Recent and Emerging Changes to the Defense Federal Acquisition Regulation Supplement (DFARS) Data Rights Regulations. Kelly Kyes The Boeing Company

Transcription

1 Recent and Emerging Changes to the Defense Federal Acquisition Regulation Supplement (DFARS) Data Rights Regulations Kelly Kyes The Boeing Company

2 Overview Federal Regulations DoD Acquisition Environment Important Definitions Follow-the-Funds Test Recent Legislative & Regulatory Changes 1

3 Federal Regulations Federal agencies use the Federal Acquisition Regulation (FAR) to acquire goods and services The Defense FAR Supplement (DFARS) establishes further restrictions and requirements on DoD acquisitions For intellectual property matters, the DFARS typically takes precedence over the FAR (see DFARS ) The FAR/DFARS generally do not apply to cooperative agreements, Cooperative Research and Development Agreements (CRADAs), Other Transactions (OTs) and NASA Space Act Agreements (SAAs) 2

4 DoD Acquisition Environment Fiscal uncertainty Declining budget Sequestration Shutdown Focus on affordability Better Buying Power (BBP) initiatives BBP 2.0: Promote Effective Competition Enforce open systems architectures and effectively manage technical data rights Greater emphasis on aligning DoD science & technology planning and industry independent research & development (IR&D) projects New IR&D reporting rule 3

5 Important DFARS Definitions 4

6 The U.S. Government obtains license rights in three types of Intellectual Property: Technical Data Computer Software Inventions/ Patents 5

7 Technical Data Recorded information, regardless of the form or method of the recording, of a scientific or technical nature Includes computer software documentation such as user's manuals and installation instructions that explain the capabilities of computer software or provide instructions for using the software Excludes: Computer software Data incidental to contract administration, such as financial and/or management information See DFARS

8 Computer Software Computer programs, source code, source code listings, object code listings, design details, algorithms, processes, flow charts, formulae, and related material that would enable the software to be reproduced, recreated, or recompiled Excludes: Computer databases Computer software documentation See DFARS

9 Developed Item, Component or Process Developed means that an item, component, or process exists and is workable The item or component must have been constructed or the process practiced Workability is generally established when the item, component, or process has been analyzed or tested sufficiently to demonstrate to reasonable people skilled in the applicable art that there is a high probability that it will operate as intended Item, component or process does not have to be ready for sale See DFARS (a)(7) 8

10 Developed Software Developed means that A computer program has been successfully operated in a computer and tested to the extent sufficient to demonstrate to reasonable persons skilled in the art that the program can reasonably be expected to perform its intended purpose Computer software, other than computer programs, has been tested or analyzed to the extent sufficient to demonstrate to reasonable persons skilled in the art that the software can reasonably be expected to perform its intended purpose Software does not have to be ready for sale See DFARS (a)(7) 9

11 Developed Exclusively at Private Expense Development accomplished entirely with costs charged to indirect cost pools, costs not allocated to a government contract, or any combination thereof Indirect cost pools include IR&D and Bid & Proposal (B&P) Costs not allocated to a government contract investments out of profit Private expense determinations should be made at the lowest practicable level See DFARS (a)(8) and DFARS (a)(8) 10

12 Categories of License Rights in Noncommercial Technical Data & Software The following license rights are royalty free, worldwide, nonexclusive, and irrevocable: Standard Categories: Limited Rights (Technical Data) Restricted Rights (Software) Government Purpose Rights Unlimited Rights Specifically Negotiated License Rights 11

13 Limited Rights (Technical Data) The rights to use, modify, reproduce, release, perform, display, or disclose technical data, in whole or in part, within the Gov t The Gov t may not release or disclose the technical data outside the Gov t, use the technical data for manufacture, or authorize the technical data to be used by another party, except as necessary for: Emergency repair and overhaul; or A release or disclosure to A covered Government support contractor, for use, modification, reproduction, performance, display, or release or disclosure to authorized person(s) in performance of a Gov t contract; or A foreign gov t (other than detailed manufacturing or process data) for evaluation or informational purposes (Abbreviated Definition) 12

14 Restricted Rights (Software) The rights to (i) (ii) Use a computer program with one computer at one time; Transfer a computer program to another Gov t agency; (iii) Make copies for safekeeping (archive), backup, or modification purposes; (iv) Modify computer software subject to certain restrictions/limitations The Gov t may release/disclose outside the Gov t To service contractors/subcontractors; For emergency repair or overhaul To covered Gov t support contractors (Abbreviated Definition) 13

15 Government Purpose Rights The rights to (i) Use, modify, reproduce, release, perform, display, or disclose technical data/software within the Gov t without restriction; and (ii) Release or disclose technical data/software outside the Gov t and authorize persons to whom release or disclosure has been made to use, modify, reproduce, release, perform, display, or disclose that data/software for U.S. Government purposes Government purpose means any activity in which the U.S. Gov t is a party Includes cooperative agreements with international or multinational defense organizations, foreign sales, competitive procurement Excludes commercial purposes 14

16 Unlimited Rights Rights to use, modify, reproduce, perform, display, release, or disclose technical data/software in whole or in part, in any manner, and for any purpose whatsoever, and to have or authorize others to do so. 15

17 Specifically Negotiated License Rights The standard license rights may be modified by mutual agreement to provide such rights as the parties consider appropriate The license shall not provide the Gov t with less than limited rights (technical data) or restricted rights (software) License agreement must be made part of the contract 16

18 Prior Government Rights If the Gov t has previously obtained rights in technical data and software, then such data/software must be provided with such preexisting rights, unless The parties have agreed otherwise; or Any restrictions on the Gov t's rights to use, modify, reproduce, release, perform, display, or disclose the data have expired or no longer apply 17

19 Follow-the-Funds Test 18

20 Follow-the-Funds Test The Gov t s rights in noncommercial technical data and software are generally determined by the source of funding used to develop the software or the item, component or process to which technical data pertain But, see exceptions at DFARS (b)(1) & -7014(b)(1) Non-COTS commercial items which are major systems, subsystems or components thereof no longer enjoy a statutory presumption of development exclusively at private expense 19

21 Follow-the-Funds Test Source of Funding Developed exclusively at private expense Developed with mixed funding Developed exclusively with Government funds N/A; rights granted by mutual agreement U.S. Government Rights in Noncommercial Technical Data Limited Rights Government Purpose Rights* Unlimited Rights Special License Rights U.S. Government Rights in Noncommercial Software Restricted Rights Government Purpose Rights* Unlimited Rights Special License Rights * GPR converts to Unlimited Rights after 5 years unless otherwise negotiated 20

22 Data Rights Spectrum Less Restrictive More Restrictive Unlimited Rights Government Purpose Rights Specially Negotiated License Rights Limited or Restricted Rights Standard Commercial License Rights 21

23 Recent Legislative & Regulatory Changes 22

24 Support Contractor Access to Proprietary Technical Data and Software Final DFARS rule issued on 22 May 13 (DFARS Case 2009 D031) Implemented Sec. 821 of the fiscal year (FY) 2010 National Defense Authorization Act (NDAA) Driven by DoD s increasing reliance on support contractors Synopsis: Authorizes DoD to disclose proprietary technical data (including commercial technical data) and software deliverables to covered Government support contractors for the sole purpose of furnishing independent and impartial advice or technical assistance directly to DoD in support of DoD s management and oversight of the program or effort to which such technical data or software relates 23

25 Support Contractor Access to Proprietary Technical Data and Software, cont. The contractor may require support contractors to sign an NDA/PIA directly with the contractor (or otherwise waive the requirement) Covered Government support contracts must already contain the nondisclosure clause at DFARS Weak notice requirement No express requirement for DoD to provide notice (or advance notice) Support contractors must notify IP owners within 30 days of receipt/access Support contractors will likely have access to proprietary information prior to negotiating NDAs/PIAs Neither party can require the other party to agree to terms or conditions beyond those necessary to implement the statutory requirements 24

26 Presumption of Development Exclusively at Private Expense (Commercial Items) Final rule issued in September 2011 (see DFARS Case D003) Implemented section 802(b) of the FY 2007 NDAA and section 815 of the FY 2008 NDAA Non-COTS commercial items which are major systems, subsystems or components thereof no longer enjoy a statutory presumption of development exclusively at private expense Shifted burden of proof to contractors Presumption now only applies to commercially available off-theshelf (COTS) items which are sold in substantial quantities in the commercial marketplace; and which are offered to the Gov t, under a contract or subcontract at any tier, without modification 25

27 Presumption of Development Exclusively at Private Expense (Commercial Items), cont. DFARS (validation/challenge procedures) now applicable to contracts and subcontracts for commercial items DoD revised DFARS to remove 10 USC 2320 (technical data statute) and 10 USC 2321 (validation/challenge procedures) from the listing of statutes which are inapplicable to subcontracts for commercial items New mandatory subcontractor flowdown requirements: DFARS is now a mandatory flowdown to subcontractors (including COTS) which deliver commercial technical data that will in turn be delivered to DoD DFARS is now a mandatory flowdown to subcontractors which have developed, or will develop, any portion of a commercial item at Gov t expense DFARS

28 Section 815 of the FY 2012 NDAA Modified 10 USC 2320 (technical data statute) to establish a new statutory deferred ordering requirement Not yet implemented in the DFARS See DFARS Case 2012-D022 (proposed rule) Statute would enable DoD to require the delivery at any time of limited rights data (and presumably, commercial data or restricted rights software) that has been utilized in the performance of a contract, if such data is needed to segregate or re-integrate an item or process from/with other items/processes DoD has described segregation and reintegration data as interface data Current DFARS deferred ordering clause applies only to data/software generated in the performance of a contract No express statutory exemption for commercial items 27

29 Section 815 of the FY12 NDAA, cont. Statute would expand use, release and disclosure requirements for limited rights data (and presumably, commercial data or restricted rights software) Would enable DoD to release or disclose such data/software outside the Gov t if such use, release or disclosure 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 Would extend challenge period from three to six years 28

30 Deferred Ordering (DFARS ) Used when a firm requirement to deliver technical data or software has not been established prior to contract award but there is a potential need for delivery In addition to the technical data or software already specified to be delivered, the Gov t may compel delivery of any technical data or software first generated in performance of a contract/subcontract The Gov t s rights are determined in accordance with the applicable data rights clauses Timeframe: Up to three years after the acceptance of all items or contract termination Compensation limited to costs of converting the data or computer software into the prescribed form, reproduction and delivery 29

31 Questions? 30

32 Back-Up 31

33 Covered Government Support Contractor "Covered Government support contractor" means a contractor under a contract, the primary purpose of which is to furnish independent and impartial advice or technical assistance directly to the Government in support of the Government s management and oversight of a program or effort (rather than to directly furnish an end item or service to accomplish a program or effort), provided that the contractor (i) Is not affiliated with the prime contractor or a first-tier subcontractor on the program or effort, or with any direct competitor of such prime contractor or any such first-tier subcontractor in furnishing end items or services of the type developed or produced on the program or effort; and (ii) Receives access to technical data or computer software for performance of a Government contract that contains the clause at , Limitations on the Use or Disclosure of Government- Furnished Information Marked with Restrictive Legends. Return 32

34 DFARS (5) the Contractor further agrees and acknowledges that (iii) The Contractor will ensure that the party whose name appears in the legend is notified of the access or use within thirty (30) days of the Contractor's access or use of such data or software; (iv) The Contractor will enter into a non-disclosure agreement with the party whose name appears in the legend, if required to do so by that party, and that any such non-disclosure agreement will implement the restrictions on the Contractor's use of such data or software as set forth in this clause. The non-disclosure agreement shall not include any additional terms and conditions unless mutually agreed to by the parties to the non-disclosure agreement Return 33