B-190571, APR 26, 1978

B-190571, APR 26, 1978

PROTEST ALLEGING MISAPPROPRIATION OF PROTESTER'S PROPRIETARY UNSOLICITED PROPOSAL FOR USE BY AGENCY IN LATER COMPETITIVE SOLICITATION IS DENIED WHERE PROTESTER FAILS TO PRESENT CLEAR AND CONVINCING EVIDENCE THAT PROCUREMENT WILL VIOLATE PROTESTER'S PROPRIETARY RIGHTS.

ANDRULIS RESEARCH CORP.:

ANDRULIS RESEARCH CORP. (ANDRULIS) PROTESTS REQUEST FOR PROPOSALS (RFP) J -001-LEAA-8, ISSUED BY THE DEPARTMENT OF JUSTICE, LAW ENFORCEMENT ASSISTANCE ADMINISTRATION (LEAA), ON OCTOBER 14, 1977. THE SUBJECT RFP SOLICITS PROPOSALS TO DEVELOP AND IMPLEMENT AN EVALUATION OF LEAA'S COURTS DIVISION TRAINING PROGRAM (CDTP), THE PURPOSE OF WHICH IS TO PROVIDE CONTINUING EDUCATION TO PROFESSIONALS (JUDGES, ATTORNEYS, AND COURT PERSONNEL) IN THE CRIMINAL JUSTICE SYSTEM.

ANDRULIS' PROTEST IS BASED UPON ITS SUBMISSION TO LEAA IN JUNE 1975 OF AN UNSOLICITED PROPOSAL IN WHICH IT OFFERED TO PERFORM A CDTP EVALUATION. ANDRULIS ALLEGES IN SUBSTANCE THAT (1) LEAA HAS USED ITS UNSOLICITED PROPOSAL AS THE BASIS OF THE RFP, (2) THE MATERIAL CONTAINED IN THE PROPOSAL WAS PROPRIETARY TO ANDRULIS, AND (3) THEREFORE, UNDER OUR DECISIONS, LEAA SHOULD BE REQUIRED TO CANCEL THE COMPETITIVE SOLICITATION AND AWARD A SOLE-SOURCE CONTRACT TO ANDRULIS. LEAA, WHILE APPARENTLY CONCEDING, ALBEIT ARGUENDO, THAT IT VIOLATED ITS OWN PROCEDURES FOR PROCESSING UNSOLICITED PROPOSALS, CONTENDS THAT ANDRULIS' PROPOSAL CONTAINS NO PROTECTIBLE PROPRIETARY DATA. FOR THE REASONS STATED BELOW, WE AGREE WITH LEAA AND DENY THE PROTEST.

THE UNDISPUTED FACTS SHOW THAT REPRESENTATIVES OF ANDRULIS MET WITH LEAA PERSONNEL IN THE FIRST HALF OF 1975, CULMINATING IN THE SUBMISSION OF A 10 -PAGE "REVISED" PROPOSAL, DATED JUNE 1975, IN WHICH ANDRULIS OUTLINED ITS PROJECTED APPROACH TO AN EVALUATION OF THE CDTP. ALTHOUGH THIS PROPOSAL COULD NOT BE CONSIDERED "SOLICITED" WITHIN THE MEANING OF CHAPTER 17 OF THE SINCE IT WAS NOT SUBMITTED IN RESPONSE TO A FORMAL RFP, NONETHELESS IN PRACTICAL TERMS THE PROPOSAL WAS NOT "UNSOLICITED " AS ITS SUBMISSION WAS ENCOURAGED BY LEAA OFFICIALS.

THIS "INFORMAL SOLICITATION" WAS BUT THE FIRST OF A SERIES OF DEPARTURES FROM THE HANDBOOK. THE HANDBOOK ALSO REQUIRES THAT UNSOLICITED PROPOSALS BE LOGGED IN WITH THE CONTRACTING OFFICER, THE "ONLY LEAA REPRESENTATIVE AUTHORIZED TO RECEIVE UNSOLICITED PROPOSALS," AND THAT ALL COMMUNICATIONS WITH RESPECT TO SUCH PROPOSALS BE CONDUCTED THROUGH THAT INDIVIDUAL. HANDBOOK, CHAPTER 17, P. 17-2. IN THE PRESENT CASE, ALTHOUGH BOTH LEAA AND ANDRULIS CONSIDERED THE PROPOSAL TO BE UNSOLICITED, IT WAS NEVER LOGGED IN, NOR IS THERE ANY EVIDENCE THAT THE LEAA CONTRACTING OFFICER WAS ADVISED OF ITS EXISTENCE.

LEAA ASSERTS THAT THE PROPOSAL SHOULD BE TREATED AS SOLICITED, AND THAT, AS SUCH, IT WAS PROPERLY PROCESSED. WE FIND THIS ARGUMENT UNTENABLE IN LIGHT OF CHAPTER 8 OF THE HANDBOOK, WHICH PROVIDES, AMONG OTHER THINGS, THAT "ONLY A CONTRACTING OFFICER HAS THE AUTHORITY TO REQUEST A PROPOSAL." HANDBOOK, P. 8-1. AS STATED, THERE IS NO EVIDENCE THAT AN LEAA CONTRACTING OFFICER HAD ANY INVOLVEMENT WITH THE ANDRULIS PROPOSAL. ALL DISCUSSIONS WERE CONDUCTED BY LEAA PERSONNEL RESPONSIBLE FOR THE CDTP WHO WERE AT ONE POINT CONSIDERING THE INITIATION OF A SOLE-SOURCE CONTRACT ACTION FOR ANDRULIS TO PERFORM THE STUDY OUTLINED IN ITS PROPOSAL.

SEVERAL INDIVIDUALS INVOLVED IN THE DEALINGS WITH ANDRULIS SUBSEQUENTLY LEFT LEAA. THIS TURNOVER, COUPLED WITH A WIDENED REVIEW PROCESS, APPARENTLY LED TO A DECISION TO DEFER SOLE-SOURCE CONTRACT ACTION AND TO PROCEED WITH A COMPETITIVE PROCUREMENT FOR THE CDTP EVALUATION. IN SUCH CIRCUMSTANCES, THE HANDBOOK REQUIRES THAT AN UNSOLICITED PROPOSAL BE RETURNED WITH AN "APPROPRIATE REPLY TO THE OFFEROR," LEAA RETAINING ONE FILE COPY. HANDBOOK, CHAPTER 17, P. 17 5. THERE IS NO EVIDENCE THAT THIS PROCEDURE WAS FOLLOWED IN THE PRESENT CASE.

NOTWITHSTANDING THESE NUMEROUS VIOLATIONS OF LEAA PROCUREMENT PROCEDURES, THE CENTRAL ISSUE IN THIS PROTEST IS WHETHER THE MATERIAL IN ANDRULIS' PROPOSAL WAS PROPRIETARY, SUCH THAT ITS USE AS THE BASIS OF A COMPETITIVE PROCUREMENT WOULD BE A VIOLATION OF THE PROTESTER'S PROPERTY RIGHTS.

IN THIS CONNECTION, WE HAVE HELD IN A NUMBER OF CASES THAT A SOLICITATION WHICH WRONGFULLY DISCLOSED A PROTESTER'S PROPRIETARY DATA OR TRADE SECRETS SHOULD BE CANCELED SO LONG AS NO AWARD HAS BEEN MADE. THIS HAS SOMETIMES INCLUDED A RECOMMENDATION FOR SOLE-SOURCE PROCUREMENT WHERE THAT HAS BEEN THE ONLY WAY IN WHICH THE PROTESTER'S PROPERTY RIGHTS COULD BE PROTECTED. HOWEVER, BEFORE MAKING SUCH A RECOMMENDATION, WE HAVE REQUIRED THE PROTESTER TO PRESENT "CLEAR AND CONVINCING EVIDENCE THAT THE PROCUREMENT WILL VIOLATE THE PROTESTER'S PROPRIETARY RIGHTS." CHROMALLOY DIVISION - OKLAHOMA OF CHROMALLOY AMERICAN CORPORATION, 56 COMP.GEN. 537 (1977), 77-1 CPD 262, AND CASES CITED THEREIN.

WE FIND ANDRULIS' EVIDENCE UNCONVINCING AS TO EVERY ELEMENT REQUISITE TO A CLAIM OF PROPRIETARY DATA OR TRADE SECRET. THERE IS NO MARKING ON THE PROPOSAL ITSELF TO INDICATE THAT ANY MATERIAL CONTAINED THEREIN IS PROPRIETARY OR CONFIDENTIAL. NEITHER DOES ANDRULIS ALLEGE THAT THE PROPOSAL WAS DISCLOSED TO LEAA OFFICIALS IN CONFIDENCE. THESE FACTS ALONE WOULD BE SUFFICIENT TO DENY PROTECTION TO THE PROPOSAL. SEE FERROLINE CORP. V. GENERAL ANILINE & FILM CORP., 207 F.2D 912, 922 (7TH CIR. 1953); CHROMALLOY, SUPRA, AT 541.

HOWEVER, THERE IS ALSO NO EVIDENCE, APART FROM THE PROTESTER'S CONCLUSORY STATEMENTS, THAT ANDRULIS' 10-PAGE PROPOSAL INVOLVED SIGNIFICANT TIME AND EXPENSE IN PREPARATION, SEE CHROMALLOY, SUPRA, AT 548, OR MOST IMPORTANTLY, THAT IT CONTAINED ANY MATERIAL OR CONCEPTS THAT COULD NOT BE INDEPENDENTLY OBTAINED FROM PUBLICLY AVAILABLE LITERATURE OR COMMON KNOWLEDGE. IF A CONCEPT IS A MATTER OF COMMON KNOWLEDGE, ITS MERE REFORMULATION OR EXPRESSION CANNOT CONSTITUTE A "SECRET" OR BE PROPRIETARY TO THE PARTY RESTATING IT, UNLESS THE RESTATEMENT REPRESENTS A VALUABLE CONTRIBUTION ARISING FROM THE INDEPENDENT EFFORTS OF THE CLAIMANT. SEE CHROMALLOY, SUPRA, AT 547 548.

WE ARE UNABLE TO FIND "CLEAR AND CONVINCING EVIDENCE" IN THIS RECORD THAT ANDRULIS' EFFORTS IN FORMULATING ITS PROPOSAL CONSTITUTED SUCH A VALUABLE CONTRIBUTION. RATHER, THE PROPOSAL APPEARS TO BE A GENERAL STATEMENT OF GOALS AND POTENTIAL METHODS OF EVALUATION FOR THE CDTP. AT SEVERAL POINTS, THE PROPOSAL OBSERVES THAT SPECIFIC EVALUATION DESIGNS ARE YET TO BE DEVELOPED, THAT QUESTIONS REMAIN TO BE FORMULATED, AND THAT RESEARCH MUST BE DONE. ANDRULIS PROPOSAL, PP. 3-2 TO 3-4. WE FIND LEAA'S ARGUMENT, BASED UPON EXCERPTS FROM SEVERAL PUBLISHED WORKS ON EVALUATION OF GOVERNMENT PROGRAMS AND ITS ALLEGATIONS OF INTERNAL DEVELOPMENT OF THE RFP, PERSUASIVE. THE PROPOSAL APPEARS TO BE SIMPLY A COMPENDIUM OF PUBLICLY AVAILABLE CONCEPTS RATHER THAN ANDRULIS' UNIQUE CREATION.

THIS CASE IS DISTINGUISHABLE FROM 49 COMP.GEN. 28 (1969), CITED BY ANDRULIS, WHERE WE FOUND THAT THE PROTESTER'S UNSOLICITED PROPOSAL FOR AN ELECTRIC LIFT TRUCK DESIGN HAD BEEN IMPROPERLY USED BY THE AIR FORCE IN AN RFP. IN THAT CASE, THE UNSOLICITED PROPOSAL WAS CLEARLY MARKED PROPRIETARY AND DELIVERED TO THE AIR FORCE IN CONFIDENCE. WE FOUND THAT THE AGENCY FAILED TO CONTRADICT THE PROTESTER'S EVIDENCE BY SHOWING THAT A SIMILAR VEHICLE WAS IN EXISTENCE OR THAT THE PROTESTER'S DESIGN CONCEPT "DID NOT REPRESENT A CONSIDERABLE DEGREE OF INDEPENDENT EFFORT." 49 COMP. GEN. AT 31. ALTHOUGH THERE IS NOT MUCH EVIDENCE AS TO LEAA'S DEVELOPMENT OF THE RFP, THE PROTESTER'S EVIDENCE OF INDEPENDENT CREATION ALSO IS LACKING.

SINCE WE CONCLUDE THAT ANDRULIS' PROPOSAL DOES NOT CONTAIN PROTECTIBLE PROPRIETARY OR TRADE SECRET INFORMATION, WE NEED NOT DETERMINE WHETHER LEAA IN FACT USED PORTIONS OF THE PROPOSAL IN ITS RFP.

ANDRULIS ARGUES THAT LEAA'S FAILURE TO FOLLOW ITS PROCEDURES DEPRIVED THE PROTESTER OF ITS "RIGHT" TO DESIGNATE PORTIONS OF THE PROPOSAL AS PROPRIETARY, SINCE THE HANDBOOK REQUIRES THAT THE CONTRACTING OFFICER'S ACKNOWLEDGEMENT OF RECEIPT INSTRUCT THE OFFEROR THAT IT SHOULD SPECIFICALLY DESIGNATE PROPRIETARY PORTIONS OF ITS PROPOSAL. HANDBOOK, CHAPTER 17, PP. 17-2, 17-7 TO 17-8. IF ANDRULIS HAD BELIEVED THAT ITS PROPOSAL CONTAINED PROPRIETARY INFORMATION, IT WOULD MOST LIKELY HAVE INDICATED THIS AT SOME POINT REGARDLESS OF WHETHER LEAA SPECIFICALLY ASKED IT TO DO SO. MORE IMPORTANTLY, OUR CONCLUSION THAT THE PROPOSAL DID NOT CONTAIN PROTECTIBLE MATERIAL MEANS THAT ANY SUCH DESIGNATION WOULD HAVE BEEN INEFFECTIVE.

ANDRULIS ALSO ARGUES THAT LEAA SHOULD BE EQUITABLY ESTOPPED FROM AWARDING THE CONTRACT FOR THE CDTP EVALUATION TO ANYONE BUT IT, IN LIGHT OF THE REPRESENTATIONS MADE BY LEAA OFFICIALS TO INDUCE ANDRULIS TO OFFER ITS PROPOSAL.

IN OUR OPINION, THE EQUITABLE ESTOPPEL ARGUMENT FAILS ON A NUMBER OF GROUNDS. THE CASE PRINCIPALLY RELIED ON BY ANDRULIS, MANLOADING & MANAGEMENT ASSOCIATES, INC. V. UNITED STATES, 461 F.2D 1299 (CT.CL. 1972), INVOLVED ORAL REPRESENTATIONS AT A BIDDERS' CONFERENCE THAT THE COURT HELD WERE REASONABLY RELIED UPON BY THE CONTRACTOR TO HIS DETRIMENT. EMECO INDUSTRIES, INC. V. UNITED STATES, 485 F.2D 652 (CT.CL. 1973), WAS A CASE IN WHICH THE GOVERNMENT FAILED TO INFORM THE LOW BIDDER ON A SOLICITATION OF ITS DECISION TO MAKE A SPLIT ORDER. THE CONTRACTOR PROCEEDED WITH TOOLING AND MANUFACTURE OF THE ENTIRE CONTRACT AMOUNT STOPPING PRODUCTION ONLY WHEN IT LEARNED OF THE SPLIT FROM ANOTHER SOURCE. ONCE AGAIN, THE COURT FOUND REASONABLE DETRIMENTAL RELIANCE UPON A COURSE OF GOVERNMENT CONDUCT INTENDED TO INDUCE SUCH RELIANCE OR UPON WHICH THE PERSON RELYING HAD A RIGHT TO BELIEVE HE WAS INTENDED TO RELY. SEE EMECO INDUSTRIES, INC. V. UNITED STATES, SUPRA, AT 657. BUT AS THE EMECO COURT ALSO POINTED OUT:

"OF COURSE, IT IS ESSENTIAL TO A HOLDING OF ESTOPPEL AGAINST THE UNITED STATES THAT THE COURSE OF CONDUCT OR REPRESENTATIONS BE MADE BY OFFICERS OR AGENTS OF THE UNITED STATES WHO ARE ACTING WITHIN THE SCOPE OF THEIR AUTHORITY." 485 F.2D AT 657.

SEE ALSO MANLOADING & MANAGEMENT ASSOCIATES, INC. V. UNITED STATES, SUPRA, AT 1302-1303; UNITED STATES V. GEORGIA-PACIFIC COMPANY, 421 F. 2D 92, 100-101 (9TH CIR. 1970).

THERE IS NO EVIDENCE THAT THE CONTRACTING OFFICER, THE ONLY LEAA OFFICIAL AUTHORIZED TO REQUEST OR ACCEPT PROPOSALS AND MAKE CONTRACTS, OR ANY OTHER LEAA OFFICIAL, EVER INFORMED ANDRULIS THAT IT WOULD DEFINITELY BE AWARDED A SOLE-SOURCE CONTRACT TO PERFORM THE EVALUATION. THE MOST THAT CAN BE GLEANED FROM THE RECORD IS THAT CERTAIN LEAA PERSONNEL TOLD ANDRULIS THAT THEY WOULD PROCESS A REQUEST FOR SOLE-SOURCE CONTRACT ACTION. ANDRULIS WAS SUBSEQUENTLY INFORMED THAT OTHER LEAA OFFICIALS HAD DECIDED THAT A COMPETITIVE PROCUREMENT WOULD BETTER SUIT THE AGENCY'S NEEDS. FINALLY, ANDRULIS PRESENTS NO EVIDENCE OR CLAIM OF RELIANCE IN THE FORM OF WORK OR EXPENSE INCURRED IN THE PERFORMANCE OF THE PROPOSAL. UNDER THE CIRCUMSTANCES, THE EQUITABLE ESTOPPEL ARGUMENT IS WITHOUT MERIT.

PROTEST DENIED.