Must Non-Disclosure Agreements (NDAs) be incorporated into the contract?

[govt2310]

DFARS 227.7103-7 Use and non-disclosure agreement contains a template for a Non-Disclosure Agreement (NDA). But it says nothing about requiring the CO to incorporate the NDA into the contract between the federal agency and the contractor.

The way the NDA template is written, it gives rights to the other contractor whose proprietary information will be "accessed" by the contractor who signs the NDA.

But it really doesn't seem to give the federal agency (DOD) any rights to say, if you breach the NDA, that is a material breach of the contract. In order to be a material breach of the contract, doesn't the NDA have to be "incorporated" into the contract?

[ji20874]

If one contractor violates its NDA with another party, they can settle their dispute in civil court. It isn't necessary for the Government to referee.

Even so, para. ( a )( 1 ) of the clause at DFARS 227.7103-7 gives the Government all the protection it needs -- if the contractor violates its NDA, it has also violated para. ( a )( 1 ).

It is uncecessary and imprudent to incorporate the signed NDAs into the contract -- the contract is between the Government and the prime contractor, and that contract has the NDA template -- the NDAs are between the prime contractor and other parties.

[Jonfucius]

I agree with jj20874. Signed NDAs should not be included in the actual contract. Template (blank) NDAs should be incorporated either through the DFARS clause or as an attachment / continuation page in the contract.

I do have a question for jj20874: Should signed NDAs be retained as part of the contract file? That is to say, not within the SF 1449 (or other format), but as a separate tab?

[ji20874]

I don't think I would want them in my contract file. I have never tried to collect them.

[govt2310]

Open FAR Case 2011-01 concerns OCIs and Contractor Access to Sensitive Information. The FAR Council issued a Proposed Rule to change the FAR on these areas back in April 2011. It looks like their Proposed New FAR Clause would address Disclosure parameters and require Non-Disclosure Agreements (NDAs) signed by the contractor's employees, but those NDAs are not required to be put into the Contract. We'll see what the Final Rule looks like whenever it comes out.