B-156715, JUN. 24, 1965, 44 COMP. GEN. 824

B-156715: Jun 24, 1965

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SUBJECT TO TERMINATION AT ANY TIME AT THE WILL OF THE GOVERNMENT. THAT THE PROPERTY IS NOT DAMAGED BY THE USE. A FEE-PER BOX RENTAL ARRANGEMENT AVAILABLE TO ANY FABRICATOR WHEN THE MOLD IS NOT IN USE BY A GOVERNMENT CONTRACTOR WILL AVOID INTERFERENCE WITH THE GOVERNMENT'S NEED FOR THE ITEM AND PREVENT A MONOPOLY IN ITS COMMERCIAL PRODUCTION. IT WAS NECESSARY TO HAVE THE MOLD MADE UNDER A VETERANS ADMINISTRATION CONTRACT AT A COST OF APPROXIMATELY $15. YOU STATE THAT IT NOW DEVELOPS THAT TOTE BOXES OF THIS DESIGN HAVE A COMMERCIAL APPEAL. WHEN THE MOLD IS NOT IN USE BY A CONTRACTOR ON VETERANS ADMINISTRATION ORDERS. B. PERMISSION TO THE FABRICATOR WHO IS UNDER VETERANS ADMINISTRATION CONTRACT FOR VETERANS ADMINISTRATION ORDERS TO USE THE MOLD FOR A ROYALTY OR FEE ON HIS COMMERCIAL PRODUCTION DURING THE TERM OF THE VETERANS ADMINISTRATION CONTRACT.

B-156715, JUN. 24, 1965, 44 COMP. GEN. 824

PROPERTY - PUBLIC - PRIVATE USE - AUTHORITY WHERE A MOLD FOR MAKING A TOTE BOX, DEVELOPED UNDER CONTRACT FOR THE GOVERNMENT, EXCEEDS THE FEATURES OF THOSE AVAILABLE IN INDUSTRY, ITS USE MAY BE PERMITTED FOR COMMERCIAL PRODUCTION, AND THE HEAD OF A DEPARTMENT OR AGENCY MAY GRANT A NONEXCLUSIVE, REVOCABLE LICENSE FOR THE ITEM, SUBJECT TO TERMINATION AT ANY TIME AT THE WILL OF THE GOVERNMENT, PROVIDED A BENEFIT INURES TO THE GOVERNMENT--- THE OFFICIAL EMPOWERED TO GRANT THE LICENSE TO DETERMINE THE USE BENEFIT TO THE GOVERNMENT--- THAT THE GRANTEE ACQUIRES NO ENFORCEABLE RIGHTS, AND THAT THE PROPERTY IS NOT DAMAGED BY THE USE, AND A FEE-PER BOX RENTAL ARRANGEMENT AVAILABLE TO ANY FABRICATOR WHEN THE MOLD IS NOT IN USE BY A GOVERNMENT CONTRACTOR WILL AVOID INTERFERENCE WITH THE GOVERNMENT'S NEED FOR THE ITEM AND PREVENT A MONOPOLY IN ITS COMMERCIAL PRODUCTION.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, JUNE 24, 1965:

YOUR LETTER OF MAY 5, 1965, SUBMITTED FOR OUR CONSIDERATION AND DECISION THE QUESTION WHETHER YOUR ADMINISTRATION MAY PERMIT A PRIVATE CONTRACTOR TO UTILIZE FOR COMMERCIAL PRODUCTION A GOVERNMENT-OWNED MOLD FOR MAKING A TOTE BOX FOR USE IN A SUPPLY CONVEYOR SYSTEM.

IT APPEARS THAT YOUR ADMINISTRATION, IN ORDER TO MAKE THE MOST EFFECTIVE USE OF SUPPLY CONVEYOR SYSTEMS IN ITS NEW HOSPITALS, DEVELOPED A TOTE BOX SPECIFICATION WHICH EXCEEDED THE FEATURES OF THOSE AVAILABLE IN THE INDUSTRY. THE DESIGN INCORPORATED CERTAIN WEIGHT AND ASEPSIS FEATURES ESPECIALLY DESIRABLE FOR HOSPITAL USE. IT WAS NECESSARY TO HAVE THE MOLD MADE UNDER A VETERANS ADMINISTRATION CONTRACT AT A COST OF APPROXIMATELY $15,000. YOU STATE THAT IT NOW DEVELOPS THAT TOTE BOXES OF THIS DESIGN HAVE A COMMERCIAL APPEAL, ESPECIALLY TO NONFEDERAL HOSPITALS USING SUPPLY CONVEYOR SYSTEMS. HENCE, THE CONTRACTOR NOW USING YOUR MOLD TO FILL YOUR ORDERS HAS ASKED PERMISSION TO USE IT TO FILL ITS COMMERCIAL ORDERS. YOUR LETTER INDICATES THAT A ROYALTY OR FEE WOULD BE PAID TO THE VETERANS ADMINISTRATION FOR SUCH USAGE AND THAT YOU UNDERSTAND THAT USE OF THE MOLD BY OTHERS WOULD IN NO WAY ADVERSELY AFFECT IT.

YOU PROPOSE TWO POSSIBLE ARRANGEMENTS UNDER WHICH SUCH USAGE, IF LEGALLY PERMISSIBLE, COULD BE ACCOMPLISHED, AS FOLLOWS:

A. RENTAL ON A FEE-PER BOX BASIS TO ANY FABRICATOR UPON REQUEST, WHEN THE MOLD IS NOT IN USE BY A CONTRACTOR ON VETERANS ADMINISTRATION ORDERS.

B. PERMISSION TO THE FABRICATOR WHO IS UNDER VETERANS ADMINISTRATION CONTRACT FOR VETERANS ADMINISTRATION ORDERS TO USE THE MOLD FOR A ROYALTY OR FEE ON HIS COMMERCIAL PRODUCTION DURING THE TERM OF THE VETERANS ADMINISTRATION CONTRACT.

IT IS STATED IN YOUR LETTER THAT THERE APPEARS TO BE NO SPECIFIC STATUTORY OR REGULATORY AUTHORITY FOR SUCH USE OF THE MOLD. YOU ALSO INDICATE THAT YOU ARE AWARE OF THE DECISIONS HOLDING, IN EFFECT, THAT THERE IS NO LEGAL OBJECTION TO A GOVERNMENT AGENCY GRANTING A REVOCABLE LICENSE OR PERMIT TO CULTIVATE FEDERAL LAND, TO CONSTRUCT A RAILROAD TRACK ACROSS FEDERAL RESERVATIONS, ETC., WHERE SUBSTANTIAL BENEFIT WILL INURE TO THE GOVERNMENT, THE GRANTEE WILL NOT ACQUIRE ANY ENFORCEABLE RIGHTS THEREUNDER, AND THE PROPERTY OF THE GOVERNMENT WILL NOT BE DAMAGED THEREBY, AND YOU CITE 22 COMP. GEN. 563 AND THE DECISIONS REFERRED TO THEREIN. HOWEVER, YOU EXPRESS UNCERTAINTY AS TO WHETHER WE WOULD HOLD THAT SUCH AUTHORITY EXTENDED TO THE PROPOSED USAGE OF THE VETERANS ADMINISTRATION MOLD.

HENCE, YOU REQUEST OUR VIEWS WITH RESPECT TO THE AUTHORITY FOR THE UTILIZATION OF THE MOLD IN THE MANNER STATED AND OUR DECISION AS TO THE ARRANGEMENTS SUGGESTED.

THERE ARE MANY DECISIONS OF THIS OFFICE AND OF THE ATTORNEYS GENERAL OF THE UNITED STATES RELATIVE TO GRANTING REVOCABLE LICENSES FOR THE USE OF GOVERNMENT PROPERTY UNDER CERTAIN CIRCUMSTANCES AND CONDITIONS. SEE, FOR EXAMPLE, 38 COMP. GEN. 36; 36 ID. 561; 25 ID. 909; B-57383, FEBRUARY 25, 1947; 34 OP.ATTY.GEN. 320; 30 ID. 470; 22 ID. 240. SUCH DECISIONS HAVE HELD GENERALLY THAT THE HEAD OF A GOVERNMENT DEPARTMENT OR AGENCY HAS AUTHORITY TO GRANT TO A PRIVATE INDIVIDUAL OR BUSINESS A REVOCABLE LICENSE TO USE GOVERNMENT PROPERTY, SUBJECT TO TERMINATION AT ANY TIME AT THE WILL OF THE GOVERNMENT, PROVIDED THAT SUCH USE DOES NOT INJURE THE PROPERTY IN QUESTION AND SERVES SOME PURPOSE USEFUL OR BENEFICIAL TO THE GOVERNMENT ITSELF. THE ATTORNEY GENERAL HAS STATED THAT THE QUESTION AS TO WHETHER THE GRANTING OF SUCH A LICENSE IN ANY GIVEN CASE IS BENEFICIAL TO THE GOVERNMENT IS FOR THE EXERCISE OF THE JUDGMENT OF THE OFFICIAL VESTED WITH THE POWER TO GRANT, RATHER THAN A QUESTION OF LAW TO BE DETERMINED IN ADVANCE BY THE LAW OFFICERS OF THE GOVERNMENT. 30 OP.ATTY.GEN. 470, 482.

OUR DECISION OF JUNE 28, 1946, B-57383, PUBLISHED AT 25 COMP. GEN. 909, CONCERNED THE USE OF GOVERNMENT-OWNED DRAWINGS BY A GLOBE MANUFACTURER IN THE COMMERCIAL PRODUCTION OF GLOBES FOR SALE TO THE PUBLIC. IN THAT CASE, WE HELD THAT THE PROPOSED AGREEMENT FOR SUCH USE, AS THEN WORDED, CONTEMPLATED A PERMANENT VESTING OF THE BENEFICIAL OWNERSHIP OF THE GOVERNMENT DRAWINGS IN THE PRIVATE CONTRACTOR, WHICH WOULD RESULT IN A DIMINUTION OF THE PROPERTY OF THE GOVERNMENT OR ITS CONTROL OVER SAID PROPERTY, AND HENCE WAS UNAUTHORIZED. WE FURTHER STATED THEREIN THAT:

"HOWEVER, IN VIEW OF THE PRINCIPLES SET FORTH IN THE OPINION OF THE ATTORNEY GENERAL CITED ABOVE, 34 OP.ATTY.GEN. 320, THE EXECUTION OF AN AGREEMENT PROVIDING FOR THE GRANT OF A NONTRANSFERABLE, NONEXCLUSIVE, REVOCABLE LICENSE TO THE CONTRACTOR TO USE THE GOVERNMENT-OWNED DRAWINGS WOULD NOT APPEAR TO BE OBJECTIONABLE.'

SUBSEQUENTLY, THE OBJECTIONABLE FEATURES OF THE PROPOSED AGREEMENT WERE CHANGED OR DELETED AND OUR DECISION B-57383, FEBRUARY 25, 1947, STATED THAT WE WOULD NOT OBJECT TO THE EXECUTION OF THE AGREEMENT IN ITS REVISED FORM.

THERE WOULD APPEAR TO BE LITTLE, IF ANY, DIFFERENCE BETWEEN PERMITTING THE USE OF DRAWINGS PREPARED BY THE GOVERNMENT FOR THE COMMERCIAL PRODUCTION OF GLOBES AND PERMITTING THE USE OF THE GOVERNMENT'S MOLD FOR THE COMMERCIAL PRODUCTION OF TOTE BOXES. THEREFORE, OUR OFFICE WILL NOT OBJECT TO THE GRANTING OF A NONEXCLUSIVE REVOCABLE LICENSE FOR SUCH USE PROVIDED THAT SUCH LICENSE CONFORMS TO THE CRITERIA SET OUT ABOVE AND IN THE DECISIONS CITED.

INASMUCH AS SUCH A LICENSE MUST NOT CREATE A MONOPOLY IN THE PRODUCTION OF THE BOXES AND USE OF THE MOLD FOR COMMERCIAL PRODUCTION MUST NOT INTERFERE WITH ITS USE BY OR FOR THE GOVERNMENT, THE ARRANGEMENT DESIGNATED IN YOUR LETTER AND HEREINABOVE AS "A" WOULD APPEAR TO BE THE ARRANGEMENT WHICH SHOULD BE USED.