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certain manufacturers, UL could not avoid listing unsafe

products.  Were that to happen, consumers and competitors

would discover it and the UL mark would no longer add value

to products.  As a result, manufacturers would stop paying

for UL and its services.

It is costly for everyone, including manufacturers and

UL, to have poor quality and performance standards and

unsafe products.  In its 1994 Annual Report, UL said,

The "real" cost . . . is compromised safety, which

can ultimately result in product rejection, manu-

facturing delay, and greater costs.  A final re-

sult is the loss of the certification organiza-

tion's credibility and the manufacturer's product

acceptance.

The loss of credibility would spell the end of jobs for UL's

management and employees.  UL, consumers, and manufacturers

all want a reliable and independent UL, and all have incen-

tives to keep it that way.

Unlike the FDA, UL has incentives to reduce Type II

errors.  If UL in any way unnecessarily delays the marketing

of a new product, it lowers the value of the UL mark to

producers.  That means that UL has powerful incentives to

certify a product as quickly as possible without unduly

increasing the likelihood of committing a Type I error.

UL operating practices contribute to appropriately

rapid certification.  UL works closely with the manufactur-

er's product developers from the earliest stages of re-

search, to help them meet the known burden of the applicable

standards.  Before a sample product or process is even

complete, UL may have been able to certify it.

Who Pays?

UL gets its job done efficiently and at low cost.  In

1994, UL employed more than 3,900 people, including more

than 900 degreed engineers and many more researchers and

technicians.  In that same year, the FDA employed 1,093

people in the Commissioner's office alone, as well as 984 in

the Center for Devices and Radiological Health and 925 in

the Center for Food Safety.

In its 1994 income tax return, UL claimed revenues of

$281.1 million.19  That is a substantial sum, but less than

the $921 million Congress appropriated for the FDA in the