Fara Fasat

Preliminary question -- what is the approximate value of each phase? The work sounds technical and complex, especially producing a new type of thermoelectric generator. The threshold for the applicability of the Trade Agreements Act instead of the Buy American Act is $183,000. If your values exceed that, your concern is the TAA not the BAA. And forget about whether you think a country is friendly to the US. Follow the BAA or TAA.

Doing my best to understand it, but it's a hard read. As I read it, there are two main parts to the decision: First, what can the government do with commercial technical data under DFARS 252.227-7015? Second, what legends are permitted on commercial technical data? The first issue involves the "unrestricted rights" in the commercial clause (not "unlimited" but essentially the same). Despite the data being commercial, the government gets unrestricted rights in certain data, listed at (b)(1)(i) through (v), which includes form, fit, and function data, and data that "Are necessary for operation, maintenance, installation, or training (other than detailed manufacturing or process data)," commonly called "OMIT" data. One of the things that makes the decision hard to understand is that the Board throughout uses the term "the data", but its analysis only applies to this limited category -- the (b)(1) data that is not detailed manufacturing or process data. Keep that in mind when you see the term "the data." The Board goes on to conclude that the prohibition in (b)(2) against using commercial data to manufacture does not apply to (b)(1) data (except for detailed manufacturing or process data). Takeaway for contractors - unless it is detailed manufacturing or process data, everything in (b)(1) can be given to another contractor for manufacturing. This may be a surprise if your focus is on the restrictions in (b)(2) and you just glance over the data described in (b)(1). More of a concern is issue 2, where the Board concluded that certain wording commonly found in commercial licenses cannot be used, because some government employees might get confused and think a restriction applied to the government. That may sound harsh, but it's implied in the decision. Acknowledging that the DFARS does not prescribe any particular commercial data legend, the Board nevertheless concludes that "proprietary", "confidential and proprietary", or similar words, cannot be used, because they imply a duty to protect the information, which would contradict the government's unrestricted rights. Similarly, a copyright notice cannot be used. Also improper - a phrase such as “It shall not be reproduced, distributed, or disclosed to others, except as expressly authorized in writing,” because this language is not limited to third parties and would contradict the government's unrestricted rights. Keep in mind, the analysis on the second issue also applies only to (b)(1) data. Small comfort though, as that data includes form, fit, and function data, and operation, maintenance, installation, or training data, all of which can be quite detailed. So what are contractors to do, if the Board is not overruled? Right now they probably use their standard commercial legend on all commercial data delivered to the government. Must they create a separate legend for (b)(1) data, that clearly states that the restrictions only apply to third parties, not the government? Scrub the words "proprietary" and "confidential"? And also remove a copyright notice? This all would necessarily include a process for differentiating (b)(1) data from (b)(2) data.

Thanks for all the information. It is very useful. The only thing I will add is that I did not dribble anything out. I posted what I knew at that time. Since I was dealing with DoD, I focused on their clause and SBA supporting materials. I then went to the Nash 3-volume IP treatise to see what it said about SBIR. That's where I noticed the FAR language. Interestingly it did not comment on the difference between the FAR and DFARS treatment of a large business's SBIR data, especially since it is a significant difference. Once I found it, I added it to the discussion. If that's a dribble, so be it.

1. because there was no corresponding definition in the DFARS clause and I hadn't found the FAR one at the time of my post. 2. I just learned about that difference. Apparently you just did too. Let's skip the snark and just stick to the discussion, OK?

I'm a bit concerned about the difference between the FAR and the DFARS. The FAR definition made me think I might be missing something in the DFARS version. But seeing nothing to the contrary in this discussion, I'll take the clause as it is. Thanks for the contributions.

Maybe the discussion is beneath you, but I first asked a couple of experienced practitioners, and they said an LB could not do it. When I showed them the clause, their reaction was "hmmm, it does seem to say that. There must be a catch." That's why I thought I would tap into the broader knowledge and experience of this forum. I should also point out that the FAR has a definition of SBIR data that is "data first produced by a Contractor that is a small business concern." The DFARS does not have that definition, and just defines SBIR data rights. It also defines "generated" as "technical data or computer software first created in the performance of this contract." It does not say first created by a small business. So you see, there is a difference in treatment under the FAR and DFARS. Seems like a legitimate area of inquiry, for Pete's sake. 😉

I asked because it seems contrary of the intent of the SBIR program, which grants special status to the work of a small business. It also seems that it allows a large business to get a benefit it would not otherwise get. I'm not saying it's wrong or that I disagree with it; I just wanted to confirm my reading, sometimes loosely referred to as a sanity check. 🙂

I'm asking whether a large subcontractor on an SBIR prime contract can deliver data that was developed on its subcontract (i.e. with government funds) with SBIR data rights instead of unlimited rights. If the clause is flowed down into its subcontract without alteration except to identify the parties, then the clause would say it can.

Scenario – a small business has an SBIR contract. One of its subcontractors is a large business. The SBIR data rights clause (DFARS 252.227-7018) is in the prime contract. The clause grants SBIR data rights to all technical data developed under the contract (essentially equivalent to limited rights). The clause (at (k)(2)) says that it is to be inserted in all subcontracts without alteration except to identify the parties. It also says that no other clause shall be used to enlarge or diminish the rights of the government, or the contractor in any subcontractor's technical data. The question – can the large business assert SBIR data rights in any data it has to deliver, thus getting the same 20-year protection as the SBIR prime? On the one hand, the clause does not limit its application to only small business subcontractors. If it goes in the subcontract without alteration, as (k)(2) says, then the large sub can deliver any data it develops with SBIR data rights. Also, SBA materials on its SBIR website do not distinguish between large and small subcontractors, which suggests they get treated the same. I could find nothing that limits the SBIR data rights protection only to a small business subcontractor. On the other hand, one would think that the favorable treatment of data developed under an SBIR contract would only be extended to the SBIR contractor or to other small businesses.

CaptJax - there is nothing in the definition of a commercial product that requires it to be used for the same purpose as it is used commercially. The definition focusses on the product, not the intended use. Even if they have to meet some government requirement, they might still qualify under the 'modified' or 'of a type' parts of the definition.

It seems that writing clear, grammatically correct regulations is a lost skill in DoD. I'm referring to the recent tantalum restriction mandated by the 2020 NDAA. Despite commenters asking for clarification of sentences that made no sense, DoD stood its ground and said there was no need to clarify. If I have time I'll start a new thread to avoid cluttering up this one. I'll just say that while the NDAA itself was not a model of clarity, DoD completely mucked it up. Was the new rule written, reviewed, and approved by people with college degrees? Likely.

Thank you.

I made that point (date of award refers to when to apply the dollar threshold) to the prime and also in my first post here. This is an administrative and process problem not a legal one, although getting a cert after the award decision has been made may technically violate the requirement to make a responsibility determination before award (especially debarment). We will decide how to handle this, and it will be an informed decision.

No that wasn't what I was hoping for. The first 8 words of your first post were sufficient. The rest -- . I should add that our order management people say that they can't do what the prime is asking, and I believe them. They came to me as the contracts person to ask whether the prime was correct and to make sure we weren't making a bad argument. I gave them my opinion. It makes a difference to me because they asked for my support on the regulatory question. They still have to figure out what to do, and they are exploring every possible workaround, but they can do it with confidence that they won't be embarrassed down the road. At some point they may have to balance the amount of business against the extra work, and make a business judgment whether it is worth any changes to our processes. Had the answer been otherwise, I would have told them the customer is right, our processes do not meet the requirement , and we need to fix them.

Yes it does. Our process requires that we enter their cert in DocuSign, route to the person with signature authority, get it signed, and return to the prime. It usually doesn't happen in one day, and it can't be backdated. Also the prime will not accept one signed and dated on any day before they issue the PO. They claim that the 'same-day certification' is required by their DCMA auditors. Their certification states "Seller certifies as of today, the date of award, the Seller, or its principals can, ______ certify –or‐ _____ not certify ...." (Italics mine) They further have stated regarding a PO that "we are required to issue the PO on the same day that debarment and anti-lobbying are certified so since this form is dated 8/23, it is considered expired.

We're running into a problem with a prime and I was interested in the views of the forum. The prime is demanding the debarment and lobbying certifications signed as of the date of a PO award, even if you submitted them with your proposal or quote. They cite 52.203-12(g) as their support: "The Contractor shall obtain a declaration, including the certification and disclosure in paragraphs (c) and (d) of the provision at 52.203-11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions, from each person requesting or receiving a subcontract under this contract that exceeds the threshold specified in FAR 3.808 on the date of subcontract award." They say it means that the certification must be obtained on the date of award. We say that 'on the date of award' refers to when you look at the contract value. In support of our view, all reps and certs are submitted with a proposal, and we can find no requirement that any be recertified on the date of award. After all, the purpose of reps and certs is to allow the buyer to determine whether a proposed seller is responsible. That decision has been made when the contract is awarded. Furthermore, the required cert in 52.203-12(g) is 50.203-11, is submitted with proposals, and so is the debarment cert. So - are we missing anything and is there any requirement to sign and submit a debarment and lobbying certification on the date of a contract award?

The pdf FAR and DFARS have bookmarks in that navigation panel on the side. I find these much easier to use than the TOC at the beginning. It's also easier to create bookmarks in a pdf document than to create a TOC in a Word document. Of course, that may be a personal preference. Nevertheless, I agree there's no excuse today for not creating a document that can be navigated.

So after all that, this is not a 'limitation on subcontracting' question. It is an evaluation question and whether [Apple] can use the past performance of its proposed sub. Back to square 1.

Are you talking about 52.219-14? If so, the prescription says that it goes in contracts if any portion is to be set aside for small businesses, i.e., not in a fully unrestricted solicitation. The clause then says that it does not apply to the unrestricted portion of a partial set-aside. In either case the limitations would not apply to a large prime. Are you saying they would? The intent of the rule is to prevent a small business from being used as a front to win a set-aside contract, and then subbing most of the work to a large. When would those limitations apply to a large winning an unrestricted competition, or the unrestricted portion of a contract?

So -- unrestricted solicitation. The answer to Patrick is no limitation on subcontracting, no 51% or any other rule, Apple can structure its team any way it wants. Whatever he has heard about primes being required to do at least 51% of the work only applies to small business set-asides.

Don't we need to know if this is a set-aside contract, or are we simply assuming that even though it wasn't stated? The 51% rule (or any limitation on subcontracting rule) is for set-asides, not unrestricted solicitations.

OK, but expressing the findings as 4 years instead of 1 week certainly makes it sound more dire, doesn't it? That's why I'm always skeptical when I see numbers in the news. If I see a percent, that tells me the actual numbers are low; if I see raw numbers, that tells me the percent is low. They choose whatever will have the bigger impact on the viewer, i.e., a 50% increase sounds far worse than going from 2 to 3. Likewise a 100,000 increase sounds much worse than going from 55.5% to 55.8%.

Genuinely curious about something. The actual time saved is 8 hours (not sure how that results in a 1-week award delay). Just because you multiply it by 200 doesn't mean that anything was delayed by 4 years, or that you can recover 4 years of something if this is implemented. Each project was delayed by 8 hours (or maybe 1 week). Implementing these recommendations would result in a project starting 8 hours (or maybe 1 week) earlier. Sure, 4 years looks impressive, but on an individual project basis, the delay doesn't look that bad. I've had longer delays than that just trying to find the next meeting slot when all parties were available.

I hadn't noticed this until your question made me look closer, but -- 252.215-7010 is a provision. A provision is defined as: "Solicitation provision or provision means a term or condition used only in solicitations and applying only before contract award." Provisions don't go in contracts, so why is there even a flowdown requirement? Take away the flowdown and there's no longer a rabbit hole to go down. This whole thing is a mess so I'm not going to waste any more time on it. The DAR council said that the authority was not extended to prime contractors, and that's been good enough for the others on this thread, and it's good enough for me.

What's old is new again. Looks like there was a similar discussion in 2019. http://www.wifcon.com/discussion/index.php?/topic/5399-subcontracts-requirements-for-nontraditional-defense-contractors-ntdc-exception-from-certified-cost-or-pricing-data/