27.406-3 Major system acquisition
Source: FAR 27.406-3 on acquisition.gov
FAR 27.406-3 ensures the Government obtains essential technical data and rights in major system acquisitions, linking data delivery to payment and protecting both Government and commercial interests.
Overview
FAR 27.406-3 addresses the requirements for technical data in major system acquisitions, focusing on the use of specific clauses to ensure the Government receives necessary rights and data deliverables. It mandates the use of clause 52.227-21 for technical data declaration, revision, and withholding of payment, requiring explicit identification of applicable data line items. Contracting officers must review delivered data for completeness and compliance, withholding payment if deficiencies exist until requirements are met. For civilian agencies (excluding NASA and the Coast Guard), additional requirements apply: clause 52.227-22 is used alongside 52.227-14 to secure minimum rights in technical data developed exclusively with Federal funds, especially when future competitive acquisitions are anticipated. The regulation also protects commercial suppliers by prohibiting the Government from requiring delivery of certain technical data as a condition of procurement if the data relates to products/processes offered for public sale, except for data needed for operation or maintenance.
Key Rules
- Technical Data Declaration and Withholding of Payment
- Use clause 52.227-21; identify applicable data line items; review and ensure data compliance before final payment.
- Major System Technical Data for Civilian Agencies
- Use clause 52.227-22 with 52.227-14 for data developed with Federal funds; ensure Government obtains minimum rights for future competition.
- Protection of Commercial Suppliers
- Do not require delivery of design/development data for commercial products/processes as a procurement condition, except for operation/maintenance needs.
Responsibilities
- Contracting Officers: Insert and enforce appropriate clauses, review technical data and declarations, withhold payment if data is deficient, and ensure compliance with statutory rights.
- Contractors: Deliver complete and accurate technical data as specified, correct deficiencies promptly, and comply with declaration requirements.
- Agencies: Oversee compliance, especially for civilian agencies (excluding NASA/Coast Guard), and ensure statutory rights are protected.
Practical Implications
This section ensures the Government secures necessary technical data and rights for major system acquisitions, supporting future competition and protecting commercial suppliers. Contractors must be diligent in data delivery and compliance, while contracting officers must rigorously review submissions and enforce payment conditions. Common pitfalls include incomplete data submissions and misunderstanding the scope of required data rights.
(a) The clause at 52.227-21, Technical Data Declaration, Revision, and Withholding of Payment-Major Systems, implements http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section2302(e)&num=0&edition=prelim" target="_blank">41 U.S.C. 2302(e). When using the clause at 52.227-21, the section of the contract specifying data delivery requirements (see 27.406-1(b)) shall expressly identify those line items of technical data to which the clause applies. Upon delivery of the technical data, the contracting officer shall review the technical data and the contractor’s declaration relating to it to assure that the data are complete, accurate, and comply with contract requirements. If the data are not complete, accurate, or compliant, the contracting officer should request the contractor to correct the deficiencies, and may withhold payment. Final payment shall not be made under the contract until it has been determined that the delivery requirements of those line items of data to which the clause applies have been satisfactorily met.
(b) In a contract for, or in support of, a major system awarded by a civilian agency other than NASA or the U.S. Coast Guard, the following applies:
(1) The contracting officer shall require the delivery of any technical data relating to the major system or supplies for the major system, that are to be developed exclusively with Federal funds if the delivery of the technical data is needed to ensure the competitive acquisition of supplies or services that will be required in substantial quantities in the future. The clause at 52.227-22, Major System-Minimum Rights, is used in addition to the clause at 52.227-14, Rights in Data-General, and other required clauses, to ensure that the Government acquires at least those rights required by Pub. L. 98-577 in technical data developed exclusively with Federal funds.
(2) Technical data, relating to a major system or supplies for a major system, procured or to be procured by the Government and also relating to the design, development, or manufacture of products or processes offered or to be offered for sale to the public (except for such data as may be necessary for the Government to operate or maintain the product, or use the process if obtained by the Government as an element of performance under the contract), shall not be required to be provided to the Government from persons who have developed such products or processes as a condition for the procurement of such products or processes by the Government.