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Contractors Responsible for Burden of Proof on Asserted Rights Restrictions in Technical Data and Computer Software Delivered under Government Contracts

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When a contractor submits a list of asserted restrictions on the Government’s rights in required-deliverable technical data (TD) and computer software (CS), it asserts the Government has less than unlimited rights in those TD/CS. Such an assertions list contains the identification of the specific TD/CS in question and the basis for restricting the Government’s rights. The submission of the list, usually before the contract award, is followed by the delivery of the TD/CS that bears the asserted rights markings during the performance of the contract.

The Government may or may not agree with the general format of the submitted list and the level of detail of the asserted restrictions. If the Government agrees before the contract award, then the assertions list is incorporated into the contract as an attachment and the Government agrees to abide by the restrictions. If the Government does not deem the format of the list to be correct, it will request the contractor revise the list’s format. If the assertions list is generally in the correct format, the Government usually incorporates it into the contract even if it disagrees with the basis of the claimed restrictions. Incorporating the assertions list only means the Government acknowledges that the contractor is making the assertions. It does not equate to the validation of its asserted restrictions, and the Government retains its right to challenge the restrictions later. An asserted restriction is only validated by the Contracting Officer’s final decision resolving a formal challenge of the marking(s) or the actions of the Board of Contract Appeals or a court of competent jurisdiction sustaining the validity of the restricted marking(s). A mere lack of an official challenge or the Government’s decision not to institute one is not a “validation” of the contractor’s asserted restrictions.    

If the Government disagrees with the asserted category or its claimed basis, it may make a pre-challenge request for information, asking the contractor (or subcontractor) to furnish a written, sufficient explanation of the asserted restrictions. Based on this explanation, the Contracting Officer will evaluate their asserted restrictions on the rights of the Government or others to use the TD/CS. To meet such pre-challenge requests, the contractor is required by the Defense Federal Acquisition Regulation Supplement (DFARS) to maintain and follow written procedures to assure that the restrictive markings are used only when authorized by the applicable DFARS provisions in the contract. This enables the contractor to produce and maintain sufficient records to justify the validity of any restrictive markings on TD/CS delivered under the contract. This is important because DFARS places the burden of proof of the propriety of any asserted restrictions wholly on the entity making the assertions. Failure to maintain such records may result in the loss of the contractor’s right to restrict.

For example, if the contractor asserts “limited rights” in TD pertaining to widget X based on the development of X exclusively at private expense, such as independent research and development (IR&D) efforts, then it must be able to explain the basis for its claim of exclusively-private-expense development if and when the Government requests it. Some common types of evidence that can support such a claim include the IR&D project number that developed widget X, the scope of the IR&D project, records of expenditure and timeline of the development, the identity of the lead investigator, list of contractor’s personnel who engaged in the IR&D, and any patent issued or patent application filed prior to the contractor obtaining the government contract. The contractor should provide pertinent information and not just dump a vast number of documents, which may or may not contain relevant information, on the Contracting Officer for him/her to sort out. Such an action is likely to lead to a request for further information supporting the contractor’s assertions or a determination from the Contracting Officer that the assertions have not been supported.

While the Government may request information supporting the contractor’s claim of exclusive private expense development for “limited rights” TD and “restricted rights” CS if it believes the restrictions are questionable, it will usually not request such evidence in cases of Government Purpose Rights (GPR). GPR allows the use of the TD/CS within the Government without restrictions and, with a non-disclosure agreement (NDA), to disclose it to outside entities for them to use the TD/CS for government purposes. “Government purposes” means any activity in which the U.S. Government is a party, including cooperative agreements with international or multi-national defense organizations. “Government purposes” also include competitive procurement, but not to use, reproduce, disclose, etc. the GPR TD for commercial purposes or the right to authorize others to do so. The commercial rights are retained exclusively by the contractor during the GPR period, usually five years from the contract execution. In sum, GPR is sufficient for the Government to conduct all its business.  

Since the Government can use GPR TD/CS for any government purpose, including disclosure to other contractors, to use in the preparation of their proposals to RFPs in competitive acquisitions, or to perform their existing contracts with the Government, there is little incentive for the Government to request supporting information from the contractor that asserts GPR on TD/CS. However, there are instances where the Contracting Officer pursues supporting information when he/she believes the TD/CS should be categorized as “unlimited rights” for the Government based on the development of the underlying item or software was developed exclusively at the Government’s expense. Therefore, it is advisable that the contractor maintain sufficient supporting records even when it intends to assert GPR.

If you have a government contract with a TD/CS deliverable and have questions regarding the assertion of rights, contact us at Whitcomb Selinsky, PC. Our DFARS-knowledgeable government contracts and intellectual property attorneys will review your TD/CS to help determine the correct assertion of rights based on your documentation and ensure these rights are noted in your contract. We will review the format of your list for correctness, help with responding to the Government’s pre-challenge requests for the assertion of rights documentation, and defend your assertions against the Contracting Officer, at the Board of Contract Appeals, or appropriate courts.

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About the AuthorAnne Lanteigne

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