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Educational Institution Subcontractor and Prime Flow Down Clauses

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Knowledgeable Ones, I humbly beseech thee:

Would greatly appreciate confirmation that my thought process is complete on this issue of flow down clauses and Educational Institutions, and I have not left any possible avenue of resolution unexplored. Thank you!

Scenario: I work for a large Corporation. Our Subcontractor is an Educational Institution (EI). They have taken numerous exceptions to the Prime Contract terms and conditions, specifically around the rights to publication (permitting the EI to publish its research performed under the subcontract, whereas the terms currently require prior Government approval to publish) as well as asking that FAR Alternate clauses specific to Educational Institutions be incorporated in lieu of those in the Prime Contract, for example 52.227-14 Alt. IV.

We had requested for the exceptions indicated by the EI in our task order proposal to the Government, but the Governmetn declined to grant these exceptions on the grounds that the Government lacked privity of contract with the sub and we were asked to revise our proposal to remove these exceptions.

Conclusion: After research, I conclude that the Government is correct in its assessment. Government cannot add terms to the Prime Contract that do not apply to its business arrangement with the Prime Contractor. Similarly, we cannot flow down terms to the EI's Subcontract that do not exist in our Prime Contract, nor could we add terms that would contradict or conflict with those in our Prime Contract. This leaves us with the option of either pressing the EI to accept the terms of the Prime Contract, or abandoning the subcontract relationship. (For what it is worth, the Government client indicated to me in a phone call on this matter that in the Government's experience EI Primes had objected to restrictions on publication requiring Government consent, but in every case they ultimately agreed to the Government's terms on publication. In those cases presumably the alternate FAR clauses were not an issue).

Coming to that conclusion does leave me at somewhat of a loss. If the above is correct, it would appear to make EI subcontracting very problematic where the Prime is not an EI. I am not intimately familiar with the differences in the FAR clauses for EIs, but I assume they exist because there is difficulty applying the non-EI clauses to the unique circumstances of an EI (which is what we are being required to do under the circumstances).

I'm sure these are not new questions, but I would appreciate any thoughts on the matter!

Graciously,

-MuchToLearn

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MtL,

I've always thought a prime contractor had the ability -- nay, the duty -- to tailor clauses appropriately for the circumstances of its subcontracting. I'm not seeing how this situation is different....

H2H

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If the government is reserving prior approval to publish anything produced under the contract, doesn't MTL have to impose that requirement on his or her subcontractor?

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Not if that reservation conflicts with applicable statute.

But I don't want to argue cases. I want to assert the general principle I articulated above. Agree or disagree?

H2H

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MTL, I think you are operating from a false premise. The only clauses from a prime contract that must be included in a subcontract are those clauses that state they must be included in a subcontract, assuming any required prerequisites, such as value of the subcontract, have been met. Otherwise, it is a matter of negotiation as to what clauses go into a subcontract. For example, a prime contract and subcontract do not have to be priced in the same way. Thus, you can have a cost reimbursement prime contract and a firm fixed price subcontract. You certainly would not include prime contract clauses that related to cost reimbursement contracts in a firm fixed price subcontract.

As for any FAR versions of clauses that are to be included in contracts with EIs, remember, those clauses are to be used by the government when entering into a prime contract with an EI. That doesn't mean that a commercial prime has to use those versions in a subcontract with an EI.

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Thanks everyone!

I agree with Retreadfed that I am operating from that false premise. I know this basic principle, but for some reason didn't see it as dispositive here.

The specific publication clause does not state it needs to be flowed down. Is the answer really that simple, though? The Government prohibits the Prime from publishing information without the CO's prior written consent. But because it is not required to be flowed down, subs are free to disregard? **EDIT: (provided the Prime either neglected to flow it down or elected not to do so?)

I also agree with H2H concerning the general principle that (excluding required flowdowns) Primes need to tailor the business deal with the subs appropriate to the Prime-Sub relationship and the role of the Subcontractor during execution. However, for the same reason stated above, can Prime contract terms effectively be circumvented in a Subcontract?

Assuming the answer is "Yes", I just can't see how it was the intended result (though it may be technically correct).

-MuchToLearn

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I've provided the text of the clauses below.

DISSEMINATION OF CONTRACT INFORMATION (OCT 1994)

The Contractor shall not publish, permit to be published, or distribute for public consumption, any information, oral or written, concerning the results or conclusions made pursuant to the performance of this contract, without the prior written consent of the Contracting Officer. Two copies of any material proposed to be published or distributed shall be submitted to the Contracting Officer. (Clause appears in IDIQ)

PROPRIETARY RIGHTS IN REPORTS All property rights, including publication rights, in progress reports and final reports produced by the Contractor in connection with this contract provided for hereunder shall rest in the Government. (Clause appears in both the IDIQ and Task Order terms)

-MuchToLearn

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It certainly seems to me that, while you aren't legally required to include this in your subcontract, you can't comply with your own contract obligation unless you do

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It certainly seems to me that the contract clause is trumped by P.L. 96-517, the Bayh-Dole Act of 1980. Accordingly, it is a nullity when applied to universities, small businesses, or not-for-profit institutions.

But then, again, I'm not a lawyer.

H2H

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It certainly seems to me that the contract clause is trumped by P.L. 96-517, the Bayh-Dole Act of 1980. Accordingly, it is a nullity when applied to universities, small businesses, or not-for-profit institutions.

But then, again, I'm not a lawyer.

H2H

MTL, what is the purpose of the research that the Educational Institution would perform?

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As a summary, the research is not delving into anything new - the requirement is to research the existing "State-of-the-Practice" using marketing and technology sources, and other publicly available resources. This includes gathering information through peer exchanges.

The information will be distilled into two informational briefs / primer documents.

MtL

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EIs do not fit really very well into FAR 19.7 but do it. would agree with contractor100.

Did I miss something here? Hard to thumb through this thread on my cell phone. Where did 19.7 come into play?

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As a summary, the research is not delving into anything new - the requirement is to research the existing "State-of-the-Practice" using marketing and technology sources, and other publicly available resources. This includes gathering information through peer exchanges.

The information will be distilled into two informational briefs / primer documents.

MtL

Pardon my stupidity, but what that have to do with PL 96-517, which covers patents and trademarks?

For that matter, I wonder why the government would object to publishing the research. Just speaking rhetorically.

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Posted Today, 12:56 PM

It certainly seems to me that the contract clause is trumped by P.L. 96-517, the Bayh-Dole Act of 1980. Accordingly, it is a nullity when applied to universities, small businesses, or not-for-profit institutions.

But then, again, I'm not a lawyer.

H2H

Agree w/H2H. Have been a prime w/EDU's many times with research work. Discuss thoroughly with all parties, up and downstream. Flowdown the specific subpart, and, for what it's worth, I always notify IN WRITING, the GVT Contracts lead and cc: the sponsor and /or COR. Solid communication builds longterm relationships and minimizes surprises.

BC

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I feel this thread is going in a few different directions here!

I am not certain P.L. 96-517, the Bayh-Dole Act of 1980 is a dispositive answer here given the scope of work, but I am far from even beginning to understand the Act and its interplay between restrictions on publication vs. rights in IP. This would certainly be the simplest answer, though. I've got a tentative discussion established with our Legal department to help explore the issue.

Joel, practically speaking, the Government will almost certainly not have any objection - the CO has (verbally!) assured me that there isn't a scenario he can envision for this task order where a request for publication would not be granted. However, the EI policies deem any reserved authority as to the final publishing decision to be unacceptable. My limited review of EI policies suggests this isn't uncommon - agency reviews appear to acceptable, and certain information can even be withheld, but the general rule is that nothing can ultimately stand in the way of publication.

Though I'm not sure this answers the question, my tentative plan is to ask the CO for advanced consent to publish the results of the "research", subject to the agency's review of the documentation for agency-sensitive or restricted release information. Under no circumstances do I want to establish a bad precedent, but here it seems everyone is in agreement but we cannot memorialize that agreement in writing...

-MtL

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Doesn't Bayh-Doyle cover patentability "any invention of the contractor that is conceived of or first actually reduced to practice in the performance of work under a funding agreement"? As opposed to the reporting of research results, or the copyright on reports?

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Doesn't Bayh-Doyle cover patentability "any invention of the contractor that is conceived of or first actually reduced to practice in the performance of work under a funding agreement"? As opposed to the reporting of research results, or the copyright on reports?

It seems that PL 96-517 isn't applicable to this scenario. But MTL makes good points. The prime is ultimately responsible to the government for the actions of its subcontractors under the contract . I like MTL's suggestion and hope that he is successful. Good luck.

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It certainly seems to me that the contract clause is trumped by P.L. 96-517, the Bayh-Dole Act of 1980. Accordingly, it is a nullity when applied to universities, small businesses, or not-for-profit institutions.

But then, again, I'm not a lawyer.

H2H

Which clause are you referring to? MTL listed two.

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Hi Don,

I was responding to Contractor100's post #9. I was referring to the same clause s/he was.

H2H

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