the standards are VCSs. When the
standard is a VCS, private sector bodies may already familiar with it and have relevant
experience testing or certifying to it. Also, if the standard to be applied in the program is an
international standard, it becomes more likely that regulated entities will be able to utilize a
single third-party conformity assessment process to satisfy multiple regulatory jurisdictions. 418
Finally, when the regulated product or activity (the regulatory target) is international in scope
because of international trade, it may be better suited to a third-party program. Many of the
existing programs have regulatory targets with significant international dimensions. FDA’s
program for food safety is specifically focused on imported food. Children’s products, medical
devices, telecommunications equipment, electrical equipment, organic food, and energy- and
water-efficient products are all often manufactured in an international production chain. Thirdparty programs enable regulatory agencies to extend their reach outside national borders by
incorporating private actors around the globe. On the other hand, a new challenge arises:
agencies may have difficulty overseeing the private actors operating in other countries.
416

Interview (by phone), Gordon Gillerman, Chief, Standards Services Division, National Institute of Standards and
Technology, Aug. 15, 2012.
417
The NRTL program similarly confers a label, but it is different in that OSHA-regulated workplaces are required
to use labeled products and that the label is more related to health and safety than the other three programs.
418
An example is provided by ISO 13485, which by its name explicitly sets forth standards for quality management
systems for regulatory purposes. An FDA official explained that ISO 13485 is directly used in the regulation of
many other countries and could become the US regulatory standard in the future. Interview (by phone), David
Kalins, Office of Compliance, CDRH, FDA, July 31, 2012. The official further explained that FDA’s current QS
regulation is similar in many ways but demands more evidence that the quality system is being effectively
implemented. Id.

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3. Compare the benefits and drawbacks of third-party programs with other approaches
Agencies that are considering third-party compliance assessment programs to achieve
regulatory goals should compare this approach with others. Most importantly, the agency should
compare a third-party approach with direct governmental compliance assessment and with
requiring regulated entities to make a self-declaration of compliance.
An evaluation that EPA undertook when it decided not to require third-party certification of
greenhouse gas emissions reports provides a good example. 419 EPA commissioned a report that
evaluated three options: (1) facility self-certification and third-party verification paid for by the
reporting companies (i.e. third-party certification); (2) Facility self-certification with EPA
verification of submitted data (i.e. direct governmental compliance assessment); and (3) Facility
self-certification with little or no independent verification of submitted data (i.e. self-declaration
of compliance).
There may be situations in which self-declaration can serve the regulatory purpose at hand. 420
Some regulatory programs may involve “low to medium-risk areas in which market
mechanisms… can mitigate the negative consequences associated with non-compliances before
those consequences are intolerable to society.” 421 Some voluntary regulatory programs that
confer marketing labels may fit this description well. However, if an agency is considering a
third-party program, there may have already been a determination that self-declaration is
insufficient. In the Energy Star program, for example, self-declaration had been used previously
and a GAO audit had revealed that the self-declaration system opened the program to fraud and
abuse.
Also, self-declaration with little or no verification is rarely considered sufficient for
mandatory standards that relate to public health and safety. Indeed, laws to protect health and
safety – and their effective enforcement -- are often necessary precisely because market
mechanisms are ineffective in protecting against harm. For example, consumers are generally
unable to tell if children’s products contain lead or if food is infected by salmonella.
Environmental protection and other societal interests are similar: consumers can’t tell if a
product came from a highly polluting facility or an unsafe workplace.
As such, the question to be considered becomes whether the agency should directly assess
compliance or rely on third parties. An agency should consider which would be less costly and
which would provide greater benefits. The EPA report for example found that setting up a thirdparty program would imply significant costs to the agency. 422 Costs would be incurred in
developing the program; approving third parties and training them; ensuring that conflicts of
419

Memorandum from Ruth Mead et al., ERG, to Suzanne Kocchi and Kong Chiu, USEPA Headquarters,
Washington DC, Review of Verification Systems in Environmental Reporting Programs (Feb. 10, 2009) (on file
with author) [hereinafter “EPA Verification System Memo”].
420
Cf. Johnson, supra note 6, at 29 (stating that businesses prefer SDoC, and citing an economist who states that
because SDoC “is surely the cheapest form of conformity assessment, it is to be preferred except when it cannot be
trusted”).
421
Gillerman, supra note 414.
422
EPA Verification System Memo, supra note 419, at 26.

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interest were not present; and performing ongoing oversight. The report also observed that, even
with third-party certification, the EPA would probably need to develop specialized software to
receive and review the data and accompany third parties on site visits. In EPA’s decision not to
require third-party verification, EPA also emphasized that the activities necessary to set up a
third-party program would “slow down implementation of the [greenhouse gas reporting]
rule.” 423 Several of the third-party programs reviewed above also suggest that program
establishment may be costly and slow. 424
On the other hand, even if there are significant set-up costs, they may be justified in light of
cost savings or benefits generated in later years. For example, with its reliance on TCBs, the
FCC now oversees the issuance of more than four times the number of equipment authorizations
annually as it did fifteen years ago with roughly the same number of staff (7-10 employees). 425
If the program had not been established, it can be expected that more staff would have been
hired. Also, even high set-up costs might be justified if the long-term alternative is not having
the program at all. Due to EPA resource constraints, the Water Sense program might not have
been pursued without a third-party approach.
In some situations, set-up costs may not be as high because third parties are already doing
similar assessments for other purposes. An agency may not have to do as much in terms of
identifying suitable third parties and training them. Also, the costs to industry may be lower
because they are already contracting with these third parties. In Water Sense, for example, one of
the most important types of products – toilets - was already often the subject of private
conformity assessment. Manufacturers were engaging third parties to certify that their products
met certain operational standards set by the Canadian government or state and local governments
in the US. When WaterSense established its third-party program to assess conformity with water
efficiency standards, the existing conformity assessment networks could be leveraged. Similar
networks may already be present in the arena of food safety due to the prevalence of private
conformity assessment. 426

423

74 Fed. Reg. 56282 (Oct. 30, 2009) (stating “developing the third party verification approach would require EPA
to establish and develop emissions verification protocols and a system to qualify and accredit the third party
verifiers, and to develop and administer a process to ensure that verifiers hired by reporting facilities do not have
conflicts of interest. Such a program could require EPA to review numerous individual conflict of interest screening
determinations made each time a reporter hires a third party verifier. Even if EPA were to partner with an existing
program or organization to accredit verifiers, EPA would still need to develop the criteria and systems described
above to implement this rule and ensure high quality emissions verification given the unique reporting requirements
of this rule. These efforts would slow down implementation of the rule and sharing of data”).
424
See especially notes 332 to 340 and accompanying text (on the shrimp aquaculture pilot) and note 366 and
accompanying text (on the FDA AP Inspections program).
425
Interview (by phone), George Tannahill, FCC Office of Engineering and Technology, August 27, 2012. Between
2000 and 2011, the number of equipment authorization applications grew from 3,168 to 13,645. In the year 2000,
FCC processed 83.5% of the applications (2,645 applications). In 2011, FCC processed only 1.6% of applications
(218 applications), and TCBs processed the rest (13,427 applications). Id.
426
In terms of food safety and possibly other areas of product safety, it is important to note that the private
conformity assessment processes that exist are often not considered to be reliable. See supra note 297 and
accompanying text. An agency that seeks to incorporate existing networks into its compliance assessment program
would need to be particularly careful to set third-program rules that enhance the reliability of third-party
determinations and otherwise instill public confidence.

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An agency should also consider the different benefits that derive from either directly
verifying compliance or relying on third-party verification. The outputs of the two approaches
differ in ways that may be important. For example, FDA staff does not view the compliance data
acquired through the AP Inspections program as equivalent to the compliance data acquired
directly through an FDA inspection of a medical device facility. If the AP inspection suggests
there may be violations, FDA must follow up with its own inspections to collect the evidence
needed for a formal enforcement action. 427 Similarly in the PMAP, FDA’s pilot program for
medical device facility inspections established in coordination with Canada, FDA found that “the
level of detail in the narrative needs to be greater in order for the regulators to have a more
complete picture of the audit/inspection and the manufacturer’s organization and operation.” 428
The narrative portion of the auditors’ reports under the PMAP varied in length from three to
twenty pages, with large variability in the format and level of detail. 429
Direct governmental verification may also enable more consistency in compliance data and
quicker release of data to the public. Rather than adopt a third-party approach for greenhouse
gas emission reporting, EPA decided to have facilities submit data electronically and to perform
a series of automated data checks with follow-up questions to regulated entities and facility
audits as necessary. EPA found that “the combination of comprehensive electronic review and a
flexible and adaptive program on on-site auditing will enable us to effectively target verification
resources while also providing the necessary consistency and quality in the data.” 430 EPA also
found that direct verification approach would enable it to make data available to the public more
quickly. With third-party verification, three to six months might be needed for third-party
verifiers to perform their verification role, and EPA would still need to review the data and
perform consistency checks after third-party verification was complete. 431
Third-party programs generally have the drawback of adding complexity and principal-agent
problems to the regulatory process. With a third-party program, many decisions must be made
about the roles and responsibilities of new actors, namely certification bodies, testing bodies, and
accreditation bodies. The regulatory agency must also assume a new role in overseeing these
actors. The new roles seem likely to make the regulatory framework more complicated, and
possibly more difficult for the public to understand and participate in. Also, the introduction of
new actors creates a “principal-agent problem.” A principal-agent problem arises when a
principal (here, the regulatory agency) chooses an agent (the third party) to act on its behalf.
Because the two parties have different interests and the agent has more information, the principal
has difficulty ensuring that the agent is acting in the principal’s best interest. 432 In third-party
programs for regulatory purposes, such principal-agent problems are likely to be exacerbated by
the fact that the third-parties are not only agents of the regulatory agency but also paid agents of
the regulated entities. 433
427

Interview (by phone), David Kalins, Office of Compliance, CDRH, FDA, July 31, 2012.
PMAP report, supra note 165, at 3.
429
Id.
430
74 Fed. Reg. 56282 (Oct. 30, 2009).
431
Id. at 56283.
432
See A Glossary of Political Economic Terms: Agency Problem, http://www.auburn.edu/~johnspm/
gloss/agency_problem (last visited Sept. 12, 2012).
433
Cf. Amy Shapiro, Who Pays the Auditor Calls the Tune?: Auditing Regulation and Clients’ Incentives, 35 SETON
HALL L. REV. 1029, 1031 (2005) (arguing that the problem of auditing in the financial sector is that auditors have
428

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4. If the use of third parties will be voluntary, evaluate whether sufficient incentives exist to
attract participation
If a third-party program is being contemplated in which regulated entities would have the
choice of contracting with third parties or being assessed directly by the agency, the agency
should consider whether regulated entities are likely to use the program. The low level of
participation in the AP inspections program exemplifies the problem. The FDA invested
significant resources into its establishment but it was seldom used by industry. 434 While the
program offered several incentives for participation, they were outweighed by a series of
disincentives including the cost of hiring the third party and the perceived risk that FDA would
ultimately take a harder look at its facility. 435
Agencies should evaluate whether sufficient incentives can be created for the use of a
voluntary third-party program in light of the costs and risks the program would impose. A
program may attract more participation if the regulated entity is able to avoid paying an agencyassessed user fee if it contracts with a third party. Another incentive would be provided if the
third-party conformity would satisfy the regulatory requirements of other jurisdictions in which a
manufacturer operates or sells products. This would generally require a federal agency to
coordinate with their counterparts in other countries to harmonize standards and assessments
procedures. In this vein, the FDA is currently developing a Medical Device Single Audit
Program (MDSAP) in coordination with Canada, Brazil, and Australia. 436 The goal of the
program is to enable a single audit/inspection of a medical device manufacturer’s quality
management system would satisfy the regulatory requirements of all the jurisdictions.
B. Establishing a Third-Party Program
1. Calibrate the third-party program to the level of risks associated with noncompliance
An important principle of private third-party conformity assessment is that the design of the
conformity assessment system should be driven by the degree of assurance its user needs. 437 In
some cases, a user – such as a product purchaser -- wants some independent assurance of
conformity, but occasional instances of nonconformity will not cause major problems to the
purchaser’s manufacturing process or business interests. The purchaser might be satisfied with
occasional third-party testing of the product. In other cases, a purchaser may be at risk of
incurring high costs due to a nonconformity in a purchased product. The purchaser might instead
impose a variety of special requirements on the supplier and require third-party certification.
two masters and that the law needs to be written “so that auditors recognize proper incentives and serve only one
master, a master whose own interests are aligned with those of the investing public”).
434

Cf. FDA 13485 Program Guidance, supra note 38, at 3 (stating that “FDA has committed significant resources to
creating the AP for Inspections program and continues to maintain it.) It is worth noting that this program was
required by statute.
435
See supra notes 383 to 389 and accompanying text.
436
Interview (by phone), Kim Trautman, Associate Director, International Affairs, Office of the Center Director,
Center for Devices and Radiological Health, U.S. Food and Drug Administration, Jun. 5, 2012.
437
See supra note 24 and accompanying text.

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The same principle applies in third-party programs for regulatory purposes. If the risks
associated with noncompliance are very high, a third-party program should be designed to
provide a maximal degree of reliability in the determinations by third parties. This could be
accomplished in a regulatory third-party program through accreditation rules that set high
standards for third parties to be accredited, selection rules that carefully guard against conflicts
of interest and the use of subcontractors, performance rules that require a rigorous and complete
set of assessment activities, reporting rules that furnish ample information about the outcomes of
the assessment, and a full array of governmental oversight and enforcement actions. Such rules
can be expected to enhance the competence and independence of third-party activities and thus
the reliability of their determinations.
Yet, such rules are also likely to entail high costs for both the regulatory agency and
regulated entities. Such rules may, in some cases, represent an instance of “over-design” that
adds costs to the system, and potentially to the products or processes assessed, without
compensating benefits. 438 In some cases, the regulatory objective can be achieved with less
intensive conformity assessment activities and with third parties who are not trained as
thoroughly as they could be or who are not completely independent.
For example, in several programs detailed above, the agency does not require that the
laboratory that tests products be completely independent of the manufacturer. Under the CPSC’s
rules, manufacturers’ laboratories can test products if they meet certain “firewalled” criteria. For
Energy Star and WaterSense, products can be tested in a manufacturer’s lab under certain
circumstances. More generally, the programs vary quite a bit in the extent they have adopted
rigorous accreditation, selection, performance and reporting rules. In some, governmental
oversight has been sporadic and little evidence exists of active enforcement of third-party
program rules.
It bears emphasis, however, that many types of regulations for which third-party programs
are considered may be in the high risk category, where noncompliance implies risks to health,
safety, and other valued regulatory goals. For such regulatory purposes, a relatively complete
third-party conformity assessment may indeed be appropriate despite its costs.
2. Incorporate existing conformity assessment standards and activities when possible
Agencies should strongly consider relying on existing conformity assessment standards and
related activities when they establish third-party programs. 439 Doing so can reduce the costs of
the program for both the regulatory agency and regulated entities. Relevant conformity
assessment standards and activities may be occurring through other governmental agencies or in
the private sector.
Sometimes a new third-party program may be able to rely on another governmental agency’s
conformity assessment activities. During development of the WaterSense program, for example,
438

Gillerman, supra note 414.
Cf. NIST Guidance, supra note 402, § 287.4(c) (advising agencies to “Use the results of other governmental
agency and private sector organization conformity assessment activities to enhance the safety and efficacy of
proposed new conformity assessment requirements and measures”); id. at § 287.4(f) (advising agencies to “Consider
using the results of other agencies’ conformity assessment procedures”).
439

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companies were concerned that participation in WaterSense would require them to duplicate
testing and reporting required for Department of Energy plumbing standards and the Federal
Trade Commission appliance labeling standards. 440 In response, the WaterSense program made
its reporting requirements similar or identical to what manufacturers already had do for DOE and
FTC.
Extensive private sector conformity assessment standards and activities are also available to
be incorporated into regulatory third-party programs. 441 Most significantly, as described above,
ISO/IEC have developed a set of international conformity assessment standards and an
international conformity assessment industry has emerged to conduct related activities. 442 These
standards set forth how testing bodies, certification bodies, and accreditation bodies should
function.
Regulated entities have expressed a preference for agencies to incorporate private conformity
standards and activities rather than creating “government-unique” conformity assessment. 443
Regulated entities fear that government-unique standards with be duplicative of private sector
conformity assessment activities that they already engage undertake for business reasons. They
also opine that government-unique conformity assessment standards “may be expensive to
develop and maintain, may impose additional costs on the private sector, and may not be
recognized beyond national boundaries.” 444
Using international standards of conformity assessment enhances the possibility that the
same conformity assessment might serve regulatory needs in other countries. For example, a
federal agency may require that a certain product be tested by a lab accredited to ISO 17025 for
conformity with a particular safety standard. If another country has the same safety standard or
otherwise considers the US standard equivalent, and if respects the international accreditation of
the lab, then the manufacturer may not need to undertake any further action to legally market its
product in that other country.
440

EPA WaterSense, Comments on the May 2007 Draft WaterSense Certification Scheme 14 (Nov. 2007), available
at http://www.epa.gov/WaterSense/docs/cert_scheme_comments508.pdf; cf. FTC, Labeling FAQs,
http://www.ftc.gov/bcp/conline/edcams/eande/faq.htm (last visited Sept. 12, 2012); DOE, Energy Efficiency and
Renewable Energy, Building Technologies Program,
http://www1.eere.energy.gov/buildings/appliance_standards/residential/plumbing_products.html (last visited Sept.
12, 2012).
441
Cf. NIST Guidance, supra note 402, § 287.4(e) (directing agencies to “Identify appropriate private sector
conformity assessment practices and programs and consider the results of such practices and/or programs as
appropriate in existing regulatory and procurement actions.”)
442
NIST Guidance, supra note 402, § 287.4(d) (directing agencies to “Use relevant guides or standards for
conformity assessment practices published by domestic and international standardizing bodies as appropriate in
meeting regulatory and procurement objectives”).
443
See, e.g., Comment of Air-Conditioning, Heating and Refrigeration Institute (AHRI) on Federal Participation in
the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities (Apr. 26,
2012 ), available at https://law.resource.org/pub/us/cfr/regulations.gov.docket.02/0900006480ffd5af.pdf.
444
See id. at 3; see also American National Standards Institute, ANSI Response to Request for Comments, Federal
Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment
Activities 5, available at
http://publicaa.ansi.org/sites/apdl/Documents/Standards%20Activities/Critical%20Issues/FederalRegister_OMBA11
9/ANSI%20Response%20OMB-A119_FINAL.pdf (advocating solutions based on VCS to reduce the costs of
compliance for industry).

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A significant way in which an agency can rely on existing conformity assessment standards
and activities is by recognizing private sector accreditation bodies to accredit certification and
testing bodies rather than accrediting them directly. As in some existing programs, an agency
may require that the private accreditation body operate in accordance with ISO/IEC 17011 and
be a member of an international organization like IAF or ILAC that coordinates a peer-review
process to evaluate accreditation bodies for membership. 445 When an agency relies on the
ISO/IEC standards for recognition, it avoids having to set all such standards itself. Also, if the
agency requires that the accreditation be a member of IAF or ILAC, those organizations conduct
periodic assessments of the accreditation body.
If an agency decides to accredit certification bodies directly, it may still find ISO 17011 to be
useful as a guide for its own accreditation activities. The NOP regulations initially required that
the NOP assemble a peer review panel pursuant to Federal Advisory Committee Act (FACA) to
evaluate its accreditation procedures. 446 In its 2010 review of the program, USDA OIG found
that the NOP had never established the panel, reportedly due to budget constraints. In response
to the OIG report, the NOP proposed an alternative, namely that it would amend its regulations
and instead develop “a quality management system that complies with the criteria set forth in
NIST’s National Voluntary Conformity Assessment Evaluation program (NVCASE) as well as
the requirements of ISO/IEC 17011:2004.” 447
The FDA’s aquaculture pilot illustrated some of the challenges faced by agencies that
directly accredit certification bodies, particularly in an international context. 448 FDA reports that
after it announced the pilot, it received applications from candidate certification bodies. It found,
however, that the candidate CBs did not reliably submit supporting documentation in their
application and determining whether CBs were qualified required a greater investment of
resources than it had anticipated. FDA recommended that “in any future program, FDA should
be clearer in its expectations for the amount and type of information needed to adequately
evaluate a firm’s application.” 449
Notably, programs that anticipate reliance on certification bodies in other countries may be
particularly well-served by relying on private accreditation bodies. Such accreditation bodies
may have more institutional competence than the agency in dealing with foreign companies and
may even be located in that country or the same region of the world. Of course, the issue then
arises of how the agency will oversee the foreign activities of private accreditation bodies and
the foreign certification bodies they accredit.
Importantly, when an agency incorporates international standards into its requirements for
certification, testing, or accreditation bodies, it can supplement those standards in various ways.
An agency, for example, may require that a certification body be accredited by an private
accreditation body to ISO Guide 65 and also meet a certain set of requirements specific to a
third-party program. The accreditation body might be given responsibility for assessing
445

See supra notes 19 to 23 and accompanying text.
USDA OIG, supra note 345, at 3.
447
Id. at 19; Cf. USDA, AMS, GV Division, “Quality Manual for Accrediting Conformity Assessment Bodies,”
http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5073714 (last visited Sept. 12, 2012).
448
Assessment of Pilot for Aquacultured Shrimp, supra note 298.
449
Id. at 7.
446

65

Third-Party Programs to Assess Regulatory Compliance
conformity with the program-specific requirements, or the agency might do its own assessment
as part of “recognizing” an accredited certification body for participation in the program.
Through these program-specific requirements, the agency can put flesh on the sometimes
bare-bones requirements of the international standard. For example, ISO Guide 65 contains a
basic requirement that certification bodies conduct surveillance of certified companies or
products. Through program-specific requirements for accreditation of the certification body, the
agency could require it to undertake particular types of surveillance activities at particular times.
Similarly, an agency might specify particular conflict of interest rules that supplement ISO Guide
65’s general requirement that certification bodies be independent and impartial.
3. Ensure that the agency and the public have appropriate access to information
Private third-party conformity assessment systems differ from regulatory third-party
programs in a key respect. In the latter, the user of the system is ultimately the public, and the
regulatory agencies that establish third-party programs are accountable to the public for their
outcomes. As a result, the responsible agency and the public should have access to a variety of
types of information about the operation of the third-party program.
The public should have access to and input into the procedures by which a regulatory thirdparty program is run. The development of program rules and guidance should include public
notice and participation. When agencies incorporate international conformity assessment
standards into their regulatory processes, important concerns arises about the public availability
of those standards. 450 Because ISO/IEC standards are copyright protected, they are not easily
accessible to interested members of the public. ACUS has recommended that when an agency
considers “incorporating copyrighted material by reference, the agency should work with the
copyright owner to ensure the material will be reasonably available to regulated and other
interested parties both during rulemaking and following promulgation.” 451
The public should also have access to certain types of information about the compliance of
regulate entities. If a third-party program replaces a regulatory compliance program, the same
types of information that were accessible to the public before the implantation of the third-party
program should remain accessible after. In some cases, however, it may be appropriate and
desirable to provide additional compliance information to the public that was not systematically
available before the third-party program came into effect.
The public should have access to certain types of information about the third parties that
participate in the regulatory program. The agency should make clear the roles and identities of
the various third-party actors. In several programs discussed above, Congress has required that
agencies maintain a public list of the private bodies associated with the program. Other
information about the characteristics and activities of the private bodies may also be important to
create public confidence in the integrity of the third-party program.
For effective oversight, the government agency will also need certain types of information
from accreditation, certification and testing bodies. For example, testing and certification bodies
450
451

See especially Administrative Conference of the United States, supra note 413.
Id. at 5.

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Third-Party Programs to Assess Regulatory Compliance
might be required to report potential conflicts of interest before performing the conformity
assessment. They might also be required to report the dates of their conformity assessment
activities so that agency officials can conduct a site visit for oversight purposes. In addition to
the positive or adverse determination that is the ultimate outcome of the conformity assessment
process, bodies can be required to submit documents gathered or generated during the process
that explain and support the determination. To the extent that information required of third
parties constitutes confidential business information, it can be held back from the public in
accordance with the Freedom of Information Act and other applicable laws.
Information disclosure requirements may have the effect of enhancing the degree to which
third-party answer directly to the agency rather than just the regulated agency that has contracted
it. For example, FSMA requires that accredited labs send their test results directly to the
FDA. 452 One commentator has called this “a game-changing requirement” that “alters the whole
dynamic between labs and their clients,” making them “directly responsible to the public (i.e.,
the government) to ensure that information is disclosed about their client.” 453
Importantly, international conformity assessment standards include confidentiality provisions
that may prevent the flow of information in a regulatory third-party program. When EPA
requested comments on a draft of its rules for the recognition of accreditation bodies that would
accredit laboratories, it received comments to the effect that several types of information that it
initially wanted from the accreditation bodies were contrary to the confidentiality provisions of
ISO 17011. 454 For example, EPA initially wanted to be informed of the results of ILAC’s peer
evaluation. After being informed that such information was against ISO 17011's confidentiality
rules, EPA struck the requirement. 455
On the same basis, a commenter also objected to EPA’s requirement that recognized
accreditation bodies provide EPA with copies of laboratory assessment documentation including
corrective action plans and documentation about the resolution of deficiencies. In this case,
however, EPA responded that the release of this information by the AB is an integral aspect of
EPA's recognition of the laboratory and suggested that the AB should seek the laboratory’s
written consent to share this information with EPA. EPA’s response also indicates how an
agency can use program-specific rules to essentially modify the default confidentiality rules
contained in the international standards.
While confidentiality provisions should not hinder the flow of information that is necessary
for adequate regulatory oversight and public accountability, some would argue that certain
confidentiality assurances ultimately serve regulatory goals. For example, the FDA has provoked
a negative reaction from industry by interpreting FSMA to require that accredited auditor must
immediately notify the FDA if it “discovers a condition that could cause or contribute to a
452

21 U.S.C. § 350k(b)(2).
Daniel R. Dwyer, Third-Party Accreditation under the FDA Food Safety Modernization Act (March 7, 2012),
http://www.kkblaw.com/blog/archives/206.html (last visited Sept. 12, 2012).
454
See http://www.energystar.gov/ia/partners/downloads/mou/AB_Comment_Matrix.pdf (providing matrix that
summarizes comments on the condition and criteria for recognition of accreditation bodies for Energy Star
laboratory recognition); see also http://www.energystar.gov/index.cfm?c=partners.intro_conf_calls#accred (listing
of stakeholder comments on draft accreditation body requirements).
455
Id. at 2.
453

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Third-Party Programs to Assess Regulatory Compliance
serious risk to the public health” during either a regulatory or a consultative audit. 456 As stated
by one industry commenter, “We disagree with this interpretation of the FSMA and maintain that
such a position could undermine the purpose of the law, ultimately dissuading manufacturers
from using third party auditors—a move that could negatively impact food safety and hinder
FDA’s efforts to efficiently use its own resources.” 457 Agencies should consider pros and cons
of limiting the types of confidentiality that regulated entities expect when they contract privately
with third parties.
Information technology (IT) can play an important role in enabling the flow of information in
a third-party program. Regulated entities, third-party conformity assessment bodies, and
accreditation bodies can be required to e-report certain types of information. Also, with welladministered IT systems, information that should be public can be more promptly made public.
In its shrimp aquaculture pilot, the FDA made a special note of the need for new “IT data
systems to capture and report on results of assessments and audits.” 458
In sum, a change in the “communicative energy” of third-party conformity assessment is
required in a regulatory context.459 The default in the private sector is for the third party to disclose
his audit report exclusively to his client. 460 If interested parties external to the contractual
relationship are privy to the audit’s results at all, they are likely to be told little more than whether
the subject of the audit conformed or not. 461 For an assessment to serve public regulatory
purposes, much richer information about its process and outcomes is necessary. 462
4. Commit to undertaking appropriate oversight activities
When an agency establishes a regulatory third-party program, its role changes from being the
guardian to guarding the guardians. 463 Governmental oversight of third-party programs is
essential to ensuring that the program is fulfilling its regulatory purpose. In addition to
exercising direct oversight, an agency can also require third parties to conduct and report
surveillance activities that provide additional information to the agency about program operation.
For a successful third-party program, a regulatory agency must implement and enforce the
rules it establishes for program actors. In principal, the same enforcement strategies and tools
would apply in enforcing third-party program rules as apply in enforcing other regulatory rules.
The agency must require certain types of reporting, conduct regulatory inspections to verify
compliance, and impose sanctions as deemed necessary to respond to noncompliance. The
456

21 U.S.C. § 384d(c)(4)(A); see also FDA, Imports, http://www.fda.gov/Food/FoodSafety/FSMA/ucm257980.htm
(answering in the affirmative the question, “I.4.2 Is the accredited auditor required to notify the FDA if a condition
of concern is found during a consultative audit?”).
457
Comment of International Dairy Foods Association, Re: Docket Nos. FDA-2011-N-0143, FDA-2011-N-0144,
FDA-2011-N-0145, FDA 2011-N-0146; Food and Drug Administration; FDA Food Safety Modernization Act: Title
111—A New Paradigm for Importers (Apr. 28, 2011), available at
http://www.idfa.org/files/IDFA_FSMA_Import_Comments_042811.pdf.
458
Assessment of Pilot for Aquacultured Shrimp, supra note 298, at 26.
459
Christine Parker, Regulator-Required Corporate Compliance Program Audits, 25 LAW & POL’Y 221, 235 (2003).
460
See id.
461
Id.
462
See id.
463
Martin Shapiro, WHO GUARDS THE GUARDIANS? (1988).

68

Third-Party Programs to Assess Regulatory Compliance
difference is that the agency’s third-party program rules apply to the private bodies that form the
third-party system rather than the regulated entities themselves.
An agency that establishes a third-party program should set forth, to the extent possible, how
it intends to conduct such oversight. The agency may determine, for example, that it will assess
the performance of accreditation bodies every few years; that it will conduct a certain number of
audits of accreditations or certifications; or that it will carry out a market surveillance program
that will test a certain number of products off the shelf each year. Special rules may be
necessary to ensure an oversight activity. In the shrimp aquaculture pilot, for example, FDA
found that entities subject to certification were not always willing to allow an FDA official to
accompany the certification body on a site visit. FDA concluded that it should “consider
requiring, as a condition for accreditation, that CBs maintain agreements with establishments
they certify to allow FDA to monitor or otherwise participate in certification audits as
necessary.” 464
The agency would also retain enforcement authority over regulated entities, which could be
used when the agency discovers through the third-party program or otherwise that a regulated
entity is out of compliance. In the NOP program, for example, AMS uses its traditional
enforcement powers to respond to situations where organic operations knowingly market
nonorganic food as organic. 465 Its enforcement actions “play a central role in maintaining the
validity of the program and ensuring public trust” in the label. 466
As in traditional regulatory programs, agencies should be equipped to receive and respond to
information about potential noncompliances from the public. In an investigation of the NOP
program, the USDA OIG found that that “NOP officials did not have adequate procedures or a
system for tracking the receipt, review, and disposition of complaints and any subsequent
enforcement actions.” 467 When third parties have played a role in assessing compliance, the
agency might be able to direct a public complaint to the relevant third-party body for an initial
investigation. The agency, however, would remain ultimately responsible for ensuring that the
complaint was resolved. The agency could also require that employees of accreditation bodies
and conformity assessment bodies be given information about how to anonymously contact an
official within the regulatory agency to report any potential problems.
The agency may require certain activities of accreditation bodies and conformity assessment
bodies that provide information for oversight purposes. Accreditation bodies may be required
for example, to conduct periodic audits of the certification bodies they accredit. Certification
bodies may be required to conduct surveillance audits of the entities and products they certify. 468
In both cases, the agency might also require that some or all of the audits be unannounced rather

464

Assessment of Pilot for Aquacultured Shrimp, supra note 298, at 21.
USDA OIG, supra note 345.
466
Id. at 8.
467
Id. at 1.
468
Energy Star requires CBs to operate a partner-funded verification testing program to ensure products meet
Energy Star standards. DOE, Energy Star Appliance Verification Testing – Pilot Program Summary Report 22 (Feb.
3, 2012), http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/
energystar_pilotprogram_report_02_03_12.pdf (last visited Sept. 12, 2012).
465

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Third-Party Programs to Assess Regulatory Compliance
than announced. 469 In its investigation of the NOP’s organic milk program, the OIG milk found
that certifying agents were not performing unannounced inspections of organic dairy
operations. 470 While unannounced inspections are not required by NOP regulations, OIG and
other stakeholders consider them to play a “critical role” in ensuring compliance. 471 Notably, if
the rules of a third-party program do not require unannounced audits, accreditation and
certification bodies will have little incentive to do them for fear of offending clients.
Unannounced audits of facilities can be facilitated by requiring regulated entities to agree to
them as a condition of certification.

469

Albersmeier et al., supra note 3 , at 933, tbl. 5 (showing that a superior risk-oriented approach includes
“randomly chosen audits without announcement” rather than “regular audits with announcements”).
470
USDA Office of Inspector General, Agricultural Marketing Service, National Organic Program – Organic Milk,
Audit Report 01601-0001-Te (2012), available at http://www.usda.gov/oig/webdocs/01601-0001Te.pdf?utm_source=Organic+Milk+Audit+Report+Published&utm_campaign=Organic+milk+audit+report&utm_m
edium=email.
471
Id. at 17.

70

Appendix A: Interviews by Phone and Email
By Phone:
David Alderman, Standards Services Division, National Institute of Standards and Technology
Cheri Courtney, Director, Accreditation & International Activities Division, National Organic
Program, U.S. Department of Agriculture
Bob Biersner, Office of the Solicitor, U.S. Department of Labor
Charlotte Christen, U.S. Food and Drug Administration
Bridget Dooling, Office of Information and Regulatory Affairs, U.S. Office of Management and
Budget
Sandra B. Eskin, Director, Food Safety Campaign, The Pew Health Group
Jim Estep, Occupational Safety & Health Administration, U.S. Department of Labor
Gordon Gillerman, Chief, Standards Services Division, National Institute of Standards and
Technology
David Hinden, Office of Enforcement and Compliance Assurance, U.S. Environmental
Protection Agency
Eamon Monahan, Energy Star Program, U.S. Environmental Protection Agency
David Kalins, Office of Compliance, Center for Devices and Radiological Health, U.S. Food and
Drug Administration
Kevin Robinson, Occupational Safety & Health Administration, U.S. Department of Labor
David Rostker, Assistant Chief Counsel, Office of Advocacy, U.S. Small Business
Administration
Ramona Saar, Standards Services Division, National Institute of Standards and Technology
Jasmeet Seehra, Office of Information and Regulatory Affairs, U.S. Office of Management and
Budget
Jon Silberman, Office of Enforcement and Compliance Assurance, U.S. Environmental
Protection Agency
George Tannahill, Federal Communications Commission

A-1

Stephanie Tanner, WaterSense Program, U.S. Environmental Protection Agency
Kim Trautman, Associate Director, International Affairs, Office of the Center Director,
Center for Devices and Radiological Health, U.S. Food and Drug Administration
Peter Unger, President & CEO, ILAC Chair, American Association for Laboratory Accreditation
(A2LA)
Mike Zatz, Chief, Market Sectors Group, Energy Star Commercial and Industrial Branch,
Office of Air and Radiation, U.S. Environmental Protection Agency
By Email:
Jean Cooper, Senior Staff Fellow, U.S. Food and Drug Administration
Lauren Kavanaugh, Quality Management Branch Chief, Grading and Verification Division,
Agricultural Marketing Service, U.S. Department of Agriculture
Linwood L. Rayford, III, Assistant Chief Counsel for Food, Drug and Health Policy, Office of
Advocacy, U.S. Small Business Administration

A-2

Appendix B: ISO Standards for Conformity Assessment Activities

Conformity Assessment Activity
Supplier’s Declaration of Conformity (SDoC)
Testing

Inspection

Certification

Accreditation

Relevant International Standard
ISO/IEC 17050, “Conformity assessment Supplier's declaration of conformity”
ISO/IEC 17025, “General requirements for the
competence of testing and calibration
laboratories.”
ISO/IEC 17020, “Conformity assessment -Requirements for the operation of various
types of bodies performing inspection”
ISO/IEC Guide 65, “General requirements for
bodies operating product certification systems”
(expected to be replaced by ISO/IEC 17065,
“Conformity assessment -- Requirements for
bodies certifying products, processes and
services”).
ISO/IEC 17011, “General requirements for
accreditation bodies accrediting conformity
assessment bodies.”

A-3

Appendix C: List of Abbreviations

Abbreviation

Description

AAMI
A2LA
AMS
ANSI
AP
AP Program
ASTM

Association for the Advancement of Medical Instrumentation
American Association for Laboratory Accreditation
[USDA] Agricultural Marketing Service
American National Standards Institute
Accredited Person(s)
Inspection by Accredited Persons Program
American Society for Testing and Materials
Collective term for conformity assessment standards and guides developed by
the ISO Committee on Conformity Assessment
Certification Body
Center for Measurement Standards/Industrial Technology Research Institute
(China)
Medicare Conditions of Participation
Consumer Product Safety Commission
Consumer Product Safety Improvement Act of 2008
Curtis Straus LLC
EPA Design for Environment label
Department of Energy
Environmental Protection Agency
Federal Advisory Committee Act
Frequently Asked Questions
Federal Communications Commission
Food and Drug Administration
Food and Drug Administration Amendments Act of 2007
FDA Modernization Act of 1997
Federal Food, Drug, and Cosmetic Act
Factory Mutual Research Corporation
Freedom of Information Act
Food Safety Modernization Act of 2011
Government Accountability Office
[USDA] Good Agricultural Practices/Good Handling Practices Audit Program
Heating, ventilation, and cooling equipment
International Accreditation Forum
International Accreditation Services Inc.
Interagency Committee on Standards Policy
International Electrotechnical Commission
International Laboratory Accreditation Cooperation
[FDA] Investigations Operations Manual
International Organization for Standardization
International Organization for Standardization/ International Electrotechnical
Commission
International Organization for Standardization / United Nations Industrial
Development Organization
Information technology
Medical Device Single Audit Program
Medical Device User Fee and Modernization Act of 2002
IAF Multilateral Recognition Agreement

CASCO toolbox
CB
CMS/ITRI
CoP
CPSC
CPSIA
CSL
DfE
DOE
EPA
FACA
FAQs
FCC
FDA
FDAAA
FDAMA
FDCA
FMRC
FOIA
FSMA
GAO
GAP/GHP
HVAC
IAF
IAS
ICSP
IEC
ILAC
IOM
ISO
ISO/IEC
ISO/UNIDO
IT
MDSAP
MDUFMA
MLA

A-4

Abbreviation

Description

MRA
NIST
NOP
NRTL
NTTAA
NVCASE
OIG
OMB
OSHA
PMAP
RF
QMI
QS
SDoC
SMTL
TCB
TPCAB
TPRB
UL
UNIDO
USDA AMS
USTR
VCS
VQIP
WMTL

ILAC Mutual Recognition Agreement
National Institute of Standards and Technology
National Organic Program
National Recognized Testing Laboratory
National Technology Transfer and Advancement Act of 1995
[NIST] National Voluntary Conformity Assessment Evaluation program
Office of Inspector General
Office of Management and Budget
Occupational Safety and Health Administration
Pilot Multi-Purpose Audit Program
Radio frequency
Quality Management Institute (Canada)
Quality System
Supplier’s Declaration of Conformity
Supervised Manufacturers’ Testing Laboratory
Telecommunication Certification Body
Third Party Conformity Assessment Body
[FDA] Third Party Recognition Board
Underwriters Laboratories, Inc.
United Nations Industrial Development Organization
USDA Agricultural Marketing Service
Office of the United States Trade Representative
Voluntary consensus standard
Voluntary Qualified Importer Program
Witnessed Manufacturers’ Testing Laboratory

A-5