27.408 Cosponsored research and development activities
Source: FAR 27.408 on acquisition.gov
FAR 27.408 allows tailored data rights clauses in cosponsored R&D contracts to balance Government needs and contractor contributions, especially when contributions are substantial and inseparable.
Overview
FAR 27.408 addresses the allocation of data rights in contracts involving cosponsored research and development (R&D) where both the Government and contractor make substantial, often inseparable, contributions. The section provides flexibility for contracting officers to negotiate less than unlimited rights to data developed under such contracts, especially when the contractor's contribution is significant (around 50% of total costs) and not easily segregable. The regulation allows for tailored clauses to reflect the unique circumstances of each cosponsored R&D effort, ensuring the Government retains necessary rights for its purposes while respecting the contractor's proprietary interests. If the contractor's contributions are readily segregable, data rights may be treated as limited rights data or restricted computer software, or negotiated otherwise if consistent with the contract's purpose.
Key Rules
- Limiting Data Rights in Cosponsored R&D
- Contracting officers may limit the Government's rights to data when contractor and Government contributions are substantial and inseparable, ensuring at least agreed-to Governmental use.
- Tailored Clauses
- No specific clause is prescribed; clauses must be tailored to the contract's circumstances, especially when contractor contributions are about 50% and not segregable.
- Segregable Contributions
- If contractor contributions are segregable, data may be treated as limited rights data or restricted software, or otherwise negotiated.
- Public Dissemination Exception
- Limiting rights is generally not appropriate if the contract's purpose is public dissemination or technology development for public use.
Responsibilities
- Contracting Officers: Assess contribution levels, negotiate and tailor appropriate data rights clauses, ensure contract specifies applicable clauses for each work element, and comply with agency supplements.
- Contractors: Clearly identify and document contributions, negotiate data rights, and comply with licensing or disclosure requirements as specified.
- Agencies: May issue supplemental regulations and oversee proper application of these provisions.
Practical Implications
- This section exists to balance Government needs and contractor proprietary interests in joint R&D.
- It impacts how data rights are negotiated and documented, especially in cost-sharing or joint development scenarios.
- Common pitfalls include failing to properly segregate contributions, not tailoring clauses, or misapplying data rights when public dissemination is intended.
(a) In contracts involving cosponsored research and development that require the contractor to make substantial contributions of funds or resources (e.g., by cost-sharing or by repayment of nonrecurring costs), and the contractor’s and the Government’s respective contributions to any item, component, process, or computer software, developed or produced under the contract are not readily segregable, the contracting officer may limit the acquisition of, or acquire less than unlimited rights to, any data developed and delivered under the contract. Agencies may regulate the use of this authority in their supplements. Lesser rights shall, at a minimum, assure use of the data for agreed-to Governmental purposes (including reprocurement rights as appropriate), and address any disclosure limitations or restrictions to be imposed on the data. Also, consideration may be given to requiring the contractor to directly license others if needed to carry out the objectives of the contract. Since the purpose of the cosponsored research and development, the legitimate proprietary interests of the contractor, the needs of the Government, and the respective contributions of both parties may vary, no specific clauses are prescribed, but a clause providing less than unlimited rights in the Government for data developed and delivered under the contract (such as license rights) may be tailored to the circumstances consistent with the foregoing and the policy set forth in 27.402. As a guide, a clause may be appropriate when the contractor contributes money or resources, or agrees to make repayment of nonrecurring costs, of a value of approximately 50 percent of the total cost of the contract (i.e., Government, contractor, and/or third party paid costs), and the respective contributions are not readily segregable for any work element to be performed under the contract. A clause may be used for all or for only specifically identified tasks or work elements under the contract. In the latter instance, its use will be in addition to whatever other data rights clause is prescribed under this subpart, with the contract specifically identifying which clause is to apply to which tasks or work elements. Further, this type of clause may not be appropriate where the purpose of the contract is to produce data for dissemination to the public, or to develop or demonstrate technologies that will be available, in any event, to the public for its direct use.
(b) Where the contractor’s contributions are readily segregable (by performance requirements and the funding for the contract) and so identified in the contract, any resulting data may be treated under this clause as limited rights data or restricted computer software in accordance with 27.404-2(c) or (d), as applicable; or if this treatment is inconsistent with the purpose of the contract, rights to the data may, if so negotiated and stated in the contract, be treated in a manner consistent with paragraph (a) of this section.