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FAR 52.227-16, Additional Data Requirements, provides a mechanism for an agency to order additional data, even if it was not specified as a deliverable in the contract, up to 3 years after acceptance of all items to be delivered under this contract. FAR 27.409(d) specifies that this clause is to be used for experimental, research type contracts, but that, "This clause may also be used in other contracts when considered appropriate."

My first question is, what does "when considered appropriate mean"? The example they give in FAR 27.409(d) is very narrow, it seems. I can tell you, over the years, I have seen this FAR 52.227-16 clause put into almost every major IT acquisition contract I have worked on, and those projects were definitely not experimental, research type contracts.

My second question is, this clause seems to say that the "additional data" at issue does not have to be listed as deliverable in the contract. But again, from my real life experience, I have seen the Government try to invoke the FAR 52.227-16 clause for additional ordering of data, and the contractor's response is to say, it was not listed as a deliverable, so we are not going to deliver it unless you pay us for it's value. The only way the Government can force the contractor to cooperate is to proactively litigate and sue the contractor in federal court to get them to cough up the data. As we all know, litigation could take years, and is a very time-consuming process. Most agencies won't fight this battle, they will just pay for the value of the data, which seems like having to pay for it again. So how do we prevent this?

Here are the clauses:

FAR 52.227-16 -- Additional Data Requirements.

As prescribed in 27.409(d), insert the following clause:

Additional Data Requirements (Jun 1987)

(a) In addition to the data (as defined in the clause at 52.227-14, Rights in Data -- General clause or other equivalent included in this contract) specified elsewhere in this contract to be delivered, the Contracting Officer may, at any time during contract performance or within a period of 3 years after acceptance of all items to be delivered under this contract, order any data first produced or specifically used in the performance of this contract.

(B) The Rights in Data -- General clause or other equivalent included in this contract is applicable to all data ordered under this Additional Data Requirements clause. Nothing contained in this clause shall require the Contractor to deliver any data the withholding of which is authorized by the Rights in Data -- General or other equivalent clause of this contract, or data which are specifically identified in this contract as not subject to this clause.

© When data are to be delivered under this clause, the Contractor will be compensated for converting the data into the prescribed form, for reproduction, and for delivery.

(d) The Contracting Officer may release the Contractor from the requirements of this clause for specifically identified data items at any time during the 3-year period set forth in paragraph (a) of this clause.

(End of Clause)

and

FAR 27.409(d):

(d) Insert the clause at 52.227-16, Additional Data Requirements, in solicitations and contracts involving experimental, developmental, research, or demonstration work (other than basic or applied research to be performed solely by a university or college where the contract amount will be $500,000 or less) unless all the requirements for data are believed to be known at the time of contracting and specified in the contract (see 27.406-2). This clause may also be used in other contracts when considered appropriate. For example, if the contract is for basic or applied research to be performed by a university or college, and the contracting officer believes the contract effort will in the future exceed $500,000, even though the initial award does not, the contracting officer may include the clause in the initial award.

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For DOD, there are additional regulations re: "additional ordering," deferred ordering, and deferred delivery of technical data or computer software:

DFARS 252.227-7026 Deferred Delivery of Technical Data or Computer Software.

As prescribed at 227.7103-8(a), use the following clause:

DEFERRED DELIVERY OF TECHNICAL DATA OR COMPUTER SOFTWARE

(APR 1988)

The Government shall have the right to require, at any time during the performance of this contract, within two (2) years after either acceptance of all items (other than data or computer software) to be delivered under this contract or termination of this contract, whichever is later, delivery of any technical data or computer software item identified in this contract as ?deferred delivery? data or computer software. The obligation to furnish such technical data required to be prepared by a subcontractor and pertaining to an item obtained from him shall expire two (2) years after the date Contractor accepts the last delivery of that item from that subcontractor for use in performing this contract.

(End of clause)

and

DFARS 252.227-7027 Deferred Ordering of Technical Data or Computer Software.

As prescribed at 227.7103-8(B), use the following clause:

DEFERRED ORDERING OF TECHNICAL DATA OR COMPUTER SOFTWARE

(APR 1988)

In addition to technical data or computer software specified elsewhere in this contract to be delivered hereunder, the Government may, at any time during the performance of this contract or within a period of three (3) years after acceptance of all items (other than technical data or computer software) to be delivered under this contract or the termination of this contract, order any technical data or computer software generated in the performance of this contract or any subcontract hereunder. When the technical data or computer software is ordered, the Contractor shall be compensated for converting the data or computer software into the prescribed form, for reproduction and delivery. The obligation to deliver the technical data of a subcontractor and pertaining to an item obtained from him shall expire three (3) years after the date the Contractor accepts the last delivery of that item from that subcontractor under this contract. The Government's rights to use said data or computer software shall be pursuant to the ?Rights in Technical Data and Computer Software? clause of this contract.

and

DFARS 227.7103-8 Deferred delivery and deferred ordering of technical data.

(a) Deferred delivery. Use the clause at 252.227-7026, Deferred Delivery of Technical Data or Computer Software, when it is in the Government's interests to defer the delivery of technical data. The clause permits the contracting officer to require the delivery of technical data identified as ?deferred delivery? data at any time until two years after acceptance by the Government of all items (other than technical data or computer software) under the contract or contract termination, whichever is later. The obligation of subcontractors or suppliers to deliver such technical data expires two years after the date the prime contractor accepts the last item from the subcontractor or supplier for use in the performance of the contract. The contract must specify which technical data is subject to deferred delivery. The contracting officer shall notify the contractor sufficiently in advance of the desired delivery date for such data to permit timely delivery.

(B) Deferred ordering. Use the clause at 252.227-7027, Deferred Ordering of Technical Data or Computer Software, when a firm requirement for a particular data item(s) has not been established prior to contract award but there is a potential need for the data. Under this clause, the contracting officer may order any data that has been generated in the performance of the contract or any subcontract thereunder at any time until three years after acceptance of all items (other than technical data or computer software) under the contract or contract termination, whichever is later. The obligation of subcontractors to deliver such data expires three years after the date the contractor accepts the last item under the subcontract. When the data are ordered, the delivery dates shall be negotiated and the contractor compensated only for converting the data into the prescribed form, reproduction costs, and delivery costs.

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The DFARS clauses seem to talk about data that had been identified all along, with a conscious decision in the RFP and contract to identify which data are subject to deferred delivery. They seem to offer a bit more precision in how to handle such things, but seem to be based on the premise that there is a scope (or spec or SOW or PWS) that is clear, well-defined, and biddable (perhaps more than usual).

A contractor might worry that the Government would use the FAR clause as an open-ended and unfunded blanket requirement to furnish anything the agency should have thought of at RFP time, but didn't, so the contractor didn't price it.

The Government might worry that a contractor should know full well what a complete documentation package comprises, but would hide behind the agency's lesser knowledge of the contractor's specialty, and seek an equitable adjustment for providing anything that was not explicitly called for in the contract.

Are these the two extremes that must be balanced by good faith, or is there more to it than that?

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Guest Vern Edwards
My first question is, what does "when considered appropriate mean"? The example they give in FAR 27.409(d) is very narrow, it seems. I can tell you, over the years, I have seen this FAR 52.227-16 clause put into almost every major IT acquisition contract I have worked on, and those projects were definitely not experimental, research type contracts.

FAR 27.409(d) explains itself. It says: "Insert the clause at 52.227-16, Additional Data Requirements, in solicitations and contracts involving experimental, developmental, research, or demonstration work (other than basic or applied research to be performed solely by a university or college where the contract amount will be $500,000 or less) unless all the requirements for data are believed to be known at the time of contracting and specified in the contract (see 27.406-2). This clause may also be used in other contracts when considered appropriate. For example, if the contract is for basic or applied research to be performed by a university or college, and the contracting officer believes the contract effort will in the future exceed $500,000, even though the initial award does not, the contracting officer may include the clause in the initial award." What don't you understand about that? Are you confused because people have used the clause inappropriately?

My second question is, this clause seems to say that the "additional data" at issue does not have to be listed as deliverable in the contract. But again, from my real life experience, I have seen the Government try to invoke the FAR 52.227-16 clause for additional ordering of data, and the contractor's response is to say, it was not listed as a deliverable, so we are not going to deliver it unless you pay us for it's value. The only way the Government can force the contractor to cooperate is to proactively litigate and sue the contractor in federal court to get them to cough up the data. As we all know, litigation could take years, and is a very time-consuming process. Most agencies won't fight this battle, they will just pay for the value of the data, which seems like having to pay for it again. So how do we prevent this?

How do you prevent what? Refusal to deliver or paying unnecessarily? Refusal to deliver would be a breach of contract. You can't prevent that, you can only take action to secure the government's rights after it has happened. As for paying unnecessarily, the way to prevent that is not to do it.

Again, the clause explains itself and is clear. The additional data do not have to be identified in the contract. If the government could identify the data in advance it wouldn't need the additional data clause. The only thing the government has to pay for when ordering additional data is "for converting the data into the prescribed form, for reproduction, and for delivery."

Refusal to deliver in accordance with the the terms of the contract would be a breach. Are you saying that you don't know how to handle that? First, if the contractor refused the CO should write a letter asserting a claim for the data. See the definition of claim in FAR 2.101. If the contractor refused, the contracting officer could declare the contractor to be in breach and demand payment of damages in a sum certain. That would establish a contract debt pursuant to FAR 32.601(a)(2) and (B)(9). If the contractor refused to pay, the CO should then follow the procedures for debt collection in FAR Subpart 32.6, including withholding of payment. It would be up to the contractor to litigate, by filing an appeal with a board of the Court of Federal Claims. A competent CO should know how to handle this.

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Vern ? I agree with what you are saying, but in practice, this is very difficult, most agencies won?t pursue breach of contract litigation. They will just sole source to the contractor with the justification that the incumbent contractor owns the source code and it is not available from any other source.

Then, for the recompete acquisition planning, the agency finds that it will have to structure the Statement of Work in such a way that the potential pool of offerors can "start from scratch" to develop new software, and this time, the contract will make the source code a deliverable. But then what happens is that, the incumbent contractor also bids, and since he does not have to start from scratch, the price of his proposal is the lowest, and no matter what the evaluation criteria, price is always a factor, so the agency may, at that point end up awarding to the incumbent. Even though it seems like the agency wins in the end by finally getting the source code under the terms of the new contract, in my view, this is still the agency "paying twice" for the source code it was entitled to in the original contract.

I have talked to my counterparts at DOD/Navy, DHS, DOJ, and some other civilian Departments, and they all have horror stories that follow this fact pattern. All of them made the same decision to not pursue the refusal to comply with the Additional Ordering Requirements clause as a breach of contract, and all for the same reason: litigation is too costly and time-consuming.

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Guest Vern Edwards

1. I doubt that you know what most agencies do. It's more likely that you know what some offices in some agencies did in the past.

2. If you're talking about a software development project, then application of the additional data clause to buy source code is dubious. It seems to me that you ought to know at the outset whether or not you want to buy source code. Deciding at a later time that you want to order the source code strikes me as asking for a dispute. Also, see FAR 27.406-2( c). If you're not talking about software development, what are you talking about?

3. If you're talking a software development project, what do "recompete" and "incumbent contractor" mean? How do you have an incumbent and a recompete for a software development project?

4. It strikes me that you are working with some incompetent people.

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Vern wrote:

3. If you're talking a software development project, what do "recompete" and "incumbent contractor" mean? How do you have an incumbent and a recompete for a software development project? If you're not talking about software development, what are you talking about?

Once the software is developed, it requires maintenance, so that is what I meant by "recompete." You are right, "recompete" does not make sense here, that is the wrong term. But that is the word everyone I worked with used, and I was the new person, so I didn't argue.

If somehow the contract history is messed up, which is when I always came on the scene hired as new employee to deal with the issue, where the government did not identify the source code as a deliverable at contract formation, if the "Additional Ordering Requirement" approach did not work, the contractor was obstinate, then the agency ended up having to start over and pay on a new contract for software development, this time, with the correct data rights and data delivery clauses and identified deliverables.

Thanks to everyone for their insights and advice.

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Guest Vern Edwards
If somehow the contract history is messed up, which is when I always came on the scene hired as new employee to deal with the issue, where the government did not identify the source code as a deliverable at contract formation, if the "Additional Ordering Requirement" approach did not work, the contractor was obstinate, then the agency ended up having to start over and pay on a new contract for software development, this time, with the correct data rights and data delivery clauses and identified deliverables.

Emphasis added.

That is why so many Americans distrust and even hate government, don't want government involved with health care, or anything else, for that matter, and are looking to reduce pay and benefits for government employees. Tolerance for incompetence is much too high in government and something ought to be done about it.

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