Taking a life cycle approach to data rights could increase contract awards

January 08, 2016

Government Contracts Alert

Author(s): David F. Crosby, Harini N. Kidambi

Understanding the Government’s approach to data rights can help contractors be more competitive in bidding contracts. The Army’s new Guide explains the approach.

Consideration of data rights over the life cycle of a program is an activity that is receiving more attention and focus in Department of Defense (“DoD”) circles. In furtherance of this focus, the U.S. Army, last August, issued the 2015 Army Data & Data Rights Guide (“D&DR Guide” or “Guide”). The Guide helps Army and other military service professionals as well as contractors better understand data and data rights acquisition and management throughout the DoD life cycle. Furthermore, the Guide touches on many issues across the spectrum of data rights while highlighting the value of identifying data rights needs over the life cycle of a given program. This approach enables the Government to identify and obtain the data rights needed over the program’s life cycle. Consideration of data rights and their utility to the Government over the life of a program and beyond positions the Government to extract long-term value and cost efficiencies that could be significant in acquiring goods and services, supporting production and sustainment and ultimately supporting the warfighter.

Data rights

As a general matter, “data rights” refer to the Government’s ability to utilize “technical data” and “computer software” pursuant to a government contract. The Federal Acquisition Regulations (FARS) and Defense Federal Acquisition Regulations (DFARS) prescribe policies and procedures for civilian agency and DoD acquisition, use and management of data and related rights. When the Government exclusively funds a project, by default the agency will seek to obtain an unlimited rights license in technical data, computer software and computer software documentation developed under the contract. This means that the government will have unlimited rights [1] to use, modify, reproduce, release, perform, display or disclose data to support the program’s life cycle related acquisition activities as compared to government purpose [2] or limited rights. [3] However, the contractor can preserve their interests in those deliverables by using the provisions of the FARS and DFARS that limit the Government’s rights to access and use them during and after the contract is completed. By understanding the Government’s needs for seeking expanded data rights, the contractor can be better prepared to negotiate data rights in the contract in contrast to contractor’s interest to limit those rights while considering programmatic life cycle concerns for the acquisition of goods and services.

The guide

The D&DR Guide is a compilation of best practices regarding the Government’s need and use of data rights during a project life cycle. It provides a roadmap for enabling the Government to maximize its ability to use competitive sourcing to manage life cycle costs. [4] It also provides valuable insights into how the DoD approaches strategies for acquiring data rights.

The D&DR Guide emphasizes the need for assessing data rights over the life cycle of the program in the early phases of a program when the Government’s bargaining position is strongest and the cost of additional data rights is normally lower. The Guide recommends an approach to life cycle data whereby each program must determine its data rights requirements based on its approved program strategies and objectives. [5] Gathering life cycle data requirements begins with an understanding of the program strategies and related activities and then determining what data is needed to support those strategies and activities. The program strategies should explain what efforts are needed throughout the program life cycle and the entity planned to perform them. Once the life cycle data needs have been identified, it becomes necessary to determine the associated data rights needed for each item. As such, in the proposal stage, it is crucial for contractors to assess the long-term technical data needs of such systems and subsystems and to understand the government’s acquisition strategies that provide for technical data rights needed to sustain such systems and subsystems over their life cycle. The combination of the data and associated data rights needed over the life cycle of a weapons system program, for example, would result in a master list of data and data rights needs that will be valuable for defining data and data rights requirements in Requests for Proposals.

Understanding the Government’s needs under the life cycle of a program can help the contractor to better negotiate the data rights that are given to the Government under the contract. It can also be used to help the contractor classify the data during its creation to avoid mixing proprietary data with data developed under the contract and to help it be competitive in future contracts. The Guide makes it clear that data and data rights requirements for the system must be defined for the entire life cycle of a program to ensure that all life cycle activities will be supported. These data rights requirements can serve as a guide for the contractor in negotiating the technical data deliverables and the data rights provisions of a contract. These requirements will also help the contractor to plan for and estimate all life cycle costs and risks related to data and data rights at the start of the project. This will help the contractor to better respond to the request for proposal and ultimately meet the requirements of the awarded contract. For example, where the data requirements are clearly defined over the life cycle, the contractor can more accurately estimate the long-terms costs of the project at a much earlier stage and better define the contingencies that might otherwise be factored in due to vague or unclear data and data rights requirements. In addition, any change from the initial data requirements can be more clearly identified and accounted for in a later stage contract modification.

Looking ahead

The Guide clearly indicates that the Government has a preference for contractor proposals that determine life cycle costs of a project earlier on rather than throughout the project. Therefore, it is expected that a contractor, using the life cycle approach, would have greater favorability to be awarded contracts over those contractors that do not use this approach. The D&DR Guide provides a good introduction to life cycle costs and data rights under the DFARS as well as provides valuable insights into the Government’s requirements and strategies for acquiring rights to data. Going forward, it is likely that the landscape of government contracting will see a shift toward more favorability to contractors utilizing the life cycle approach. As such, by understanding these life cycle requirements, a contractor can be better positioned to remain competitive in what will likely become an increasingly competitive contracting environment.

  1. DFARS 252.227-7013. [Back to reference]
  2. Id. (“Government purpose rights” include competitive procurement, but do not include the rights to use, modify, reproduce, release, perform, display or disclose technical data for commercial purposes or authorize others to do so.) [Back to reference]
  3. Id. (“Limited rights” means the rights to use, modify, reproduce, release, perform, display or disclose technical data, in whole or in part, within the Government.) [Back to reference]
  4. 2015 Army Data & Data Rights Guide (click here); Army Guide for the Preparation of a Program Product Data Management Strategy (DMS) (click here); and Addendum to Army Guide for the Preparation of a Program Product Data Management Strategy (DMS) (click here). [Back to reference]
  5. Id. [Back to reference]

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