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On Technical Data Rights And Small Businesses.

* In reference to the "Editor's Notes" column, "Technical Data Rights: Finding Common Ground," in the August 2018 of National Defense, the article hit the nail on the head regarding intellectual property and the military. We have had 12 Small Business Innovation Research contracts so we understand the issues.

Let me briefly explain the depth of the problems we found as a small business working through a SBIR Phase II contract, which absolutely guarantees us data rights of our new technologies and designs.

We developed a replacement pallet for the Air Force 463L material handling system, which is the standard freight and equipment system used by the service around the world. The technology that we incorporated into this new composite 463L pallet was developed by us prior to this SBIR PII contract where we demonstrated the utility of our solutions.

As we entered into this contract we discovered data rights clauses inserted into the contract by the Air Force which are strictly forbidden in SBIR funded contracts. The engineering staff at Robins Air Force Base--not the contracting office--attempted to coerce us over a dozen times to give up our SBIR data rights, including, at the last minute, sending a Memorandum of Understanding, that was little more than a Faustian bargain to sign away our rights in exchange for a Phase III contract.

It took more than three years going between the Air Force SBIR Office, our contacts at Robins, and the Small Business Administration to finally get a modification to the contract with the appropriate SBIR data rights clauses. It is clear today that when we declined to sign the MOU the Air Force had no intentions to allow us to move forward with our data rights intact.

The current 463L pallet repair contract is $330 million for three to five years of maintenance all done by one facility in Michigan wherein they repair/replace an average of 35,000 pallets a year. Of the damaged pallets, the 22 tie-down rings surrounding the perimeter of each 463L pallet have the highest failure rates.

There are 240,000 tie-down rings called out for repair every single year, which averages to over 660 rings every single day. The tie-down rings alone account for over $50 million per year in repair. It is estimated that the repair of 463L pallets has cost taxpayers $2 billion to $4 billion over the 50-year life span of this same legacy design, according to documents we are sharing with National Defense to back up these facts.

Our SBIR Phase II contract had us baseline the performance of the existing 463L pallet (Legacy) as well as design, build and deliver six all-new prototype Composite 463L pallets. Our testing of the legacy design proved the premature failure of the tie-down ring system and explains the drastically high failure rate while in normal field use. The tie-down ring is supposed to be capable of being pulled in any direction to 7,500 pounds without yielding. Our testing concluded with legacy rings yielding between 3,000 to 5,000 pounds depending on what angle it was being pulled.

Furthermore, the tie-down ring system should have a 1.5x safety factor for ultimate load situations at 11,250 pounds, and of course, the legacy design could not meet that. However, the final report as written by the Air Force does not say the legacy pallet tie-down rings fail, and in fact, they changed the test procedures so they never pulled the tie-down rings to the 11,250-pounds limit as had been agreed upon by all concerned parties.

Our new tie-down ring and rail design were so robust, they did not yield above the 11,250-pound ultimate load target regardless of direction pulled and many of our pulls maxed out at 20,000 pounds. Our system further improved on the legacy design by being field repairable in several key areas. We could service a damaged tie-down ring in under five minutes with basic hand tools and can repair composite top/bottom pallet skins from scratches and punctures. These were just two of the more than 10 critical design improvements made over the legacy design.

However, all of this appears to have been for nothing because as soon as our SBIR data rights were reinstated, and we were unwilling to give those rights away, the Air Force decided they did not want to pursue a future with our technology because they did not want to deal with licensing or come to an agreement to use our technology. All the more galling since we were forced out of this program after developing and demonstrating technology that solved most of the problems the Air Force needed to be fixed in the 463L material handling system.

Mark Livesay

Sunrez Corp. El Cajon, CA
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Comment:On Technical Data Rights And Small Businesses.
Author:Livesay, Mark
Publication:National Defense
Article Type:Letter to the editor
Date:Nov 1, 2018
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