Disagreement Over Interpretation of License Agreement

Two protesters objected to the Government's method of royalty computation set forth in the evaluation factors of a solicitation and to the use of an economic price adjustment clause based upon an actual cost system for royalties paid under a license agreement between the protesters and the agency. The dispute involving the interpretation of the license agreement was not considered since it was for resolution before the Armed Services Board of Contract Appeals or the U.S. Court of Claims. The agency's use of an actual cost method of price adjustment was justified since regulations provide that its use was appropriate for a contract involving no major element of design or development work and since the protesters failed to rebut the agency's conclusion that only minimal design and development was required for the procurement.