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NONPROFIT RESEARCH CORPORATIONS
AND THE FEDERAL TECHNOLOGY
TRANSFER ACT VA has authority
to establish nonprofit research corporations as "flexible funding
mechanisms" for conducting approved research at VA medical centers. 38
U.S.C. § 7361 (a). VA also has authority to permit the directors of
Government-operated laboratories to enter into cooperative research and
development agreements (CRADA) with other Government agencies, private
organizations, and persons. 15 U.S.C. § 3710a (a) (1). The question
presented is whether a nonprofit research corporation has authority to
enter into a CRADA on behalf of the Government. As explained below, a
nonprofit research corporation is not a Government-operated laboratory
and therefore does not fall within the statutory language permitting
such agreements.
The purpose of the statute authorizing
nonprofit research corporations is to allow private entities to
contribute research moneys to Government projects without augmenting
appropriations and without passing moneys through universities. The
relationship which the statue creates between these corporations and the
Federal Government is that the corporations, although formed under and
subject to state corporate laws, are subject to oversight by the
Inspector general and the Comptroller general. The statute does not
create a relationship in which a nonprofit research corporation is an
arm of the Government.
In the House Report on the Veterans'
Omnibus Health Care Amendments of 1987, Congress addressed the proposed
amendment authorizing nonprofit research corporations, stating that
“…these corporations would not be considered for any purposes as
corporations owned or controlled by the United States, except for the
limitations made applicable to these corporations by this Acct.” H.R.
Rep. No. 373, 100th
Cong., 1st Sess., at 5 (1987).
Given this legislative history, attorneys
at the Department of Veterans Affairs and the Department of Justice have
concluded that the Federal Tort Claims Act does not cover employees of
nonprofit research corporations, that nonprofit research corporations
cannot use the GSA supply schedule, and that VA medical centers may not
transfer funds received pursuant to a CRADA to nonprofit research
corporations for administration.
Consistent with the conclusion that
nonprofit research corporations are not Government-operated
laboratories, and consistent with prior determinations finding that
nonprofit research corporations have no governmental authority, we find
that they also have no authority to enter into CRADAs on behalf of the
Federal Government. However, VA nonprofit foundations may administer
CRADA funds for the affiliated VA medical center though VA
nonprofits still may not enter into CRADAs.
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