B-154079, OCT. 14, 1964

B-154079, OCT. 14, 1964

TO THE SECRETARY OF THE ARMY:

FURTHER REFERENCE IS MADE TO THE PROTEST BY TELEGRAM OF MAY 1, 1964, WHICH WAS CONFIRMED BY LETTER TO US DATED MAY 4, 1964, FROM HUDSON AND CREYKE, ATTORNEYS AT LAW, WASHINGTON, D.C., ON BEHALF OF COUSE MANUFACTURING, INC., OF UNION, NEW JERSEY, AGAINST THE AWARD TO ANY OTHER FIRM OF A NEGOTIATED CONTRACT--- DOC. NO. A5873R41087300--- FOR THE PURCHASE OF APPROXIMATELY 217 MCN 4920-M54-0073 HELICOPTER TRANSPORTABLE MAINTENANCE SHELTERS BY THE UNITED STATES ARMY AVIATION MATERIEL COMMAND (USAAMC), ST. LOUIS, MISSOURI, ON THE PRIMARY GROUND THAT SUCH AN AWARD WOULD NECESSARILY INVOLVE THE DISCLOSURE OF INFORMATION AND DATA PROPRIETARY TO COUSE FURNISHED TO THE GOVERNMENT IN CONFIDENCE FOR THE SOLE PURPOSE OF NEGOTIATING THE PROPOSED PROCUREMENT WITH COUSE.

NOTWITHSTANDING THE PROTEST WAS MADE PRIOR TO AWARD, THE CONTRACTING OFFICER DENIED IT, AWARDED THE CONTRACT TO ANOTHER FIRM AND WE UNDERSTAND DELIVERY OF THE REQUIREMENTS WAS COMPLETED THEREUNDER ON JULY 22, 1964. IN THIS CONNECTION WE HAVE RECEIVED A COPY OF YOUR LETTER DATED JUNE 26, 1964, ADVISING THE HONORABLE CLIFFORD P. CASE, UNITED STATES SENATE, WHO HAS REQUESTED A COPY OF OUR DECISION ON THIS PROTEST, THAT WHERE AN UNSUCCESSFUL BIDDER PROTESTS TO OUR OFFICE IN CASES SUCH AS THIS, BOTH SIDES MAKE THEIR PRESENTATIONS AND THE "PROCUREMENT ACTION IS STOPPED UNTIL A DECISION IS REACHED.'

THE MATTER HAS BEEN THE SUBJECT OF CONSIDERABLE CORRESPONDENCE INCLUDING AN EXTENSIVE ADMINISTRATIVE REPORT DATED JUNE 11, 1964, AND A SUPPLEMENTAL REPORT DATED JULY 23, 1964, FROM YOUR DEPARTMENT. MOREOVER, IN THEIR VIGOROUS PURSUIT OF THE PROTEST THE ATTORNEYS FOR COUSE HAVE ALLEGED THAT MUCH OF THE MATERIAL CONTAINED IN THE SUPPLEMENTAL REPORT "IS ALMOST INCREDULOUS" AND THEY HAVE CHARGED THE CONTRACTING OFFICER WITH ABUSE OF ADMINISTRATIVE POWER AND "INEPT HANDLING OF THE CONTRACT AWARD.' IN VIEW OF THE NATURE OF THE ALLEGATIONS AND THE ADVERSE ECONOMIC EFFECT A FAILURE TO ADEQUATELY SAFEGUARD INFORMATION AND DATA FURNISHED DURING CONTRACT NEGOTIATIONS GENERALLY MIGHT HAVE ON THIS AND OTHER FIRMS UNDER SIMILAR CIRCUMSTANCES, WE BELIEVE YOU WILL AGREE CAREFUL CONSIDERATION OF THE MATTER IS WARRANTED, HAVING IN MIND THE POSSIBILITY THAT CORRECTIVE MEASURES CLARIFYING THE ADMINISTRATIVE POLICIES AND PROCEDURES IN THIS AREA MAY BE REQUIRED.

BY HIS LETTER DATED MAY 4, 1964, THE CONTRACTING OFFICER ADVISED COUSE THAT HE HAD DENIED THE PROTEST AND HAD AWARDED THE CONTRACT ON MAY 2, 1964, TO THE FAB-WELD CORPORATION, AS FOLLOWS:

"IN CONNECTION WITH A PROCUREMENT OF HELICOPTER TRANSPORTABLE SHELTERS, I ADVISED YOU BY PHONE AT 0820 HOURS ON 1 MAY 1964 THAT WE WERE CONSIDERING ANOTHER, OR OTHER, PROPOSALS IN ADDITION TO YOUR PROPOSAL. THIS WAS DONE FOR THE PURPOSE OF ALLOWING YOU AN OPPORTUNITY TO REVISE YOUR PROPOSAL IN ANY MANNER THAT YOU COULD IF IT WOULD BE MORE FAVORABLE.

"AT 1400 HOURS, 1 MAY 1964, YOU CALLED AND VERBALLY PROTESTED OUR CONSIDERATION OF ANOTHER PROPOSAL ON THE BASIS OF THE COUSE ITEM BEING PROPRIETARY AND THIS CONSIDERATION OF ANOTHER PROPOSAL BEING A COPY OF IT. YOU ALSO REQUESTED THAT YOU BE NOTIFIED OF THE SUCCESSFUL OFFEROR BEFORE AWARD. AT 1450 HOURS, 1 MAY 1964, YOU CALLED AGAIN AND FURNISHED ME YOUR REVISED PROPOSAL WHICH DID IN FACT MAKE YOUR PROPOSAL MORE FAVORABLE, BOTH ON PRICE AND ON DELIVERY TERMS. YOUR PROTEST WAS VERY CAREFULLY REVIEWED, AND IT WAS FOUND THAT PROPRIETARY INFORMATION WAS IN NO WAY DIVULGED BY ANY MEMBER OF THIS COMMAND. FURTHER, WE FAILED TO FIND THAT ANY MEMBER OF THIS COMMAND POSSESSED PROPRIETARY INFORMATION WHICH WOULD HAVE BEEN DIVULGED.

"THEREFORE YOUR PROTEST IS CONSIDERED TO BE WITHOUT MERIT AND IS HEREBY DENIED.

"AS THE DELIVERY REQUIREMENT ON THIS PROCUREMENT, WHICH WAS NEGOTIATED UNDER THE AUTHORITY OF A PUBLIC EXIGENCY, IS SO CRITICAL AWARD WAS MADE ON 2 MAY 1964 TO THE FAB WELD CORPORATION, P.O. BOX 1447, MAIN STREET, SIMPSON, LACKAWANNA COUNTY, PENNSYLVANIA. THE CONTRACT PROVIDES FOR A UNIT PRICE OF $1190 EACH, DRAWINGS SEVEN DAYS AFTER RECEIPT OF CONTRACT, PROTOTYPE MODELS FOURTEEN DAYS AFTER RECEIPT OF CONTRACT, DELIVERY COMPLETED 40 DAYS AFTER RECEIPT OF CONTRACT.'

IT IS THE POSITION OF THE COUSE COMPANY, IN BRIEF, THAT THE ADMINISTRATION ACTION IN THIS CASE VIOLATED THE COMPANY'S PROPRIETARY RIGHTS AND TRADE SECRETS, FURNISHED UNDER A CONFIDENTIAL RELATIONSHIP ESTABLISHED DURING THE NEGOTIATIONS WITH PROCUREMENT PERSONNEL OF YOUR DEPARTMENT, BY USE AND DISCLOSURE THEREOF WITHOUT PERMISSION OR LEGAL RIGHT; AND THAT THE AWARD ACTION WAS ARBITRARY AND CAPRICIOUS AND UNSUPPORTED BY THE DETERMINATION AND FINDINGS OF THE CONTRACTING OFFICER'S AUTHORITY UNDER THE APPLICABLE STATUTORY AND REGULATORY REQUIREMENTS.

ON THE OTHER HAND, THE PROCUREMENT AGENCY OF YOUR DEPARTMENT, IN EFFECT, MAKES A GENERAL DENIAL THAT ANY PROPRIETARY RIGHTS OR TRADE SECRETS OF THE COUSE COMPANY WERE VIOLATED OR IMPROPERLY USED; AND URGES THAT THE PROTEST WAS PROPERLY DENIED AND THE CONTRACT WAS PROPERLY NEGOTIATED AND AWARDED UNDER AUTHORITY OF STATUTORY PROVISIONS IN 10 U.S.C. 2304 (A) (2) AND IN ACCORDANCE WITH REGULATORY REQUIREMENTS IN PARAGRAPHS 2-407.9 (B) (3) (I) AND 3-302 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR).

IN ORDER TO PLACE THIS MATTER IN ITS PROPER PERSPECTIVE, WHERE THERE IS A CONFLICT INVOLVING THE USE OF TRADE SECRETS DISCLOSED IN CONFIDENCE, MR. JUSTICE HOLMES SUCCINCTLY STATED IN DU PONT POWER CO. V. MASLAND (1917), 244 U.S. 100, THE WORD PROPERTY OR PROPRIETARY AS APPLIED TO TRADE SECRETS IS OF SECONDARY IMPORTANCE TO "THE PRIMARY FACT THAT THE LAW MAKES SOME RUDIMENTARY REQUIREMENTS OF GOOD FAITH.' THE PROPERTY RIGHTS OR PROPRIETARY CHARACTER OF A TRADE SECRET, MR. JUSTICE HOLMES POINTED OUT," MAY BE DENIED BUT THE CONFIDENCE CANNOT BE.' THEREFORE THE ,STARTING POINT," HE STATED, IS THE CONFIDENTIAL RELATIONSHIP ENGENDERED BY THE DEALINGS BETWEEN THE PARTIES AND THE FIRST THING TO BE MADE SURE OF IS THAT THE TRUSTEE SHALL NOT ABUSE THE TRUST REPOSED IN HIM, IN THE INSTANT MATTER THE GOVERNMENT. THIS IS THE USUAL INCIDENT OF A RELATIONSHIP OF TRUST AND CONFIDENCE WHICH MAY NATURALLY RESULT FROM THE CIRCUMSTANCES SURROUNDING THE DEALINGS BETWEEN THE PARTIES, THAT IS, AN EXPRESS NONDISCLOSURE AGREEMENT IS NOT A PREREQUISITE THERETO BUT SUCH A CONTRACT MAY BE IMPLIED.

THUS, WHERE THE PARTIES ARE A SELLER AND A PROSPECTIVE PURCHASER, WHICH IS THE SITUATION HERE, CERTAIN DISCLOSURES NORMALLY ARE MADE CONCERNING THE ITEM TO BE SOLD SO THE PURCHASER MAY RATIONALLY ASSESS THE MERITS OF CONCLUDING THE PURCHASER. IF THE INFORMATION DISCLOSED IS OF SUCH A NATURE AS TO QUALIFY AS TRADE SECRETS, THE PROSPECTIVE PURCHASER IS BOUND BY ESTABLISHED PRINCIPLES OF FAIR DEALING TO RECEIVE THE INFORMATION IN CONFIDENCE. AND, SINCE THE PROSPECTIVE PURCHASER IS FURNISHED THE INFORMATION FOR THE LIMITED PURPOSE OF AIDING HIM IN DECIDING WHETHER TO BUY, HE IS BOUND TO ACCEPT THE INFORMATION FOR USE WITHIN THE AMBIT OF THIS LIMITATION. MANIFESTLY, HE MAY NOT IN GOOD CONSCIENCE ACCEPT THE INFORMATION, TERMINATE NEGOTIATIONS FOR THE PURCHASE AND SALE, AND THEN USE THE VITAL DATA SECURED FROM THE OFFEROR OR WOULD-BE SELLER IN NEGOTIATING THE PURCHASE FROM THE OFFEROR'S COMPETITORS. IN OTHER WORDS, WHEN PARTIES BARGAIN AT ARM'S LENGTH, COMPLIANCE WITH THE ESSENTIALS OF FAIR DEALING IS A REASONABLY NECESSARY REQUIREMENT. CF. HEYMAN V. AR. WINARICK, INC. (2D C.A. 1963), 325 F.2D 584. THESE PRINCIPLES HAVE BEEN RECOGNIZED AND APPLIED IN RECENT DECISIONS OF OUR OFFICE FOLLOWING THE RATIONALE OF THE RULE STATED BY MR. JUSTICE DOUGLAS FOR THE SUPREME COURT IN UNITED STATES V. STANDARD RICE CO., INC. (1944), 323 U.S. 106, THAT THE UNITED STATES AS A CONTRACTOR GENERALLY MUST BE TREATED AS OTHER CONTRACTORS UNDER ANALOGOUS SITUATIONS. SEE 41 COMP. GEN. 148, 42 ID. 346 AND 43 ID. 193, AND THE AUTHORITIES REFERRED TO THEREIN.

AS A MATTER OF FACT, GOVERNMENT OFFICERS AND EMPLOYEES ARE EXPRESSLY ENJOINED FROM USING IN A MANNER NOT AUTHORIZED BY LAW ANY INFORMATION PERTAINING TO TRADE SECRETS AND BUSINESS DATA RECEIVED IN THE COURSE OF THEIR OFFICIAL DUTIES, BY THE FOLLOWING STATUTORY PROVISIONS CARRIED IN 18 U.S.C. 1905:

"SEC. 1905. DISCLOSURE OF CONFIDENTIAL INFORMATION GENERALLY.

"WHOEVER, BEING AN OFFICER OR EMPLOYEE OF THE UNITED STATES OR OF ANY DEPARTMENT OR AGENCY THEREOF, PUBLISHES, DIVULGES, DISCLOSES, OR MAKES KNOWN IN ANY MANNER OR TO ANY EXTENT NOT AUTHORIZED BY LAW ANY INFORMATION COMING TO HIM IN THE COURSE OF HIS EMPLOYMENT OR OFFICIAL DUTIES OR BY REASON OF ANY EXAMINATION OR INVESTIGATION MADE BY, OR RETURN, REPORT OR RECORD MADE TO OR FILED WITH, SUCH DEPARTMENT OR AGENCY OR OFFICER OR EMPLOYEE THEREOF, WHICH INFORMATION CONCERNS OR RELATES TO THE TRADE SECRETS, PROCESSES, OPERATIONS, STYLE OF WORK, OR APPARATUS, OR TO THE IDENTITY, CONFIDENTIAL STATISTICAL DATA, AMOUNT OR SOURCE OF ANY INCOME, PROFITS, LOSSES, OR EXPENDITURES OF ANY PERSON, FIRM, PARTNERSHIP, CORPORATION, OR ASSOCIATION; OR PERMITS ANY INCOME RETURN OR COPY THEREOF OR ANY BOOK CONTAINING ANY ABSTRACT OR PARTICULARS THEREOF TO BE SEEN OR EXAMINED BY ANY PERSON EXCEPT AS PROVIDED BY LAW; SHALL BE FINED NOT MORE THAN $1,000, OR IMPRISONED NOT MORE THAN ONE YEAR, OR BOTH; AND SHALL BE REMOVED FROM OFFICE OR EMPLOYMENT.'

IMPLEMENTATION OF THESE STATUTORY PROVISIONS IN CONDUCTING CONTRACT NEGOTIATIONS BY THE MILITARY DEPARTMENTS MAY BE FOUND IN ASPR. FOR EXAMPLE, ASPR 3-506.2 SEEMS PERTINENT:

"3-506.2 DISCLOSURE OF INFORMATION DURING THE PRE-AWARD OR PRE ACCEPTANCE PERIOD.

"/A) GENERAL. AFTER RECEIPT OF PROPOSALS, NO INFORMATION CONTAINED IN ANY PROPOSAL OR REGARDING THE NUMBER OR IDENTITY OF THE OFFERORS SHALL BE MADE AVAILABLE TO THE PUBLIC, OR TO ANYONE WITHIN THE GOVERNMENT NOT HAVING A LEGITIMATE INTEREST THEREIN, EXCEPT IN ACCORDANCE WITH 3 507 (A).

"/B) EQUAL CONSIDERATION AND INFORMATION TO ALL PROSPECTIVE CONTRACTORS. DISCUSSIONS WITH PROSPECTIVE CONTRACTORS REGARDING A POTENTIAL PROCUREMENT AND THE TRANSMISSION OF TECHNICAL OR OTHER INFORMATION SHALL BE CONDUCTED ONLY BY THE CONTRACTING OFFICER, HIS SUPERIORS HAVING CONTRACTUAL AUTHORITY OR OTHERS SPECIFICALLY AUTHORIZED. SUCH PERSONNEL SHALL NOT FURNISH ANY INFORMATION TO A POTENTIAL SUPPLIER WHICH ALONE OR TOGETHER WITH OTHER INFORMATION MAY AFFORD HIM AN ADVANTAGE OVER OTHERS. HOWEVER, GENERAL INFORMATION WHICH WOULD NOT BE PREJUDICIAL TO OTHERS MAY BE FURNISHED UPON REQUEST, E.G., EXPLANATION OF A PARTICULAR CONTRACT CLAUSE OR A PARTICULAR CONDITION OF THE SCHEDULE. WHEN NECESSARY TO CLARIFY AMBIGUITIES, OR CORRECT MISTAKES OR OMISSIONS, AN APPROPRIATE AMENDMENT TO THE SOLICITATION SHALL BE FURNISHED IN A TIMELY MANNER TO ALL TO WHOM THE SOLICITATION HAS BEEN FURNISHED. SEE 3-504.'

IT IS ALLEGED IN THE LETTER OF MAY 4, 1964, THAT COMMENCING IN 1957 THE COUSE COMPANY ,CONCEIVED, DESIGNED AND DEVELOPED A MAINTENANCE SHELTER, I.E., A SELF CONTAINED SHOP HAVING ELECTRIC POWER, LIGHTING, WELDING FACILITIES, WORKBENCHES, PARTS AND TOOL STORAGE, ETC., CAPABLE OF BEING HELICOPTER TRANSPORTED OR TRUCK MOUNTED FOR FIELD USE BY THE ARMED FORCES.' COSTS IN EXCESS OF $200,000 ALLEGEDLY WERE INCURRED BY THE COMPANY IN THE DESIGN AND DEVELOPMENT STAGE OF THIS PRODUCT IN ANTICIPATION OF A REQUIREMENT BY THE MILITARY SERVICES OF THIS PARTICULAR DESIGN AND CONCEPT. DURING 1958, IT IS STATED, THE PRODUCT WAS DEMONSTRATED AND TESTED FOR THE ARMED FORCES, BUT IT WAS NOT UNTIL JANUARY OF 1964 THAT MAJOR R. E. BENDL, REPRESENTING THE 11TH AIR ASSAULT GROUP AT FORT BENNING, GEORGIA, CONTACTED THE COUSE COMPANY TO SUPPLY A PROTOTYPE OF THE SHELTER AND A PROCUREMENT PROPOSAL THEREON. IN HIS SUPPORTING AFFIDAVIT DATED JUNE 19, 1964, MR. ROBERT E. FREEMAN, PRESIDENT OF THE COMPANY, STATES THAT ON JANUARY 31, 1964, A DEMONSTRATION OF THE COUSE MODEL "HT" SHELTER WAS CONDUCTED FOR MR. MELVIN BLOCK OF AVCOM, ST. LOUIS, MISSOURI; THAT PRIOR TO THIS DEMONSTRATION MR. BLOCK WAS INFORMED AND AGREED "THAT ANYTHING HE MIGHT SEE, BE TOLD, OR DATA GIVEN HIM PERTAINING TO THE MODEL "HT" WAS TO BE CONSIDERED PROPRIETARY ORMATION.' ALSO, THAT THE COMPANY "WOULD MAKE THE DEMONSTRATION AND ANSWER ALL OF HIS QUESTIONS WHICH HE SAID WERE NECESSARY FOR ST. LOUIS TO MAKE AN ENGINEERING EVALUATION OF THE UNIT.' ON FEBRUARY 6, 1964, THE AFFIANT STATES, ANOTHER DEMONSTRATION OF THE MODEL WAS CONDUCTED FOR THE 11TH AIR ASSAULT GROUP AT FORT BENNING, GEORGIA, AT THE REQUEST OF LIEUTENANT COLONEL MCQUEARY; THAT PRIOR TO THIS DEMONSTRATION THE COMPANY ASSURED BY LIEUTENANT COLONEL MCQUEARY AND CHIEF WARRANT OFFICER HARRY FRYE (PROJECT OFFICER) THAT INFORMATION DIVULGED AT THE DEMONSTRATION WOULD BE RESPECTED AND TREATED AS PROPRIETARY. THE AFFIANT ALSO STATES THAT DURING THIS DEMONSTRATION A REPRESENTATIVE OF A COMPETITION FIRM MADE SKETCHES OF THE COUSE UNIT AND PRESENTED A PROPOSAL TO LIEUTENANT COLONEL MCQUEARY DEPICTING A VERY SIMILAR UNIT; THAT COUSE WAS "ADVISED OF THIS SITUATION BY LT. COL. MCQUEARY AND LT. COL. O. PREMO WHO ASSURED US THAT THIS TYPE OF ACTION WOULD NOT BE TOLERATED BY THE ARMY" AND FURTHER,"THAT ANY AND ALL DATA GIVEN OR SHOWN WOULD BE TREATED AS PROPRIETARY.' THE AFFIANT STATES FURTHER, THAT AT A MEETING HELD ON FEBRUARY 18, 1964, AT AVCOM, ST. LOUIS, MISSOURI, PRODUCTION DRAWINGS FOR THE MODEL "HT" SHELTER WERE TURNED OVER TO MR. BLOCK AND MR. JAMES SMITH WHO GAVE ASSURANCES THAT THE DRAWINGS AND ANY OTHER INFORMATION INCLUDING PHOTOGRAPHS AND DESCRIPTIVE LITERATURE WOULD BE CONSIDERED PROPRIETARY AND NOT GIVEN TO ANY OTHER COMPANY; THAT ON MARCH 6, 1964, A PHONE CALL WAS RECEIVED FROM LIEUTENANT COLONEL O. PREMO, R AND D OFFICER OF PROJECT TEAM, FORT BENNING, GEORGIA, REQUESTING 8 BY 10 INCHES GLOSSY PHOTOGRAPHIC PRINTS OF THE MODEL "HT" SHELTER IN VARIOUS POSITIONS AND ANGLES; THAT LIEUTENANT COLONEL PREMO WAS ADVISED THAT THE COMPANY HESITATED SENDING THIS INFORMATION BECAUSE OF ITS PROPRIETARY NATURE BUT WAS ASSURED THAT "THE ONLY PURPOSE OF THE PICTURES WAS FOR A BRIEFING FOR THE GENERAL; " THAT BECAUSE OF THE RELUCTANCE TO RELEASE THIS TYPE OF INFORMATION THE PICTURES WERE HAND CARRIED BY MR. FREEMAN ACCOMPANIED BY MR. SAMUEL ASHELFORD AND DELIVERED TO LIEUTENANT COLONEL PREMO ON MARCH 16, 1964, "AT WHICH TIME WE WERE TOLD THAT THE PHOTOGRAPHS WOULD NOT BE USED FOR ANY PURPOSE OTHER THAN A BRIEFING FOR THE GENERAL.'

THE AFFIANT ALSO STATES AS FOLLOWS:

"ON APRIL 3, 1964 I WAS ADVISED BY LT. COL. J. JENKINS, CHIEF OF STAFF, G -4, FT. BENNING, THAT THE AUTHORIZATION FOR THE PROCUREMENT OF 217 COUSE MODEL "HT" SHELTERS HAD BEEN SENT FROM WASHINGTON TO MOCOM, DETROIT ON APRIL 1, 1964. FURTHER, HE SUGGESTED WE CONTACT MR. J. D. HARP AT AVCOM, ST. LOUIS. I CONTACTED MR. HARP WHO TOLD ME HE HAD NOT RECEIVED THE AUTHORIZATION AND SUGGESTED I SPEAK TO MAJOR CORNWELL IN THE PROCUREMENT SECTION. MAJOR CORNWELL WAS NOT IN, AND I LEFT WORD FOR HIM TO CALL BACK. SINCE MY CALL WAS NOT RETURNED, I AGAIN TRIED TO CONTACT MAJOR CORNWELL ON APRIL 6TH--- AGAIN HE WAS OUT, AND I LEFT WORD FOR HIM TO CALL BACK. ON APRIL 7TH LT. COL. JENKINS ADVISED ME THAT HE HAD A CONFERENCE WITH MR. R. HOGAN, THE CONTRACTING OFFICER, AND THAT AN AGREEMENT HAD BEEN REACHED TO ISSUE A LETTER OF INTENT FOR 217 MODEL "HT" SHELTERS SO THAT PRODUCTION COULD START IMMEDIATELY AND PRIOR TO A FORMAL CONTRACT. SUGGESTED WE CONTACT MR. HOGAN AT ST. LOUIS THE FOLLOWING DAY. ON APRIL 8TH WE CALLED MR. HOGAN, HE WAS OUT AND WE LEFT WORD FOR HIM TO CALL BACK. ON APRIL 9TH, WE RECEIVED OUR FIRST CALL FROM MR. HOGAN, AND HE REQUESTED THAT WE COME TO ST. LOUIS FOR NEGOTIATIONS. ON APRIL 10TH NEGOTIATIONS WERE HELD, PRIMARILY WITH MR. A. F. LIBERATORE OF THE PROCUREMENT SECTION AT AVCOM, ST LOUIS, MO. FOR SOME REASON, STILL NOT KNOWN TO ME, MR. LIBERATORE ASSUMED A HOSTILE ATTITUDE. * * * AT THIS NEGOTIATION SESSION ALL PERSONS WERE PUT ON NOTICE THAT ANY AND ALL DATA, DRAWINGS, PHOTOGRAPHS AND INFORMATION SUPPLIED TO DATE WAS TO BE CONSIDERED PROPRIETARY.

"AS LATE AS MAY 4, 1964 I WAS TOLD BY LT. COL. J. JENKINS, CHIEF OF STAFF, G-4, 11TH AIR ASSAULT GROUP, THAT HAD THIS CONTRACT BEEN AWARDED AT FT. BENNING, AS HE HAD REQUESTED, IT WOULD HAVE GONE TO OUR COMPANY ON A SOLE SOURCE BASIS.'

IT IS ALLEGED FURTHER IN PARAGRAPH 6 OF THE LETTER OF MAY 4, 1964, THAT NEGOTIATIONS FOR PROCUREMENT IN THE COUSE MODEL "HT" SHELTER WERE CONDUCTED ALMOST CONSTANTLY DURING THE EARLY MONTHS OF 1964, THAT THESE NEGOTIATIONS INCLUDED ARMY AUDIT COST ANALYSIS AND PREAWARD SURVEYS OF THE COUSE COMPANY, AND THAT THE COMPANY WAS ADVISED ON APRIL 15, 1964, THAT THE PREAWARD SURVEY WAS FAVORABLE; THAT ON THE NEXT DAY THE CONTRACTOR WAS ADVISED THAT ITS SELLING PRICE WAS ACCEPTABLE AND ON APRIL 22, 1964, THE COMPANY RECEIVED AN UNEXECUTED COPY OF NEGOTIATED CONTRACT NO. A5873R41087300 FROM HEADQUARTERS, USAAMC, ST. LOUIS. IT IS ALSO ALLEGED IN PARAGRAPH 6 OF THE MAY 4 LETTER THAT THE CONTRACT ANTICIPATED PROCUREMENT OF 217 COUSE MODEL "HT" SHELTERS AT A UNIT PRICE OF $2,401.10 AND THAT THE COMPANY WAS REQUESTED TO SEND ITS REPRESENTATIVE TO ST. LOUIS ON MAY 5, 1964, TO EXECUTE A CONTRACT; THAT "HOWEVER, AT 9:00 A.M., MAY 1, 1964, THE CONTRACTOR WAS ADVISED BY MR. HOGAN, THE PROSPECTIVE CONTRACTING OFFICE OF AAMC AND THAT THE CONTRACTOR HAD FIVE HOURS TO REVISE ITS CONTRACT PRICE AND DELIVERY SCHEDULE; " ALSO, THAT "AT 3:00 P.M. THAT DAY THE CONTRACTOR DID INFORM THE PROSPECTIVE CONTRACTING OFFICER OF ITS BEST REVISED PRICE AND DELIVERY SCHEDULE, BUT AT 5:30 P.M. WAS ADVISED THAT THE CONTRACT WOULD NOT BE AWARDED TO COUSE MANUFACTURING COMPANY.' IT IS ALLEGED FURTHER THAT COUSE ORALLY PROTESTED SUCH ACTION AND ,THEREUPON IMMEDIATELY NOTIFIED BY TELEGRAM BOTH THE PROSPECTIVE CONTRACTING OFFICER AND THE GENERAL ACCOUNTING OFFICE OF ITS PROTEST OF THE AWARD OF THE SUBJECT CONTRACT TO ANY MANUFACTURER OTHER THAN THE COUSE COMPANY.' WHILE THE TELEGRAM RECEIVED HERE AND THE COPY OF THE TELEGRAM TO THE CONTRACTING OFFICER SHOW THEY WERE DISPATCHED ON MAY 1, 1964, NEVERTHELESS, THE CONTRACTING OFFICER AWARDED THE CONTRACT TO FAB-WELD CORPORATION, AS STATED IN HIS LETTER OF MAY 4, 1964, DENYING THE PROTEST, QUOTED ABOVE.

IN THE "CONTRACTING OFFICER'S STATEMENT," PART III, PARAGRAPH 6, ACCOMPANYING THE ADMINISTRATIVE REPORT OF JUNE 11, 1964, THE ALLEGATIONS SET OUT IN PARAGRAPH 6 OF THE LETTER OF MAY 4, 1964, ARE CONCEDED TO BE CORRECT, WITH THE EXCEPTION OF THE ACCEPTABILITY OF THE PROPOSED PRICE, AS FOLLOWS:

"6. IT IS GENERALLY AGREED THAT NEGOTIATIONS AS STATED IN PARAGRAPH 6 OF THE CONTRACTOR'S LETTER WERE CONDUCTED AND THAT A COST ANALYSIS AND PRE- AWARD SURVEY WAS PERFORMED. THE PRE-AWARD SURVEY WAS FAVORABLE. IT IS NOT CORRECT THAT ON 16 APRIL 1964 THE CONTRACTOR WAS ADVISED THAT ITS SELLING PRICE WAS ACCEPTABLE. THE CONTRACTOR, ON THE CONTRARY, WAS TOLD UPON HIS SPECIFIC INQUIRY ONLY THAT THE AUDITOR AND THE GOVERNMENT PRE- AWARD SURVEY PERSONNEL HAD STATED THAT THEY WERE SATISFIED THAT COUSE HAD SUBSTANTIATED ITS PRICE WITH VENDOR QUOTATIONS AND BUSINESS RECORDS. THE CONVERSATION WAS NOT DIRECTED TO THE ACCEPTABILITY OF COUSE'S PRICE, BUT SOLELY TO THE FACT THAT HE APPEARED TO HAVE FACILITIES AND QUOTATION FROM HIS VENDORS. IT IS TRUE THAT ON 22 APRIL 1964 THE PROTESTOR WAS ADVISED THAT ITS DELIVERY SCHEDULE WAS ACCEPTABLE. AT THIS POINT IN TIME THE CONTRACTING OFFICER FELT THAT THE PROCUREMENT WAS NECESSARILY GOING TO BE MADE TO COUSE AND THERE WAS NO BASIS AS TO DELIVERY SCHEDULE. THE CONTRACTOR WAS FURNISHED, ABOUT 25 APRIL 1964, AN UNEXECUTED DRAFT COPY OF A PROPOSED CONTRACT. BECAUSE OF THE TIME LIMITATIONS AND THE NECESSITY OF MANY GOVERNMENT ADMINISTRATIVE STEPS TO BE REQUIRED PRIOR TO AN AWARD, THE CONTRACTING OFFICER HAD ADVISED MR. FREEMAN THAT IN ORDER TO SAVE TIME HE WOULD FURNISH HIM A ROUGH DRAFT FOR A REVIEW BY MR. FREEMAN AND HIS COUNSEL, WHILE AT THE SAME TIME THE CONTRACTING OFFICER WOULD BE PROCESSING A FINAL COPY THROUGH THE PROCUREMENT ADMINISTRATIVE STEPS. THE CONTRACTING OFFICER IS CERTAIN THAT MR. FREEMAN UNDERSTOOD THAT THIS WAS NOT A PROPOSED CONTRACT FOR HIS SIGNATURE, BUT THAT IT WAS MERELY A DEVICE TO SPEED UP THE FINALIZATION OF ANY POSSIBLE RESULTING CONTRACT. THE ARRANGEMENT TO HAVE A COMPANY REPRESENTATIVE IN ST. LOUIS ON 5 MAY 1964 WAS FOR THE SAME PURPOSE AND WAS MADE EARLY IN THE NEGOTIATIONS. THE CONTRACTING OFFICER DID INFORM THE COUSE COMPANY EARLY ON 1 MAY 1964 THAT THIS WAS A COMPETITIVE PROCUREMENT AND REQUESTED THE PROTESTOR TO GIVE THE BEST CONTRACT PRICE AND DELIVERY SCHEDULE BY CLOSE OF BUSINESS ON THAT DATE. THE COUSE COMPANY INFORMED THE CONTRACTING OFFICER OF A REVISED PRICE AND DELIVERY SCHEDULE BY CLOSE OF BUSINESS ON THAT DATE. THE COUSE COMPANY INFORMED THE CONTRACTING OFFICER OF A REVISED PRICE AND DELIVERY SCHEDULE LATER IN THE AFTERNOON OF 1 MAY 1964, AND WAS INFORMED AT ABOUT 4:30 P.M. ON THAT DATE THAT IT WAS THE UNSUCCESSFUL PROPOSER. THE TELEGRAM OF PROTEST MENTIONED WAS RECEIVED AFTER THE AWARD.'

THE INFORMATION AND EVIDENCE OF RECORD DISCLOSE THAT PROCUREMENT OF THE ITEM IN QUESTION BY NEGOTIATION ON THE BASIS THE PUBLIC EXIGENCY WOULD NOT PERMIT THE DELAY INCIDENT TO ADVERTISING WAS APPROVED IN A LETTER DATED APRIL 2, 1964, FROM THE DIRECTOR, PROC. AND PDN., HEADQUARTERS, UNITED STATES ARMY MOBILITY COMMAND, WARREN, MICHIGAN, TO THE COMMANDING OFFICER, USAAMC, ST. LOUIS, MISSOURI, WHICH INCLUDED THE FOLLOWING DIRECTIVE:

"4. THE ASSIGNMENT OF ISSUE PRIORITY DESIGNATOR 2 FOR THE PROJECT TEAM REQUIREMENTS AUTHORIZES PROCUREMENT BY NEGOTIATION PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2304 (A) (2) AND ASPR 3-202.2.'

THE CONTRACTING OFFICER THEREUPON MADE HIS "DETERMINATION AND FINDINGS" DATED APRIL 17, 1964, OF "AUTHORITY TO NEGOTIATE AN INDIVIDUAL CONTRACT" PROVIDING AS FOLLOWS:

"1. I HEREBY FIND THAT:

"A. THE U.S. ARMY AVIATION MATERIEL COMMAND PROPOSES TO PROCURE BY NEGOTIATION 217 EACH AIR MOBILE MAINTENANCE SHELTERS, MODEL "HT" AS DEVELOPED BY COUSE MANUFACTURING INC.

"B. THE ESTIMATED COST OF THE PROPOSED PROCUREMENT IS $508,000.

"C. PROCUREMENT BY NEGOTIATION OF THE ABOVE DESCRIBED PROPERTY IS JUSTIFIED BECAUSE THE ITEMS ARE NOT AVAILABLE FROM DEPOT STOCK AND MUST BE PROCURED IMMEDIATELY FOR U.S. ARMY UNITS PARTICIPATING IN "PROJECT TEAM.' A PRIORITY DESIGNATOR 2 HAS BEEN ASSIGNED TO THIS PROCUREMENT IN ACCORDANCE WITH THE UNIFORM MATERIEL ISSUE SYSTEM.

"D. USE OF FORMAL ADVERTISING FOR PROCUREMENT OF THE ABOVE DESCRIBED SUPPLIES IS IMPRACTICAL BECAUSE THE PUBLIC EXIGENCY WILL NOT PERMIT THE TIME DELAY INCIDENT TO FORMAL ADVERTISING.

"2. UPON THE BASIS OF THE FINDINGS SET FORTH ABOVE, I HEREBY DETERMINE THAT THIS PROCUREMENT IS FOR SUPPLIES URGENTLY NEEDED WHICH WARRANTED THE ASSIGNMENT OF A PRIORITY DESIGNATOR 2 IN ACCORDANCE WITH THE UNIFORM MATERIEL ISSUE SYSTEM.

"3. SUBJECT TO THE AVAILABILITY OF FUNDS, AND PROVIDING THAT THE ABOVE SUPPLIES HAVE OTHERWISE BEEN AUTHORIZED FOR PROCUREMENT, IT MAY, THEREFORE, BE PROCURED BY NEGOTIATION FOR A PERIOD OF NINETY (90) DAYS FROM THE DATE THEREOF PURSUANT TO 10 U.S.C. 2304 (A) (2) AND PARAGRAPH 3- 202.2 (VI) OF THE ARMED SERVICES PROCUREMENT REGULATION.

"4. THE ABOVE DETERMINATION APPLIES TO AN APPROVED PROGRAM FOR FISCAL YEAR 1964.'

IT SEEMS CLEARLY EVIDENT FROM THE STATEMENTS REFERRED TO AND PARAGRAPH 1A OF THE CONTRACTING OFFICER'S FINDING THAT THE NEGOTIATIONS WERE INITIATED FOR PROCUREMENT OF AN ITEM DEVELOPED AND MANUFACTURED SOLELY BY COUSE. THIS CONNECTION, IT IS STATED IN PART III, PARAGRAPH 9 OF THE ,CONTRACTING OFFICER'S STATEMENT" IN SUPPORT OF THE DETERMINATION TO NEGOTIATE THAT:

"* * * THE GENERAL REQUIREMENT OF 10 U.S.C. 2304 (A) IS NOT APPLICABLE HERE, FOR THE ADDITIONAL REASON THAT THE URGENCY OF THE REQUIREMENT PRECLUDED BOTH THE DELAY INCIDENT TO ADVERTISING AND THE DELAY INCIDENT TO DEVELOPMENT OF SPECIFICATIONS NECESSARY FOR FORMAL ADVERTISING.'

THIS IS FOLLOWED BY HIS CONCLUSION IN PARAGRAPH 10 THAT "THERE WAS NO "SOLE SOURCE CERTIFICATE" NOR SOLE SOURCE PROCUREMENT.'

SIGNIFICANTLY TO US, HOWEVER, THE RECORD SHOWS THAT THE NEGOTIATIONS WERE IN FACT INITIALLY CONDUCTED WITH ONLY ONE FIRM--- COUSE MANUFACTURING, INC.--- AND IT WAS NOT UNTIL COUSE HAD SUBMITTED A PROPOSAL WITH FULL INFORMATION AND DATA AND THE NEGOTIATIONS CULMINATED IN THE TENDER OF A CONTRACT FOR SIGNATURE OF THE PARTIES OF THAT OTHER FIRM--- THE FAB-WELD CORPORATION--- WAS EVEN CONTACTED. THE REASONS ASSIGNED FOR THIS ACTION IN PART II, PARAGRAPH 2 OF THE "CONTRACTING OFFICER'S STATEMENT" ARE (1) THAT THE COUSE PROPOSAL "WAS NOT DESIRABLE FROM THE STANDPOINT OF DESIRED DELIVERY" WHICH IS INCONSISTENT WITH HIS STATEMENT IN PARAGRAPH 6 QUOTED ABOVE "THAT ON 22 APRIL 1964 THE PROTESTOR WAS ADVISED THAT ITS DELIVERY SCHEDULE WAS ACCEPTABLE" AND (2) THAT ,THE COUSE COMPANY DID NOT PRESENT WHAT THE CONTRACTING OFFICER CONSIDERED TO BE A REASONABLE PRICE FOR THESE ITEMS" ALTHOUGH IT IS NOTED APPROPRIATE PROVISIONS FOR ADJUSTMENTS DUE TO DEFECTIVE COST AND PRICING DATA WERE INCLUDED IN THE CONTRACT TENDERED TO COUSE. THE PARAGRAPH IS AS FOLLOWS:

"2. THE PROTESTOR'S PROPOSAL, AFTER VERY AGGRESSIVE NEGOTIATIONS, WAS NOT DESIRABLE FROM THE STANDPOINT OF DESIRED DELIVERY. IN ADDITION, THE COUSE COMPANY DID NOT PRESENT WHAT THE CONTRACTING OFFICER CONSIDERED TO BE A REASONABLE PRICE FOR THESE ITEMS. THE CONTRACTING OFFICER HAD THE IMPRESSION THAT THE NEGOTIATIONS ON DELIVERY AND PRICE WERE ONE-SIDED BECAUSE OF THE SOLE NATURE OF THE CONTEMPLATED PROCUREMENT. COUSE PERSONNEL OBVIOUSLY BELIEVED THAT THEY WERE IN A POSITION TO DICTATE DELIVERY TERMS AND PRICE WITHOUT FEAR OF COMPETITION. THE CONTRACTING OFFICER THEREFORE DETERMINED, IN SPITE OF THE SHORT PERIOD AVAILABLE BEFORE THE REQUIRED DELIVERY DATE, TO MAKE EVERY EFFORT TO OBTAIN A COMPETITIVE PROPOSAL. THE CONTRACTING OFFICER KNEW THE FAB-WELD CORPORATION HAD PERFORMED IN A HIGHLY SATISFACTORY MANNER ON MANY PREVIOUS PROCUREMENTS FOR CONEX CONTAINERS. THE CONTRACTING OFFICER ALSO KNEW THAT FAB-WELD WAS A LOW COST PRODUCER AND THAT THIS COMPANY HAS DEMONSTRATED AN ABILITY TO ADJUST TO NUMEROUS PROBLEMS INCLUDING RECOVERY TO REQUIRED PRODUCTION OF NINETY-SIX (96) CONEX CONTAINERS, PER WORKING DAY WITHIN 30 DAYS AFTER ITS MAIN PLANT BUILDING AND PRODUCTION LINE HAD BEEN DESTROYED IN A FIRE. THE PROPOSED PROCUREMENT OF MAINTENANCE SHELTERS APPEARED TO BE A PRODUCT VERY SIMILAR IN CONSTRUCTION TO CONTAINERS THAT THE FAB-WELD CORPORATION HAD BUILT IN THE PAST AND THE CONTRACTING OFFICER FELT THERE WAS A POSSIBILITY EVEN WITH A LIMITED TIME FRAME OF OBTAINING A RESPONSIVE PROPOSAL FOR AN "EQUAL" ITEM FROM THE FAB-WELD CORPORATION. THEREFORE, AFTER THE NEGOTIATIONS WERE CONCLUDED ON THE 10TH OF APRIL WITH THE PROTESTOR WITH INCONCLUSIVE RESULTS, THE CONTRACTING OFFICER SOLICITED BY TELEPHONE A PROPOSAL FROM THE FAB WELD CORPORATION. THE ITEM WAS DESCRIBED TO FAB-WELD BY MEANS OF A COUSE COMPANY COMMERCIAL BROCHURE. THE 11TH OF APRIL, THE CONTRACTING OFFICER AIRMAILED THE BROCHURE TO FAB- WELD ANNOTATING ON IT THE REQUIRED QUANTITIES, THE REVISED DIMENSIONS AND MAXIMUM WEIGHT DESIRED. THE CONTRACTING OFFICER ALSO INFORMED FAB-WELD THAT THE ITEM WAS ALLEGED TO BE PATENTED AND GAVE THEM THE PATENT NUMBER. THE BROCHURE HAD NO PROPRIETARY RESTRICTION UPON IT AND WAS TO HIS KNOWLEDGE A STANDARD COMMERCIAL BROCHURE DISTRIBUTED WITHIN THE TRADE.'

IN HIS STATEMENT THE CONTRACTING OFFICER ADMITS "THE SOLE SOURCE NATURE" OF THE PROCUREMENT AND CONCEDES THAT ALL OF THE INFORMATION AND DATA RECEIVED FROM COUSE (WITH THE POSSIBLE EXCEPTION OF THE DRAWINGS) WAS MADE AVAILABLE TO THE FAB-WELD CORPORATION. MOREOVER, IT SEEMS REASONABLY CLEAR THAT INFORMATION AND DATA BASED ON THE COUSE DRAWINGS, IF NOT THE DRAWINGS THEMSELVES, WERE INCLUDED AS INDICATED IN THE FOLLOWING EXCERPT FROM THE AFFIDAVIT DATED JULY 20, 1964, BY MR. MELVIN BLOCK, MECHANICAL ENGINEER ON THE PROCUREMENT:

"THAT, ON 18 FEBRUARY 1964, MR. FREEMAN VISITED AVCOM AND THERE WAS DISCUSSION AS TO HIS PROVIDING DETAILED DRAWINGS AND STRESS ANALYSIS OF THE COUSE "HT" SHELTER. MR. FREEMAN REFUSED TO GIVE SUCH INFORMATION AND IT WAS AT THAT TIME THAT THE UNDERSIGNED SUGGESTED TO HIM THAT HE COULD PLACE ANY SORT OF RESTRICTION HE DESIRED ON THE DRAWINGS AS TO THEIR USE BY THE GOVERNMENT. BY VIRTUE OF THIS, MR. FREEMAN AGREED TO SEND THE DRAWINGS. DRAWINGS, THOUGH NOT VERY COMPLETE ONES, WERE SENT BY COUSE. EVEN THOUGH THEY CONTAINED NO WRITTEN RESTRICTIVE LEGEND, THEY WERE NOT USED IN ANY MANNER IN FOSTERING COMPETITION FOR THE PROCUREMENT ACTION.

"THAT, ON 10 APRIL 1964, THE UNDERSIGNED AGAIN HAD OCCASION TO MEET WITH MR. FREEMAN AND SOUGHT, AGAIN FOR THE PURPOSE OF FORMULATING A MORE ACCURATE STATEMENT OF WORK, FURTHER INFORMATION REGARDING THE COUSE SHELTER BUT MR. FREEMAN WAS MOST RELUCTANT TO DO SO UNLESS THE GOVERNMENT WAS PREPARED TO GIVE HIM AN ORDER FOR THE SHELTERS AT THAT TIME.

"THAT THE STATEMENT CONTAINED AT THE END OF PARAGRAPH 2, PAGE 2, OF MR. FREEMAN'S AFFIDAVIT OF 19 JUNE 1964, IS NOT ACCURATE AND IS DENIED BY THE UNDERSIGNED. I PERSONALLY WAS NOT PUT ON NOTICE AS TO COUSE'S POSITION THAT ANY AND ALL DATA, DRAWINGS, PHOTOGRAPHS, AND INFORMATION SUPPLIED UP TILL THAT DATE OF 10 APRIL WAS CONSIDERED TO BE PROPRIETARY NOR HAS ANYONE ELSE SO NOTIFIED TO THE BEST OF MY KNOWLEDGE.

"THAT, AT THE REQUEST OF MR. R. F. HOGAN, CONTRACTING OFFICER, THE UNDERSIGNED MET, ON 14 APRIL 1964 AT AVCOM, WITH CONTRACTING AND ENGINEERING REPRESENTATIVES OF FAB-WELD, INC., TO DESCRIBE AND EXPLAIN THE SHELTERS TO THEM. IT IS MY UNDERSTANDING THAT MR. HOGAN CALLED FAB-WELD ON 11 APRIL 1964, DESCRIBED THE SHELTER ORALLY, AND SENT THE COMPANY THE COUSE BROCHURE AND THE STATEMENT OF WORK DRAWN UP BY THE OFFICE OF THE UNDERSIGNED. THAT, AT THIS 14 APRIL MEETING, THE DRAWINGS SUBMITTED BY COUSE WERE NOT MADE AVAILABLE TO REPRESENTATIVES OF FAB-WELF. I ATTEMPTED TO EXPLAIN THE PICTURE OF THE SHELTER THAT WAS CONTAINED IN THE BROCHURE AND DISCUSS THE NEEDED REVISIONS AS ESTABLISHED IN AVCOM'S STATEMENT OF WORK. ONLY INFORMATION PROVIDED TO THE UNDERSIGNED WITHOUT RESTRICTION PLUS MY OWN ENGINEERING KNOWLEDGE WERE CALLED UPON AT THAT TIME.'

THE CONTRACTING OFFICER ATTEMPTS TO JUSTIFY THE ACTION TAKEN PRINCIPALLY ON THE GROUNDS THAT THE COUSE FIRM HAD NO PROPRIETARY OR PROPERTY RIGHTS SUBJECT TO RESTRICTION OR PROTECTION; THAT IF COUSE DID HAVE SUCH PROPERTY RIGHTS, RESTRICTIONS ON THE USE THEREOF WERE NOT AFFIRMATIVELY IMPOSED BY COUSE, AND THAT IN ANY EVENT NONE OF COUSE'S PROPRIETARY RIGHTS WERE VIOLATED. BUT NO RECOGNITION WHATEVER IS GIVEN THE GOVERNMENT'S OBLIGATION NOT TO DISCLOSE THE INFORMATION AND DATA RECEIVED FROM COUSE, A SUBSTANTIAL PART OF WHICH HAD NOT BEEN MADE AVAILABLE TO THE PUBLIC AND, FOR THE REASONS STATED ABOVE, WAS THEREFORE PROPRIETARY IN NATURE AND COULD NOT RIGHTFULLY BE USED BY THE GOVERNMENT IN COMPETITIVE NEGOTIATIONS WITH FAB-WELD OR OTHERS.

WITHOUT GOING FURTHER INTO THE MANY PROS AND CONS CONTAINED IN THE STATEMENTS MADE ON BEHALF OF COUSE AND THE OPPOSING STATEMENTS BY THE RESPONSIBLE PROCUREMENT PERSONNEL, IT IS OUR VIEW THAT THE FACTS AND CIRCUMSTANCES SURROUNDING THE NEGOTIATIONS HERE INVOLVED, THE TIME AND THE MANNER IN WHICH THE PROPOSAL WAS SOLICITED FROM THE FAB-WELD CORPORATION, AND THE SIMILARITY OF THE ITEM OFFERED BY FAB-WELD UNDER ITS PROPOSAL, CLEARLY SHOW THAT THERE WAS A FAILURE ON THE PART OF THE PROCUREMENT REPRESENTATIVES OF YOUR DEPARTMENT TO ABIDE BY THE CARDINAL PRINCIPLES FOR CONSIDERATION AND APPLICATION IN THE TRANSACTION OF GOVERNMENT AS WELL AS PRIVATE BUSINESS IN CASES SUCH AS HERE INVOLVED. CF. THE CASES CITED ABOVE; ALSO, B-153941, AUGUST 27, 1964, AND THE AUTHORITIES REFERRED TO THEREIN.

FURTHERMORE, THE STATEMENT IN THE ADMINISTRATIVE REPORT OF JULY 23, 1964, THAT "AN AWARD WAS MADE SUBSEQUENT TO THE RECEIPT BY THIS COMMAND OF ORAL NOTICE OF INTENT TO PROTEST WAS DEEMED PROPER IN VIEW OF THE URGENCY FOR DELIVERY OF THE ITEM" SEEMS PARTICULARLY STRIKING INASMUCH AS A STRIKE WAS IN PROGRESS AT THE FAB-WELD PLANT WHEN THE CONTRACT WAS AWARDED, WHICH THE CONTRACTING OFFICER STATES DID NOT BECOME KNOWN TO HIM UNTIL HE WAS SO ADVISED BY THE ATTORNEYS FOR COUSE ON MAY 14, 1964, ABOUT TWO WEEKS AFTER SUCH AWARD. THE CONTRACTING OFFICER ALSO STATES IN PARAGRAPH 8 OF HIS "ADDITIONAL STATEMENT" AS FOLLOWS:

"* * * WHETHER THE POSITION TAKEN BY THE CONTRACTOR WITH RESPECT TO THE STRIKE SITUATION IS JUSTIFIED OR NOT, THE MAIN POINT IS THAT THE CONTRACTING OFFICER HAD NO KNOWLEDGE, AND COULD NOT REASONABLY BE EXPECTED TO HAVE KNOWLEDGE, OF THE EXISTENCE OF THE STRIKE WHEN HE ENTERED INTO A BINDING CONTRACT WITH FAB-WELD ON 2 MAY 1964. THUS, HE DID NOT AWARD A CONTRACT IN UTTER DISREGARD OF A STRIKE SITUATION, AS FAR AS HE KNEW.'

APPARENTLY IT IS THE CONTRACTING OFFICER'S POSITION THAT HE WAS NOT RESPONSIBLE FOR AWARDING A CONTRACT TO A FIRM WHICH HAD BECOME SERIOUSLY AFFECTED, IF NOT TOTALLY INCAPACITATED, PRIOR TO THE AWARD. UNDER THE FACTS OF THIS CASE SINCE THE STRIKE BEGAN ON MAY 1, 1964, DURING THE NEGOTIATIONS AND THE "CRITICAL" DELIVERY REQUIREMENT WAS THE JUSTIFICATION GIVEN FOR THE AWARD ACTION WE BELIEVE IT WAS THE DUTY OF THE CONTRACTING OFFICER TO HAVE DETERMINED PRIOR TO AWARD OF THE CONTRACT THAT THE COMPANY WAS RESPONSIBLE AND ABLE TO MEET THE DELIVERY TERMS OF THE CONTRACT.

AS I AM SURE YOU ARE AWARE, OUR OFFICE WHOLEHEARTEDLY COMMENDS AND SUPPORTS YOUR EFFORTS AND THE EFFORTS OF YOUR PERSONNEL IN OBTAINING THE MAXIMUM COMPETITION AVAILABLE IN THE PROCUREMENT OF YOUR DEPARTMENT'S REQUIREMENTS. WE BELIEVE YOU WILL AGREE, HOWEVER, SUCH EFFORTS SHOULD NOT DISREGARD THE ESTABLISHED PRINCIPLES DESIGNED TO MAINTAIN THE HIGH STANDARDS AND DEGREE OF COMPETITION DESIRED IN PROCURING THE GOVERNMENT'S REQUIREMENTS.