27.404-2
Limited rights data and restricted computer software
FAR 27.404-2 ensures contractors can protect proprietary data and software while allowing the government to obtain and use such data/software only under clearly defined, contractually specified rights and restrictions.
Overview
FAR 27.404-2 addresses the handling of limited rights data and restricted computer software in government contracts. It outlines how contractors can protect proprietary data and software, the circumstances under which the government may require delivery of such data/software, and the rights and restrictions that apply to both parties. The section details the use of specific FAR clauses and their alternates (52.227-14 and 52.227-15), the process for identifying and delivering protected data, and the limitations on government use and disclosure. It also provides guidance for contracting officers on when and how to use these clauses and alternates, including during negotiations and contract modifications.
Key Rules
- Protection of Limited Rights Data and Restricted Computer Software
- Contractors may withhold qualifying data/software, delivering only form, fit, and function data, unless the government requires delivery via contract clauses.
- Alternate Definitions and Clauses
- Agencies may use alternate definitions and clause alternates (Alternate I, II, III) based on contract requirements and the nature of the data/software.
- Government Rights and Restrictions
- The government’s use and disclosure of delivered limited rights data or restricted software is strictly limited by the contract and associated notices.
- Contractor Declarations
- Offerors must declare the likelihood of delivering limited rights data or restricted software, guiding the contracting officer’s clause selection.
- Modification and Negotiation
- Clauses and alternates can be added or modified during negotiations or contract performance if needed.
Responsibilities
- Contracting Officers: Must select appropriate clauses/alternates, specify deliverables, and ensure rights and restrictions are clearly stated in contracts.
- Contractors: Must identify and declare limited rights data/restricted software, comply with delivery requirements, and mark data/software appropriately.
- Agencies: Must enforce restrictions on use/disclosure and may supplement notices for specific purposes.
Practical Implications
- Ensures protection of contractor intellectual property while meeting government needs.
- Impacts proposal preparation, contract negotiation, and data/software delivery processes.
- Common pitfalls include failure to properly declare, mark, or negotiate rights, leading to disputes or loss of protection.