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THESE LATTER ISSUES WILL BE ADDRESSED IN DOD'S SUPPLEMENT TO THE FAR.). THIS IS FAR CASE NO. 85-39. WE HAVE TWO COMMENTS ON THE PROPOSAL. THUS CREATING UNCERTAINTY AS TO (1) WHEN DATA OR SOFTWARE MAY BE CONSIDERED "DEVELOPED" AND (2) WHETHER AND TO WHAT EXTENT DEVELOPMENT THAT HAS BEEN FUNDED IN PART BY THE GOVERNMENT MAY BE CONSIDERED TO HAVE BEEN "AT PRIVATE EXPENSE.". WHAT IS INCLUDED. NOR IS IT READILY APPARENT TO US WHAT THE CONTRACTOR WOULD BE REQUIRED TO FURNISH UNDER THE CLAUSE AS PROPOSED.

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B-219923, OCT 11, 1985, OFFICE OF GENERAL COUNSEL

FEDERAL ACQUISITION REGULATION - PROPOSED REVISION DIGEST: GAO COMMENTS ON A PROPOSAL TO REVISE FEDERAL ACQUISITION REGULATION (FAR) SUBPART 27.4 CONCERNING RIGHTS IN DATA AND COPYRIGHTS AND TO ADD AT FAR SEC. 52.227-14, A RIGHTS IN DATA-- GENERAL CLAUSE, BY SUGGESTING (1) THAT CONSIDERATION BE GIVEN TO DEFINING THE PHRASE "DEVELOPED AT PRIVATE EXPENSE" AND (2) THAT THE DEFINITION OF "FORM, FIT AND FUNCTION DATA" BE REVISED TO INDICATE MORE SPECIFICALLY WHAT THE GOVERNMENT EXPECTS TO RECEIVE WHEN IT REQUIRES THAT SUCH DATA BE DELIVERED IN CONNECTION WITH THE ACQUISITION OF COMPUTER SOFTWARE.

MS. MARGARET A. WILLIS: FAR SECRETARIAT GENERAL SERVICES ADMINISTRATION

THIS RESPONDS TO YOUR LETTER OF AUGUST 15, 1985, REQUESTING OUR COMMENTS ON A PROPOSAL TO AMEND FEDERAL ACQUISITION REGULATION (FAR) SUBPART 27.4, IMPLEMENTING FOR ALL EXECUTIVE AGENCIES THE POLICIES OF THE SMALL BUSINESS AND FEDERAL PROCUREMENT COMPETITION ENHANCEMENT ACT OF 1984, PUB.L. 98-577, AND THE DEPARTMENT OF DEFENSE AUTHORIZATION ACT, 1985, PUB.L. 98-525, CONCERNING BOTH GOVERNMENT AND CONTRACTOR INTERESTS IN DATA AND COPYRIGHTS. THE PROPOSAL ALSO PRESCRIBES DETAILED POLICIES, PROCEDURES, INSTRUCTIONS, AND CONTRACT CLAUSES FOR CIVILIAN AGENCIES WITH RESPECT TO RIGHTS IN DATA AND COPYRIGHTS AND THE ACQUISITION OF DATA. (FOR THE DEPARTMENT OF DEFENSE (DOD), THESE LATTER ISSUES WILL BE ADDRESSED IN DOD'S SUPPLEMENT TO THE FAR.) THIS IS FAR CASE NO. 85-39.

WE HAVE TWO COMMENTS ON THE PROPOSAL. FIRST, UNDER THE PROPOSED CLAUSE AT FAR SEC. 52.227-14, RIGHTS IN DATA-- GENERAL, THE GOVERNMENT GENERALLY WOULD OBTAIN UNLIMITED RIGHT IN DATA DELIVERED UNDER A CONTRACT, UNLESS THE CONTRACT PROVIDED OTHERWISE FOR "LIMITED RIGHTS DATA" OR "RESTRICTED COMPUTER SOFTWARE," TERMS WHICH THE CLAUSE DEFINES, IN ESSENCE, AS PROPRIETARY MATERIAL "DEVELOPED AT PRIVATE EXPENSE." THE CLAUSE DOES NOT DEFINE "DEVELOPED AT PRIVATE EXPENSE," HOWEVER, THUS CREATING UNCERTAINTY AS TO (1) WHEN DATA OR SOFTWARE MAY BE CONSIDERED "DEVELOPED" AND (2) WHETHER AND TO WHAT EXTENT DEVELOPMENT THAT HAS BEEN FUNDED IN PART BY THE GOVERNMENT MAY BE CONSIDERED TO HAVE BEEN "AT PRIVATE EXPENSE." IN THIS CONNECTION, WE NOTE THAT THE ISSUE OF MIXED GOVERNMENT-CONTRACTOR FUNDING HISTORICALLY HAS BEEN PARTICULARLY TROUBLESOME. SEE, E.G., MEGAPULSE, INC., B-194986, JAN. 15, 1980, 80-1 CPD PARA. 42. DOD HAS PROPOSED A DEFINITION OF "DEVELOPED AT PRIVATE EXPENSE" FOR INCLUSION IN THE RIGHTS IN TECHNICAL DATA AND COMPUTER SOFTWARE CLAUSE APPLICABLE TO DEFENSE AGENCIES. 50 FED.REG. 36,888 (1985). WE BELIEVE THAT IN ORDER TO REDUCE AREAS OF UNCERTAINTY, AND TO PROMOTE CONSISTENCY IN THE INTERPRETATION OF THE GOVERNMENT'S RIGHTS IN DATA CLAUSES, CONSIDERATION SHOULD BE GIVEN TO INCLUDING IN THE RIGHTS IN DATA CLAUSES APPLICABLE TO CIVILIAN AGENCIES A DEFINITION OF "DEVELOPED AT PRIVATE EXPENSE."

OUR SECOND COMMENT INVOLVES THE PROPOSED DEFINITION OF "FORM, FIT AND FUNCTION DATA" AS IT RELATES TO COMPUTER SOFTWARE. THE RIGHTS IN DATA-- GENERAL CLAUSE AT PROPOSED FAR SEC. 52.227-14 PROVIDES AT PARAGRAPH (G)(1) THAT WHEN A CONTRACT SPECIFIES RESTRICTED COMPUTER SOFTWARE TO BE DELIVERED UNDER THE CONTRACT, AND THE CONTRACTOR WISHES TO CONTINUE PROTECTION OF THIS DATA, THE CONTRACTOR MAY WITHHOLD THE DATA AND FURNISH FORM, FIT AND FUNCTION DATA INSTEAD. THE CLAUSE DEFINES "FORM, FIT AND FUNCTION DATA" AS, IN ESSENCE, DATA THAT DESCRIBE THE PHYSICAL AND FUNCTIONAL CHARACTERISTICS OF THE ITEM BEING PROCURED. THE DEFINITION ALSO PROVIDES THAT FOR COMPUTER SOFTWARE, THE TERM EXCLUDES "THE SOURCE CODES, ALGORITHM, PROCESS, FORMULAE, AND FLOW CHARTS OF THE SOFTWARE." THE DEFINITION DOES NOT INDICATE, HOWEVER, WHAT IS INCLUDED, NOR IS IT READILY APPARENT TO US WHAT THE CONTRACTOR WOULD BE REQUIRED TO FURNISH UNDER THE CLAUSE AS PROPOSED. WE SUGGEST THAT THE PROPOSED CLAUSE BE REVISED TO INDICATE MORE SPECIFICALLY WHAT THE GOVERNMENT EXPECTS TO RECEIVE BY REQUIRING A SOFTWARE CONTRACTOR TO DELIVER FORM, FIT AND FUNCTION DATA.

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