## Facts

- Congress enacted the Federal Technology Transfer Act (FTTA) authorizing federal laboratory directors to enter “cooperative research and development agreements” (CRADAs) with private entities to facilitate technology transfer.
- The Environmental Monitoring Systems Laboratory–Cincinnati (EMSL–CI), an EPA laboratory involved in developing and certifying reference materials, entered into three CRADAs with NSI Environmental Solutions, Inc. (NSI).
- Chem Service, Inc., a private producer and seller of certified reference materials and a market competitor of NSI, was not a party to the CRADAs.
- Chem Service alleged the CRADAs effectively permitted NSI to sell EPA-developed reference materials and associate the products with EPA in a way that conferred competitive advantage.
- Chem Service contended the challenged CRADA provisions authorized commercial activity based on preexisting technology and functioned as procurement arrangements, thereby avoiding federal procurement and competitive bidding requirements.
- Chem Service sued under the Administrative Procedure Act (APA) to enjoin federal defendants from implementing the disputed CRADA provisions, asserting that 31 U.S.C. § 6303 required use of procurement contracts (and corresponding procurement laws) if the government was, in substance, procuring goods or services.

## Issues

1. Whether a non-party competitor has APA standing under the “zone of interests” test to challenge CRADAs allegedly used to bypass federal procurement requirements.
2. Whether the disputed portions of the CRADAs are, in substance, procurement contracts under 31 U.S.C. § 6303, requiring compliance with federal procurement laws.

## Decision

- The Third Circuit reversed the district court’s dismissal for lack of standing as to Chem Service’s principal procurement-based claim.
- The court held Chem Service’s interests were arguably within the zone of interests protected or regulated by the relevant statutory scheme, including procurement statutes implicated by the alleged circumvention.
- The court remanded for the district court to determine whether the contested CRADA provisions were actually procurement contracts under 31 U.S.C. § 6303 and to conduct further proceedings consistent with that determination.
- The court did not finally decide whether the CRADAs were procurement contracts; it decided only that Chem Service could obtain judicial review of that question under the APA.

## Legal Principles

- APA standing requires that the plaintiff be “adversely affected or aggrieved” within the meaning of a relevant statute, which incorporates the “zone of interests” inquiry.
- The zone-of-interests test is not demanding; a plaintiff’s interest need only be arguably within the zone of interests protected or regulated by the statutory provisions at issue.
- Competitors may have APA standing to challenge government contracting actions when they plausibly allege that the government used an alternative contracting vehicle to evade procurement statutes intended to protect competitive processes.
- FTTA authorization for CRADAs does not permit agencies to circumvent the statutory line between cooperative research arrangements and procurement contracts.
- If an agreement labeled a CRADA is, in substance, a procurement contract within the meaning of 31 U.S.C. § 6303, federal procurement laws apply regardless of the agreement’s label.

## Conclusion

The Third Circuit held that a competitor may pursue APA review when it plausibly alleges a federal laboratory used CRADAs to avoid procurement requirements, reversed the standing dismissal in part, and remanded for a determination whether the challenged CRADA provisions were procurement contracts subject to federal procurement law.


Chem Serv., Inc. v. Env’t Monitoring Sys. Lab.-Cincinnati of U.S. Env’t Prot. Agency, 12 F.3d 1256 (3d Cir. 1993)