In re General Atronics Corp.

General Atronics Corporation (Atronics) (plaintiff) contracted with the United States Navy (Navy) (defendant) to provide data terminals and associated software to the Navy. In its technical proposal, Atronics listed certain enhancements not required in the Navy’s specifications, including a wireline interface, and provided the Navy with a price matrix for the various enhancements. The price matrix described certain software packages associated with the wireline interface as options. The proposal also included references to Atronics’s proprietary rights in its intellectual property. A memorandum of negotiations that detailed the pricing of the options accepted by the Navy did not mention the wireline interface as an option that the Navy purchased. The contract incorporated various federal regulations that gave the Navy unlimited rights in Atronics’s software unless Atronics marked it with a particular restricted-rights legend and, before delivering the software, incorporated the restrictions in a license agreement that was made a part of the contract. Atronics delivered the wireline software but did not mark it with the restricted-rights legend and did not incorporate the restrictions in a license agreement that was made a part of the contract. Some of the items delivered to the Navy under the contract included references to their confidential or proprietary nature, but none of these references conformed to the standards described in the regulations. The Armed Services Board of Contract Appeals (ASBCA) determined that Atronics had offered the software interface as an option, and the parties modified their contract, with the Navy agreeing to make an additional payment to Atronics to cover the cost of the interface in settlement of its claim. Atronics then requested an equitable adjustment in the amount of $327,000 for license fees for the software applications associated with the interface. The contracting officer never issued a final decision on the adjustment claim. Therefore, it was deemed denied, and Atronics appealed.