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B-170688 1 (1972-01-17)

handle is hein.gao/gaobablci0001 and id is 1 raw text is: , R RTRCTED -Not Jh6*rolsd, it i al Accoumti~xg afflo oxcoep n We ba~~ap as by the o9,rj@ of Congressioaja R#Amtfns COMPTROLLER GENERAL OF THE A S 0: ~WASHINGTON, D.C. 20# RELEASED B-170688 JAN'l 7 1972 u( Dear Senator Percy: Your letter of April 26, 1971, referred for our consid- eration a letter dated April 5, 1971, from your constituent, Mr. Sheldon I. Dorenfest, president of Compucare, Inc. Mr. Dorenfest commented on information included in our pre- vious report to Congressman Robert McClory (B-170688, dated January 8, 1971) and requested that we consider certain other /issues related to the use of Government funds to develop prod- ucts which are subsequently acquired by large companies to the detriment of smaller companies such as Compucare. In his letter Mr. Dorenfest stated that McDonnell Auto- I mation Company (a division of McDonnell Douglas Corporation) had been provided an advantage over its competitors by the acquisition of the data processing division of the Sisters of the Third Order &PSt. Francis. (The Third Order is a religious group which operates 11 hospitals in Illinois, Iowa, and Michigan.) Mr. Dorenfest indicated that, in his view, an even more significant advantage than the premature disclosure of infor- mation to McDonnell Automation was provided by McDonnell Automation's (1) ability to demonstrate and market a partially operational patient-care information system using Third Order facilities an$_({2) employment of former Third Order employees who were familiar with the operation of the data processing division. In addition to commenting on Mr. Dorenfest's views, we are furnishing information relating to the marketability of the patient-care information system and to the legality of the contractual arrangements between the Third Order and McDonnell Automation. ABILITY TO DEMONSTRATE AND/OR MARKET FINANCIAL CONTROL AND PATIENT-CARE INFORMATION SYSTEMS Department of Health, Education, and Welfare (HEW) rec- ords show that, since 1964, the Third Order has had an opera- tional automated financial control information system. The 076R

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