Grumman Corporation Computer Software Development Costs and Licensing Fees Paid by the Government

PSAD-79-69: Published: May 18, 1979. Publicly Released: May 18, 1979.

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According to Defense Acquisition Regulations, the government is to have unlimited rights in computer software required to be developed under or generated as a necessary part of performing a government contract. No license fees payment is to be made where the government has obtained unlimited rights.

The government paid $1,858,000 for the use of special-purpose computer software packages called Telescope 340, Telescope 350, and TeleDynamic, even though these packages had been developed primarily at Government expense. Additionally, these packages were acquired with restricted rights. This occurred because the Defense Acquisition Regulations did not provide adequate guidance on ownership rights in computer software developed under a government contract and because contracting officials did not enforce certain provisions of the acquisition regulations. In addition, the regulations provide no guidance about the government's rights in computer software developed for support of government work and indirectly charged to government contracts. The government also paid license fees and costs on software so developed and charged by Grumman Data and Grumman Aerospace.

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