Transcript Intellectual Property andDoD Acquisitions:Taming the

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Many thanks to Mr. Richard Gray for some content.
UNCLASSIFIED
“Those who fail to learn from history are
doomed to repeat it.”
“The Army and the Air Force have encountered
limitations in their sustainment plans for some
fielded weapon systems because they lacked
needed technical data rights.… Although the
circumstances surrounding each case were unique,
earlier decisions made on technical data rights
during system acquisition were cited as a primary
reason for the limitations subsequently
encountered.”
(GAO Report 06-839 at 6)
2
“Insanity: Doing the same thing over and over
again and expecting different results.”
“Most of the contracting and program officials at
DOD that we spoke with pointed to the lack of access
to technical data as one of the main barriers to
competition. Some contracting officers described this
condition as essentially being “stuck” with a certain
contractor. … Some contracting and program officials
have inquired about the cost of obtaining the technical
data, only to discover that the package is not for sale
or purchase of it would be cost-prohibitive, especially
the systems and equipment that have been contracted
out for decades.”
(GAO Report 10-833 at 19)
3
Data Rights Reasons for Vendor
Lock in a Nutshell
5 Jan 2001 USD(ATL) Memo emphasized 4 policies:
 “emphasize use of specifically negotiated license
rights”
 “exercise of flexibility when negotiating patent rights”
 “use of performance-based acquisition strategies that
may obviate the need for data and/or rights”
 “acquire only data and/or rights truly needed for a
given acquisition”
… a perfect storm
4
A Perfect Storm




Lack of long term planning for technical data
and rights and up front acquisition when the
USG has more leverage
Misguided notion that it was unnecessary to
secure the USG’s rights in complex technical
solutions because initial requirements were
performance based
Use of specially negotiated licenses to give
up “unneeded” data rights at contractor
request
Excessive fear of the 800 lb. gorilla
5
The Swiss Cheese Problem:
Segregability

“Contractors may
assert limited rights in
a segregable sub-item,
sub-component, or
portion of a process
which otherwise
qualifies for limited
rights under the
[252.227-7013
clause].” 227.7103-4(b),
but “[p]rivate expense
determinations should
be made at the lowest
practicable level.”
252.227.7013(a)(8)


This often leads to
Swiss cheese data, or
cherry picking.
Often, control of the
cherries is control of
the whole cheese.
6
Overview of Efforts
to Calm the Storm (… or slice the cheese?)

Allocating Data Rights During Source Selection

National Defense Authorization Act for 2012:
Deferred Ordering and Segregation/Reintegration

The Move Toward Open Architecture
Note: Corresponding details & background in the “Backup Slides”
7
PART ONE
Allocating
Data Rights
During Source Selection

National Defense Authorization Act for 2012: Deferred
Ordering and Segregation/Reintegration

The Move Toward Open Architecture
8
The 800 lb. Gorilla

10 U.S.C. 2320(a)(2)(F): A [prospective] contractor or subcontractor . . .
may not be required, as a condition of being responsive to a solicitation or
as a condition for the award of a contract—
◦ (i) to sell or otherwise relinquish to the United States any rights in technical
data except—
 (I) rights in technical data described in subparagraph (A) for which a use or release restriction
has been erroneously asserted . . . ;
 (II) rights in technical data described in subparagraph (C); or
 (III) under the conditions described in subparagraph (D); or
◦ (ii) to refrain from offering to use, or from using, an item or process to which
the contractor is entitled to restrict rights in data under subparagraph (B).

DFARS: 227.7103-1(c) & (d), 227.7203-1(c) & (d)
9
Ok… more from

10 USC
2320(a)(2)
(A) In the case of an item or process that is developed by a contractor or subcontractor exclusively with Federal funds (other than an item or process developed
under a contract or subcontract to which regulations under section 9(j)(2) of the Small Business Act (15 U.S.C. 638(j)(2)) apply), the United States shall have the unlimited right
to-(i) use technical data pertaining to the item or process; or
(ii) release or disclose the technical data to persons outside the Government or permit the use of the technical data by such persons.

(B) Except as provided in subparagraphs (C) and (D), in the case of an item or process that is developed by a contractor or subcontractor exclusively at private
expense, the contractor or subcontractor may restrict the right of the United States to release or disclose technical data pertaining to the item or process to persons outside
the government or permit the use of the technical data by such persons.

(C) Subparagraph (B) does not apply to technical data that—
(i) constitutes a correction or change to data furnished by the United States;
(ii) relates to form, fit, or
function [(“FFF” data)]; ;
(iii) is necessary for operation, maintenance, installation, or training (other than detailed manufacturing or process data) [(“OMIT” data)];
or
(iv) is otherwise publicly available or has been released or disclosed by the contractor or subcontractor without restriction on further release or disclosure.

(D) Notwithstanding subparagraph (B), the United States may release or disclose technical data to persons outside the Government, or permit the use of
technical data by such persons, if—
(i) such release, disclosure, or use—
(I) is necessary for emergency
repair and overhaul; or
(II) is necessary for the segregation of an item or process from, or the reintegration of that item or process (or a physically or functionally equivalent item or process) with,
other items or processes; or
(III) is a release or disclosure of technical data (other than detailed manufacturing or process data) to, or use of such data by, a foreign government that is in the interest of
the United States and is required for evaluational or informational purposes;
(ii) such release, disclosure, or use is made subject to a
disclose, or use such data; and
[Non-Disclosure] prohibition that the person to whom the data is released or disclosed may not further release,
(iii) the contractor or subcontractor asserting the restriction is
notified of such release, disclosure, or use.
10
Ok… more from

10 USC
2320(a)(2)
(A) In the case of an item or process that is developed by a contractor or subcontractor exclusively with Federal funds (other than an item or process developed
¶ (A) - 100% Government Funding
under a contract or subcontract to which regulations under section 9(j)(2) of the Small Business Act (15 U.S.C. 638(j)(2)) apply), the United States shall have the unlimited right
to--
 Unlimited Rights
(i) use technical data pertaining to the item or process; or
(ii) release or disclose the technical data to persons outside the Government or permit the use of the technical data by such persons.

(B) Except as provided in subparagraphs (C) and (D), in the case of an item or process that is developed by a contractor or subcontractor exclusively at private
- 100%
funding
expense, the contractor or subcontractor may restrict the right of¶
the(B)
United States
to release orPrivate
disclose technical
data pertaining to the item or process to persons outside
the government or permit the use of the technical data by such persons.

 Limited Rights
(C) Subparagraph (B) does not apply to technical data that—
(i) constitutes a correction or change to data furnished by the United States;
EXCEPT …
(ii) relates to form, fit, or
function [(“FFF” data)]; ;
¶ (C)  Unlimited Rights in certain TYPES
(iii) is necessary for operation, maintenance, installation, or training (other than detailed manufacturing or process data) [(“OMIT” data)];
or
of data (e.g., OMIT data, FFF data)
(iv) is otherwise publicly available or has been released or disclosed by the contractor or subcontractor without restriction on further release or disclosure.

(D) Notwithstanding subparagraph (B), the United States
disclose technical
data to persons
outside-the Government, or permit the use of
¶ may
(D)release
 or
Limited
Rights
allows
technical data by such persons, if—
RELEASE for data for certain PURPOSES
(I) is necessary for emergency repair and overhaul; or
(e.g., emergency repair & overhaul,
(II) is necessary for the segregation of an item or process from, or the reintegration of that item or process (or a physically or functionally equivalent item or process) with,
other items or processes; or
segregation or reintegration)
(III) is a release or disclosure of technical data (other than detailed manufacturing or process data) to, or use of such data by, a foreign government that is in the interest of
the United States and is required for evaluational or informational purposes;
 Subject to safeguards (notice & NDA)
(ii) such release, disclosure, or use is made subject to a [Non-Disclosure] prohibition that the person to whom the data is released or disclosed may not further release,
(i) such release, disclosure, or use—
disclose, or use such data; and
(iii) the contractor or subcontractor asserting the restriction is notified of such release, disclosure, or use.
11
What is NOT Prohibited – Part 1

Mandatory Delivery Requirements – the statutory restriction directed
primarily to RIGHTS
◦ But policy restrictions on mandating commercial deliverables beyond those typically
provided to commercial customers (DFARS 227.7102-1; 227.7202-1)

Unlimited Rights in Certain Data Types (¶C): For example--
◦ OMIT  data necessary for Operation, Maintenance, Installation, Training
◦ FFF  Form, Fit, and Function data

Right to Release Outside Govt for Special Purposes (¶D): Limited rights
includes the authorization to release -◦ For emergency repair & overhaul,
◦ For segregation & reintegration (more in next section),
◦ To certain types of support contractors (2320(c)(2) & (f); and see 10 U.S.C. 129d)

Mandatory Minimum Rights Based on Source of Development Funding
◦ 100% Govt $$ Unlimited || 100% Private $$  Limited || Mixed $$  GPR

Voluntary Negotiation for additional rights
12
What is NOT Prohibited – Part 2

EVALUATION OF DATA RIGHTS. Prohibition covers only a mandatory condition of
responsiveness/award
◦ “Information provided by offerors in response to the solicitation provision may be used in the source
selection process to evaluate the impact on evaluation factors that may be created by restrictions on
the Government's ability to use or disclose technical data. However, offerors shall not be
prohibited from offering products for which the offeror is entitled to provide the
Government limited rights in the technical data pertaining to such products and offerors
shall not be required, either as a condition of being responsive to a solicitation or as a
condition for award, to sell or otherwise relinquish any greater rights in technical data when
the offeror is entitled to provide the technical data with limited rights.” (DFARS 227.7103-10(a)(5)
& 227.7203-10(a)(5))
◦ LIFE CYCLE SUPPORT
 COST REALISM – lack of competition  increased cost of future production,
support, upgrade
 Risk of parts obsolescence – vanishing supplies/suppliers
◦ TECHNICAL RISK – interoperability between proprietary systems
◦ SUBCONTRACTOR/SUPPLIER MANAGEMENT – identifying and managing proprietary
restrictions
◦ NOTE: "open architecture" approach can mitigate these issues
Cont’d . . .
13
What is NOT Prohibited – Part 2
(… conc.)
( More on evaluating data rights in best value source selections)

The Tradeoff Process (FAR 15.101-1) – “easier” to
◦ Recognize offers of “additional” or specialized rights (negotiated vs. default)
◦ Encourage negotiations for same

Lowest Price Technically Acceptable Process (FAR 15.101-2)
◦ Minimum “default” rights could never be “unacceptable” but … other effects
◦ Potential for a COST REALISM adjustment in the offered price
◦ Allows Govt to accept lesser than default rights, as long as the minimum is
specified
 This step down may have value to the contractor, allowing a reduction in price, or an offer of
greater rights elsewhere to minimize or mitigate effects from lack of competition

Voluntary Negotiation for additional rights
◦ Interest-based negotiations – Government must step up first…
◦ Always available – tech data and software, commercial and noncommercial
14
Source Selection – Key Elements

Data Deliverable: USG must CREATE delivery requirements
◦
◦

Data Rights: require Offeror to ASSERT restrictions UP-FRONT
◦
◦



When in doubt – OPTIONs
Priced [option] CLINs (if NSP, then "exercise" the option upfront)
Standard clause for NONcommercial (DFARS 252.227-7017)
MUST supplement this requirement for commercial
Explanation of the proposal – Offeror explains the data rights
elements – how delivery/rights affect other aspects of the effort
Evaluation: Data/software delivery and rights MUST be
evaluated
Interest-based negotiations, flexibility … but stand firm on
◦
data needed for requirements (be sure to consider non-data alternatives)
◦
Return on Investment
15
PART TWO

Allocating Data Rights during Source Selection
National
Defense
Authorization Act for 2012:
Deferred Ordering and
Segregation/Reintegration

The Move Toward Open Architecture
16
FY 2012 NDAA – Section 815:
“Rights in Technical Data and Validation of
Proprietary Data Restrictions”

New “Type” of Data: Necessary for Segregation & Reintegration
◦ Details in slides to follow 

Expanded and extended Deferred Ordering scheme
◦ Details in slides to follow 

Validation of Asserted Restrictions
◦ Challenge period is now 6 years after contract (current = 3yrs)
◦ No time limit for assertions based on fraud

Housekeeping
◦ Government Purpose Rights (GPR) is default for mixed funding
◦ Repeal FY11 NDAA § 824’s rewrite of IR&D rules
17
Segregation/Reintegration Data

New exception to the prohibition against disclosure
outside USG of proprietary data (i.e., data related to technology
developed 100% at private expense)
◦
◦
◦
◦

Along with “emergency repair & overhaul”. . .
Purpose of Release: only for segregation/reintegration
Implied Data Type: necessary for segregation/reintegration
Procedural: notice to data owner & NDA for recipient
Included in the expanded Deferred Ordering (DO)
scheme
◦ The ONLY DO data type for which development funding
is irrelevant
◦ No change to applicable license rights (e.g., Limited Rights)
◦ Compensation only for converting & delivering in required form
18
What is Segregation/Reintegration Data?

Segregation or Reintegration Data:
◦ “. . . is necessary for the segregation of an item or process from, or the
reintegration of that item or process (or a physically or functionally equivalent item
or process) with, other items or processes” (10 U.S.C. § 2320 (a)(2)(D)(i)(II), and (b)(9)(B)(ii))

Form, Fit, and Function Data:
◦ DFARS: “. . . data that describes the required overall physical, functional, and
performance characteristics (along with the qualification requirements, if
applicable) of an item, component, or process to the extent necessary to permit
identification of physically and functionally interchangeable items.” (DFARS 252.2277013(a)(11))
◦

FAR: “. . . data
relating to items, components, or processes that are sufficient to
enable physical and functional interchangeability, and data identifying source, size,
configuration, mating, and attachment characteristics, functional characteristics,
and performance requirements. For computer software it means data identifying
source, functional characteristics, and performance requirements but specifically
excludes the source code, algorithms, processes, formulas, and flow charts of the
software.” (FAR 52.227-14(a))
OMIT Data:
◦ “. . . necessary for operation, maintenance, installation, or training (other than
detailed manufacturing or process data)” (10 U.S.C. § 2320 (a)(2)(C)(iii))
19
Focus: FY12 NDAA – Section 815 (cont’d)

DEFERRED ORDERING “PLUS” – new para. (b)(9) added to 10 U.S.C. § 2320
‘‘(9) providing that, in addition to technical data that is already subject to a
contract delivery requirement, the United States may require at any time the
delivery of technical data that has been generated or utilized in the performance
of a contract, and compensate the contractor only for reasonable costs incurred
for having converted and delivered the data in the required form, upon a
determination that—
‘‘(A) the technical data is needed for the purpose of reprocurement, sustainment,
modification, or upgrade (including through competitive means) of a major
system or subsystem thereof, a weapon system or subsystem thereof, or any
noncommercial item or process; AND
‘‘(B) the technical data—
‘‘(i) pertains to an item or process developed in whole or in part with Federal
funds; OR
‘‘(ii) is necessary for the segregation of an item or process from, or the
reintegration of that item or process (or a physically or functionally equivalent
item or process) with, other items or processes;”
20
Deferred Ordering – Plus!

Prescription: mandatory, or optional?
◦ “Regulations … shall require that, whenever practicable, a contract …” (preexisting language at 2320(b))
◦ Current DFARS 252.227-7027: entirely optional

No time limit – “at any time”
◦ Current -7027 clause: limit is 3yrs after contract

Data generated “or utilized” under the contract
◦ Current -7027 clause  only if “generated” under the contract

DoD must determine that the data meets BOTH of the following:
◦ necessary for reprocurement, sustainment, modification, or upgrade of a
major/weapon/noncommercial system, AND
◦ Is either:
 Development funded in whole or in part by the Govermment –OR–
 Necessary for segregation or reintegration
21
PART THREE

Allocating Data Rights during Source Selection

National Defense Authorization Act for 2012:
Deferred Ordering and Segregation/Reintegration
The
Move Toward Open
Architecture
22
Let’s Be Clear . . .?

Open Systems Architectures (OSA)
◦ Modular design
◦ “Open” standards and interfaces between modules or
components
◦ “OSA Approach” combines OSA technical design with an
“open business model”

Open Source Software (OSS)
◦
◦
◦
◦
Often, no up-front cost for the code
Source code is distributed with the executable code
No “restrictions” on use or re-distribution of the code
. . . But there may be conditions or affirmative obligations
23
Better Buying Power
Promoting Real and Sustained Competition for the Life Cycle
Require open systems architectures
Set rules for acquisition of technical data rights.
Business case analysis & engineering trade analysis for:
open systems architectures and data rights
https://acc.dau.mil/bbpgovonly
Page 6
24
DoD-Wide Guidance for Open Architecture
and Technical Data Rights
Emphasis on properly acquiring technical data rights continues in
the effort to achieve affordability
 USD(AT&L) Implementation Directive “Better Buying Power Obtaining Greater Efficiency and Productivity in Defense
Spending,” Nov 3, 2010, excerpt:
◦ Require open systems architectures and set rules for acquisition of
technical data rights: Effective November 15, 2010, you will
conduct a business case analysis, in consort with the engineering
tradeoff analysis that will be presented at MS B. The business
case analysis will outline the open systems architecture approach,
combined with technical data rights the government will pursue in
order to ensure a lifetime consideration of competition in the
acquisition of weapon systems. The results of this analysis will be
reported in the Acquisition Strategy Report and in the
competition strategy.

25
25
BACKUP SLIDES – PART ONE
Allocating
Data Rights
During Source Selection

National Defense Authorization Act for 2012: Deferred
Ordering and Segregation/Reintegration

The Move Toward Open Architecture
26
References

Air Force Space & Missile Command, Office of
the Staff Judge Advocate, “Acquiring and
Enforcing the Government’s Rights in Technical
Data and Computer Software Under
Department of Defense Contracts: A Practical
Handbook for Acquisition Professionals”
◦ 5th ed., October 2012, available at
https://acc.dau.mil/oa

DoD Open System Architecture Contract
Guidebook v 1.0
◦ Will be at https://acc.dau.mil/oa
27
Do it EARLY and ALWAYS -evaluation of data/rights in source selection

Mandatory PRE-Award Assertion of
Restrictions (for non-commercial)
◦ USG must supplement for commercial stuff

Delivery requirement (or option) is the trigger

MUST include data deliverables and rights as
an EVALUATION FACTOR in source selection
◦ Both competitive and sole source awards
◦ Do NOT be (too) afraid of 10 U.S.C. 2320(a)(2)(F)
28
Contractor Assertion of Restrictions – Early Identification
& Marking

Step 1: Early identification -- notice of assertions
◦ Pre-Award – with the Proposal
◦ Post-Award Update
◦ Current DFARS – not required for commercial!

Step 2: Marking requirements
◦ A FAILURE to mark   Unlimited Rights
◦ Contractor's obligation to mark, in order to “perfect” their assertions
◦ Government’s obligation to CONFIRM marking is accurate  AS PART
of inspection/acceptance
◦ Noncommercial technology: legends are specified word-for-word
◦ Commercial technology:
 TD: any restrictive notice is allowed (commercial practices?)
 CS: no express req’t the DFARS (likely: shrink-wrap, click-wrap, run-time, etc)
29
RFP Tactical Considerations

How to Define the delivery requirement
◦ Traditional: specification of detail, content, format (CDRLs, etc)
◦ Performance-based: "data necessary for [X]"
◦ Multiple classes!!!

How to define the license rights needed …
wanted?
◦ Analogous to delivery req't – specification vs. perf-based
◦ Note: cannot REQUIRE greater rights in proprietary
◦ Multiple "classes"

Evaluation Factor(s): Data Rights as stand-alone,
or integrated with other factors
◦ Maybe a little of both?
30
Sample RFP Language –
Section B – CLINS

PRICED [OPTION?] CLINS

Hybrid: Specification + Performance-based
requirements for -◦ The DATA DELIVERABLE  Cost type
◦ LICENSE RIGHTS to use the deliverables  Fixed Price

Expressly cross-references the H-clause . . . CDRLs…
31
Sample RFP Language –
Section H – Special Clause

Transparency: defines and explains DoD’s requirements, desires -◦ Performance-based requirements
◦ Interest-based negotiations

Data deliverables
◦ – examples of DoD’s expectations & requirements

License Rights –
◦ Supplement the up-front listing of restricted data
◦ Identify willingness to receive “lesser” negotiated license
◦ Focus: minimum rights needed … and ensure protections

Applies to subcontractors & suppliers at all tiers

Integrated with the remainder of the standard data rights clauses
32
Sample RFP Language –
Section L – IP in the Proposal

Narrative and explanation – propose the approach to meeting DoD
requirements
◦ Discuss BOTH – (1) data needed, and (2) data rights
◦ Specifically explain any exceptions

Managing the detail for the Option CLINS

Data deliverables –
◦ Use sub-CLINS to breakout by system, subsystem
◦ Modify CDRLS to provide appropriate level of detail, etc.

License Rights
◦ Reinforce the identification of ALL restricted deliverables
◦ Broken out by system, subsystem….
33
Sample RFP Language –
Section M – Evaluation Factors

Overall – best-value evaluation

Technical -- Offeror’s approach to providing the …
◦ Data deliverables
◦ License rights
. . . Necessary for organic depot maintenance…

Cost & Price
◦
◦
◦
◦
Cost for delivery of data/software
Price for associated license rights
Cost/price reasonableness (FAR 15.504)
Part of the best-value determination
34
Sample of “The Usual Suspects” for
Commercial Software Licenses


Minimum rights (~limited rights) for commercial TD
Disputes –
◦ Choice of law – federal vs. state
◦ Jurisdiction/venue
◦ Specific remedies – injunction, attorney’s fees

Indemnification & other Anti-Deficiency Act (ADA) issues
◦ Limits on amount may resolve ADA technically, but … policy obstacles remain

“Time bombs” – automatic
◦ Termination (operationally)
◦ Renewal (ADA)

Agency Needs!!!! Often overlooked
◦ Support, physical or geographic location
◦ Interoperability, networking with other applications

See also, DFARS 227 proposed rewrite – draft PGI 227.7104-5(c)(2)
35
BACKUP SLIDES – PART TWO

Allocating Data Rights during Source Selection
National
Defense
Authorization Act for 2012:
Deferred Ordering and
Segregation/Reintegration

The Move Toward Open Architecture
36
FY 2012 NDAA – Section 815

Paragraph (a) – Rights in Technical Data. Amends 10 U.S.C. § 2320 as follows:
◦
Segregation/Reintegration Data. New ¶ (a)(2)(D)(i)(II) authorizes TD “necessary for the segregation of an item or process
from, or the reintegration of that item or process (or a physically or functionally equivalent item or process) with, other items
or processes” (hereafter segregation/reintegration data), to be released outside the Government even if it was developed
exclusively at private expense.
◦
GPR. Revise ¶ (a)(2)(E) to expressly recognize that the Government will have government purpose rights (GPR) in data
related to technology developed with mixed funds, except when negotiated otherwise
◦
IR&D. Retroactively reverses in its entirety the changes to paragraph (a)(3) made by § 824(b) of the FY2011 NDAA (above),
restoring the long-standing rule that IR&D and B&P are treated as private expense.
◦
Deferred Ordering. New (b)(9), authorized USG to order, at any time after award, certain types of technical data that are
determined to be necessary for the “reprocurement, sustainment, modification, or upgrade (including through competitive
means) of a major system or subsystem thereof, a weapon system or subsystem thereof, or any noncommercial item or
process.” Covers data related to technology developed in whole or in part with Government funds, and to
segregation/reintegration data.
◦
New (b)(10), which provides that the Government is “not foreclosed from requiring the delivery of the technical data by a
failure to challenge, in accordance with the requirements of [10 U.S.C. § 2321(d)], the contractor’s assertion of a use or
release restriction on the technical data.”

Paragraph (b) – Validation of Proprietary Data Restrictions. Amends § 2321(d)(2) to change the challenge period
from 3 years to 6 years, and to expand the scenarios in which there is no time limit on challenges to include
“are the subject of a fraudulently asserted use or release restriction.”.

DFARS Case 2012-D022, Rights in Technical Data and Validation of Proprietary Data Restrictions, initiated on January
11, 2012, to implement these new changes
37
Overview of the Changing Legal
Landscape -- Chronologically

FY 2007: § 802
◦ (a) Assess data requirements in all Acq Strategies
◦ (b) Presume development at Govt expense for major systems

FY 2008: § 815(a)(2)  COTS exception to 802(b)

FY 2009: § 822  data rights for "non-FAR" agreements

FY 2010: § 821  Support contractor access to data...

FY 2011: § 824  IR&D funding & erroneous assertions
§ 801  Litigation support contractor access…

FY 2012: § 815  IR&D, deferred ordering, segregation &
reintegration data, validating assertions
§ 802  Litigation support contractor access… expanded
38
Overview of the Changing Legal
Landscape -- By Subject Matter Focus
THREE PRIMARY “TRACKS” FOR THESE CHANGES
Acquisition Strategies & planning
1.
◦
◦
Release to Support Contractors . . . Necessary to support USG
operations
2.
◦
◦
◦
3.
FY 2007: § 802(a) Assess data reqts in all Acq Strategies
FY 2009: § 822  data rights for "non-FAR" agreements
FY 2010: § 821  Support contractor access to data...
FY 2011: § 801  Litigation support contractor access…
FY 2012: § 802  Litigation support contractor access… expanded
Re-capturing competition in Legacy Programs / During Sustainment
◦ FY 2007: § 802(b) Presume development at Govt expense for major systems
◦ FY 2008: § 815(a)(2) COTS exception to 802(b)
◦ FY 2012: § 815  IR&D, deferred ordering, segregation & reintegration data,
validating erroneous or fraudulent assertions
39
FY2007 NDAA §
802(a) –
DoD Implementation

DoD Instruction 5000.02 (12/08/08) -- Encl. 12, ¶ 9
• ~ “codification” of USD(AT&L) Memo, Data Management and Technical Data
Rights, 19 July 2007

DFARS 2006-D055, Additional requirements relating to tech data rights
◦ Added DFARS 207.106(s-70)
◦ Amended DFARS 227.7103-1(f) & 227.7203-1(e)
◦ Interim Rule: 72 FR 51188, September 06, 2007
◦ Final Rule: 74 FR 68699, December 29, 2009

NOTE: long-standing guidance
◦ DFARS 227.7103-2 & 7203-2 … dating from1995…1988…1960s
◦ USD(AT&L)'s guidebook "IP: Navigating Through Commercial Waters" –
October 2001
As of:
40
DoDI 5000.02 – Encl. 12, Systems Engineering
9. DATA MANAGEMENT AND TECHNICAL DATA RIGHTS
a. Program Managers for ACAT I and II programs, regardless of planned sustainment
approach, shall assess the long-term technical data needs of their systems and reflect that
assessment in a Data Management Strategy (DMS). The DMS shall:
(1) Be integrated with other life-cycle sustainment planning and included in the
Acquisition Strategy;
(2) Assess the data required to design, manufacture, and sustain the system, as well as to
support re-competition for production, sustainment, or upgrades; and
(3) Address the merits of including a priced contract option for the future delivery of
technical data and intellectual property rights not acquired upon initial contract award and shall
consider the contractor’s responsibility to verify any assertion of restricted use and release of
data.
b. The DMS shall be approved in the context of the Acquisition Strategy prior to issuing a
contract solicitation.
As of:
41
FY2007 § 802(b) & FY2008 §
815(a)(2)

Special presumptions of Development Exclusively
at Private Expense (DEPE):
◦ Since 1995 – the “Commercial Rule”: Commercial
Items  must presume DEPE …
◦ . . . Unless it's a Major System  presume developed
exclusively at Govt expense (DEGE) (“Major Systems
Rule”). . .
◦ . . . . . . Unless it's COTS  then the Commercial Rule

DFARS Case 2007-D003, “Presumption of
Development [Exclusively] at Private Expense”
◦ Proposed Rule: 75 FR 25161, May 7, 2010
◦ Final Rule: 76 FR 57144, September 20, 2011
42
FY09 NDAA – IP related sections


Sec. 803. Commercial Software Reuse Preference.
Sec. 822. Technical Data Rights: More on data/rights in acquisition strategies &
life cycle planning
◦ For "non-FAR transactions"
◦ Report on implementation of FY07 § 802(a)

Sec. 824. Modification And Extension Of Pilot Program For Transition To FollowOn Contracts Under Authority To Carry Out Certain Prototype Projects.

Sec. 825. Clarification Of Status Of Government Rights In The Designs Of
Department Of Defense Vessels, Boats, Craft, And Components Thereof.

Sec. 881. Expansion Of Authority To Retain Fees From Licensing Of Intellectual
Property.
43
FY10 NDAA § 821

Support contractor access to proprietary tech data
◦ Defined “Covered Government Support Contractor”
◦ USG may release proprietary tech data to [CGSC]
◦ CGSC will-
 Protect & use only for performance of the USG contract
 Enter into a non-disclosure agreement (NDA) directly with the Owner
of the proprietary data

DFARS Case 2009-D031: Government Support
Contractor Access to Technical Data




Applies to ALL tech data; and NON-commercial software
“Direct” NDA is at the discretion of the Owner of the data/software
Interim Rule: 76 FR 11363 (March 02, 2011)
Final Rule: ___ FR _______
44
FY2011 NDAA -- §§ 801 & 824

§ 801: Litigation Support Contractors
access to proprietary data
◦ Similar to approach for “Covered Govt Support Contractors” (DFARS 2009-D031)
 No “direct NDA” requirement
 Issue: requirement for NOTICE to the proprietary info owner?
◦ DFARS Case 2011-D018:
 Interim Rule: ____ FR ________
◦ OBE: repealed by §802 of FY12 NDAA

§ 824: IR&D and B&P funding; Erroneous
Assertions
◦ Treatment of Independent R&D (IR&D), and Bid & Proposal (B&P) funding  as either
Private or Govt funding
◦ Special Procedures for Erroneous Assertions of Restrictions on Data Related to Items
Developed Exclusively at Govt Expense
◦ DFARS Case 2011-D022:
 Proposed/Interim Rule: ___ FR ________
◦ OBE: repealed by §815 of FY12 NDAA
45
FY2011 NDAA Section 824 –
Now OBE! (see FY2012 NDAA Section 815)

Treatment of IR&D and B&P funding
◦ Historically: treated as PRIVATE funding
◦ Now --
*
when otherwise DE[G]E*
 Treated as PRIVATE $$ when otherwise DE[P]E
 Treated as GOVT $$
* NOTE: DE[?]E = Developed Exclusively at [?] Expense
[?] = P  Private or

G  Government
Special Procedures for Erroneous Assertions
of Restrictions on Data Related to Items
Developed Exclusively at Govt Expense
◦ Govt can require UR as condition of award/responsive
◦ No time limits on challenging assertion of restrictions
46
FY 2012 NDAA – Section 802

§ 802, Disclosure to Litigation Support Contractors. Added new section 10
U.S.C. § 129d, Disclosure to litigation support contractors

Essentially, relocated the scheme implemented at 10 U.S.C. 2320 to
authorize Covered Litigation Support Contractors access to
proprietary technical data (pursuant to § 801 of the FY2011 NDAA),
and expanded that scheme to cover other types of proprietary data,
including “confidential commercial, financial, or proprietary information,
technical data, or other privileged information.”

Repealed all of those previous revisions to 10 U.S.C. 2320 made
pursuant to § 801 of the FY2011 NDAA.

Note: DFARS Case 2012-D029, Disclosure to Litigation Support
Contractors, initiated on 25 Jan 2012, to implement this new
requirement (and supersede former DFARS Case 2011-D018,
Disclosure to Litigation Support Contractors, which was initiated to
implement FY10 NDAA § 801, and which was at Office of Information
and Regulatory Affairs (OIRA) for pre-publication coordination when
the FY12 NDAA passed).
47