27.202-5
Solicitation provisions and contract clause
FAR 27.202-5 mandates specific provisions and clauses in solicitations and contracts to ensure proper disclosure and management of royalties and patent rights, protecting the Government’s interests.
Overview
FAR 27.202-5 prescribes the use of specific solicitation provisions and contract clauses related to royalties and patents in government contracts. It ensures that royalty information is properly disclosed and managed to protect the Government’s interests, particularly when certified cost or pricing data is required or when the Government may be obligated to pay royalties on patents.
Key Rules
- Royalty Information Provision (52.227-6)
- Must be included in solicitations for negotiated contracts where royalty information is needed and certified cost or pricing data is obtained, or in sealed bid solicitations if approved above the contracting officer.
- Alternate I for Communication Services
- Use Alternate I of 52.227-6 for solicitations involving communication services and facilities by a common carrier.
- Patents-Notice of Government Licensee (52.227-7)
- Insert this provision if the Government will pay a royalty on a patent in the contract; if 52.227-6 is not used, the contracting officer may require sufficient information from offerors to notify others.
- Refund of Royalties Clause (52.227-9)
- Required in negotiated fixed-price solicitations and contracts where royalties may be paid; modify for fixed-price incentive contracts and consider for cost-reimbursement contracts if agency approval is needed.
Responsibilities
- Contracting Officers: Ensure the correct provisions and clauses are included in solicitations and contracts, obtain necessary approvals, and collect required royalty information.
- Contractors: Provide accurate royalty information and comply with all solicitation provisions and contract clauses regarding royalties and patents.
- Agencies: Approve inclusion of royalty provisions in sealed bids and oversee royalty-related compliance.
Practical Implications
- This section ensures transparency and proper management of royalty payments in federal contracts, reducing the risk of improper payments or disputes. Contractors must be diligent in disclosing royalty information and understanding which clauses apply to their solicitations. Failure to comply can result in delays, disqualification, or financial penalties.