27.202-5 Solicitation provisions and contract clause
Source: FAR 27.202-5 on acquisition.gov
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.
(a)
(1) Insert a solicitation provision substantially the same as the provision at 52.227-6, Royalty Information, in-
(i) Any solicitation that may result in a negotiated contract for which royalty information is desired and for which certified cost or pricing data are obtained under 15.403; or
(ii) Sealed bid solicitations only if the need for such information is approved at a level above the contracting officer as being necessary for proper protection of the Government’s interests.
(2) If the solicitation is for communication services and facilities by a common carrier, use the provision with its Alternate I.
(b) If the Government is obligated to pay a royalty on a patent involved in the prospective contract, insert in the solicitation a provision substantially the same as the provision at 52.227-7, Patents-Notice of Government Licensee. If the clause at 52.227-6 is not included in the solicitation, the contracting officer may require offerors to provide information sufficient to provide this notice to the other offerors.
(c) Insert the clause at 52.227-9, Refund of Royalties, in negotiated fixed-price solicitations and contracts when royalties may be paid under the contract. If a fixed-price incentive contract is contemplated, change "price" to "target cost and target profit" wherever it appears in the clause. The clause may be used in cost-reimbursement contracts where agency approval of royalties is necessary to protect the Government’s interests.