Sign In
  • Question

    Whenever software is excess to the needs of the contract who should be disposing of the software? Should it be new build, Government property or does it matter? Can it be sent to the Government property warehouse if it not considered Government property? Who should provide disposition instructions for the disposal of the software, Program Manager?


    There really is no short nor easy answer to the questions you pose relating to the disposition of intellectual property and software a company acquires or generates attendant to a Government contract. 
    But let’s start by defining a few terms so that you may understand what it is you are trying to dispose of.
    ·  Intellectual property (IP) - refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.  IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create.  (World Intellectual Property Organization (WIPO))
    ·  Software - Organized information in the form of operating systems, utilities, programs, and applications that enable computers to work.  Software consists of carefully-organized instructions and code written by programmers in any of various special computer languages. (The Business Dictionary)
    ·  Software package - A package that consists of (a) one or more computer programs and possibly related material such as utility programs or tutorial programs, recorded on a medium suitable for delivery to the user, and from which the user can transfer the program(s) to a data-processing device, and (b) instructional materials such as handbooks and manuals, update information, and possibly support services information. Note 1: The computer programs may consist, for example, of application programs or operating systems, and are usually written in a high-level or low-level language, respectively. Note 2: The recording medium is usually a magnetic diskette or an optical compact disk. (The Institute for Telecommunication Sciences (ITS))
    ·  Medium - The material on which data are or may be recorded, such as plain paper, paper tapes, punched cards, magnetic tapes, magnetic disks, or optical disks. (ITS)
    Now let’s look at what lawful “guidance” that may have bearing upon the course of action you take relative to the disposition of intellectual property and software acquired or generated attendant to a Government contract:
    ·  Laws dealing with patents, data rights, and copyrights and licensing (not all inclusive, but you get the idea…!)
    ·  The Government contract document (again, not an all-inclusive listing but you get the idea…)
    ·  Deliverables (i.e., contract line items (CLINs))
    ·  Statement of Work (SOW)/Performance Work Statement (PWS)
    ·  Special Contract clauses
    ·  Prescriptive FAR/DFARS Parts and contract included general contract clauses thereof such as:
    ·  FAR Part 27 - Patents, Data, and Copyrights (software)
    ·  DFARS 227 – Supplemental guidance to the above
    ·  Agency peculiar guidance
    ·  FAR Part 30 - Cost Accounting Standards and disclosure statements
    ·  FAR Part 45 – Government Property
    With the clarity of a few definitions and the backdrop of a Government contract, let’s turn our attention to your questions/background relative to the disposition of intellectual property and software.
    Reviewing your series of questions it appears that your disposal issues revolves around disposition of software medium
    Despite having “substance” software medium is not Government contract property and is specifically excluded from coverage as Government contract property under FAR Part 45, Government Property.  Note that FAR Part 45.000(b)(2) specifically excludes software and intellectual property: 
    45.000 -- Scope of part.
    (a) This part prescribes policies and procedures for providing Government property to contractors, contractors’ management and use of Government property; and reporting, redistributing, and disposing of contractor inventory.
    (b) It does not apply to—
    (4) Software and intellectual property;
    You therefore should neither seek nor expect ANY treatment or guidance relative to contractor management (including disposition) of intellectual property and software within FAR Part 45 and the attendant FAR and DFARS clauses.  This may have a couple of immediate ramifications for you and your company in how you may presently seek disposal of software:
    1.  Since software is not Government contract property, disposal of software is not covered under FAR 52.245-1(j) - Contractor inventory disposal and disposal of software will not be listed items in inventory disposal schedules required for Government contract property under paragraph (j)(2) – so, don’t list it inventory disposal schedules (SF 1428) and don’t sent it through plant clearance
    2.  Logically, since software is not Government contract property and is not covered under FAR 52.245-1, it will therefore not be listed for disposition via PCARSS (Plant Clearance Automated Reutilization Screening System) when DFARS clause 252.245-7004, Reporting, Reutilization, And Disposal, is on contract – so, don’t list it for disposal in PCARSS and don’t send it through plant clearance
    3.  Since software is not Government contract property, your FAR 52.245-1 Contractor property management system (PMS) is not required to address software as Government contract property, procedures relative to software control and disposal thereof are not typically reviewed by a Government property administrator nor subject to the property management system audit (PMSA) they periodically conduct
    Bottom line – intellectual property and software isn’t Government contract property IAW FAR Part 45 and won’t be disposed of as such!
    Yet the bulk of your question remains on how to disposition intellectual property and software and who directs that disposition.
    Perhaps the path for disposition must first begin with determining who owns that intellectual property and software!
    That aspect of ownership relative to intellectual property and software (and therefore disposition thereof) isn’t always easy to determine and can be affected by laws and/or terms of a contract.  So each intellectual property and software instance/treatment must be considered separately; one-at-a-time, vis-à-vis prevailing laws and contract terms (or lack thereof!).
    A couple of examples relative to a contract illustrates some complexities:
    ·  A contractor develops and delivers software to the Government under a CLIN - Clearly the Government purchased the software, but rights and or limits on use of that software will more than likely be stipulated in special clauses or general contract clauses dealing specifically with rights in technical data (for instance, DFARS Subpart 227.72 & DFARS 252.227-7014).  Another internal Government regulation (DoDI 5000.76 cited below) directs the Government as to how this is to be captured on the Government’s records – which is related to the actual delivery to the Government. 
    ·  A contractor acquires for use on (but not delivery under), a Government contract commercially available software – is that software cost an allowable charge to the contract in accordance with the contractor’s disclosure statement (see FAR Part 30 and disclosure statement requirements)?  I would want to do a thorough review of your CASB DS 1, Disclosure Statement, to determine how you said you would charge software – and then if this is commercially available software – did you charge it in a consistent fashion (CAS 402). If charged as an indirect cost – then it is NOT Software to which the Government has any concern with in regard to license or ownership. If an allowable direct charge to the contract and licensed as Government owned, did you license it in the Government’s name – or the contractor’s name?  If in the contractor’s name, then you would need to contact the software manufacturer and ask permission to “transfer the license” to that software – as there MAY be a fee to accomplish this transfer.  Further confusing the issue of whose software is it!
    So then, ownership of intellectual property and software helps but does not fully nail down disposition responsibilities.  Indeed, what the above discussion did was focus on the multi-dimensional complexities involved with this area which is the conundrum you face in developing a process/procedure addressing disposal of software and technical data. 
    Your task writing such a procedure is vastly more complex than the Department of Defense had in authoring disposition direction in Paragraph 3.11, DoDI 5000.76, March 2, 2017 - Accountability and Management of Internal Use Software (IUS).  While not directly applicable to your situation, it witnesses to the complexity of an internal-to-the-DoD software disposition process.  Yet, it can be of some help as a point of departure or basic reference material.
    Hopefully this response will provide some vector guidance, but ultimately you will have to perform the research to discern and document the, who, what, when, where and why relative to software disposal.
    I applaud you for assuming the responsibility to do the right thing relative to the disposal of software!
    Good luck!
    ·  DAU AAP - Disposition of Government Provided Software,
    ·  DoDI 5000.76, March 2, 2017 - Accountability and Management of Internal Use Software (IUS)

    Open full Question Details