B-150369, AUG. 22, 1963, 43 COMP. GEN. 193

B-150369, AUG. 22, 1963, 43 COMP. GEN. 193

CONTRACTS - DATA, RIGHTS, ETC. - USE BY GOVERNMENT THE USE BY THE GOVERNMENT IN AN INVITATION FOR BIDS OF PROPRIETARY DATA OBTAINED UNDER A PRIOR CONTRACT FROM A CONTRACTOR ON THE BASIS OF ASSURANCES FROM CONTRACTING OFFICIALS THAT THE DATA WOULD BE HELD CONFIDENTIAL AND USED ONLY FOR A LIMITED PURPOSE IS CONTRARY TO THE REPRESENTATIONS MADE BY RESPONSIBLE OFFICIALS WHICH ARE BINDING ON THE GOVERNMENT AND, THEREFORE, THE INVITATION SHOULD BE CANCELED AND THE DRAWINGS FURNISHED TO POTENTIAL BIDDERS RECOVERED.

TO THE DIRECTOR, DEFENSE SUPPLY AGENCY, AUGUST 22, 1963:

FURTHER REFERENCE IS MADE TO THE PROTEST OF EAGLE CRUSHER COMPANY, INC., GALION, OHIO, DATED NOVEMBER 26, 1962, AND RELATED CORRESPONDENCE, AGAINST ANY POSSIBLE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS (IFB) DSA-7-63- 21 ISSUED SEPTEMBER 26, 1962, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, DEFENSE SUPPLY AGENCY, COLUMBUS, OHIO, FOR FURNISHING VARIOUS ITEMS OF ROCK CRUSHING AND SCREENING PLANT PARTS TO BE MANUFACTURED IN ACCORDANCE WITH EAGLE CRUSHER COMPANY DRAWINGS SPECIFIED FOR EACH PART IN THE IFB SCHEDULE.

EAGLE URGES, IN BRIEF, THAT IFB DSA-7-63-21 SHOULD BE CANCELED AND ANY COPIES OF EAGLE'S DRAWINGS FURNISHED TO BIDDERS UNDER THE IFB SHOULD BE RECALLED BY THE GOVERNMENT. THE PRIMARY GROUND ADVANCED BY EAGLE IS THAT THE GOVERNMENT'S USE OF THESE DRAWINGS FOR COMPETITIVE PURPOSES WOULD VIOLATE EAGLE'S RIGHTS IN PROPRIETARY DATA SET FORTH THEREON AS THE DRAWINGS WERE ACQUIRED BY THE GOVERNMENT FROM EAGLE UNDER PRIOR CONTRACTS COVERING THE DESIGN AND MANUFACTURE OF THE ROCK CRUSHER AND SCREENING PLANTS FOR WHICH THE PARTS ARE NOW BEING PROCURED, AND EAGLE WAS INDUCED TO SUPPLY SUCH PROPRIETARY DATA UPON REPEATED ASSURANCES OF A RESPONSIBLE PROCUREMENT OFFICIAL THAT THE PLANS WOULD BE HELD CONFIDENTIAL AND USED FOR IDENTIFICATION AND CATALOGING PURPOSES ONLY.

THE GOVERNMENT URGES THAT IFB DSA-7-63-21 DOES NOT VIOLATE EAGLE'S PROPRIETARY RIGHTS AND SHOULD NOT BE CANCELED BASED ON A DENIAL THAT THE ALLEGED ASSURANCES OF THE PROCUREMENT OFFICIAL CREATED A CONFIDENTIAL RELATIONSHIP BETWEEN THE GOVERNMENT AND EAGLE, OR THAT EAGLE WAS OBLIGATED TO FURNISH OR, IN FACT, DID FURNISH ANY PROPRIETARY DATA TO THE GOVERNMENT IN CONFIDENCE, OR OTHERWISE, UNDER THE PRIOR CONTRACTS.

IN OUR DECISIONS RELATING TO THE USE OF DRAWINGS AND TECHNICAL DATA WHICH MAY BE PROPRIETARY TO CONTRACTORS WITH THE GOVERNMENT, WHEN THE RIGHT OF THE GOVERNMENT TO USE SUCH DATA HAS BEEN CHALLENGED WE HAVE RECOGNIZED AND APPLIED THE WELL-ESTABLISHED RULE THAT INDEPENDENTLY OF THE LAW APPLICABLE TO PATENTS AND COPYRIGHTS THE OWNER OF PROPRIETARY INFORMATION OR TRADE SECRETS MAY BE GRANTED APPROPRIATE RELIEF WITH RESPECT TO A USE OR DISCLOSURE BY ONE WHOSE KNOWLEDGE THEREOF WAS OBTAINED "IN CONFIDENCE" OR THROUGH A CONFIDENTIAL RELATIONSHIP AND THAT UNDER CERTAIN CIRCUMSTANCES A NONDISCLOSURE AGREEMENT OR CONTRACT MAY BE IMPLIED. SEE, IN THIS CONNECTION, OUR DECISIONS AND THE AUTHORITIES CITED THERE, B-148376, JULY 24, 1962; B-143711, DECEMBER 22, 1960; B-136916, AUGUST 28, 1961; 41 COMP. GEN. 148; B-149295, JANUARY 8, 1963, 42 COMP. GEN. 346.

EAGLE HAS SUBMITTED "DATA AND CHRONOLOGICAL STATEMENT OF FACTS" RELATING TO ALL THE TRANSACTIONS INVOLVED AND BRIEFS WITH DOCUMENTARY EXHIBITS HAVE BEEN SUBMITTED IN SUPPORT OF THE RESPECTIVE POSITIONS OF THE PARTIES. BELIEVE YOU WILL AGREE THAT IN DETERMINING THE ISSUES PRESENTED HERE ALL THE PERTINENT FACTS AND CIRCUMSTANCES SURROUNDING THE PRIOR TRANSACTIONS SHOULD BE CONSIDERED WITH REFERENCE TO THE RIGHTS AND OBLIGATIONS WHICH HAVE BEEN MANIFESTED IN THE MAKING AND PERFORMANCE OF THE CONTRACTS.

THE ROCK CRUSHER AND SCREENING PLANTS WERE PROCURED FROM EAGLE BY THE U.S. ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, CORPS OF ENGINEERS (EPOC), UNDER THREE CONTRACTS, NOS. DA-11-184-ENG-18092, -18521 AND 19152, AWARDED MAY 20, 1960, DECEMBER 29, 1960, AND NOVEMBER 3, 1961, RESPECTIVELY. THE FIRST PROCUREMENT WAS INITIATED BY AN ADVERTISED INVITATION FOR BIDS, IFB DA-ENG-11-184-60-B-451, DATED FEBRUARY 5, 1960, INVITING BIDS FOR OPENING MARCH 21, 1960, FOR FURNISHING 38 PORTABLE DIESEL ENGINE AND ELECTRIC MOTOR-DRIVEN ROCK CRUSHING AND SCREENING PLANTS WITH 75 TONS PER HOUR CAPACITY, IN ACCORDANCE WITH CERTAIN PURCHASE DESCRIPTIONS AND GENERAL REQUIREMENTS AND MODIFICATIONS SET OUT IN THE INVITATION. THE PLANTS REQUIRED WERE TO CONSIST OF THREE COMPONENTS, I.E., ITEM 1A--- PORTABLE CONVEYOR BELT IN ACCORDANCE WITH PURCHASE DESCRIPTION TITLED "CONVEYOR, BELT, PORTABLE, WHEEL-MOUNTED, ELECTRIC MOTOR DRIVEN, 50 FOOT" DATED NOVEMBER 6, 1959, AS MODIFIED THEREIN; ITEM 1B--- CRUSHER JAW, IN ACCORDANCE WITH PURCHASE DESCRIPTION TITLED "CRUSHER, JAW, DIESEL ENGINE AND ELECTRIC MOTOR DRIVEN, 75 TONS PER HOUR CAPACITY" DATED NOVEMBER 6, 1959, AS MODIFIED THEREIN; ITEM 1C--- CRUSHER ROLL IN ACCORDANCE WITH PURCHASE DESCRIPTION TITLED "CRUSHER, ROLL, DIESEL ENGINE AND ELECTRIC MOTOR DRIVEN, 75 TONS PER HOUR CAPACITY," DATED NOVEMBER 9, 1959, AS MODIFIED THEREIN; TOGETHER WITH (1) "PROVISIONING LIST AND SUPPORTING DOCUMENTATION IN ACCORDANCE WITH PROVISION NO. 20 OF SPECIAL TERMS AND CONDITIONS; " (2) ,PUBLICATIONS IN ACCORDANCE WITH PROVISIONS 27 AND 28 OF SPECIAL TERMS AND CONDITIONS; " (3) ,PHOTOGRAPHS IN ACCORDANCE WITH PROVISION TITLED "PHOTOGRAPHS" OF GENERAL REQUIREMENTS; " AND (4) ,ASSEMBLY DRAWINGS IN ACCORDANCE WITH PROVISION NO. 23 OF SPECIAL TERMS AND CONDITIONS" FOR EACH OF THE COMPONENTS. THE TOTAL QUANTITY TO BE PROCURED UNDER THE IFB INCLUDED 38 COMPLETE PLANTS CONSISTING OF 114 CONVEYERS, 38 JAW CRUSHERS, AND 38 ROLL CRUSHERS. AN "ADDITIONAL PRE- PRODUCTION UNIT"WAS ALSO REQUIRED FOR EACH ITEM. AMONG THE "IMPORTANT NOTES TO BIDDERS" WERE THE OLLOWING:

1. THE CONVEYORS AND CRUSHERS WHICH FORM THE COMPLETE CRUSHING PLANT MUST ABLE TO OPERATE AS A UNIT OR INDIVIDUALLY WITHOUT MODIFICATION BY THE GOVERNMENT. A COMPLETE PLANT CONSISTS OF: THREE (3) EACH, CONVEYORS; ONE (1) EACH, CRUSHER, JAW; AND ONE (1) EACH CRUSHER, ROLL.

2. THE VARIOUS COMPONENTS OF THE PLANT WILL BE PURCHASED AS A PACKAGE UNIT FROM ONE MANUFACTURER TO INSURE COMPATIBILITY BETWEEN COMPONENTS AND TO REDUCE PARTS REQUIREMENTS FOR EACH COMPONENT.

IN ADDITION TO THE EXTENSIVE SPECIAL AND GENERAL REQUIREMENTS OF THE IFB THE "SPECIAL TERMS AND CONDITIONS" CONTAINED NUMEROUS DETAILED PROVISIONS. UNDER PARAGRAPH 7 PROSPECTIVE BIDDERS WERE ADVISED THAT A MAXIMUM OF TWO SETS OF DRAWINGS COULD BE OBTAINED BY BONA FIDE BIDDERS UPON DEPOSIT OF $50 PER SET TO INSURE THEIR RETURN AND PARAGRAPH 8 SPECIFIED THE OFFICES FROM WHICH SPECIFICATIONS MIGHT BE OBTAINED.

PARAGRAPH 20 PROVIDED AS FOLLOWS:

20. PROVISIONING PROCEDURE: THE DEPARTMENT OF THE ARMY, CORPS OF ENGINEERS, PROVISIONING PROCEDURES, PP-CE-EE1A DATED 26 NOVEMBER 1958, IS MADE A PART HEREOF. THE PROVISIONING LIST AND SUPPORTING DOCUMENTATION SHALL BE SUBMITTED IN ACCORDANCE WITH PARAGRAPH 3.5.1.

THE CONTRACTOR SHALL ALSO FURNISH THE HIGH MORTALITY PARTS LIST REFERRED TO IN PARAGRAPH 3.4 OF PP-CE-EE1A.

NOTE: COPIES OF DEPARTMENT OF THE ARMY, CORPS OF ENGINEERS, PROVISIONING PROCEDURES, PP-CE-EE1A DATED 26 NOVEMBER 1958 MAY BE OBTAINED FROM CONTRACTING OFFICER, U.S. ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, CORPS OF ENGINEERS, 226 WEST JACKSON BOULEVARD, CHICAGO 6, ILLINOIS.

PARAGRAPHS 22 AND 23 DEALING WITH THE FURNISHING OF SERVICE AND TECHNICAL ASSISTANCE AND ASSEMBLY DRAWINGS PROVIDED AS FOLLOWS:

22. SERVICE AND TECHNICAL ASSISTANCE:

ITEMS CALLED FOR BY THIS INVITATION FOR BIDS ARE DESTINED FOR SUPPORT OF A COMPLEX MISSILE SYSTEM CALLING FOR A CONSTANT STATE OF READINESS. TO BE CONSIDERED "RESPONSIBLE" UNDER THIS PROCUREMENT, EACH BIDDER MUST HAVE IN BEING, AT THE TIME OF BID OPENING, AN ADEQUATE ORGANIZATIONAL ELEMENT DEVOTED EXCLUSIVELY TO THE PROVISION OF FIELD SERVICE AND TECHNICAL ASSISTANCE TO USERS OF HIS PRODUCTS. BIDDERS WHO DO NOT HAVE THE SERVICE ORGANIZATION REQUIRED HEREIN OR WHO CANNOT DEMONSTRATE A HISTORY OF ACTIVE FIELD SERVICE OPERATIONS WILL BE CONSIDERED NONRESPONSIBLE AND THEIR BIDS WILL BE REJECTED.

23. ASSEMBLY DRAWINGS:

THE CONTRACTOR SHALL PREPARE ASSEMBLY DRAWINGS OF THE UNIT HE PROPOSES TO FURNISH UNDER THE CONTRACT. THE ASSEMBLY DRAWINGS WILL SHOW THE GENERAL LAYOUT OF THE COMPLETE UNIT, THE IDENTIFICATION AND LOCATIONS OF ALL COMPONENTS, INCLUDING ACCESS OPENINGS, DRAIN AND FILLER OPENINGS, AND OTHER DETAILS NECESSARY TO REVEAL THE COMPLETE DESIGN. PRIOR TO FABRICATION OF THE PRE-PRODUCTION UNIT, THE CONTRACTOR WILL MAKE HIS ASSEMBLY DRAWINGS AVAILABLE FOR REVIEW BY THE CONTRACTING OFFICER. REVIEW OF ASSEMBLY DRAWINGS BY THE CONTRACTING OFFICE MAY RESULT IN REQUIRED CHANGES OF IDENTIFYING FEATURES FOR ACCEPTANCE OF THE UNIT. THIS REVIEW WILL NOT BE CONSTRUED AS A FINAL APPROVAL OF THE UNIT. THE CONTRACTOR SHALL MAKE ANY CHANGES REQUIRED BY THE CONTRACTING OFFICER. THIS REVIEW WILL NOT RELIEVE THE CONTRACTOR OF THE RESPONSIBILITY FOR PRODUCING A UNIT WHICH MEETS ALL OF THE PERFORMANCE AND OTHER REQUIREMENTS OF THE CONTRACT. THE CONTRACTING OFFICER WILL CONDUCT THE ASSEMBLY DRAWING REVIEW WITHIN THIRTY (30) DAYS AFTER THE CONTRACTOR GIVES NOTICE OF THEIR AVAILABILITY.

PARAGRAPH 27 GAVE DETAILED INSTRUCTIONS FOR THE FURNISHING OF MANUFACTURER'S MAINTENANCE MANUALS, INCLUDING SERVICE INSTRUCTIONS, COMPLETE OPERATIONAL AND MAINTENANCE INSTRUCTIONS, LUBRICATION INSTRUCTIONS, A COMPLETE LIST OF ALL PARTS INCORPORATED IN THE END ITEM, OPERATOR AND SPECIAL MAINTENANCE TOOL LIST AND LISTING OF OPERATIONAL SUPPLIES FOR AN 8-HOUR PERIOD. THE FOLLOWING SIGNIFICANT STIPULATION WAS INCLUDED:

NOTE: THE GOVERNMENT UNDER THIS INVITATION FOR BID IS NOT SEEKING NOR DOES IT REQUIRE ,PROPRIETARY DATA" AS DEFINED IN ASPR 9-201 (B).

PARAGRAPH 28 CONTAINED THE STANDARD "DATA" CLAUSE SET OUT IN STANDARD FORM 36 PRESCRIBED BY GENERAL SERVICES ADMINISTRATION, NOVEMBER 1949 EDITION, AND PARAGRAPH 29 CONTAINED INSTRUCTIONS FOR THE FURNISHING OF DESCRIPTIVE IDENTIFICATION DATA SHOWING THE CONTRACTOR'S MODEL NUMBERS TO BE ASSIGNED TO ITEMS FURNISHED UNDER THE CONTRACT.

THE PURPOSE OF THE PROVISIONING PROCEDURES PRESCRIBED BY THE MANUAL PP-CE -EE1A INCORPORATED INTO THE CONTRACT BY PARAGRAPH 20 OF THE SPECIAL TERMS AND CONDITIONS WAS SET OUT IN PARAGRAPH 1.1, AS FOLLOWS:

1.1 PURPOSE. THIS PROVISIONING PROCEDURE PRESCRIBES TERMS AND CONDITIONS GOVERNING THE INITIAL PROVISIONING OF REPAIR PARTS (INCLUDING MAINTENANCE TOOLS), AND THE QUANTITIES THEREOF, WHEN REPAIR PARTS ARE TO BE DELIVERED CONCURRENTLY, OR AS OTHERWISE INDICATED BY THE GOVERNMENT, WITH MECHANICAL AND/OR ELECTRICAL EQUIPMENT PROCURED BY THE GOVERNMENT. THIS PROVISIONING PROCEDURE ALSO PRESCRIBES TERMS, AND CONDITIONS GOVERNING THE PREPARATION AND SUBMISSION OF PROVISIONING TECHNICAL DOCUMENTATION BY CONTRACTORS FURNISHING ENGINEER EQUIPMENT TO THE GOVERNMENT. THE PROVISIONING TECHNICAL DOCUMENTATION REQUIRED HEREIN IS USED TO PERMIT THE TIMELY SELECTION OF REPAIR PARTS, THE ASSIGNMENT OF FEDERAL STOCK NUMBERS, AND COMPILATION OF PARTS SUPPLY CATALOGS.

THE FOLLOWING PROCEDURE FOR THE ORDERING OF REPAIR PARTS WAS STIPULATED IN PARAGRAPH 3.7.1 OF THE MANUAL:

3.7.1 REPAIR PARTS LIST AND PROCEED LETTER. WITHIN 45 DAYS FROM THE POSTMARKED DATE THAT AN ACCEPTABLE PROVISIONING LIST AND DOCUMENTATION IS FURNISHED, THE CONTRACTOR SHALL BE MAILED OR OTHERWISE FURNISHED A PROCEED LETTER AND REPAIR PARTS LIST INDICATING THE ITEMS AND QUANTITIES OF REPAIR PARTS (I.E., REPAIR PARTS, AND MAINTENANCE TOOLS) WHICH THE CONTRACTOR SHALL DELIVER IN ACCORDANCE WITH SECTION 10 OF THESE PROVISIONING PROCEDURES. IN THE EVENT THE PROCEED LETTER/S) AND REPAIR PARTS LIST/S) IS NOT MAILED OR OTHERWISE FURNISHED TO THE CONTRACTOR WITHIN THE 45-DAY PERIOD ABOVE SPECIFIED, THE REQUIREMENT FOR CONCURRENT DELIVERY AS SET FORTH IN SECTION 10 OF THESE PROVISIONING PROCEDURES SHALL NOT APPLY. THE LATTER EVENT, THE DELIVERY SCHEDULE FOR THE REPAIR PARTS SHALL BE MADE A MATTER OF NEGOTIATION BETWEEN THE CONTRACTOR AND THE CONTRACTING OFFICER. IMMEDIATELY UPON RECEIPT OF THE PROCEED LETTER AND REPAIR PARTS LIST THE CONTRACTOR SHALL PROCEED WITH PRODUCTION (INCLUDES FABRICATION AND PURCHASE FROM VENDORS) OF THE ITEMS SELECTED TO ACCOMPLISH DELIVERY AS SET FORTH IN SECTION 10 OF THESE PROVISIONING PROCEDURES.

FIVE AMENDMENTS TO THE IFB WERE ISSUED CONSISTING OF 25 PAGES OF ADDITIONAL INSTRUCTIONS AND REQUIREMENTS, AND THE OPENING DATE WAS CHANGED TO APRIL 11, 1960.

EAGLE OBTAINED A SET OF THE DRAWINGS PURSUANT TO PARAGRAPH 7 OF THE "SPECIAL TERMS AND CONDITIONS" WHICH WAS FOUND TO COVER ONLY THE WHEEL, BRAKE AND WIRING SYSTEMS OF THE TRAILERS. AS INDICATED ABOVE, THE DATA IN THE IFB CONSISTED PRIMARILY OF PURCHASE DESCRIPTIONS OF THE ROLL, JAW, CONVEYER SYSTEMS AND AUXILIARY COMPONENTS. HOWEVER, A BID WAS DEVELOPED AND SUBMITTED BY EAGLE WHICH WAS THE ONLY BID RECEIVED. OTHER POTENTIAL MANUFACTURERS IN THE INDUSTRY FILED A LETTER PRIOR TO THE BID OPENING REQUESTING THAT THE IFB BE SET ASIDE BECAUSE OF THE UNUSUAL REQUIREMENTS CONTAINED THEREIN; SUCH AS, AIR AND HIGHWAY TRANSPORTABILITY OF THE PLANTS; SECTIONALIZATION AND COMPLETE INTERCHANGEABILITY OF PARTS, THE EXTENSIVE TESTING PROCEDURES, AND THE LACK OF DESIGN DRAWINGS AND SPECIFICATIONS.

A FACILITY SURVEY TEAM VISITED EAGLE'S FACILITIES AND A PREAWARD CONFERENCE WAS HELD ON APRIL 27 AND 28, 1960. DURING THIS FACILITY SURVEY AND PREAWARD CONFERENCE, EAGLE WAS REQUIRED TO FURNISH EXHAUSTIVE INFORMATION AND DATA CONCERNING ITS ORGANIZATION, PERSONNEL, FINANCIAL RESOURCES, FACILITIES, AND ALL FACETS OF ITS OPERATIONS TOGETHER WITH EVIDENCE OF ITS ABILITY TO PRODUCE SPARE PARTS (TO BE SHIPPED 30 DAYS PRIOR TO SHIPMENT OF FIRST CRUSHER AND SCREENING PLANT) CONCURRENT WITH THE END ITEMS. THE PREAWARD SURVEY TEAM EMPHASIZED THE NECESSITY FOR EAGLE TO BE ABLE TO FULLY COMPLY WITH ALL CONTRACT REQUIREMENTS AND NOTED PARTICULARLY THE SPECIAL PROVISION OF THE IFB SET OUT ABOVE THAT ALL THE VARIOUS COMPONENTS OF THE PLANTS WOULD BE PURCHASED AS A PACKAGE UNIT FROM ONE MANUFACTURER TO INSURE COMPATIBILITY BETWEEN COMPONENTS AND TO REDUCE PARTS REQUIREMENTS FOR EACH COMPONENT.

AN INVESTIGATION OF EAGLE WAS CONTINUED FOR SEVERAL WEEKS AND ON OR ABOUT MAY 17, 1960, THE VICE PRESIDENT IN CHARGE OF SALES WAS ADVISED THAT IF EAGLE WERE TO RECEIVE THE AWARD A $1,000,000 PERFORMANCE BOND WOULD BE REQUIRED TO ASSURE THAT EAGLE WOULD MEET THE ENGINEERING PRODUCTION AND TEST REQUIREMENTS OF THE CONTRACT WHILE FURNISHING CONCURRENTLY THE SPARE PARTS. EAGLE STATED ITS READINESS TO FURNISH SUCH BOND BY WIRE DATED MAY 18, 1960, AND WAS REQUESTED TO CONFIRM ITS BID OF APRIL 9, 1960, WHICH IT DID BY WIRE DATED MAY 19, 1960. THE AWARD WAS MADE TO EAGLE ON MAY 20, 1960, AND CONTRACT NUMBERED DA-11 184-ENG-18092 WAS RECEIVED ON MAY 21, 1960, WHICH CONTAINED, AMONG OTHERS, AN ADDITIONAL NEW PROVISION NOT INCLUDED IN THE IFB AS AMENDED, REQUIRING THE FURNISHING OF A PERFORMANCE BOND IN THE PENAL SUM OF $1,000,000 ON U.S. STANDARD FORM 25, WITHIN 10 DAYS AFTER RECEIPT OF NOTICE OF AWARD. THE REQUIRED BOND WAS FURNISHED AT A PREMIUM COST OF $18,000 TO EAGLE. SINCE THE IFB DID NOT REQUIRE THE FURNISHING OF A PERFORMANCE BOND, THIS ADDITIONAL COST OBVIOUSLY WAS NOT INCLUDED IN EAGLE'S BID PRICES FOR FURNISHING THE ITEMS REQUIRED.

FOLLOWING THE CONTRACT AWARD, A "PROVISIONING" CONFERENCE WAS HELD ON JUNE 15, 1960, AT EAGLE'S FACILITY. AT THIS CONFERENCE THE CONTRACTING OFFICER'S REPRESENTATIVES ADVISED EAGLE THAT MR. DONALD C. ROSS HAD BEEN DESIGNATED AS PROJECT ENGINEER AND WAS ASSIGNED AS THE CONTRACTING OFFICER'S REPRESENTATIVE FOR ALL PROVISIONING PROCEDURES AND FOR PROCUREMENT OF THE SPARE PARTS. EAGLE WAS ADVISED BY MR. ROSS THAT THE PP -CE-EE1A MANUAL DATED SEPTEMBER 6, 1957, AND REVISED NOVEMBER 26, 1958, WAS MADE A PART OF THE CONTRACT; THAT THIS MANUAL WAS THE "BIBLE" AND WOULD COVER ALL PROVISIONING PROCEDURES AND SPARE PARTS ACQUISITION; AND THAT HE HAD ASSISTED IN THE PREPARATION OF THIS MANUAL WHICH HAD BEEN DEVELOPED IN AN EFFORT TO ESTABLISH ADEQUATE PROVISIONING PROCEDURES AND PARTS PROCUREMENT.

AT THIS "PROVISIONING" MEETING, MR. ROSS STATED THAT REPAIR PARTS DRAWINGS WOULD BE REQUIRED AND A STRONG PROTEST WAS IMMEDIATELY MADE BY RESPONSIBLE EXECUTIVES OF EAGLE. THUS, MR. NORMAN J. SCHNELKER, EAGLE'S EXECUTIVE VICE PRESIDENT, POINTED OUT THAT EAGLE'S ONLY AVAILABLE DRAWINGS CONTAINED PROPRIETARY DATA AND DESIGN RIGHTS; THAT HE WAS OPPOSED TO ANY DISCLOSURE OF EAGLE'S PROPRIETARY DATA, CONFIDENTIAL PROPERTY RIGHTS, AND DESIGN RIGHTS; AND HE POINTED OUT FURTHER THE DAMAGE WHICH WOULD RESULT TO EAGLE FROM SUCH DISCLOSURE.

MR. ROSS GAVE ASSURANCES TO EAGLE THAT SUCH DRAWINGS AND THE DATA THEREON WOULD BE USED ONLY FOR THE PURPOSE OF CATALOGING AND IDENTIFICATION TO PROVIDE FEDERAL STOCK NUMBERS. MR. ROSS GAVE FURTHER ASSURANCES THAT EAGLE DRAWINGS WOULD NOT BE USED FOR PROCUREMENT PURPOSES NOR BE DISCLOSED TO COMPETITIVE MANUFACTURERS. IT WAS EXPLAINED BY MR. ROSS THAT ALTHOUGH PROVISIONING REQUIREMENTS HAD BEEN IN EFFECT FOR TWO OR THREE YEARS PREVIOUS TO THE DATE OF THIS CONTRACT, MANY CONTRACTORS HAD FAILED TO FULFILL THE PP-CE-EE1A MANUAL REQUIREMENTS AND THAT THIS NEW SYSTEM WAS NECESSARY AND VITAL TO INSURE THE SAFETY AND DEFENSE OF OUR COUNTRY. REFERRED TO THE FACT THAT THE CONTRACT CARRIED A DEFENSE ORDER RATING AND CONTAINED THE STATEMENT THAT THE END ITEMS WERE DESTINED FOR "SUPPORT OF A CRITICAL MISSILE SYSTEM" AS SET OUT IN PARAGRAPH 22 QUOTED ABOVE. MR. ROSS QUOTED THE PROVISIONS OF THE PROVISIONING PROCEDURES MANUAL PP-CE- EE1A EMPHASIZING PARAGRAPHS 12.1.8 AND 12.1.10, AS FOLLOWS:

12.1.8 DRAWINGS. GRAPHIC DATA IN THE FORM OF LINE DRAWINGS, SKETCHES, BLUEPRINTS, DIAGRAMS OR PICTURES WHICH FURNISH SUFFICIENT DESCRIPTIVE DATA TO SHOW WHAT THE PARTS ITEM IS, DETAILED DIMENSIONS OF THE PARTS ITEM, WHAT IT LOOKS LIKE AND WHAT IT IS MADE OF, SO THAT IT MAY BE DEFINITELY DETERMINED THAT THE PARTS ITEM IS NOT THE SAME AS ANOTHER PARTS ITEM ALREADY IN THE SUPPLY SYSTEM.

12.1.10 INITIAL PROVISIONING. INITIAL PROVISIONING IS THE PROCESS OF DETERMINING THE RANGE AND QUANTITY OF ITEMS (I.E., REPAIR PARTS, MAINTENANCE TOOLS, TEST EQUIPMENT AND SUPPORT EQUIPMENT) REQUIRED TO SUPPORT AND MAINTAIN AN END ITEM OF MATERIAL FOR AN INITIAL PERIOD OF SERVICE. ITS PHASES INCLUDE THE IDENTIFICATION OF ITEMS OF SUPPLY; THE ESTABLISHMENT OF TECHNICAL INFORMATION FOR USE IN THE FEDERAL CATALOGING PROGRAMS, THE PREPARATION OF SUPPLY MANUALS, TECHNICAL MANUALS, AND ALLOWANCE TABLES; AND THE PREPARATION OF INSTRUCTIONS TO ASSURE DELIVERY OF NECESSARY SUPPORT ITEMS WITH RELATED END ARTICLES.

MR. ROSS STATED FURTHER THAT THE ONLY OTHER CIRCUMSTANCES UNDER WHICH EAGLE'S DRAWINGS COULD BE USED OTHERWISE BY THE GOVERNMENT WOULD BE IN THE EVENT OF A NATIONAL EMERGENCY OR IF EAGLE SUFFERED A TOTAL FIRE LOSS, OR CLOSED DOWN ITS FACILITY AND THE CONTRACTING OFFICER'S REPRESENTATIVE WHO WAS PRESENT AT THE "PROVISIONING" MEETING DID NOT IN ANY MANNER INDICATE HIS DISAPPROVAL OR NONCONCURRENCE WITH THE EXPLANATION BY MR. ROSS THAT THE DRAWINGS WOULD BE USED ONLY FOR THE LIMITED PURPOSES STATED. EAGLE'S REPRESENTATIVES POINTED OUT THAT DIFFICULTY WOULD BE ENCOUNTERED IN SECURING NECESSARY DRAWINGS CONTAINING PROPRIETARY DATA FROM THEIR VENDORS BUT WAS ASSURED BY MR. ROSS THAT THE SAME SECTIONS OF THE "PROVISIONING" MANUAL WOULD APPLY. IT WAS WITH THESE ASSURANCES THAT DRAWINGS WITH PROPRIETARY DATA ULTIMATELY WERE OBTAINED BY EAGLE FROM ITS SUPPLIERS.

AN AFFIDAVIT BY MR. ROSS DATED DECEMBER 14, 1962, HAS BEEN SUBMITTED RELATING TO THE ,PROVISIONING" REQUIREMENTS AND PROCEDURES UNDER THE MANUAL, AS FOLLOWS:

AFFIDAVIT

STATE OF OHIO, COUNTY OF FRANKLIN

THIS DAY PERSONALLY APPEARED BEFORE ME, THE UNDERSIGNED NOTARY PUBLIC, DONALD C. ROSS, AND, AFTER FIRST BEING DULY SWORN, DID DEPOSE AND SAY:

MY NAME IS DONALD C. ROSS, EQUIPMENT SPECIALIST, GS-11, AND I AM CURRENTLY EMPLOYED BY EQUIPMENT SUPPORT DIVISION, CONSTRUCTION EQUIPMENT BRANCH OF THE MOBILITY SUPPORT CENTER, U.S. ARMY MOBILITY COMMAND. IN MAY AND JUNE OF 1960, I WAS EMPLOYED AS AN EQUIPMENT SPECIALIST BY THE PROVISIONING BRANCH, MAINTENANCE SUPPORT DIVISION, U.S. ARMY ENGINEER MAINTENANCE CENTER, COLUMBUS, OHIO.

AS A PROJECT ENGINEER, OF WHICH THERE ARE MANY IN THE EQUIPMENT SUPPORT DIVISION, ONE OF MY DUTIES IS TO ASSURE THAT CONTRACTORS WHO HOLD CONTRACTS WITH THE GOVERNMENT THAT HAVE PROVISIONING REQUIREMENTS AS EXPRESSED IN CORPS OF ENGINEERS PROVISIONING PROCEDURES PP-CE-EE1A AND PP- CE-EE1B ARE INDOCTRINATED AS TO THE CONTRACTORS AND GOVERNMENT REQUIREMENTS. PROJECT ENGINEERS NORMALLY ATTEND PREPROVISIONING-POST AWARD CONFERENCES UPON CALL OF THE CONTRACTING OFFICER'S REPRESENTATIVE OR THE CONTRACTING OFFICER. PROJECT ENGINEERS ARE THE TECHNICAL ADVISORS TO CORS AND CONTRACTING OFFICERS ON PROVISIONING MATTERS RELATING TO THE REQUIREMENTS SET FORTH IN THE CONTRACT. QUESTIONS RAISED BY THE CONTRACTOR IN THIS AREA ARE NORMALLY REFERRED TO EQUIPMENT SUPPORT DIVISION PERSONNEL FOR CLARIFICATION AND INTERPRETATION. PP-CE-EE1A AUTHORIZES DIRECT COMMUNICATION BETWEEN THE CONTRACTOR AND THE MOBILITY SUPPORT CENTER. ALL FORMAL COMMUNICATIONS ARE EXCHANGED EITHER THROUGH THE COR OR THE CONTRACTING OFFICER. FORMAL DETERMINATIONS AND FINDINGS ARE FORWARDED TO THE CONTRACTING OFFICER WITH RECOMMENDATION OF MOBILITY SUPPORT CENTER. PROJECT ENGINEERS ARE INDOCTRINATED BY KEY PERSONNEL OF EQUIPMENT SUPPORT DIVISION AS TO INTENT AND REQUIREMENTS OF PROVISIONING REQUIREMENTS OF THE CONTRACT.

ON OR ABOUT THE 15TH OF JUNE, 1960 I PARTICIPATED IN A MEETING WITH REPRESENTATIVES OF EAGLE CRUSHER COMPANY AT EAGLE CRUSHER COMPANY'SPLANT IN WHICH I READ EACH PARAGRAPH OF THE PP-CE-EE1A TO EAGLE'S REPRESENTATIVES AND EXPLAINED THE REQUIREMENTS OF THE PARAGRAPHS. AT THIS MEETING VARIOUS REPRESENTATIVES OF THE GOVERNMENT WERE PRESENT INCLUDING AN AUTHORIZED REPRESENTATIVE OF THE CONTRACTING OFFICER. I RECALL THAT AT THIS MEETING EAGLE REPRESENTATIVES PRESENTED A QUESTION AS TO WHETHER OR NOT THE GOVERNMENT WOULD USE THE REPAIR PARTS DRAWINGS TO BE SUBMITTED UNDER PP-CE-EE1A FOR PROCUREMENT PURPOSES FROM OTHER CONTRACTORS OR COMPETITORS OF EAGLE CRUSHER COMPANY. I INFORMED THEM THAT THE GOVERNMENT NEEDED THE REPAIR PARTS DRAWINGS AND INFORMATION REQUIRED BY THE PP-CE- EE1A FOR THE PURPOSE OF CATALOGING IN THE FEDERAL CATALOGING PROGRAM, ASSIGNMENT OF FEDERAL STOCK NUMBERS, TO INSURE THAT LIKE PARTS ARE OR ARE NOT PRESENTLY IN THE SUPPLY SYSTEM, FOR USE IN TIMES OF NATIONAL EMERGENCIES AND FOR TECHNICAL REFERENCES IN THE YEARS TO COME AS MAY BE REQUIRED BY THE GOVERNMENT. I STATED IT HAS NOT BEEN OUR POLICY TO RELEASE THESE DRAWINGS TO THE COMPETITORS OF EAGLE CRUSHER COMPANY.

SUBSEQUENT TO THIS OCCASION AT SEVERAL OTHER MEETINGS AND CONTACTS I HAD WITH EAGLE CRUSHER COMPANY, THIS SAME QUESTION AS TO THE USE OF EAGLE CRUSHER COMPANY DRAWINGS AND THE DRAWINGS WHICH WOULD BE SUBMITTED BY EAGLE'S SUBSUPPLIERS WAS PRESENTED. THE SUBSTANCE OF THESE QUESTIONS WAS WHETHER OR NOT THE GOVERNMENT WOULD ALLOW THE DRAWINGS OF THE SUPPLIERS TO BECOME AVAILABLE TO THE SUPPLIER'S COMPETITORS. I ANSWERED THESE QUESTIONS IN THE SAME MANNER AS EXPLAINED ABOVE.

THE FOREGOING ADVICE WHICH I GAVE TO EAGLE CRUSHER COMPANY IS THE SAME ADVICE THAT OTHER PROJECT ENGINEERS AND I HAVE GIVEN TO OTHER CONTRACTORS IN CONNECTION WITH DRAWINGS FOR REPAIR PARTS FOR PROVISIONING PURPOSES, SEE PARAGRAPH 12.1.16 AND 4.3 OF PP-CE-EE1A REQUIREMENTS. INTERPRETATION IS IN CONSONANCE WITH THE POLICY OF THE MOBILITY SUPPORT CENTER, EQUIPMENT SUPPORT DIVISION.

I WAS NOT A CONTRACTING OFFICER'S REPRESENTATIVE ON THIS CONTRACT AS DEFINED IN THE CONTRACT, HOWEVER, I WAS DESIGNATED PROJECT ENGINEER BY THE ENGINEER MAINTENANCE CENTER AS THE REPRESENTATIVE OF THE MAINTENANCE CENTER WHO WOULD BE PRIMARILY RESPONSIBLE FOR LOGISTICAL SUPPORT OF THESE CRUSHERS. IT WAS IN THIS CAPACITY THAT I MADE MY CONTACTS WITH EAGLE CRUSHER COMPANY IN AN EFFORT TO OBTAIN ADEQUATE DRAWINGS FOR INITIAL PROVISIONING PURPOSES AND INFORMATION FOR COMPLIANCE WITH THE PROVISIONS OF THE PP-CE-EE1A. I DID NOT REQUIRE OR DEMAND ANY INFORMATION, DRAWINGS OR DATA WHICH I CONSIDERED TO BE BEYOND THE REQUIREMENTS OF THE PP-CE- EE1A, HOWEVER, I DID INSIST THAT THE INFORMATION SUPPLIED BE COMPLETE ENOUGH FOR IDENTIFICATION OF THE REFERENCED SPARE PART. IT MUST BE OBSERVED THAT THERE IS NO CONTRACT REQUIREMENT FOR A COMPLETELY DIMENSIONED MANUFACTURING DRAWING WITH MINIMUM-MAXIMUM MANUFACTURING FITS, TOLERANCES AND CLEARANCES, TYPE AND DEPTH OF HARDNESS, SURFACE FINISHES, AND OTHER CRITICAL MACHINE SHOP DATA. A REVIEW OF DRAWINGS IS NOT MADE TO ASCERTAIN THAT ANY PART/S) PURCHASED USING THE DRAWING WOULD OR WOULD NOT PRODUCE A PART INTERCHANGEABLE AND EQUAL TO THE PARTS IN THE ORIGINAL EQUIPMENT.

AS THE PROVISIONING PROGRESSED, THE USE OF EAGLE'S DRAWINGS WAS CONTINUALLY BEING QUESTIONED BY EAGLE'S TOP EXECUTIVES. CONFERENCES WERE HELD WITH THE CONTRACTING OFFICER FROM THE ENGINEER PROCUREMENT OFFICE, CHICAGO, THE CONTRACTING OFFICER'S REPRESENTATIVE FROM THE OFFICE OF THE CORPS OF ENGINEERS IN DETROIT, AND OTHER RESPONSIBLE OFFICIALS FROM BOTH OF THESE OFFICES. DURING THESE CONFERENCES EAGLE WAS REASSURED THAT THE AUTHORITY AND RESPONSIBILITY FOR PROVISIONING AND SPARE PARTS PROCUREMENT HAD BEEN DELEGATED TO MR. DONALD C. ROSS, THE ENGINEER MAINTENANCE CENTER (EMC) PROJECT ENGINEER AND CONTRACTING OFFICER'S REPRESENTATIVE FOR PROVISIONING, AND THAT MR. ROSS HAD AUTHORITY TO SPEAK FOR THE GOVERNMENT CONCERNING PROVISIONING MATTERS. EAGLE EMPHASIZES THAT ITS DRAWINGS CONTAINING PROPRIETARY DATA WHICH WOULD NOT HAVE BEEN FURNISHED "HAD NOT THIS CONFIDENTIAL RELATIONSHIP BEEN ESTABLISHED BY MR. ROSS' PROMISES AND REAFFIRMED BY SUCH LATER INQUIRIES OF GOVERNMENT AUTHORIZED CONTRACT PERSONNEL.'

A SECOND IFB, NO. DA-ENG-11-194-61-B-128, WAS ISSUED ON OCTOBER 24, 1960, FOR 35 ADDITIONAL CRUSHING AND SCREENING PLANTS AND AT THE BID OPENING DECEMBER 14, 1960, EAGLE WAS THE LOW BIDDER. FOLLOWING FURTHER CONFERENCES AND ADVICE THAT TO OBTAIN THE CONTRACT EAGLE WOULD HAVE TO FURNISH A $700,000 PERFORMANCE BOND, A SECOND AWARD WAS MADE TO EAGLE FOR 35 PLANTS WHICH WAS LATER INCREASED TO 40 PLANTS. PREMIUM ON THE BOND COST EAGLE AN ADDITIONAL $15,570. AT THIS TIME FINAL DESIGN OF THE PREPRODUCTION MODEL UNDER THE FIRST CONTRACT WAS BEING ACCOMPLISHED AND THE MODEL WAS BEING SUBJECTED TO VISUAL AND PHYSICAL OPERATION TESTS. THE OUTPUT OF STONE AND GENERAL PERFORMANCE DURING FIELD SERVICE TESTS WERE FOUND TO FAR EXCEED THE EXPECTATIONS OF PROCUREMENT OFFICIALS AND CONTRACTOR PERSONNEL AND ALL CONCERNED WERE ENTHUSIASTIC OVER THE PERFORMANCE AND OUTPUT OF THE PLANTS. SPARE AND REPAIR PARTS WERE AGAIN DISCUSSED IN DETAIL, AND IN CONFIRMATION OF ITS ABILITY TO SUPPLY ALL SUPPORT PARTS AND ALL SPARE PARTS NEEDED FOR MAINTENANCE AND FIELD SERVICE ON BOTH CONTRACTS CONCURRENTLY, EAGLE MADE SUBSTANTIAL INVESTMENTS FOR ADDITIONAL PATTERNS, TOOLS, JIGS AND FIXTURES, AND SET UP ADDITIONAL LINES FOR THE PRODUCTION OF MACHINES AND PARTS SO THAT ALL CONTRACT REQUIREMENTS AND CORPS OF ENGINEERS DEMANDS COULD BE MET, AS REQUIRED. A THIRD IFB WAS ISSUED AUGUST 19, 1961, WHICH AS AMENDED ASKED FOR BIDS ON 40 ADDITIONAL PLANTS TO BE OPENED ON OCTOBER 2, 1961. AGAIN EAGLE WAS THE LOW BIDDER AND RECEIVED THE AWARD ON NOVEMBER 3, 1961. NO ADDITIONAL BOND WAS REQUIRED. EARLY IN 1962, HOWEVER, INDICATIONS WERE THAT SPARE PARTS REQUIREMENTS ESTABLISHED BY EMC FOR ALL THREE CONTRACTS WOULD AMOUNT TO ONLY 1.28 PERCENT OF TOTAL CONTRACT VALUATION AS COMPARED WITH A PREVIOUS DETERMINATION BY EAGLE THAT ON THE BASIS OF 1,000 HOURS OPERATION PER UNIT A MINIMUM OF 22.7 PERCENT SPARE PARTS WOULD BE REQUIRED. EAGLE THEREFORE CALLED UPON THE RESPONSIBLE GOVERNMENT OFFICIALS AND URGED THE IMPORTANCE OF ADEQUATE SUPPORT PARTS TO INSURE SATISFACTORY OPERATION OF THE UNITS IN THE FIELD WITH A MINIMUM OF DELAY AND EXPENSE TO THE GOVERNMENT. IT WAS POINTED OUT THAT BETTER SERVICE COULD BE ACCOMPLISHED WITH EVEN LESS MACHINES BUT WITH SUFFICIENT SPARE PARTS TO INSURE CONTINUOUS OPERATION. UPON REVIEW, THE TOTAL SPARE PARTS REQUISITION WAS INCREASED TO APPROXIMATELY 2.75 PERCENT OF THE TOTAL CONTRACT VALUATION.

THE LACK OF SPARE PARTS REQUISITIONS WAS AGAIN DISCUSSED IN JULY 1962, AND WAS ATTRIBUTED IN PART TO A DELAY IN DELIVERY OF THE END ITEMS. WAS DETERMINED THAT WHEN THE UNITS WERE IN THE FIELD IN OPERATION, PROBABLY ADDITIONAL PARTS ORDERS WOULD BE FORTHCOMING. IT WAS IN THIS CLIMATE OF UNDERSTANDING THAT EAGLE RECEIVED IFB DSA-7-63 21 ISSUED SEPTEMBER 26, 1962, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, WITH EAGLE'S DRAWINGS ATTACHED, REQUESTING QUOTATIONS ON MISCELLANEOUS SPARE PARTS, ALL OF WHICH WERE COMPONENTS USED IN THE NEWLY DEVELOPED EAGLE PLANTS. THE IFB AND THE DRAWINGS WERE MAILED TO APPROXIMATELY 40 POTENTIAL SUPPLIERS, RANGING FROM RECOGNIZED MANUFACTURERS OF CRUSHING AND SCREENING EQUIPMENT TO SMALL MACHINE SHOPS AND FOUNDRIES OF UNPROVEN CAPABILITIES AND EXPERIENCE.

EAGLE'S REPRESENTATIVES PROMPTLY PROTESTED THE ISSUANCE, PUBLICATION AND DISTRIBUTION TO THE TRADE AND THE GENERAL PUBLIC OF PROPRIETARY AND CONFIDENTIAL DATA SUBMITTED BY EAGLE IN CONFIDENCE TO EMC AS A VIOLATION OF THE AGREED BASIS UNDER WHICH THE DRAWINGS CONTAINING SUCH DATA HAD BEEN FURNISHED.

WE BELIEVE A CAREFUL CONSIDERATION OF ALL THE FACTS AND CIRCUMSTANCES ESTABLISHES THAT EAGLE UNDERTOOK THE RESPONSIBILITY AND EXPENSE OF DESIGNING AND MANUFACTURING THE ROCK CRUSHING AND SCREENING PLANTS WITH THE UNDERSTANDING THAT REQUISITIONS WOULD BE RECEIVED FOR AT LEAST THE INITIAL PROVISIONING SPARE PARTS REQUIREMENTS. UNDER THE THREE CONTRACTS COVERING THE DESIGN AND PRODUCTION OF THE PLANTS EAGLE WAS OBLIGATED TO FURNISH ASSEMBLY DRAWINGS AND PROVISIONING TECHNICAL DOCUMENTATION INCLUDING DRAWINGS FOR SPARE PARTS AND IT WAS EXPRESSLY STIPULATED THAT THE GOVERNMENT WAS NOT SEEKING AND DID NOT REQUIRE ANY OF EAGLE'S PROPRIETARY DATA. HOWEVER, THE DRAWINGS WHICH WERE MADE BY EAGLE AND SUPPLIERS OF COMPONENTS IN THE COURSE OF DESIGNING AND PRODUCING THE PLANTS CONTAINED INFORMATION CONCERNING THEIR TRADE SECRETS AND KNOW-HOW REGARDED AS PROPRIETARY DATA. THIS WAS MADE KNOWN TO THE RESPONSIBLE OFFICIALS CHARGED WITH THE PROCUREMENT AND ADMINISTRATION OF THE CONTRACTS WHO INDUCED EAGLE TO FURNISH SUCH DRAWINGS INCLUDING THE PROPRIETARY DATA BY THEIR ASSURANCES THAT THE DRAWINGS WOULD BE HELD AND USED FOR LIMITED PURPOSES ONLY AND IN SUCH A MANNER AS TO PROTECT THE RIGHTS OF EAGLE AND OTHERS IN THE PROPRIETARY DATA THEREON.

THE ASSURANCES TO EAGLE IN ALL PROBABILITY WERE GIVEN IN AN EFFORT TO EXPEDITE THE PRODUCTION AND DELIVERY OF THE PLANTS AND MIGHT SEEM IN EFFECT TO BE IN DEROGATION OF THE LICENSE GRANTED TO THE GOVERNMENT UNDER PARAGRAPH 28 OF THE "SPECIAL TERMS AND CONDITIONS" TO "DUPLICATE, USE, AND DISCLOSE IN ANY MANNER AND FOR ANY PURPOSE WHATSOEVER," ALL SUBJECT DATA INCLUDING DRAWINGS SPECIFICALLY REQUIRED TO BE DELIVERED UNDER THE CONTRACT BUT FOR THE EXPRESS EXCLUSION OF ,PROPRIETARY DATA" THEREFROM. THE CONTRACT ADMINISTRATION OFFICIALS COULD HAVE INSISTED UPON THE FURNISHING OF DRAWINGS WITHOUT THE PROPRIETARY DATA BUT THIS THEY DID NOT ELECT TO DO.INSTEAD, THE DRAWINGS WERE ACCEPTED WITH THE KNOWLEDGE THEY WERE BEING FURNISHED BY EAGLE THROUGH THE SPECIAL CONFIDENCE REPOSED IN THE GOVERNMENT IN RELIANCE UPON THE ASSURANCES GIVEN.

IT IS THIS CONFIDENCE, MR. JUSTICE HOLMES STATED, WHEN CONSIDERING A SOMEWHAT SIMILAR SITUATION IN THE CASE OF DU PONT POWDER CO. V. MASLAND, 244 U.S. 100 (1917), WHICH MAY NOT IN GOOD FAITH BE VIOLATED EVEN THOUGH THE PRESERVATION OF THE TRADE SECRETS AND KNOW-HOW RECEIVED THROUGH THE CONFIDENTIAL RELATIONSHIP MIGHT WORK SOME DISADVANTAGE. AND A FUNDAMENTAL RULE OF LONG STANDING IN THE FEDERAL COURTS WITH RESPECT TO GOVERNMENT TRANSACTIONS IS "THAT THE GOVERNMENT MUST BE HELD TO THE SAME GENERAL PRINCIPLES OF EQUITY AND FAIR PLAY IN DEALING WITH THOSE WHO CONTRACT WITH IT AS ARE THE CONTRACTORS THEMSELVES," AS EMPHASIZED IN KEMP V. UNITED STATES, 38 F.SUPP. 568 (D.C., MD. 1941), AT PAGE 570. THIS RULE WAS RECOGNIZED IN GEORGE H. WHIKE CONSTRUCTION CO. V. UNITED STATES, 135 CT.CL. 126 (1956), WHERE THE COURT OF CLAIMS FOUND THAT ASSURANCES GIVEN BY REPRESENTATIVES OF THE CONTRACTING OFFICER THAT THE CONTRACTOR WOULD BE PROTECTED BY THE TERMS OF THE CONTRACT AMOUNTED TO EITHER AN OUTRIGHT PROMISE OR TO A REPRESENTATION GIVING RISE TO AN ESTOPPEL. IN THE RECENT CASE OF PADBLOC COMPANY, INC. V. UNITED STATES, CT.CL. NO. 523-57, DECIDED APRIL 5, 1963, THE COURT OF CLAIMS HELD THAT AFTER EXAMINING THE COMMON SENSE AND REALISTIC SHAPE OF THE PARTIES' TRANSACTION THE ACTIONS OF THE GOVERNMENT OFFICIALS CONSTITUTED A CONTRACT NOT TO USE PROPRIETARY DATA EXCEPT UNDER THE CONDITIONS UNDER WHICH IT WAS FURNISHED BY THE CONTRACTOR. THE COURT POINTED OUT IN SUPPORT OF ITS FINDING A "LONG TERM TREND IN THE MODERN LAW OF CONTRACTS" THAT "LOOKS TOWARD HOLDING, IF JUSTICE SO REQUIRES, ONE WHOSE PROMISSORY WORDS HAVE INDUCED SIGNIFICANT ACTION IN RELIANCE (EVEN THOUGH THERE BE NO TECHNICAL CONSIDERATION IN THE NARROW SENSE)" CITING UNIVERSALLY RECOGNIZED AUTHORITIES.

APPLYING THESE PRINCIPLES TO THE CIRCUMSTANCES OF THE INSTANT CASE WE ARE OF THE OPINION THAT EAGLE JUSTIFIABLY ASSUMED THAT ITS CONFIDENCE WOULD NOT BE VIOLATED AND THAT LIMITATIONS CLEARLY WERE PLACED UPON THE USE OF THE DRAWINGS BY THE REPRESENTATIONS OF RESPONSIBLE OFFICIALS WHICH ARE BINDING ON THE GOVERNMENT. HENCE, IT SEEMS REASONABLE TO CONCLUDE THAT THE GOVERNMENT PROPERLY MAY NOT USE THE DRAWINGS FURNISHED BY EAGLE SO AS TO DISCLOSE THE PROPRIETARY DATA THEREON TO OTHERS.

IT IS THEREFORE OUR VIEW THAT IFB DSA-7-63-21 DATED SEPTEMBER 26, 1962, SHOULD BE CANCELED; THAT THE DRAWINGS IN QUESTION FURNISHED TO POTENTIAL BIDDERS THEREUNDER SHOULD BE RECOVERED; AND THAT SUCH DRAWINGS SHOULD NOT BE USED FOR COMPETITIVE PROCUREMENT PURPOSES.