27.405-3 Commercial computer software
Source: FAR 27.405-3 on acquisition.gov
Government contracts for commercial computer software must clearly define rights and ensure vendor licenses comply with Federal law and Government needs.
Overview
FAR 27.405-3 addresses the acquisition of commercial computer software by the Government outside of GSA’s Multiple Award Schedule contracts. It emphasizes that while no specific FAR clause is required, contracts must clearly define the Government’s rights to use, disclose, modify, distribute, and reproduce the software. The regulation directs contracting professionals to acquire commercial software under licenses customarily provided to the public, as long as these licenses comply with Federal law and meet Government needs. If there is uncertainty about the adequacy of commercial licenses, the clause at 52.227-19 may be used. The section also provides guidance for negotiating additional or lesser rights and requires that any such negotiated rights be explicitly stated in the contract. When vendor standard agreements are used, contracting officers must ensure these are consistent with Federal requirements and that Government contract terms take precedence. Special provisions apply when restricted software is acquired through subcontractors under certain clauses.
Key Rules
- Government Rights Must Be Defined
- Contracts must specify the Government’s rights regarding commercial computer software, including use, disclosure, modification, distribution, and reproduction.
- Use of Customary Commercial Licenses
- Software should be acquired under standard commercial licenses unless inconsistent with Federal law or Government needs.
- Use of Clause 52.227-19
- This clause may be used if there is confusion about the adequacy of rights or license terms.
- Negotiation of Rights
- Additional or lesser rights than those in 52.227-19 must be negotiated and documented in the contract.
- Vendor Agreements
- Contracting officers must ensure vendor agreements are consistent with Federal requirements, and contract terms override vendor terms.
- Subcontractor Acquisitions
- Special approval is needed for changes to restricted rights when software is acquired from subcontractors under certain clauses.
Responsibilities
- Contracting Officers: Ensure contract terms clearly define Government rights, review and reconcile vendor agreements, use appropriate clauses, and approve changes to restricted rights from subcontractors when required.
- Contractors: Provide licenses consistent with Federal law, negotiate rights as needed, and ensure documentation and descriptions are complete.
- Agencies: Oversee compliance and ensure contracts meet legal and operational requirements.
Practical Implications
- This section ensures the Government secures necessary rights for commercial software use and avoids conflicts with vendor terms. It impacts daily contracting by requiring careful review of license agreements and explicit contract language. Common pitfalls include failing to reconcile vendor terms with Federal requirements or inadequately documenting negotiated rights.
(a) When contracting other than from GSA’s Multiple Award Schedule contracts for the acquisition of commercial computer software, no specific contract clause prescribed in this subpart need be used, but the contract shall specifically address the Government’s rights to use, disclose, modify, distribute, and reproduce the software. Section 12.212 sets forth the guidance for the acquisition of commercial computer software and states that commercial computer software or commercial computer software documentation shall be acquired under licenses customarily provided to the public to the extent the license is consistent with Federal law and otherwise satisfies the Government’s needs. The clause at 52.227-19, Commercial Computer Software License, may be used when there is any confusion as to whether the Government’s needs are satisfied or whether a customary commercial license is consistent with Federal law. Additional or lesser rights may be negotiated using the guidance concerning restricted rights as set forth in 27.404-2(d), or the clause at 52.227-19. If greater rights than the minimum rights identified in the clause at 52.227-19 are needed, or lesser rights are to be acquired, they shall be negotiated and set forth in the contract. This includes any additions to, or limitations on, the rights set forth in paragraph (b) of the clause at 52.227-19 when used. Examples of greater rights may be those necessary for networking purposes or use of the software from remote terminals communicating with a host computer where the software is located. If the computer software is to be acquired with unlimited rights, the contract shall also so state. In addition, the contract shall adequately describe the computer programs and/or databases, the media on which it is recorded, and all the necessary documentation.
(b) If the contract incorporates, makes reference to, or uses a vendor’s standard commercial lease, license, or purchase agreement, the contracting officer shall ensure that the agreement is consistent with paragraph (a) of this subsection. The contracting officer should exercise caution in accepting a vendor’s terms and conditions, since they may be directed to commercial sales and may not be appropriate for Government contracts. Any inconsistencies in a vendor’s standard commercial agreement shall be addressed in the contract and the contract terms shall take precedence over the vendor’s standard commercial agreement. If the clause at 52.227-19 is used, inconsistencies in the vendor’s standard commercial agreement regarding the Government’s right to use, reproduce or disclose the computer software are reconciled by that clause.
(c) If a prime contractor under a contract containing the clause at 52.227-14, Rights in Data-General, with paragraph (g)(4) (Alternate III) in the clause, acquires restricted computer software from a subcontractor (at any tier) as a separate acquisition for delivery to or for use on behalf of the Government, the contracting officer may approve any additions to, or limitations on the restricted rights in the Restricted Rights Notice of paragraph (g)(4) in a collateral agreement incorporated in and made part of the contract.