## Facts

- Data Enterprises of the Northwest (DEN) developed the ATICTS commercial, off-the-shelf tool-inventory management software at its own expense and offered it to federal users through a General Services Administration (GSA) multiple-award schedule (MAS) contract.
- Under the MAS contract, government users obtained restricted licenses to use ATICTS.
- The contract included a utilization limitations clause that (1) limited ATICTS use to tool-inventory management and (2) barred disclosure of ATICTS, the ATICTS Workbook, or ATICTS-related documentation to third parties.
- The ATICTS Workbook provided a detailed description of ATICTS functions and was available only to licensed ATICTS users.
- ATICTS software and related materials carried proprietary/confidential legends stating they were not to be reproduced, distributed, or disclosed without authorization.
- The MAS contract also incorporated FAR clauses addressing Rights in Data and commercial computer software.
- The Naval Systems Support Group (NSSG) used ATICTS for tool tracking and separately used MAXIMO (software associated with contractor Anteon) for equipment tracking.
- Seeking a single application to manage both tools and equipment, NSSG provided DEN’s proprietary ATICTS information to Anteon—including the ATICTS software and the ATICTS Workbook (and related technical information)—so Anteon could incorporate ATICTS functionality into its own system.
- DEN submitted a certified claim to GSA alleging the Navy exceeded the restricted license and violated the nondisclosure limits; the contracting officer denied the claim, asserting the Government had “unlimited rights” under the incorporated FAR clauses.
- DEN appealed to the General Services Board of Contract Appeals (GSBCA), asserting breach of contract and also advancing takings and copyright-based theories.

## Issues

1. Whether the GSBCA had jurisdiction under the Contract Disputes Act to decide Fifth Amendment takings and copyright infringement theories arising from the Government’s conduct.
2. Whether the MAS contract’s utilization limitations and proprietary markings limited the Government’s rights in ATICTS and related materials, notwithstanding the incorporated FAR Rights in Data and commercial software clauses.
3. Whether NSSG’s disclosure of ATICTS software and documentation to Anteon for use in developing a consolidated tools-and-equipment capability exceeded the license and breached the MAS contract.
4. If there was a breach, what measure of damages was recoverable, including whether DEN could recover lost profits for license sales the Government would have made absent the breach and the appropriate time period.

## Decision

- The Board granted the Government partial summary relief and dismissed the appeal to the extent it asserted a Fifth Amendment taking and copyright infringement.
- On the contract claim, the Board found the Government’s rights were limited by the MAS contract’s restricted-license terms, including the utilization limitations and nondisclosure requirements for ATICTS, the Workbook, and related documentation.
- The Board held the Navy breached the MAS contract by disclosing DEN’s proprietary ATICTS materials to Anteon so Anteon could incorporate ATICTS functionality into another system.
- The Board awarded DEN damages, including lost profits for license sales DEN would have made absent the breach, with the damages period extending through 2006.

## Legal Principles

- A board of contract appeals’ authority under the Contract Disputes Act is confined to contract disputes; independent constitutional takings and statutory copyright infringement claims are not within its remedial authority in the same manner as breach-of-contract claims.
- In interpreting government contracts for commercial software, specific license terms and negotiated restrictions (such as a utilization limitations clause and nondisclosure limits) define the Government’s permitted use and disclosure and can restrict broader readings of incorporated boilerplate clauses.
- Contract terms that limit use to a defined purpose and bar third-party disclosure of software, manuals, and related documentation are enforceable; providing those materials to another contractor to replicate or incorporate functionality outside the license scope constitutes breach.
- Expectation damages may include lost profits when supported by the record and tied to purchases the Government likely would have made if it had complied with the license restrictions.

## Conclusion

In Data Enterprises of the Northwest v. General Services Administration, the GSBCA treated the dispute primarily as a contract case: it dismissed takings and copyright theories, found that the MAS contract granted only restricted rights in DEN’s ATICTS software and documentation, held the Navy breached those restrictions by disclosing ATICTS materials to Anteon to build a competing capability, and awarded DEN lost-profit damages through 2006.


Data Enterprises of the Northwest v. General Services Administration, 04-1 BCA P 32,539, GSBCA No. 15,607 (2004)