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  • Question

    Can the government require the contractor to provide documented evidence of the disposition of Government furnished Software or Data?


    Answer

    You will have noticed that disposition of software and intellectual property are outside the scope of FAR Part 45 dealing with Government Furnished Property.  See FAR 45.000(b)(4).  Instead these items are treated under DFARS Subpart 227.4.  
     
    The subject of rights pertaining to software and data is one of the most complex subjects in Federal Acquisition and it is strongly recommended that for individual contracts your intellectual property attorney be consulted for questions. There are a number of variables that must be addressed for each individual circumstance.  For example, technical data is treated differently than software, rights arising from commercial items are treated differently than rights from non-commercial items, computer software documentation is different from computer software.  
     
    Your specific answer will depend on the contract clauses in your specific contract, as applied to the specific items in your specific acquisition, given the consideration of the limitations that the government itself may have had on the software or data that was supplied. 
     
    As one example, noncommercial technical data that is supplied by the government to a contractor may be subject to the rules outlined in DFARS 227.7103-7.  That section prescribes the non-disclosure agreement which includes the following language: 
     
    “(7)The Recipient agrees to destroy these Data, and all copies of the Data in its possession, no later than 30 days after the date shown in paragraph (8) of this Agreement, to have all persons to whom it released the Data do so by that date, and to notify the Contractor that the Data have been destroyed.”  See.  DFARS 227.7103-7(c).  The notification referred to in this non-disclosure agreement is to be provided to the Contractor whose name appears in the restrictive legend on the technical data, i.e., the Contractor who “owns” the intellectual property and has provided it to the Government.  The non-disclosure agreement makes clear that the Contractor owning the intellectual property has the right to pursue the “Recipient” directly for misuse of the technical data rights and that furthermore the Recipient is indemnifying the Government from any claim or liability that the Contractor may bring against the government.  
     
    The government’s right to seek documentation that a contractor has destroyed data in accordance with a required nondisclosure agreement would be consistent with the government’s right to have “proof” or documentation that all terms of the contract have been completed.  
     
    Again, this is an area where legal counsel must be consulted.  The issues are complex and the consequences of misunderstanding are potentially quite costly. 

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