17.403 Procedures
Source: FAR 17.403 on acquisition.gov
FAR 17.403 requires contracting officers to structure leader-follower contracts carefully and ensure proprietary information is protected through firm agreements.
Overview
FAR 17.403 outlines the procedures for awarding contracts under leader company contracting arrangements. This section provides contracting officers with three options for structuring contracts between leader and follower companies to facilitate production and technical assistance. It also mandates that contracts include firm agreements regarding the disclosure and protection of proprietary information, such as trade secrets, technical designs, and software. The goal is to ensure effective collaboration while safeguarding sensitive contractor data.
Key Rules
- Contract Award Structure
- The contracting officer can award contracts in three ways: (1) to a leader company with a requirement to subcontract to a follower; (2) to both a leader (for assistance) and a follower (for production); or (3) to a follower company with a requirement to subcontract to a leader for assistance.
- Protection of Proprietary Information
- Any contract under this arrangement must include a firm agreement on the disclosure and protection of trade secrets, technical data, and proprietary software.
Responsibilities
- Contracting Officers: Must select the appropriate contract structure and ensure proprietary information is protected through clear contractual agreements.
- Contractors: Must comply with subcontracting and assistance obligations and adhere to proprietary information agreements.
- Agencies: Should oversee compliance with these procedures and ensure sensitive information is safeguarded.
Practical Implications
- This section exists to facilitate collaboration between companies with different capabilities while protecting proprietary information.
- It impacts daily contracting by requiring careful contract drafting and negotiation of information protection clauses.
- Common pitfalls include inadequate protection of proprietary data and unclear subcontracting arrangements.
(a) The contracting officer may award a prime contract to a-
(1) Leader company, obligating it to subcontract a designated portion of the required end items to a specified follower company and to assist it to produce the required end items;
(2) Leader company, for the required assistance to a follower company, and a prime contract to the follower for production of the items; or
(3) Follower company, obligating it to subcontract with a designated leader company for the required assistance.
(b) The contracting officer shall ensure that any contract awarded under this arrangement contains a firm agreement regarding disclosure, if any, of contractor trade secrets, technical designs or concepts, and specific data, or software, of a proprietary nature.