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FAR 6.401:  Unsolicited Proposals

Comptroller General - Key Excerpts

Digital contends that the agency has made improper use of its proprietary material contained in its unsolicited proposal. Specifically, the protester maintains that the RFP copies from its unsolicited proposal the essential process of the electronic identification of all known insurance sources covering VA beneficiaries. Digital argues that the electronic polling of databases to identify insurance coverage is an element of its proprietary process. In protests of this nature the burden is on the protester to demonstrate by clear and convincing evidence that its proprietary rights have been violated. EDN Corp., B-225746.2, July 10, 1987, 87-2 CPD para. 31 at 3. To prevail on a claim of violation of proprietary rights, the protester must show that (1) its material was marked proprietary or confidential or that it was disclosed to the government in confidence, and (2) the material involved significant time and expense in preparation and contained material or concepts that could not be independently obtained from publicly available literature or common knowledge. Porta Power Pak, Inc., B-196218, Apr. 29, 1980, 80-1 CPD para. 305 at 4. Commercial products, for instance, are not considered proprietary, NEFF Instrument Corp., B-216236, Dec. 11, 1984, 84-2 CPD para. 649 and neither are ideas or concepts which are obvious, and not innovative or unique. Chromalloy Div.—Oklahoma of Chromalloy Amer. Corp., B-187051, Apr. 15, 1977, 77-1 CPD para. 262. Moreover, the mere reformulation of a concept which is common knowledge cannot be proprietary unless the restatement represents a valuable contribution arising from the independent efforts of the claimant. Andrulis Research Corp., B-190571, Apr. 26 1978, 78-1 CPD para. 321 at 4. Finally, the value of proprietary information lies in its unique possession by the owner; once such information becomes public knowledge, its value and status as proprietary information is lost. Porta Power Pak, Inc., supra. Digital maintains that the key requirement of the RFP is the same key functional solution proposed by it in its unsolicited proposal, that being the electronic identification of all known insurance sources covering VA beneficiaries. Digital argues that the electronic polling of databases to identify insurance coverage is one element of its proprietary process. Digital maintains that the e-commerce process described in its unsolicited proposal is a trade secret because it qualifies as a method of doing business, has actual and potential value, and would be very valuable to Digital’s competitors. Digital states that it has filed one or more patent applications on the methods that it has developed to conduct an e-commerce business that collects the relevant information necessary to identify primary and secondary coverage, and thereafter to bill and collect from those sources. Based on our review of the record, we find unconvincing Digital’s claim that the agency improperly used proprietary information contained in the protester's unsolicited proposal. As stated above, the protester must demonstrate that the information was marked proprietary and was provided to the government in confidence. As explained above, once proprietary information becomes public knowledge, it is no longer considered proprietary. A significant amount of the information in Digital’s unsolicited proposal about its capabilities and approach to automation of the coordination of benefits among health plans, and related procedures is available to the public on Digital’s website. Specifically, while it claims that the electronic polling of databases to identify insurance coverage is somehow proprietary to Digital, its website includes a discussion of its ability to “obtain the latest eligibility data from 4,000 other payors” with its “automated COB process.” Also on the website is a quote from the Office of Management and Budget (OMB) at a hearing before the Senate Finance Committee in 1995 that OMB envisions: “an on-line, up front query system in which the primary and secondary payors will be determined at or before the time that care is provided …” http://www.dhinc.biz/docs/Digital_Healthcare_Brochure.pdf.  at 6. Thus, based on Digital’s website, it appears that the concept touted by Digital as proprietary is public knowledge. (Digital Healthcare, Inc., B-296489, August 24, 2005) (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
Digital Healthcare, Inc., B-296489, August 24, 2005 (pdf)  


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