B-157300, NOV. 19, 1965

B-157300: Nov 19, 1965

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TO PACIFIC INFRARED SYSTEMS COMPANY: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 21. THE GROUND OF YOUR PROTEST IS THAT. INFORMATION SUBMITTED IN CONFIDENCE BY YOU TO NASA IS BEING DISCLOSED TO THIRD PARTIES WITHOUT YOUR AUTHORITY OR CONSENT. IT IS ALLEGED THAT RFP 670-96015-262 DISCLOSES INFORMATION IN VIOLATION OF THE PROPRIETARY RIGHTS OF PACIFIC INFRARED ON THE GROUND SUCH INFORMATION HAD BEEN PREVIOUSLY SUBMITTED IN CONFIDENCE BY PACIFIC INFRARED SYSTEMS. THAT SUCH INFORMATION WAS CONTAINED IN PACIFIC INFRARED'S PROPOSAL P-10019. WHICH WAS SUBMITTED IN RESPONSE TO RFP A-6000. IT IS ALSO ALLEGED IN THE BRIEF THAT RFP A-6000 COVERED A REQUIREMENT FOR FIVE UNITS OF A "BORE SIGHTED STAR AND PLANET TRACKER" AND SPECIFIED TWO- PART PROPOSALS (ONE TECHNICAL AND ONE BUSINESS) SO THE STRICTLY TECHNICAL PORTIONS COULD BE EVALUATED.

B-157300, NOV. 19, 1965

TO PACIFIC INFRARED SYSTEMS COMPANY:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 21, 1965, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER REQUEST FOR PROPOSALS (RFP) 670-96015-262, ISSUED JUNE 25, 1965, BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), GODDARD SPACE FLIGHT CENTER, GREENBELT, MARYLAND, COVERING THE PROCUREMENT OF THREE FLIGHT QUALIFIED STAR TRACKERS AND RELATED ITEMS. THE GROUND OF YOUR PROTEST IS THAT, IN VIOLATION OF YOUR PROPRIETARY RIGHTS THEREIN, INFORMATION SUBMITTED IN CONFIDENCE BY YOU TO NASA IS BEING DISCLOSED TO THIRD PARTIES WITHOUT YOUR AUTHORITY OR CONSENT. AWARD OF A CONTRACT UNDER THE RFP IN QUESTION HAS BEEN HELD IN ABEYANCE PENDING CONSIDERATION OF THE MATTERS PRESENTED BY YOUR PROTEST.

IN THE BRIEF DATED JULY 23, 1965, SUBMITTED WITH ACCOMPANYING EXHIBITS BY YOUR ATTORNEYS, VOEGELIN, BARTON, HARRIS AND CALLISTER, IT IS ALLEGED THAT RFP 670-96015-262 DISCLOSES INFORMATION IN VIOLATION OF THE PROPRIETARY RIGHTS OF PACIFIC INFRARED ON THE GROUND SUCH INFORMATION HAD BEEN PREVIOUSLY SUBMITTED IN CONFIDENCE BY PACIFIC INFRARED SYSTEMS; THAT SUCH INFORMATION WAS CONTAINED IN PACIFIC INFRARED'S PROPOSAL P-10019, DATED AUGUST 22, 1962, WHICH WAS SUBMITTED IN RESPONSE TO RFP A-6000, ISSUED JULY 17, 1962, BY NASA AMES RESEARCH CENTER, MOFFETT FIELD, CALIFORNIA. IT IS ALSO ALLEGED IN THE BRIEF THAT RFP A-6000 COVERED A REQUIREMENT FOR FIVE UNITS OF A "BORE SIGHTED STAR AND PLANET TRACKER" AND SPECIFIED TWO- PART PROPOSALS (ONE TECHNICAL AND ONE BUSINESS) SO THE STRICTLY TECHNICAL PORTIONS COULD BE EVALUATED. IT IS ALLEGED FURTHER THAT SOME TIME AFTER THE PROPOSALS WERE RECEIVED MR. WHITNEY WAS ADVISED BY NASA THAT HIS PROPOSAL HAD BEEN EVALUATED FAVORABLY; THAT MESSRS. MARION MANSON OF AMES RESEARCH CENTER AND DAVID U. WRIGHT, JR., OF GODDARD SPACE FLIGHT CENTER VISITED THE PACIFIC INFRARED PLANT AND TALKED AT LENGTH WITH MESSRS. WHITNEY AND GEORGE AROYAN ABOUT THE PROPOSED TRACKER; THAT AT ALL TIMES MESSRS. MANSON AND WRIGHT WERE FULLY AWARE THAT THE TRACKER PROPOSED BY PACIFIC INFRARED WAS DEVELOPED WITHOUT GOVERNMENT SUPPORT AND "THAT THE DESIGN WAS SUBMITTED SOLELY IN ORDER FOR NASA TO DETERMINE WHETHER TO AWARD PACIFIC INFRARED A CONTRACT.' ULTIMATELY, MR. WHITNEY WAS INFORMALLY ADVISED ,THAT HIS COMPANY WAS REGARDED AS TOO SMALL TO PRODUCE THESE TRACKERS" AND PACIFIC INFRARED'S PROPOSAL WAS NOT ACCEPTED.

THE BRIEF ALSO ALLEGES THAT "THE TRACKER DESIGN CONTAINED IN RFP 670- 96015-262 EMBODIES COMPLETELY AS ITS OPERATING PRINCIPLE THE TWO FIELD TRACKER AND THE AROYAN FM RETICLE SUBMITTED IN THE PACIFIC INFRARED PROPOSAL P-10019 (AND UPON WHICH PATENT APPLICATIONS ARE BEING PROCESSED). IT IS VERY EVIDENT," IT IS CONTENDED,"THAT NASA TOOK THE EXACT PACIFIC INFRARED DESIGN, DID CONSIDERABLE DETAILED ENGINEERING ON IT, AND HAS NOW SENT IT TO COMPETING COMPANIES FOR BIDS.'

THE BRIEF ALLEGES FURTHER THAT UPON RECEIPT OF RFP 670-96015-262 PACIFIC INFRARED IMMEDIATELY PROTESTED TO THE CONTRACTING OFFICER AT GODDARD; THAT IN TELEPHONE CONVERSATIONS NO ONE HAD DENIED THAT THE PACIFIC INFRARED DESIGN WAS USED; THAT IN FACT MODELS OF THE PACIFIC INFRARED TRACKER APPARENTLY WERE BUILT AT GODDARD AND SUCCESSFULLY TESTED, AND THAT PACIFIC INFRARED IS INFORMED ,THAT THE PROTEST IS BEING DENIED BECAUSE A COPY OF THE PACIFIC INFRARED TECHNICAL PROPOSAL ALLEGEDLY WAS NOT STAMPED CONFIDENTIAL.' IT IS ALSO ALLEGED IN THE BRIEF THAT MR. WHITNEY HAS FURNISHED INFORMATION "THAT TO THE BEST OF HIS KNOWLEDGE SOME IF NOT ALL OF THE PROPOSAL COPIES WERE STAMPED "PROPRIETARY" SINCE THIS IS HIS USUAL OFFICE PROCEDURE WHEN SUBMITTING TECHNICAL PROPOSALS; " AND THAT "THE NASA PERSONNEL WHO TALKED TO HIM SHORTLY AFTER THE PROPOSAL'S SUBMISSION WERE WELL AWARE THAT THE PROPOSAL WAS PROPRIETARY.' THE VIEW IS EXPRESSED THEREIN THAT "IT IS INCONCEIVABLE THAT ANYONE COULD SOLICIT A TECHNICAL PROPOSAL SUCH AS THIS ONE, WHICH REQUIRED CONSIDERABLE DESIGN ENGINEERING WORK AND WHICH INVOLVED ORIGINAL CONCEPTS, AND THEN BELIEVE IN GOOD FAITH THAT THE BIDDER WAS RELINQUISHING ALL OF HIS RIGHTS TO IT IF THE BID WAS NOT ACCEPTED.'

THE BRIEF URGES THAT THE LAW REGARDING THE RIGHTS OF A BIDDER IS VERY CLEAR; THAT "WHEN PROPRIETARY OR CONFIDENTIAL MATERIAL IS SUBMITTED FOR A PARTICULAR PURPOSE, SUCH AS IN RESPONSE TO A REQUEST FOR BID, THE GOVERNMENT IS OBLIGATED TO USE THAT MATERIAL SOLELY FOR THE PURPOSE SUBMITTED; " THAT THE GOVERNMENT "CANNOT USE THE MATERIAL FOR OTHER PURPOSES WITHOUT PERMISSION OR WITHOUT NEGOTIATING A LICENSE.' THE RECENT CASE OF PEDBLOC COMPANY, INC. V. UNITED STATES (CT.CL. 1963), 161 CT.CL. 369 IS CITED; ALSO DUPONT POWDER CO. V. MASLAND (1917), 244 U.S. 100; AND DECISIONS OF OUR OFFICE, B-150369, AUGUST 22, 1963, 43 COMP. GEN. 193, 9 CCF PARA. 72, 267, AND B-154079, OCTOBER 14, 1964, 6 GOVERNMENT CONTRACTOR PARA. 459 (1964).

THE CONTRACTING OFFICER APPARENTLY HAS TAKEN THE POSITION, IT IS ALLEGED IN THE BRIEF,"THAT BECAUSE A COPY OF PACIFIC INFRARED'S TECHNICAL PROPOSAL ALLEGEDLY CONTAINED NO STAMP ROPRIETARY," THE GOVERNMENT WAS FREE TO APPROPRIATE IT WITHOUT COMPENSATION. * * * WHILE WE BELIEVE," IT IS ASSERTED,"SOME IF NOT ALL OF THE COPIES OF THE TECHNICAL PROPOSAL WERE STAMPED PROPRIETARY, THERE IS NO MAGIC IN SUCH A STAMP; " THAT THE "TEST IS WHETHER BOTH PARTIES INTENDED THE GOVERNMENT TO BE FREE TO USE THIS MATERIAL WITHOUT ANY OBLIGATION. BOTH THE FACTS AND COMMON SENSE, IT IS CONTENDED,"DICTATE THAT THE ANSWER BE NO," THAT THE MATERIAL WAS SPECIFICALLY SOLICITED IN A REQUEST FOR BIDS WHEREIN THE BIDDER WAS REQUESTED TO PROPOSE A PRICE FOR WHICH HE WOULD PRODUCE THE PRODUCT HE OFFERED; THAT "BOTH PARTIES KNEW PACIFIC INFRARED'S SOLE PURPOSE IN ATTACHING ITS TECHNICAL PROPOSAL WAS TO INDUCE THE GOVERNMENT TO AWARD IT THE CONTRACT" AND "TO ASSUME THAT PACIFIC INFRARED WOULD SUBMIT A TECHNICAL PROPOSAL OF THIS TYPE, WHICH INVOLVED A UNIQUE DESIGN CONCEPT AND CONSIDERABLE ORIGINAL DESIGN ENGINEERING, ON THE ASSUMPTION THAT THE GOVERNMENT WAS FREE TO APPROPRIATE IT WITHOUT COMPENSATION AND CONTRACT WITH OTHER PARTIES FOR ITS MANUFACTURE IS CONTRARY TO ALL REASON.' THE VIEW IS EXPRESSED IN THE BRIEF THAT "NO GOVERNMENT EMPLOYEE COULD HAVE BELIEVED THIS WAS THE INTENT OF PACIFIC INFRARED--- OR THE GOVERNMENT: WHEN THE GOVERNMENT SOLICITS BIDS WHICH CALL FOR A TECHNICAL PROPOSAL INCORPORATING ORIGINAL DESIGN," IT IS CONTENDED,"THE CLEAR IMPLICATION IS THAT THE GOVERNMENT WILL USE THE PROPRIETARY DATA RECEIVED ONLY FOR EVALUATING THE BID," AND IF,"AS APPARENTLY WAS THE CASE HERE, THE GOVERNMENT LIKED THE TECHNICAL PROPOSAL BUT FELT PACIFIC INFRARED WAS TOO SMALL A COMPANY (HARDLY A BOOST FOR SMALL BUSINESS.), IT SHOULD HAVE NEGOTIATED A LICENSE" AS THE "LAW DOES NOT ALLOW IT TO APPROPRIATE THE DESIGN WITHOUT COMPENSATION AND DISSEMINATE THE TRADE SECRETS TO LARGE COMPETING MANUFACTURERS.' IN CONCLUSION, THE BRIEF URGES THAT THE CONTRACTING OFFICER SHOULD BE REQUIRED:

"/A) TO CANCEL THE RFP;

"/B) TO RECOVER ALL DOCUMENTS DISSEMINATED AND TO DIRECT RECIPIENT NOT TO FURTHER DISCLOSE THE MATERIAL;

"/C) TO NEGOTIATE WITH PACIFIC INFRARED EITHER FOR SOLE-SOURCE PROCUREMENT OR FOR A LICENSE IF PACIFIC INFRARED'S DESIGNS ARE TO BE USED.'

THE DIRECTOR OF PROCUREMENT FOR NASA HAS RECOMMENDED THAT THE PROTEST BE DENIED, BASED ON A DETAILED REPORT DATED SEPTEMBER 27, 1965, AND ITS ACCOMPANYING DOCUMENTS. SUBSTANTIAL DISAGREEMENT IS DISCLOSED THEREIN WITH RESPECT TO THE ALLEGATIONS AND CONTENTIONS YOU HAVE PRESENTED. THUS, THE REPORT CONTAINS, IN EFFECT, A GENERAL DENIAL THAT (1) PACIFIC INFRARED'S PROPOSAL P-10019, OR ANY OF ITS COPIES, WAS MARKED WITH A RESTRICTIVE NOTICE, (2) THAT ORAL NOTICE OF PROPRIETARY RIGHTS CLAIMED BY PACIFIC INFRARED WAS RECEIVED BY NASA, (3) THAT MODELS OF THE PACIFIC INFRARED TRACKER WERE BUILT AND SUCCESSFULLY TESTED AT GODDARD AND (4) THAT THE TRACKER DESIGN CONTAINED IN RFP 670-96015-262 UTILIZES THE CONCEPTS IN PACIFIC INFRARED'S PROPOSAL P-10019. IT IS URGED BY NASA THAT PROPRIETARY RIGHTS OF PACIFIC INFRARED HAVE NOT BEEN VIOLATED ON THE GROUNDS THAT PROPOSALS SUBMITTED IN RESPONSE TO A REQUEST FOR PROPOSALS WHICH ARE NOT MARKED AS REQUIRED BY THE NASA PROCUREMENT REGULATION ARE NOT REQUIRED TO BE PROTECTED; AND THAT PACIFIC ABANDONED ANY PROPRIETARY RIGHTS IN DATA BY FAILING TO MARK THE SAME IN ACCORDANCE WITH THE REGULATION.

THE RULE IS WELL ESTABLISHED THAT, INDEPENDENTLY OF THE LAW APPLICABLE TO PATENTS AND COPYRIGHTS, THE OWNER OF PROPRIETARY INFORMATION OR TRADE SECRETS CONSISTING OF ANY FORMULA OR PATTERN, ANY MACHINE OR PROCESS OF MANUFACTURE, OR OF ANY DEVICE OR COMPILATION OF INFORMATION USED IN HIS BUSINESS WHICH MAY GIVE TO HIM AN OPPORTUNITY TO OBTAIN AN ADVANTAGE OVER COMPETITORS WHO DO NOT KNOW OR USE IT, MAY PROTECT HIMSELF BY CONTRACT AGAINST ITS DISCLOSURE BY ONE TO WHOM IT IS COMMUNICATED IN CONFIDENCE OR MAY RESTRICT ITS USE BY SUCH PERSON. SEE JOHN D. PARK AND SONS CO. V. BARTMAN, 6 C.C.A. 1907, 153 F.24, CERT.DEN. 1908, 212 U.S. 588; VULCAN DETINNING CO. V. AMERICAN CAN CO., CT. OF ERRORS AND APPEALS N.J. 1907, 67 A. 339; DUPONT POWDER CO. V. MASLAND (1917), 244 U.S. 100; UNITED LENS CORPORATION V. DEROY LAMP CO., 7 C.C.A. 1937, 93 F.2D 969; SMITH V. DRAVO CORPORATION, 7 C.C.A. 1953, 203 F.2D 369, 376; AND VITRO CORPORATION OF AMERICA V. HALL CHEMICAL CO., 6 C.C.A. 1958, 254 F.2D 787. AND, UNDER CERTAIN CIRCUMSTANCES A NONDISCLOSURE AGREEMENT OR CONTRACT MAY BE IMPLIED. CF. NOELTKE V. C. M. KEMP MFG. CO., 4 C.C.A. 1936, 80 F.2D 912, CERT. DEN. 1936, 298 U.S. 673, AND DE FILIPPIA V. CHRYSLER CORPORATION, D.C. N.Y. 1944, 53 F.SUPP. 977, AFFIRMED 2 C.C.A. 1947, 159 F.2D 478; SCHREYER V. CASCO PRODUCTS CORP., 2 C.C.A. 1951, 190 F.2D 921, AND INTERNATIONAL INDUSTRIES V. WARREN PETROLEUM CORP., D.C. DEL. 1956, 146 F.SUPP. 157, 177. ONE WHO LAWFULLY ACQUIRES A TRADE SECRET SUBJECT TO A CONTRACTUAL LIMITATION OR RESTRICTION AS TO ITS USE, AND WHO USES THE SECRET FOR PURPOSES BEYOND THE SCOPE OF THE CONTRACTUAL LIMITATION IS LIABLE FOR A BREACH OF CONTRACT. SEE AKTIEBOLAGET BOFORZ V. UNITED STATES, C.C.A. D.C. 1951, 194 F.2D 145; ALSO, 139 CT.CL. 642 (1957) WHERE A JUDGMENT WAS AWARDED AGAINST THE UNITED STATES BY THE COURT OF CLAIMS.

IT SEEMS WELL ESTABLISHED ALSO THAT A CONTRACTUAL OBLIGATION TO RESPECT THE OWNER'S RIGHT IN A TRADE SECRET USUALLY TERMINATES WITH THE PUBLIC DISCLOSURE OF THE SECRET BY THE OWNER IN THE ABSENCE OF A SPECIFIC CONTRACT PROVISION REQUIRING THE PROMISOR TO ADHERE TO HIS CONTRACTUAL OBLIGATION AFTER SUCH DISCLOSURE, AND HIS RIGHT TO FURTHER SECRECY ORDINARILY IS TERMINATED BY THE ISSUANCE OF A PATENT. SEE PICARD V. UNITED AIRCRAFT CORPORATION, 2 C.C.A. 1942, 128 F.2D 632; SANDLIN V. JOHNSON, 8 C.C.A. 1944, 141 F.2D 660; CONMAR PRODUCTS CORP. V. UNIVERSAL SLIDE FASTENER CO., 2 C.C.A. 1949, 172 F.2D 150; SKOOG V. MCCRAY REFRIGERATOR CO., 7 C.C.A. 1954, 211 F.2D 254; AND DOLLAC CORPORATION V. MARGON CORPORATION, D.C. N.J. 1958, 164 F.SUPP. 41. HOWEVER, NO EXCLUSIVE RIGHTS ARE VESTED IN THE INVENTOR BY THE FILING OF A PATENT APPLICATION, GAYLOR V. WILDER, (1850), 51 U.S. 477, 493, AND IT HAS BEEN CONSISTENTLY HELD BY THE COURTS THAT A SINGLE USE OR SALE WITHOUT RESTRICTION OR INJUNCTION OR SECRECY BY THE INVENTOR MAY BE SUFFICIENT TO DENY THE PROTECTION OF A PATENT TO THE INVENTOR. METALIZING ENGINEER CO. V. KENYON BEARING AND A.P. CO., 2 C.C.A. 1946, 153 F.2D 516, CERT. DEN. 328 U.S. 840; NATIONAL WELDING E. CO. V. HAMMON PRECISION E. CO., D.C. CALIF. 1958, 165 F.SUPP. 788; AND PIET V. UNITED STATES, D.C. CALIF. 1959, 176 F.SUPP. 576, AFFIRMED 9 C.C.A. 1960, 283 F.2D 693. CF. THE AUTHORITIES COLLECTED IN THE ANNOTATION 170 A.L.R. 449-500.

WITH RESPECT TO THE AMES RESEARCH CENTER PROCUREMENT UNDER RFQ A 6000, THE AVAILABLE RECORD DISCLOSES THAT THIS PROCUREMENT WAS INITIATED BY THE PROCUREMENT OFFICER'S SINGLE PAGE LETTER DATED JULY 17, 1962, WHICH ENCLOSED A GENERAL OUTLINE OF THE "REQUIREMENTS FOR BORE SIGHTED STAR AND PLANET TRACKER" DESIRED FOR USE IN EXPERIMENTS BEING CONDUCTED BY NASA. THE RFQ STIPULATED THAT "IT IS INTENDED TO ENTER INTO COMPETITIVE NEGOTIATIONS LEADING TO A DEFINITIVE CONTRACT AS SOON AS POSSIBLE AFTER RECEIPT OF PROPOSALS," AND REQUESTED THAT PROPOSALS BE SUBMITTED BY AUGUST 10, 1962, WHICH DATE APPARENTLY WAS EXTENDED BY AN ADDENDUM DATED AUGUST 2, 1962. THE RFQ ALSO STIPULATED THAT "A PROPOSAL IN TWO PARTS IS DESIRED, SO THAT THE STRICTLY TECHNICAL PORTIONS, WITHOUT PRICE REFERENCE, MAY BE DETACHED FOR SEPARATE STUDY.' THE RFQ STIPULATED FURTHER THAT ,WE DO NOT PLAN TO ENTER INTO DISCUSSIONS OR NEGOTIATIONS REGARDING ANY PROPOSAL UNTIL ALL CONCERNED HAVE BECOME FAMILIAR WITH IT AND MUTUALLY ACCEPTABLE ARRANGEMENTS HAVE BEEN MADE FOR DISCUSSIONS.' AND ALSO, THAT "QUESTIONS OF ANY NATURE REGARDING THIS NEGOTIATION SHOULD BE DIRECTED TO GABRIEL FOX, CONTRACT NEGOTIATOR OR THE UNDERSIGNED. (TELEPHONE YORKSHIRE 8-9411, EXTENSION 273).' NO STIPULATION WAS MADE NOR WAS IT OTHERWISE INDICATED IN THE RFQ AND ITS ATTACHMENTS THAT THE PROPOSALS SOLICITED AND THE PROPRIETARY INFORMATION AND DATA CONTAINED THEREIN WERE TO BE USED BY NASA OTHER THAN FOR "STUDY" AND "COMPETITIVE NEGOTIATIONS LEADING TO A DEFINITIVE CONTRACT.' NOR DID THE RFQ CONTAIN REFERENCES TO ANY OTHER DOCUMENTS OR REGULATIONS. IT HAS BEEN ADMINISTRATIVELY REPORTED THAT A TOTAL OF 70 RFQ PACKAGES WERE ISSUED AND THAT 9 PROPOSALS WERE RECEIVED INCLUDING PACIFIC INFRARED'S PROPOSAL P-10019 DATED AUGUST 24, 1962, AS EVIDENCED BY A COPY THEREOF CONSISTING OF 16 PAGES OF DESCRIPTIVE MATERIAL AND ILLUSTRATIONS FURNISHED WITH THE REPORT. IT WAS STIPULATED IN THE INTRODUCTORY PARAGRAPH NUMBERED 1.0 OF PROPOSAL P-10019,"THIS DOCUMENT CONSTITUTES THE TECHNICAL DISCUSSION OF A PROPOSAL BY PACIFIC INFRARED SYSTEMS COMPANY FOR A BORE SIGHTED STAR AND PLANT TRACKER * * * SUBMITTED TO AMES RESEARCH CENTER IN RESPONSE TO RFP 6000.' THE PROPOSAL SETS FORTH A DETAILED DESCRIPTION OF THE "PACIFIC INFRARED PI-3 TRACKER" ILLUSTRATED IN FIGURE 1. AN OUTLINE OF THE COMPANY'S QUALIFICATIONS WAS ALSO SUBMITTED WITH THE PROPOSAL INCLUDING DETAILS OF THE COMPANY'S ORGANIZATION AND FACILITIES AND ITS PERSONNEL AND EXPERIENCE. AS WAS THE CASE IN RFQ A-6000, NO STIPULATION OR REFERENCE WAS MADE IN THE PROPOSAL CONCERNING THE USE AND PROTECTION OF PROPRIETARY INFORMATION AND DATA.

IT IS STATED IN THE REPORT THAT 5 COPIES OF PROPOSAL P-10019 WERE SUBMITTED BY PACIFIC INFRARED, 3 COPIES TO AMES RESEARCH CENTER IN RESPONSE TO RFQ A-6000, AND 2 EXTRA COPIES FURNISHED TO MR. DAVID U. WRIGHT, JR., GODDARD SPACE FLIGHT CENTER, AS RELATED IN PACIFIC INFRARED'S LETTER TO HIM DATED SEPTEMBER 14, 1962. BY DILIGENT SEARCH THE AGENCY HAS BEEN ABLE TO LOCATE 3 OF THE 5 COPIES RECEIVED. EXAMINATION THEREOF DISCLOSES NO RESTRICTIVE RESERVATIONS OR MARKINGS AND THE REPORT POINTS OUT THAT NONE OF THE CORRESPONDENCE RELATING TO THIS PROPOSAL CONTAINS ANYTHING "TO SUGGEST THAT ANY OF THE COPIES WERE RESTRICTIVELY MARKED OR WERE TO BE RECEIVED IN CONFIDENCE.'

MOREOVER, THE AGENCY REPORT DISCLOSES THAT AFTER THE AWARD OF THE CONTRACT UNDER RFQ A-6000, PACIFIC INFRARED SUBMITTED AN UNSOLICITED PROPOSAL TO DR. NANCY ROMAN, NASA HEADQUARTERS, BY LETTER DATED JANUARY 14, 1963, PROPOSAL P-10026. THE REPORT ALSO DISCLOSES THAT PACIFIC INFRARED WAS NOTIFIED BY LETTER DATED MARCH 19, 1964,"FROM T. L. K. SMALL, DIRECTOR OF GRANTS AND RESEARCH CONTRACTS DIVISION, NASA HEADQUARTERS, THAT THE PROSPECTS FOR INVESTIGATION UNDER PACIFIC'S PROPOSAL P-10026 WERE NOT SUFFICIENT TO WARRANT FURTHER CONSIDERATION.' AS EVIDENCED BY A COPY FURNISHED WITH THE REPORT, THIS UNSOLICITED PROPOSAL DESCRIBED THE BASIC STAR TRACKER OF PROPOSAL F 10019, WITH ALLEGED MODIFICATIONS AND IMPROVEMENTS, AND AS WAS THE CASE IN PROPOSAL P-10019, IT CONTAINED NO STIPULATIONS OR RESERVATIONS CONCERNING THE USE AND PROTECTION OF PROPRIETARY INFORMATION AND DATA.

HENCE, IT IS CONTENDED BY THE ADMINISTRATIVE AGENCY THAT THE AVAILABLE RECORD DOES NOT SUPPORT THE INFORMATION FURNISHED BY MR. WHITNEY TO THE EFFECT THAT SOME OF NOT ALL OF THE COPIES OF PROPOSAL P 10019 WERE STAMPED "PROPRIETARY," IN ACCORDANCE WITH HIS USUAL OFFICE PROCEDURE WHEN SUBMITTING TECHNICAL PROPOSALS. THE ADMINISTRATIVE AGENCY URGES THEREFORE THAT THE CONCLUSION SEEMS REASONABLY JUSTIFIED- - AND WE ARE INCLINED TO AGREE--- THAT NONE OF THE COPIES OF PROPOSAL P-10019 WERE STAMPED "PROPRIETARY.'

AS A PART OF THE EVALUATION OF THE PROPOSALS RECEIVED IN RESPONSE TO RFQ A-6000, THE AGENCY REPORTS, PLANT SURVEYS WERE CONDUCTED FOR THE PURPOSE OF EVALUATING THE IN-HOUSE CAPACITY OF THE PROSPECTIVE CONTRACTORS. THE SURVEY OF PACIFIC INFRARED'S PLANT WAS MADE BY MESSRS. MARION HANSON OF NASA-AMES AND DAVID U. WRIGHT, JR., OF GSFC ON SEPTEMBER 13, 1962. THEREAFTER, TECHNICAL REVIEW ELIMINATED ALL BUT TWO OF THE PROPOSALS, PACIFIC INFRARED'S BEING ONE OF THOSE ELIMINATED. THE AGENCY ALLEGES, HOWEVER, THAT NO NEGOTIATIONS WERE CONDUCTED WITH PACIFIC INFRARED AND NO DISCUSSIONS WERE HAD OTHER THAN THE IN-HOUSE CAPABILITY SURVEY BY MESSRS. HANSON AND WRIGHT, WHOSE AUTHORITY AND FUNCTION AT THE TIME DID NOT INCLUDE EVALUATION OF PACIFIC INFRARED'S TECHNICAL PROPOSAL. A CONTRACT WAS NEGOTIATED WITH ONE OF THE FIRMS WHOSE PROPOSAL WAS DETERMINED ACCEPTABLE AND ALL INTERESTED PARTIES INCLUDING PACIFIC INFRARED WERE SO ADVISED BY LETTER DATED NOVEMBER 15, 1962, STATING THAT "SELECTION OF THE CONTRACTOR WAS MADE ON A COMBINATION OF TECHNICAL APPROACH AND PRICE.' THE AGENCY STATES THAT THE STAR TRACKER DEVELOPMENT UNDER THAT CONTRACT IS CONTINUING; THAT IT IS IN NO WAY SIMILAR TO THE STAR TRACKER DISCLOSED IN PACIFIC INFRARED'S PROPOSAL P-10019, AND POINTS OUT THAT NO ALLEGATIONS HAVE BEEN MADE THAT THE AWARD WAS IMPROPER OR THAT THE STAR TRACKER BEING DEVELOPED UNDER THAT CONTRACT IS PROPRIETARY TO PACIFIC INFRARED.

WHILE IT IS TRUE, THE AGENCY'S REPORT EXPLAINS, THAT THERE WAS SOME CONCERN AT THE TIME OF EVALUATING THE PROPOSALS AS TO WHETHER OR NOT PACIFIC HAD ADEQUATE IN-HOUSE PRODUCTION FACILITIES AND PERSONNEL TO MEET THE REQUIREMENTS OF THE PROPOSED CONTRACT,"THE TECHNICAL CONSIDERATIONS THAT LED TO THE ELIMINATION OF THE PACIFIC PROPOSAL WAS THE FACT THAT THE PACIFIC TRACKER HAD BEEN ONLY PROPOSED AND HAD NOT AT THAT TIME ACTUALLY BEEN BUILT AND TESTED, AND THAT A TWO-CHANNEL OR DUAL OPTIC SYSTEM WAS CONSIDERED LESS DESIRABLE THAN A SINGLE CHANNEL SYSTEM FOR THE PURPOSES OF THE PROPOSED PROCUREMENT.' THESE CONSIDERATIONS, THE AGENCY'S REPORT STATES, WERE ALSO FACTORS IN THE ELIMINATION OF OTHER PROPOSALS AND THEREFORE THE ALLEGATIONS THAT THE CONTRACT WAS DENIED SOLELY ON THE BASIS PACIFIC WAS CONSIDERED TOO SMALL OR THAT NASA OFFICIALLY INFORMED REPRESENTATIVES OF PACIFIC INFRARED THAT PROPOSAL P-10019 HAD BEEN "FAVORABLY EVALUATED" BUT THAT THE "COMPANY WAS REGARDED AS TOO SMALL TO PRODUCE THESE TRACKERS" APPARENTLY ARE WITHOUT JUSTIFICATION.

IN SUPPORT OF THE AGENCY'S DENIAL OF YOUR CONTENTIONS URGING THAT NASA RECEIVED ORAL NOTICE OF THE PROPRIETARY RIGHTS CLAIMED BY PACIFIC INFRARED BASED PRIMARILY ON THE PLANT SURVEY MADE BY MESSRS. HANSON AND WRIGHT, AS RELATED ABOVE, A STATEMENT BY MR. WRIGHT DATED AUGUST 13, 1965, AND A STATEMENT ON BEHALF OF MR. HANSON DATED AUGUST 19, 1965, BY MR. ROBERT F. KEMPF OF THE OFFICE OF PATENT COUNSEL, GODDARD SPACE FLIGHT CENTER, HAVE BEEN SUBMITTED. THESE STATEMENTS ARE TO THE EFFECT THAT AFTER THE ELAPSE OF 3 YEARS, MESSRS. WRIGHT AND HANSON HAVE NO DEFINITE RECOLLECTION AS TO WHETHER OR NOT THEY WERE ADVISED THAT PACIFIC INFRARED CONSIDERED THE STAR TRACKER A PROPRIETARY ITEM. ON THE OTHER HAND, YOU HAVE FURNISHED NO EVIDENCE TO ESTABLISH YOUR CONTENTIONS AND THERE IS NOTHING IN THE RECORD TO SHOW THAT SUCH ADVICE WAS COMMUNICATED TO THE PROCUREMENT OFFICER.

WITH RESPECT TO THE ALLEGATIONS THAT "MODELS OF THE PACIFIC INFRARED TRACKER APPARENTLY WERE BUILT AT GODDARD AND SUCCESSFULLY TESTED" AND THAT THE TRACKER DESIGN IN RFP 670-96015-262 UTILIZES THE CONCEPTS IN PACIFIC INFRARED'S PROPOSAL P-10019, THE REPORT DISCLOSES THAT THE ,MODELS BUILT AND TESTED WERE OF THE TRACKER DESIGN CALLED FOR BY SPECIFICATION 67-60, WHICH HAS SUBSTANTIAL DEPARTURES FROM THE PACIFIC DESIGN.' THE DESIGN CALLED FOR BY SPECIFICATION 67-60, TO WHICH STAR TRACKERS CALLED FOR IN RFP 670-96015-262 ARE TO BE MADE, IS REFERRED TO AS THE GODDARD TRACKER IN CONTRAST TO THE PACIFIC TRACKER. ONLY PRELIMINARY TESTS OF THE GODDARD TRACKER HAVE BEEN MADE. "THE ENGINEERS DIRECTLY INVOLVED WITH THE DEVELOPMENT OF THE GODDARD STAR TRACKER MAINTAIN THEY DEVELOPED THE GODDARD TRACKER DESIGN INDEPENDENTLY, BASED ON THEIR INVESTIGATION OF THE PRIOR ART, AND THAT THE FEATURES WHICH THE GODDARD STAR TRACKER HAS IN COMMON WITH THE PACIFIC TRACKER RESULTS FROM SIMILARITY OF CONCEPT RATHER THAN FROM DIRECT COPYING FROM THE PACIFIC PROPOSAL; " THAT THE TRACKER DEVELOPED AT GODDARD IS BASICALLY A GIMBALLED SYSTEM, WHEREAS THE PACIFIC TRACKER DESCRIBED IN PROPOSAL P-10019 IS A BORE SIGHTED OR NONGIMBALLED TRACKER. "IT IS HIGHLY QUESTIONABLE," THE REPORT STATES,"THAT THE BORE SIGHTED STAR TRACKER OF PACIFIC PROPOSAL P-10019 WOULD BE ACCEPTABLE FOR THE INTENDED APPLICATION" OF THE GODDARD TRACKER.

WITH RESPECT TO THE CONTENTIONS CONCERNING THE ASSERTED PROPRIETARY RIGHTS OF PACIFIC INFRARED THE ADMINISTRATIVE REPORT ALLEGES THAT THE FIRST NOTICE RECEIVED BY THE PROCURING AGENCY PERTAINING THERETO WAS A TELEPHONE CALL TO THE CONTRACTING OFFICER ON JULY 2, 1965, FROM MR. WHITNEY FOLLOWED BY HIS LETTER DATED JULY 8, 1965, STATING IN PART AS FOLLOWS:

"INSPECTION OF THIS DESIGN DISCLOSES THAT YOU HAVE BASED THE OPERATION OF THIS TRACKER ON A RETICLE SYSTEM WHICH IS PROPRIETARY TO THIS COMPANY, AND WHICH WAS SUBMITTED TO NASA, AMES RESEARCH CENTER ON A PROPRIETARY BASIS AS OUR TRACKER PI-3 IN RESPONSE TO THEIR RFQ SPECIFICATION A-6000, DATED 17 JULY 1962. AT THAT TIME PACIFIC INFRARED WAS SERIOUSLY CONSIDERED FOR THAT AWARD. MR. MARION HANSON OF AMES AND MR. DAVID U. WRIGHT, JR. OF YOUR CENTER VISITED US, AND TALKED OVER OUR DEVICE IN DETAIL. AS WE SUBSEQUENTLY UNDERSTOOD THE MATTER, WE DID NOT RECEIVE THAT AWARD BECAUSE OUR COMPANY WAS THOUGHT TOO SMALL AND TOO NEW TO HANDLE THE JOB.

"IT IS MY UNDERSTANDING, BASED UPON A CONVERSATION LAST WEEK WITH MR. WRIGHT, THAT NASA GODDARD HAS MANUFACTURED SEVERAL OF THESE PACIFIC INFRARED TRACKERS IN-HOUSE, AND THAT WITH THIS PROCUREMENT THEY INTEND TO START BUYING MORE FROM PRIVATE INDUSTRY.

"PLEASE BE ADVISED THAT THE RETICLE AND TRACKER SYSTEM DESCRIBED IN OUR PROPOSAL P-10019, AND EMBODIED IN YOUR TRACKER DESIGN, ASSEMBLY DRAWING NO. GH 1052940 IS PROPRIETARY TO PACIFIC INFRARED SYSTEMS CO. THIS COMPANY IS PROCEEDING FOR PATENT COVERAGE ON THIS RETICLE AND TRACKING SYSTEM.

"WE ARE PLEASED THAT YOU HAVE FOUND THE DESIGN USEFUL, AND WE ARE WILLING TO NEGOTIATE A NON-EXCLUSIVE, ROYALTY-BEARING LICENSE TO PERMIT ITS CONTINUED USE. WE BELIEVE, HOWEVER, THAT THE RELEASE OF THIS INFORMATION TO OUR COMPETITORS, WHILE DOUBTLESS INADVERTENT, HAS DAMAGED THE COMPETITIVE POSITION OF THIS COMPANY. WE ASK THEREFORE THAT YOU WITHDRAW THE RFP AS SOON AS POSSIBLE.

"IF NASA STILL REQUIRES THESE TRACKERS, PACIFIC INFRARED WILL BE HAPPY TO BID THEM TO DESIGN OF ASSEMBLY DRAWING NO. GH 1052940 AND ITS SUBSIDIARY DRAWINGS ON A SOLE-SOURCE BASIS.'

BY LETTER DATED JULY 21, 1965, DENYING THAT THE GODDARD STAR TRACKER EMBODIED THE PACIFIC INFRARED DESIGN, GODDARD SPACE FLIGHT CENTER ADVISED MR. WHITNEY AS FOLLOWS:

"AN INVESTIGATION CONDUCTED BY THE CONTRACTING OFFICER IN CONJUNCTION WITH THE OFFICE OF PATENT COUNSEL, INITIATED AS A RESULT OF YOUR LETTER OF JULY 8, 1965, RESULTS IN OUR WILLINGNESS TO CONSIDER THE POSSIBILITY OF OBTAINING A LICENSE FOR ANY PATENT RIGHTS THAT PACIFIC INFRARED SYSTEMS MAY HAVE COVERING THE STAR TRACKER DESIGN OF THE SUBJECT PROCUREMENT. HOWEVER, BEYOND THE AMBIT OF ANY POSSIBLE PATENT PROTECTION, WE ARE UNABLE TO AGREE WITH YOUR CONTENTION THAT THE GODDARD-DESIGNED STAR TRACKER, AS EMBODIED IN ASSEMBLY DRAWING NO. GH 1052940, IS PROPRIETARY TO PACIFIC INFRARED SYSTEMS.

ACCORDINGLY, THERE IS NO JUSTIFICATION FOR WITHDRAWING THE RFP AND NEGOTIATING WITH PACIFIC INFRARED SYSTEMS ON A SOLE-SOURCE BASIS. WILL, OF COURSE, BE HAPPY TO CONSIDER YOUR PROPOSAL ON A COMPETITIVE BASIS.'

IN ADDITION TO THE CONTENTIONS RELATED ABOVE, IT IS URGED IN THE ADMINISTRATIVE REPORT THAT PARAGRAPH 3.109 OF THE NASA PROCUREMENT REGULATION PROVIDES THAT A FIRM WHICH DESIRES TO RESTRICT THE USE OF DATA SUBMITTED WITH A PROPOSAL IN RESPONSE TO A REQUEST FOR PROPOSALS SHALL MARK THE DATA WITH A PRESCRIBED LEGEND; THAT PROPOSALS SUBMITTED IN RESPONSE TO A REQUEST FOR PROPOSALS WHICH ARE NOT SO MARKED NEED NOT BE PROTECTED; AND THAT BY FAILING TO MARK PROPOSAL P-10019 AS REQUIRED BY THIS REGULATION PACIFIC ABANDONED ANY PROPRIETARY RIGHTS IN THE DATA SUBMITTED IN THE PROPOSAL. IT IS STATED IN THE REPORT THAT PARAGRAPH 3.109 OF THE NASA PROCUREMENT REGULATION IS SUBSTANTIALLY SIMILAR TO A CORRESPONDING PROVISION WHICH HAS BEEN CONTAINED IN THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WITH SOME MODIFICATIONS SINCE THE INITIAL PUBLICATION THEREOF IN REVISION NO. 17 OF ASPR DATED SEPTEMBER 7, 1956, AND NOW APPEARING AS PARAGRAPH 3-506 OF ASPR. PARAGRAPH 3.109 OF THE NASA PROCUREMENT REGULATION, IT IS STATED, WAS FIRST PUBLISHED BY TRANSMITTAL SHEET (TS) 70 AS A PART OF CHAPTER 18 OF THE NASA MANAGEMENT MANUAL, EFFECTIVE MARCH 1, 1960, AND HAS BEEN IN EFFECT IN ITS PRESENT FORM SINCE THAT DATE.

THE PROVISIONS OF THE "NEW NASA PROCUREMENT REGULATION, JANUARY 1964 EDITION (NPC 400)," WHICH IS AVAILABLE WITH REVISIONS FROM THE SUPERINTENDENT OF DOCUMENTS, GOVERNMENT PRINTING OFFICE, ARE PUBLISHED IN TITLE 41 OF THE CODE OF FEDERAL REGULATIONS, 41 CFR, CHAPTER 18, REVISED AS OF JANUARY 1, 1965, PARAGRAPH 3.109 THEREOF PROVIDES AS FOLLOWS:

"S18-3.109 RESTRICTIONS ON DISCLOSURE OF DATA IN PROPOSALS.

"/A) REQUESTS FOR PROPOSALS MAY REQUIRE THE OFFEROR TO SUBMIT WITH HIS PROPOSAL DATA WHICH MAY INCLUDE A DESIGN OR PLAN FOR ACCOMPLISHING THE OBJECTIVES OF THE PROCUREMENT. SUCH DATA MAY INCLUDE INFORMATION WHICH THE OFFEROR DOES NOT WANT DISCLOSED TO THE PUBLIC OR USED BY THE GOVERNMENT FOR ANY PURPOSE OTHER THAN EVALUATION OF THE PROPOSALS. OFFERORS SHALL MARK EACH SHEET OF DATA WHICH THEY SO WISH TO RESTRICT WITH THE LEGEND SET FORTH BELOW:

"THIS DATA, FURNISHED IN RESPONSE TO RFP NO. ------- , SHALL NOT BE DISCLOSED OUTSIDE THE GOVERNMENT OR BE DUPLICATED, USED, OR DISCLOSED IN WHOLE OR IN PART FOR ANY PURPOSE OTHER THAN TO EVALUATE THE PROPOSAL PROVIDED, THAT IF A CONTRACT IS AWARDED TO THIS OFFEROR AS A RESULT OF OR IN CONNECTION WITH THE SUBMISSION OF SUCH DATA, THE GOVERNMENT SHALL HAVE THE RIGHT TO DUPLICATE, USE, OR DISCLOSE THIS DATA TO THE EXTENT PROVIDED IN THE CONTRACT. THIS RESTRICTION DOES NOT LIMIT THE GOVERNMENT'S RIGHT TO USE INFORMATION CONTAINED IN SUCH DATA IF IT IS OBTAINED FROM ANOTHER SOURCE. (DECEMBER 1962) "CONTRACTING OFFICERS SHALL NOT REFUSE TO CONSIDER ANY PROPOSAL MERELY BECAUSE DATA SUBMITTED WITH THAT PROPOSAL IS SO MARKED. DATA SO MARKED SHALL BE USED ONLY TO EVALUATE PROPOSALS AND SHALL NOT BE DISCLOSED OUTSIDE THE GOVERNMENT WITHOUT THE WRITTEN PERMISSION OF THE OFFEROR EXCEPT UNDER THE CONDITIONS PROVIDED IN THE LEGEND. IF IT IS DESIRED TO DUPLICATE, USE, OR DISCLOSE THE DATA OF THE OFFEROR TO WHOM THE CONTRACT IS AWARDED FOR PURPOSES OTHER THAN TO EVALUATE THE PROPOSAL, THE CONTRACT SHOULD SO PROVIDE.

"/B) THE PROVISIONS OF PARAGRAPH (A) OF THIS SECTION DO NOT APPLY TO PROCUREMENT BY FORMAL ADVERTISING. HOWEVER, SEE SEC. 18-2.404-4 OF THIS CHAPTER WITH RESPECT TO PUBLIC DISCLOSURE OF DESCRIPTIVE LITERATURE OR MATERIAL SUBMITTED BY A BIDDER ON A RESTRICTIVE BASIS.'

WITH SPECIFIC REFERENCE TO "DISSEMINATION OF PROCUREMENT INFORMATION," PARAGRAPH 3.106 OF THE NASA PROCUREMENT REGULATION AS MODIFIED BY REV. 4, DATED MAY 31, 1965, PROVIDES IN SUBPARAGRAPH 3,AS FOLLOWS:

"3.106-3 AWARD INFORMATION TO UNSUCCESSFUL OFFERORS.

"/A) PRE-AWARD NOTICE OF UNACCEPTABLE OFFERS. THE FOLLOWING POLICIES AND PROCEDURES SHALL BE OBSERVED IN MAKING INFORMATION AVAILABLE TO UNSUCCESSFUL OFFERORS:

"/I) EXCEPT AS PROVIDED IN (II) BELOW, IN ANY PROCUREMENT IN EXCESS OF $10,000 IN WHICH IT APPEARS THAT THE PERIOD OF EVALUATION OF PROPOSALS IS LIKELY TO EXCEED 30 DAYS OR IN WHICH A LIMITED NUMBER OF OFFERORS HAS BEEN SELECTED FOR ADDITIONAL NEGOTIATION, THE CONTRACTING OFFICER, UPON DETERMINATION THAT A PROPOSAL IS UNACCEPTABLE, SHALL PROVIDE PROMPT NOTICE OF THE FACT TO THE OFFEROR SUBMITTING THE PROPOSAL. SUCH NOTICE NEED NOT BE GIVEN WHERE DISCLOSURE WILL PREJUDICE THE GOVERNMENT'S INTEREST OR WHERE THE PROPOSED CONTRACT IS:

"/A) NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (4), (5), OR (6) (SEE 3.204, 3.205, OR 3.206):

"/B) NEGOTIATED WITH A FOREIGN SUPPLIER WHEN ONLY FOREIGN SOURCES OF SUPPLIES OR SERVICES HAVE BEEN SELECTED.

"IN ADDITION TO STATING THAT THE PROPOSAL HAS BEEN DETERMINED UNACCEPTABLE, NOTICE TO THE OFFEROR SHALL INDICATE, IN GENERAL TERMS, THE BASIS FOR SUCH DETERMINATION AND SHALL ADVISE THAT, SINCE FURTHER NEGOTIATION WITH HIM CONCERNING THIS PROCUREMENT IS NOT CONTEMPLATED, A REVISION OF HIS PROPOSAL WILL NOT BE CONSIDERED.

"/II) IN THE CASE OF PROCUREMENTS FOR WHICH A SOURCE EVALUATION BOARD HAS BEEN APPOINTED AND ONE OR MORE THAN ONE OFFEROR HAS BEEN SELECTED FOR NEGOTIATIONS, THOSE OFFERORS NOT SELECTED FOR EITHER PRELIMINARY NEGOTIATIONS OR FINAL NEGOTIATIONS WILL BE NOTIFIED, UPON ELIMINATION BY THE SOURCE SELECTION OFFICIAL, OF THAT FACT IN WRITING.

"/B) POST-AWARD NOTICE OF UNACCEPTED OFFERS.

"/1) PROMPTLY AFTER MAKING ALL AWARDS IN ANY PROCUREMENT IN EXCESS OF $10,000, THE CONTRACTING OFFICER SHALL GIVE WRITTEN NOTICE TO THE UNSUCCESSFUL OFFERORS THAT THEIR PROPOSALS WERE NOT ACCEPTED, EXCEPT THAT SUCH NOTICE NEED NOT BE GIVEN WHERE NOTICE HAS BEEN PROVIDED PURSUANT TO (A) ABOVE OR THE CONTRACT IS NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (4), (5), OR (6) (SEE 3.204, 3.205, OR 3.206), OR IS NEGOTIATED WITH A FOREIGN SUPPLIER WHEN ONLY FOREIGN SOURCES OF SUPPLIES OR SERVICES HAVE BEEN SOLICITED. SUCH NOTICE SHALL ALSO INCLUDE:

"/I) THE NUMBER OF PROSPECTIVE CONTRACTORS SOLICITED;

"/II) THE NUMBER OF PROPOSALS RECEIVED;

"/III) THE NAME AND ADDRESS OF EACH OFFEROR RECEIVING AN AWARD; AND

"/IV) THE ITEMS, QUANTITIES, AND UNIT PRICES OF EACH AWARD; PROVIDED THAT, WHERE THE NUMBER OF ITEMS OR OTHER FACTORS MAKES THE LISTING OF UNIT PRICES IMPRACTICABLE, ONLY THE TOTAL CONTRACT PRICE NEED BE FURNISHED.

"ADDITIONAL INFORMATION AS TO WHY AN OFFEROR'S PROPOSAL WAS NOT ACCEPTED SHOULD BE PROVIDED TO THE OFFEROR UPON HIS WRITTEN REQUEST TO THE CONTRACTING OFFICER, EXCEPT WHERE THE PRICE INFORMATION IN (IV) ABOVE READILY REVEALS SUCH REASON, BUT IN NO EVENT WILL ANY OFFEROR'S COST BREAKDOWN, PROFIT, OVERHEAD RATES, TRADE SECRETS, MANUFACTURING PROCESSES AND TECHNIQUES, OR OTHER CONFIDENTIAL BUSINESS INFORMATION BE DISCLOSED TO ANY OTHER OFFEROR.

"/2) IN PROCUREMENTS OF $10,000 OR LESS AND SUBJECT TO THE EXCEPTIONS IN (1) ABOVE, THE INFORMATION DESCRIBED IN (1) ABOVE SHALL BE FURNISHED TO UNSUCCESSFUL OFFERORS UPON REQUEST.

"/C) CLASSIFIED INFORMATION. CLASSIFIED INFORMATION SHALL BE FURNISHED ONLY IN ACCORDANCE WITH REGULATIONS GOVERNING CLASSIFIED INFORMATION.

"/D) DEBRIEFING. IT IS NASA POLICY TO PROVIDE A DEBRIEFING TO UNSUCCESSFUL OFFERORS IN COMPETITIVE PROCUREMENTS WHERE SOURCE EVALUATION BOARD PROCEDURES ARE EMPLOYED AND WHEN REQUESTED IN WRITING. SUCH DEBRIEFING SHOULD BE CONFINED TO A DISCUSSION OF THE UNSUCCESSFUL OFFEROR'S PROPOSAL IN RELATION TO THE GOVERNMENT'S REQUIREMENT. CARE SHOULD BE TAKEN TO AVOID COMPARISON OF ONE COMPANY'S PROPOSAL WITH ANOTHER AND DISCLOSURE OF INFORMATION CONTAINED IN OTHER OFFERS OR THE GOVERNMENT'S ESTIMATE. THE POLICIES AND PROCEDURES GOVERNING DEBRIEFING ARE MORE FULLY SET FORTH IN NASA MANAGEMENT MANUAL 3-3-15A.'

IT IS CONTENDED IN THE REPORT THAT THE PURPOSE AND INTENT OF ASPR 3 109, AND LIKEWISE PARAGRAPH 3.109 OF THE NASA PROCUREMENT REGULATION, "WAS TO PROTECT ONLY THAT DATA, SUBMITTED WITH A PROPOSAL IN RESPONSE TO A REQUEST FOR PROPOSALS, WHICH WAS MARKED WITH THE PRESCRIBED LEGEND," THAT THE REGULATION IS A "MATERIAL FACT FOR CONSIDERATION IN DETERMINING WHETHER DATA SUBMITTED BY A PROPOSER IN A CONFIDENTIAL DISCLOSURE UNDER AN IMPLIED CONTRACT.' IN A "STATEMENT OF THE LAW" ACCOMPANYING THE REPORT IT IS POINTED OUT THAT THE DECISIONS OF OUR OFFICE REFERRED TO IN THE BRIEF SUBMITTED IN SUPPORT OF YOUR PROTEST MAY BE DISTINGUISHED ON THE GROUND THEY DID NOT INVOLVE A PROPOSAL SUBMITTED IN RESPONSE TO AN RFP.

THE NASA PROCUREMENT REGULATIONS WERE ISSUED PURSUANT TO TH BOARD AUTHORITY GRANTED THE ADMINISTRATION UNDER SECTION 203 (B) (1) OF THE NATIONAL AERONAUTICS AND SPACE ACT OF 1958, 42 U.S.C. 2473 (B) (1), "TO MAKE, PROMULGATE, ISSUE, RESCIND, AND AMEND RULES AND REGULATIONS GOVERNING THE MANNER OF ITS OPERATIONS AND THE EXERCISE OF THE POWERS VESTED IN IT BY LAW.' ALSO, PURSUANT TO SECTION 301 (B) OF THE NASA ACT OF 1958, SECTIONS 2302 (1) AND 2303 (A) OF TITLE 10 U.S.C. WERE AMENDED SO AS TO PROVIDE, IN EFFECT, THAT NASA PROCUREMENT IS SUBJECT TO THE PROVISIONS OF CHAPTER 137, TITLE 10 OF THE U.S.C. COVERING "PROCUREMENT GENERALLY" BY THE ARMED FORCES. SEE THE CASES IN SUPPORT OF THE GENERAL PROPOSITION THAT REGULATIONS PROMULGATED PURSUANT TO STATUTORY AUTHORITY WHICH ARE CONSISTENT WITH THE STATUTORY PURPOSES AND INTENT HAVE THE FORCE AND EFFECT OF LAW, STANDARD OIL CO. V. JOHNSON, 316 U.S. 481 (1942); LESLIE MILLER, INC. V. ARKANSAS, 352 U.S. 187 (1956); CALIFORNIA COMM-N. V. UNITED STATES, 355 U.S. 534, 542 (1958); CAFETERIA WORKERS V. MCELROY, 367 U.S. 886, 890 (1961); PAUL V. UNITED STATES, 371 U.S. 245, 250-255 (1963); AND UNITED STATES V. GEORGIA PUB. SERV. COMM-N., 371 U.S. 285, 288 -293 (1963). CF. G. L. CHRISTIAN AND ASSOCIATES V. UNITED STATES, DECIDED BY THE COURT OF CLAIMS, JANUARY 11, 1963, 312 F.2D 418; RECONSIDERED JULY 12, 1963, 320 F.2D 345, CERT. DEN. 375 U.S. 954.

AS CONTENDED BY THE AGENCY IT APPEARS THAT NASA PROCUREMENT REGULATION 3.109 AND ASPR 3-506.1 ARE REASONABLE REGULATIONS PROMULGATED FOR THE PURPOSE OF FACILITATING THE OPERATIONS OF THE GOVERNMENT. THE AGENCY POINTS OUT THAT THESE REGULATIONS SAY THAT IF AN OFFEROR DOES NOT WANT HIS DATA DISCLOSED OR USED FOR ANY PURPOSE OTHER THAN EVALUATION OF THE PROPOSAL, HE SHALL MARK THE DATA WITH THE LEGEND PRESCRIBED BY THE REGULATIONS. "IF HE DOES NOT WORK THE DATA AS PRESCRIBED," IT IS CONTENDED,"THERE IS AN IMPLIED CONTRACT IN FAVOR OF THE GOVERNMENT THAT THE OFFEROR IS NOT INVOKING THE CONFIDENTIAL RELATIONSHIP AUTHORIZED, EITHER BECAUSE THE DATA CONTAINS NOTHING PROPRIETARY OR BECAUSE THE OFFEROR DOES NOT WISH TO ASSERT SUCH RIGHT" AND THAT "ON THE OTHER HAND, WHEN THE OFFEROR DOES MARK THE DATA AS PRESCRIBED, THE IMPLIED CONTRACT ESTABLISHING THE CONFIDENTIAL RELATIONSHIP IS ESTABLISHED.' THE AGENCY URGES THAT "IT WOULD GREATLY COMPLICATE THE WORK OF THE ADMINISTRATIVE BRANCH OF THE GOVERNMENT IF IT MUST PROVIDE SAFEGUARDS AGAINST THE IMPROPER, UNCONSCIOUS OR INADVERTENT USE OF EVERY PROPOSAL SUBMITTED TO IT UNDER A REQUEST FOR PROPOSALS OR AN INVITATION FOR BIDS.' THE VIEW IS EXPRESSED BY THE AGENCY "THAT THE REGULATION NOT ONLY CODIFIES THE LAW, BY REQUIRING DATA DESIRED TO BE PROTECTED TO BE RESTRICTIVELY MARKED, BUT ALSO STRIKES THE BEST BALANCE IN THE PUBLIC INTEREST.' AND WITH RESPECT TO REFERENCES IN DECISIONS OF OUR OFFICE IN CASES CHARACTERIZED AS "SO CALLED "CONFIDENTIAL RELATIONSHIP" CASES TO ANOTHER REGULATION, ASPR 3 507 (B) (V)" WHICH CONTAINS PROVISIONS SUBSTANTIALLY THE SAME AS NASA PROCUREMENT REGULATION 3.106-E (B), QUOTED ABOVE, THE POSITION IS TAKEN IN THE AGENCY'S "STATEMENT OF THE LAW" THAT "NASA DOES NOT REGARD PARAGRAPH 3.106-3 (B) OF ITS REGULATION AS LIMITING OR MODIFYING NASA PR 3.109" ON THE BASIS "TECHNICAL DATA RECEIVED UNDER A PROPOSAL WHICH IS NOT MARKED AS PROVIDED IN 3.109 DOES NOT QUALIFY AS A "TRADE SECRET, MANUFACTURING PROCESS OR TECHNIQUE," AS THESE TERMS ARE USED IN PARAGRAPH 3.106-3 (B). IT IS ONLY WHEN THEY ARE RESTRICTIVELY MARKED," IT IS CONTENDED,"THAT THE PROHIBITION OF PARAGRAPH 3.106-3 (B) APPLIES.'

WE DO NOT AGREE THAT PARAGRAPH 3.106-3 (B) OF THE NASA PROCUREMENT REGULATION MAY BE GIVEN THE BROAD CONSTRUCTION ADMINISTRATIVELY SUGGESTED. CERTAINLY, THE TERM "TRADE SECRETS" AS THIS TERM IS ORDINARILY UNDERSTOOD EMBRACES TECHNICAL DESIGNS AS WELL AS MANUFACTURING PROCESSES AND TECHNIQUES; AND WHEN "TRADE SECRETS" ARE OFFERED FOR EVALUATION IN PROPOSALS SUBMITTED IN RESPONSE TO AN RFQ OR INVITATION FOR BIDS COVERING GOVERNMENT REQUIREMENTS, THEY PROPERLY MAY NOT BE DISCLOSED OR USED BY THE GOVERNMENT WITHOUT DUE CONSIDERATION OF THE RIGHTS OF THE COMPETING OFFERORS INVOLVED. SEE, IN THIS CONNECTION, FEDERAL COMMUNICATIONS COMMISSION V. COHN (D.C. N.Y. 1957), 154 F.SUPP. 899, 912, WHERE THE COURT REFERS TO THE PROVISIONS OF 18 U.S.C. 1905, MENTIONED IN YOUR BRIEF,"PROHIBITING OFFICERS OR EMPLOYEES OF FEDERAL AGENCIES FROM DISCLOSING CONFIDENTIAL INFORMATION RECEIVED BY THEM "IN ANY MANNER OR TO ANY EXTENT NOT AUTHORIZED BY LAW.' CF. OUR DECISION OF SEPTEMBER 13, 1965, B 154079, AND THE AUTHORITIES CITED THEREIN. SEE, ALSO, THE DECISIONS OF THE UNITED STATES COURT OF APPEALS, DISTRICT OF COLUMBIA CIRCUIT, RENDERED IN THE CASE OF SPEVACK V. STRAUSS, SEPTEMBER 19, 1957, 248 F.2D 752, AND JUNE 9, 1958, 257 F.2D 208, WHERE IT WAS ALLEGED THAT AN UNAUTHORIZED PUBLICATION BY THE ATOMIC ENERGY COMMISSION OF TRADE SECRETS CONSTITUTED A TAKING OF PROPERTY FOR WHICH COMPENSATION MUST BE PAID UNDER THE FIFTH AMENDMENT TO THE FEDERAL CONSTITUTION. IN THESE CASES THE COURT FOUND THE PLAINTIFF'S REMEDY WAS NOT BY WAY OF A SUIT TO RESTRAIN THE COMMISSION FROM PUBLICIZING THE INFORMATION BUT HELD THAT RECOVERY OF SUCH COMPENSATION COULD BE HAD BY A SUIT IN THE COURT OF CLAIMS UNDER THE PROVISIONS OF 28 U.S.C. 1491, PROVIDING THAT "THE COURT OF CLAIMS SHALL HAVE JURISDICTION TO RENDER JUDGMENT UPON ANY CLAIM AGAINST THE UNITED STATES FOUNDED EITHER UPON THE CONSTITUTION, OR ANY ACT OF CONGRESS, OR ANY REGULATION OF AN EXECUTIVE DEPARTMENT, OR UPON ANY EXPRESS OR IMPLIED CONTRACT WITH THE UNITED STATES, OR FOR LIQUIDATED OR UNLIQUIDATED DAMAGES IN CASES NOT SOUNDING IN TORT.' IN THE EVENT YOUR APPLICATION FOR A PATENT IS GRANTED, YOUR ATTENTION IS INVITED TO THE PROVISIONS OF 28 U.S.C. 1498 WHEREBY YOU MAY BE PRIVILEGED TO FILE A SUIT IN THE COURT OF CLAIMS TO RECOVER REASONABLE COMPENSATION FOR PATENT INFRINGEMENT BY CONTRACTORS WHEN SUPPLYING GOVERNMENT REQUIREMENTS.

FROM A CAREFUL CONSIDERATION OF THE AVAILABLE RECORD IN THE LIGHT OF THE PRINCIPLES SET OUT ABOVE, HOWEVER, WE DO NOT BELIEVE THE FACTS AND CIRCUMSTANCES PRESENTED ESTABLISH THAT TECHNICAL INFORMATION AND DATA CONSTITUTING "TRADE SECRETS" OF YOUR FIRM HAVE, IN FACT, BEEN UTILIZED BY NASA IN THE INSTANT PROCUREMENT. ON THE OTHER HAND, IF IT WERE FOUND THAT YOUR TECHNICAL INFORMATION HAS BEEN SO UTILIZED IT SEEMS QUITE CLEAR THAT YOU HAVE FAILED TO TAKE THOSE MEASURES REASONABLY CALCULATED AND NECESSARY TO PROTECT SUCH TECHNICAL INFORMATION AS "TRADE SECRETS" BY RESTRICTING ITS USE AND POSSIBLE DISCLOSURE UNDER THE PARTICULAR CIRCUMSTANCES INVOLVED. THIS IS TO SAY, THE RECORD DOES NOT SHOW THAT YOU HAVE STIPULATED OR OBTAINED AN AGREEMENT WITH THE AGENCY THAT THE TECHNICAL INFORMATION SUBMITTED WITH YOUR PROPOSAL INCLUDED "TRADE SECRETS" AND WAS TO BE USED ONLY FOR EVALUATION PURPOSES; NOR DOES THE RECORD SHOW THAT ITS USE WAS RESTRICTED IN ANY OTHER MANNER OR THAT YOU REQUESTED ITS RETURN IF YOUR PROPOSAL WAS NOT ACCEPTED. IN THE ABSENCE OF SUCH SPECIFIC MEASURES ON YOUR PART SUBSTANTIAL EVIDENCE ESTABLISHING AN INTENT OR UNDERSTANDING OF THE PARTIES TO PROTECT THE TECHNICAL INFORMATION FROM DISCLOSURE IS REQUIRED TO SHOW THE EXISTENCE OF AN IMPLIED CONTRACT TO THAT EFFECT. THE AUTHORITIES CITED ABOVE. REASONABLY CONSTRUED, THE REGULATION APPLICABLE IN THE INSTANT CASE--- PARAGRAPH 3.109 OF THE NASA PROCUREMENT REGULATION--- WOULD SEEM TO MANIFEST A PURPOSE TO DISAFFIRM ANY SUCH IMPLICATION OF INTENTION OR UNDERSTANDING ON THE PART OF THE PROCURING AGENCY. THUS, IN OUR OPINION, EXISTING LAW DOES NOT SUPPORT THE POSITION THAT THE OFFER OF TECHNICAL INFORMATION FOR EVALUATION PURPOSES NECESSARILY IMPLIES OF ITSELF, THAT SUCH INFORMATION IS REGARDED AS A "TRADE SECRET" BY THE OFFEROR SO AS TO IMPOSE AN OBLIGATION ON THE OFFEREE TO SO REGARD AND PROTECT IT, AS APPARENTLY URGED BY YOU, PARTICULARLY WHERE AS HERE THE OFFER IS MADE PURSUANT TO A REQUEST FOR PROPOSALS COVERING GOVERNMENT REQUIREMENTS IN ACCORDANCE WITH A SPECIFIC ADMINISTRATIVE PROCEDURE PRESCRIBED BY REGULATION.

IN CONCLUSION, WE DO NOT BELIEVE THE INFORMATION AND EVIDENCE SUBMITTED IN THIS MATTER REASONABLY MAY BE REGARDED AS AFFORDING ADEQUATE JUSTIFICATION FOR REQUIRING CANCELLATION OF THE REQUEST FOR PROPOSALS IN QUESTION, RFP 670-96015-262, AND YOUR PROTEST IS THEREFORE DENIED.