B-156152, MAY 28, 1965

B-156152: May 28, 1965

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 23. COVERING PROCUREMENT OF VARIOUS ITEMS ON THE GROUND THE "OCAMA PROCUREMENT DIVISION IS ILLEGALLY ADVERTISING FIREWEL PROPRIETARY INFORMATION.'. IT WAS STATED IN YOUR LETTER OF MARCH 4. FURTHER WORD OR INFORMATION HAS BEEN RECEIVED FROM YOU AND WE ASSUME THAT SUCH INFORMATION WILL NOT BE FORTHCOMING. IS THE ASSURANCE THAT THE PRODUCTS SO DEVELOPED BY THE CONTRACTORS WITH THEIR OWN FUNDS WILL BE CONSIDERED AS PROPRIETARY. YOU ALLEGE IN THIS LETTER THAT THE DRAWINGS WHICH WERE CIRCULATED WITH THE IFB'S HERE INVOLVED WERE DELIVERED BY YOUR COMPANY IN GOOD FAITH UNDER THE TERMS OF CONTRACT AF 34/601/-12752 AND YOU ASSERT "THAT CONTRACT SPECIFICALLY STATED THAT THE DRAWINGS WERE REQUIRED FOR PURPOSES OTHER THAN (MANUFACTURER COMPETITIVE REPROCUREMENT).'.

B-156152, MAY 28, 1965

TO THE FIREWEL COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 23, 1965, PROTESTING AGAINST THE AWARD OF CONTRACTS OTHER THAN TO YOUR COMPANY UNDER INVITATIONS FOR BIDS (IFB) NOS. IFB 34-601-65-299 (OCPDSB), 332, -333, - 344 AND -355, ISSUED BY THE OKLAHOMA CITY, OKLAHOMA, COVERING PROCUREMENT OF VARIOUS ITEMS ON THE GROUND THE "OCAMA PROCUREMENT DIVISION IS ILLEGALLY ADVERTISING FIREWEL PROPRIETARY INFORMATION.' IT WAS STATED IN YOUR LETTER OF MARCH 4, 1965, THAT DETAILED INFORMATION SUPPORTING THE PROTEST WOULD BE FORWARDED TO OUR ATTENTION IN THE VERY NEAR FUTURE. FURTHER WORD OR INFORMATION HAS BEEN RECEIVED FROM YOU AND WE ASSUME THAT SUCH INFORMATION WILL NOT BE FORTHCOMING.

IN YOUR LETTER OF FEBRUARY 23, 1965, YOU STATE THAT THE DEPARTMENT OF DEFENSE (DOD) HAS OFTEN PROCLAIMED ITS POLICY OF ENCOURAGING CONTRACTORS TO INVEST THEIR OWN FUNDS TO DEVELOP PRODUCTS AND CAPABILITIES TO MATCH DOD REQUIRED. THE NECESSARY COROLLARY TO THIS POLICY, YOU STATE, IS THE ASSURANCE THAT THE PRODUCTS SO DEVELOPED BY THE CONTRACTORS WITH THEIR OWN FUNDS WILL BE CONSIDERED AS PROPRIETARY. YOU ALLEGE IN THIS LETTER THAT THE DRAWINGS WHICH WERE CIRCULATED WITH THE IFB'S HERE INVOLVED WERE DELIVERED BY YOUR COMPANY IN GOOD FAITH UNDER THE TERMS OF CONTRACT AF 34/601/-12752 AND YOU ASSERT "THAT CONTRACT SPECIFICALLY STATED THAT THE DRAWINGS WERE REQUIRED FOR PURPOSES OTHER THAN (MANUFACTURER COMPETITIVE REPROCUREMENT).' YOU ASSERT ALSO THAT THE DRAWINGS SO SUBMITTED ARE TYPICAL OF LITERALLY THOUSANDS OF FIREWEL DRAWINGS WHICH HAVE BEEN AT ONE TIME OR ANOTHER DELIVERED TO THE AIR FORCE FOR PURPOSE OF RECEIVING INSPECTION, OPERATION, MAINTENANCE, OVERHAUL, ETC., AND AT NO TIME HAS THE FIREWEL COMPANY CONSIDERED THAT THE DELIVERY OF SUCH DRAWINGS WOULD EXPOSE THE COMPANY TO COMPETITIVE BIDS ON THE BASIS OF ITS OWN DATA.

WHEN THE RIGHT OF THE GOVERNMENT TO USE CONTRACTOR-FURNISHED DRAWINGS AND TECHNICAL DATA FOR COMPETITIVE PROCUREMENT PURPOSES HAS BEEN CHALLENGED, WE HAVE RECOGNIZED AND APPLIED THE WELL-ESTABLISHED RULE THAT, INDEPENDENT OF THE LAW APPLICABLE TO PATENTS AND COPY RIGHTS, THE OWNER OF PROPRIETARY INFORMATION OR TRADE SECRETS IS ENTITLED TO APPROPRIATE RELIEF AGAINST THE USE OR DISCLOSURE THEREOF IN VIOLATION OF A CONFIDENTIAL OR CONTRACTUAL RELATIONSHIP, AND THAT A NONDISCLOSURE AGREEMENT OR CONTRACT MAY BE IMPLIED FROM THE PARTICULAR CIRCUMSTANCES INVOLVED. SEE OUR DECISIONS B- 152684, FEBRUARY 5, 1965; B-150369, AUGUST 22, 1963, 43 COMP. GEN. 193; B- 149295, JANUARY 8, 1963, 42 COMP. GEN. 346; B-148376, JULY 24, 1962; B- 136916, AUGUST 28, 1961, 41 COMP. GEN. 148, AND THE AUTHORITIES CITED THEREIN; ALSO THE CASES COLLECTED IN THE ANNOTATION IN 170 A.L.R. 449- 500.

THE AVAILABLE RECORD IN THIS CASE DISCLOSES THAT SOME 1,450 DRAWINGS WERE DELIVERED BY YOUR COMPANY UNDER SOME 34 CONTRACTS WITH THE AIR FORCE. ALL OF THESE CONTRACTS CONTAIN PROVISIONS GOVERNING THE RIGHTS GRANTED TO THE GOVERNMENT TO USE THE DRAWINGS AND DATA FURNISHED THEREUNDER AND MAY BE CLASSIFIED UNDER ONE OF THE FOLLOWING THREE CATEGORIES:

A. CONTRACTS WHICH CONTAIN THE DATA CLAUSE SPECIFIED BY THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) FOR SUPPLY CONTRACTS, I.E., ASPR 9- 203.1, 9-203.2, AND USED IN CONJUNCTION WITH AIR FORCE PROCUREMENT INSTRUCTIONS (AFPI) 9-203.2 (B). AFPI 9-203.2 (B) CONTAINS THE STIPULATION "FOR THE PURPOSE OF PARAGRAPH (I) OF CLAUSE ................ ENTITLED DATA," THE CONTRACTOR AGREES THAT NONE OF THE DATA REQUIRED BY THE CONTRACT IS PROPRIETARY DATA AS DEFINED IN PARAGRAPH (I).

B. CONTRACTS WHICH CONTAIN THE LIMITED RIGHTS IN DATA CLAUSE PRESCRIBED BY ASPR 9-203.1, 9-203.2 AND 9-203.3 AND THE CONTRACT SCHEDULES RECITED A PROVISION WHEREBY THE PROPRIETARY DATA WAS REQUIRED TO BE SUITABLY IDENTIFIED IN RESPECTIVE APPROVED PRODUCTION LISTS, ORDERS, CALLS AND/OR INSTRUMENTS OF LIKE IMPORT, AS AMENDED. UNDER THIS IDENTIFICATION PROCEDURE THE CONTRACTING OFFICER WAS REQUIRED TO NEGOTIATE WITH THE CONTRACTOR TO REACH AGREEMENT THAT CERTAIN DATA WAS PROPRIETARY AS DEFINED IN PARAGRAPH (I); AND IF SUCH DATA WAS TO BE ACQUIRED SUBJECT TO LIMITATION ON USE, THE APPROVED PRODUCTION LIST WAS REQUIRED TO BE AMENDED TO IDENTIFY SUCH DATA AS BEING SUBJECT TO THE LIMITATION OF USE OF PARAGRAPH (J) OF THE DATA CLAUSE. THIS FORM OF DATA RIGHTS CLAUSE PROVIDED YOUR COMPANY WITH AN OPPORTUNITY TO IDENTIFY AND NEGOTIATE YOUR PROPRIETARY DATA RIGHTS UNDER THE TERMS OF THE DATA RIGHTS CONDITIONS OF THE CONTRACT. IN THE EVENT YOU DID NOT IDENTIFY THE EXTENT OF YOUR PROPRIETARY DATA THE (J) PARAGRAPH FAILED AND THE SUPPLY DATA CLAUSE PRESCRIBED BY ASPR 9-203.1 AND 9-203.2 BECAME CONTROLLING. UNDER THIS CLAUSE YOU WERE PERMITTED TO WITHHOLD DATA WHICH YOU CONSIDERED PROPRIETARY TO YOUR COMPANY.

C. A NUMBER OF YOUR DRAWINGS WERE RECEIVED AS A RESULT OF SUBCONTRACTOR WORK UNDER LOCKHEED PRIME CONTRACTS. THE DATA CLAUSE OF SUCH PRIME CONTRACTS WAS THE ASPR LIMITED RIGHTS IN DATA CLAUSE AND THE PRIME CONTRACTOR RECITED THE EXTENT OF ITS PROPRIETARY DATA BY CATEGORIES. THESE DRAWINGS BEAR THE LIMITED DATA RIGHTS LEGEND.

IN SUMMARY, 1,081 DRAWINGS ARE CODED UNLIMITED BOTH BY YOUR COMPANY AND BY THE GOVERNMENT. THE DRAWINGS INVOLVED IN THE IFB'S SUBJECT TO YOUR PROTEST ARE INCLUDED IN THIS GROUP OF DRAWINGS.

IN ADDITION TO INCLUSION OF EITHER THE DATA CLAUSE PRESCRIBED FOR SUPPLY CONTRACTS OR THE LIMITED RIGHTS DATA CLAUSE WHICH IN THE CASES EXAMINED BY THE PROCUREMENT AGENCY WAS NEVER MADE LEGALLY OPERATIVE BY YOUR COMPANY, ALL THE CONTRACTS EXAMINED CONTAINED AFPI CLAUSE 9-202.1 (B) WHICH PROVIDES AS FOLLOWS:

"RIGHTS IN DATA

"THE RIGHTS OBTAINED BY THE GOVERNMENT IN SUBJECT DATA ARE SET FORTH IN THE DATA CLAUSE INCORPORATED IN THIS CONTRACT, AND NOTHING ELSEWHERE IN THIS CONTRACT OR IN ANY DOCUMENTS INCORPORATED BY REFERENCE IN THIS CONTRACT SHALL BE CONSTRUED AS IN ANY WAY ALTERING SUCH RIGHTS.'

ALSO, UNDER THE ABOVE-RECITED CONDITIONS EXCEPT FOR THE DATA WHICH YOU SUPPLIED AS A SUBCONTRACTOR UNDER LOCKHEED PRIME CONTRACTS, NO SINGLE FIREWEL CONTRACT WAS FOUND TO HAVE OTHER THAN A RIGHTS IN DATA UNLIMITED CLAUSE OR THE EQUIVALENT THEREOF IN THOSE INSTANCES WHERE THE (J) CLAUSE WAS MADE INOPERATIVE UNDER THE TERMS OF THE DATA RIGHTS CLAUSE OF THE CONTRACT. FURTHERMORE, I. HAS BEEN DISCLOSED THAT AS OF AUGUST 16, 1962, YOUR COMPANY WAS INFORMED THAT IN ORDER TO DELIVER DATA AS PROPRIETARY UNDER CONTRACT AF 36/600/-9164 NEGOTIATION AND AGREEMENT WITH THE CONTRACTING OFFICER WAS NECESSARY AND THAT IN NO INSTANCE EVEN AFTER THIS OFFICIAL NOTIFICATION WERE ANY OF THE THREE PRODUCTION LISTS UNDER THE CONTRACT AMENDED TO IDENTIFY PROPRIETARY DATA.

IT THUS SEEMS REASONABLY CLEAR THAT THE DRAWINGS AND DATA IN QUESTION WERE ACQUIRED BY THE GOVERNMENT AND WERE DELIVERED BY YOU UNDER CONTRACTS WHICH CONTAINED PROVISIONS GRANTING TO THE GOVERNMENT THE RIGHT TO USE SUCH DRAWINGS AND DATA FOR GOVERNMENTAL PURPOSES, INCLUDING COMPETITIVE PROCUREMENT. SEE IN THIS CONNECTION THE ABOVE MENTIONED DECISION OF FEBRUARY 5, 1965, B-152684. IN FACT, YOUR LETTERS OF MARCH 19, 1965, AND MARCH 31, 1965, TO THE AIR FORCE LOGISTICS COMMAND, WRIGHT-PATTERSON AIR FORCE BASE, DAYTON, OHIO, AND THE COMMANDER, OKLAHOMA CITY AIR MATERIEL AREA, TINKER AIR FORCE BASE, OKLAHOMA CITY, OKLAHOMA, RESPECTIVELY, INDICATE THAT YOU ARE FULLY AWARE OF THE CONDITIONS UNDER WHICH THE DATA WAS SUPPLIED. NOR MAY THE IMPLICATIONS FROM THE STATEMENTS IN THE LETTER OF MARCH 31, 1965, FOR EXAMPLE, THAT "THE FIREWEL COMPANY, EITHER BECAUSE OF A MISUNDERSTANDING OR BECAUSE FIREWEL PERSONNEL AND LOCAL AIR FORCE PERSONNEL WERE CONFUSED AS TO THE MEANING AND INTENT OF THE CONFLICTING PARTS OF THE CONTRACTS, HAS IN FACT INADVERTENTLY TURNED OVER TO THE AIR FORCE MUCH DATA WHICH IS PROPRIETARY AND FROM WHICH SOME PARTS COULD BE MANUFACTURED WHETHER OR NOT SUCH PARTS WOULD IN FACT BE GOOD, INTERCHANGEABLE, RELIABLE PARTS" REASONABLY BE CONSIDERED, IN OUR OPINION, AS A PROPER BASIS FOR PROHIBITING THE GOVERNMENT FROM USING THE DRAWINGS AND DATA IN QUESTION FOR COMPETITIVE PROCUREMENT PURPOSES.

FROM A CAREFUL REVIEW OF THE FACTS AND CIRCUMSTANCES PRESENTED, WE FIND NO JUSTIFICATION FOR QUESTIONING THE ADMINISTRATIVE ACTION IN THIS CASE AND YOUR PROTEST IS THEREFORE DENIED.