For subcontractors at any tier, how does the Government determine data rights and challenge data markings?
When technical data rights are involved with the acquisition of a "major system" (or their subsystems or components), there are specific rules concerning ownership of those rights. It is no longer presumed that a contractor owns technical data rights for commercial items sold to the government. Rather, the contractor may be required to provide evidence they developed the item at private expense. This is known as the "Major Systems Rule" and does not apply to Commercial-Off-The-Shelf (COTS) items.
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Contractors and subcontractors must identify data rights restrictions in accordance with DFARS 252.227-7017. Those assertions may then be challenged by the Contracting Officer if it is believed that the markings are improper. The Contracting Officer may submit a formalletter challenging the markings and this challenge will be sustained unless the contractor or subcontractor at any tier can demonstrate that the item was developed at private expense.
DFARS 252.227-7037 contains clear guidance concerning the validation and challenge of data markings.
Adjudication currently underway with the ASBCA has demonstrated the board's opinion that a Contracting Officer's challenge can be seen as a Government claim. The results of ASBCA No. 57935, Mar 26, 2013 (2013 WL 1871512) may bring more light to the subject.