[Federal Register Volume 60, Number 98 (Monday, May 22, 1995)]
[Proposed Rules]
[Pages 27069-27074]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12849]



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DEPARTMENT OF ENERGY

48 CFR Part 970

RIN 1991-AA63


Acquisition Regulation; Technology Transfer Activities of 
Department of Energy (DOE) Management and Operating Contractors

AGENCY: Department of Energy.

ACTION: Proposed rule.

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SUMMARY: The Department of Energy (DOE) today proposes an amendment to 
codify DOE's implementation of its technology transfer mission for DOE 
laboratories (including weapon production facilities) operated by 
management and operating contractors. The National Competitiveness 
Technology Transfer Act of 1989 required that technology transfer be 
established as a mission of each Government-owned laboratory operated 
under contract by a non-Federal entity. The National Defense 
Authorization Act for Fiscal Year 1994 expanded the Stevenson-Wydler 
Technology Innovation Act of 1980 definition of laboratory to include 
weapon production facilities of the Department of Energy that are 
operated for national security purposes and are engaged in the 
production, maintenance, testing, or dismantlement of a nuclear weapon 
or its components. DOE is proposing to amend the Department of Energy 
Acquisition Regulation to specify that each new award for or renewal of 
an existing management and operating contract for the operation of a 
DOE laboratory or weapon production facility shall have technology 
transfer as a mission.
DATES: Written comments must be received by July 21, 1995.

ADDRESSES: Comments should be addressed to: Howard K. Mitchell, Policy 
Analyst, Office of Policy (HR-51), Office of the Deputy Assistant 
Secretary for Procurement and Assistance Management, Washington, D.C., 
20585, (202) 586-8190.

FOR FURTHER INFORMATION CONTACT: Howard K. Mitchell, (202) 586-8190.

SUPPLEMENTARY INFORMATION:
I. Background
II. Section by Section Analysis of the Proposed Rule
III. Procedural Requirements
A. Regulatory Review Under Executive Order 12866
B. Review Under Executive Order 12612
C. Review Under Executive Order 12778
D. Review Under the Regulatory Flexibility Act
E. Review Under the Paperwork Reduction Act
F. Review Under the National Environmental Policy Act (NEPA)
IV. Public Comments
V. Public Hearing

I. Background

    Under Section 644 of the Department of Energy Organization Act, 
Pub. L. 95-91 (42 U.S.C. 7254), the Secretary of Energy is authorized 
to prescribe such procedural rules and regulations as may be deemed 
necessary or appropriate to accomplish the functions vested in the 
position. Accordingly, the Department of Energy Acquisition Regulation 
was promulgated with an effective date of April 1, 1984, (49 FR 11922, 
March 28, 1984), 48 CFR chapter 9. With this rule, DOE is proposing an 
addition amending part 970 of the Department of Energy Acquisition 
Regulation to codify DOE's implementation of its technology transfer 
mission for DOE laboratories and weapon production facilities operated 
by management and operating contractors.
    Technology advancement is a key component in the growth of the 
United States industrial economy, and a strong industrial base is an 
essential element of national security. Further, there is a continuing 
need to enhance United States competitiveness in both domestic and 
international markets. DOE laboratories and weapon production 
facilities, operated by DOE management and operating contractors, have 
developed outstanding capabilities in a wide variety of advanced 
technologies and are staffed with scientists, engineers, technicians 
and other personnel associated with those technologies. The deployment 
of these resources to work with the private sector through cooperative 
efforts, consistent with the laboratory's or facility's program mission 
assignments, can make a substantial contribution to the competitive 
posture of United States industry.
    In recognition of such capabilities, Congress enacted the National 
Competitiveness Technology Transfer Act of 1989. This Act extended to 
Government-owned contractor-operated laboratories the same authority to 
enter into cooperative research and development agreements (CRADAs) 
which the Federal Technology Transfer Act of 1986 had given to 
Government-owned Government-operated laboratories and also provided for 
the protection from dissemination of certain types of information 
generated under CRADAs. Section 3133(d) of the Act required, by April 
30, 1990, each agency which had contracted with a non-Federal entity to 
operate a Government-owned laboratory to propose for inclusion in that 
laboratory's operating contract, appropriate contract provisions to 
implement the requirements of the Act. The National Competitiveness 
Technology Transfer Act of 1989, as amended by Sections 3134 and 3160 
of the National Defense Authorization Act for Fiscal Year 1994, 
established technology transfer as a mission for Government-owned, 
contractor-operated laboratories as well as for weapon production 
facilities. It also authorized such laboratories and weapon facilities 
to negotiate and award CRADAs with other Federal agencies, State and 
local governments, industrial organizations, public and private 
foundations, nonprofit organizations and other persons for the purposes 
of transferring technology and conducting research and development. 
Additionally, Sec. 3133(a)(7) of the Act allows certain types of 
information generated under CRADAs to be protected from disclosure 
under the Freedom of Information Act for a period of up to five years.
    The promulgation and use of a final version of a technology 
transfer contract clause for DOE laboratories and weapon production 
facilities operated by [[Page 27070]] management and operating 
contractors, which is proposed in this rulemaking, will minimize 
unnecessary differences in policies and procedural requirements among 
various laboratories and weapon production facilities. This is expected 
to benefit the prospective CRADA or other industrial participants by 
improving both the speed and certainty of the technology transfer 
process.
    The clause requires that the availability of technology transfer 
opportunities be well publicized with enough general detail to quickly 
attract private sector participants with the capabilities to fully 
exploit the technology's commercial applications while benefitting the 
U.S. economy. It requires that all aspects of the technology transfer 
program are handled to avoid real or perceived conflict of interest and 
that commercially valuable data, including marketing and financial 
data, are appropriately handled and protected. As required by the Act, 
the proposed rule requires that all new awards for or extensions of 
existing DOE laboratory or weapon production facility management and 
operating contracts will have technology transfer as a laboratory or 
facility mission.

II. Section-by-Section Analysis

    A detailed list of additions and changes follows.
    1. The authority citation for part 970 is revised to add a 
reference to the authorities provided by the National Competitiveness 
Technology Transfer Act of 1989, as amended by Sections 3134 and 3160 
of Public Law 103-160.
    2. The clause for a laboratory or weapon production facility 
management and operating contract is added as a new section 970.5204-X, 
Technology Transfer Mission.
    3. A new subpart 970.73, Technology Transfer, and a new section 
thereunder, 970.7310, General, are added to summarize the DOE 
technology transfer mission and its conduct in DOE owned-facilities. 
Two additional new sections, 970.7320, Policy, and 970.7330, Contract 
Clause, are added to describe the circumstances when technology 
transfer is to be made a contract requirement of a management and 
operating contract for the operation of a laboratory or weapon 
production facility and the clause reference to be used in a 
solicitation and contract award.

III. Procedural Requirements

A. Regulatory Review Under Executive Order 12866

    Today's regulatory action has been determined not to be a 
``significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993). 
Accordingly, today's action was not subject to review under the 
Executive Order by the Office of Information and Regulatory Affairs.

B. Review Under Executive Order 12612

    Executive Order 12612 (52 FR 41285, October 30, 1987) requires that 
regulations, rules, legislation, and any other policy actions be 
reviewed for any substantial direct effects on States, on the 
relationship between the national government and the States, or in the 
distribution of power and responsibilities among various levels of 
government. If there are sufficient substantial direct effects, then 
the Executive Order requires preparation of a federalism assessment to 
be used in all decisions involved in promulgating and implementing a 
policy action.
    Today's proposed rule, when finalized, will revise certain policy 
and procedural requirements. However, DOE has determined that none of 
the revisions will have a substantial direct effect on the 
institutional interests or traditional functions of the States.
C. Review Under Executive Order 12778

    Section 2 of Executive Order 12778 instructs each agency to adhere 
to certain requirements in promulgating new regulations and reviewing 
existing regulations. These requirements, set forth in sections 2(a) 
and (b)(2), include eliminating drafting errors and needless ambiguity, 
drafting the regulations to minimize litigation, providing clear and 
certain legal standards for affected conduct, and promoting 
simplification and burden reduction. Agencies are also instructed to 
make every reasonable effort to ensure that the regulation: specifies 
clearly any preemptive effect, effect on existing Federal law or 
regulation, and retroactive effect; describes any administrative 
proceedings to be available prior to judicial review and any provisions 
for the exhaustion of such administrative proceedings; and defines key 
terms. DOE certifies that today's proposal meets the requirements of 
sections 2(a) and (b) of Executive Order 12778.

D. Review Under the Regulatory Flexibility Act

    This proposed rule was reviewed under the Regulatory Flexibility 
Act of 1980, Pub. L. 96-354, which requires preparation of a regulatory 
flexibility analysis for any rule which is likely to have significant 
economic impact on a substantial number of small entities. This 
proposed rule will have no impact on interest rates, tax policies or 
liabilities, the cost of goods or services, or other direct economic 
factors. It will also not have any indirect economic consequences, such 
as changed construction rates. DOE certifies that this proposed rule 
will not have a significant economic impact on a substantial number of 
small entities and, therefore, no regulatory flexibility analysis has 
been prepared.

E. Review Under the Paperwork Reduction Act

    No new information collection or recordkeeping requirements are 
imposed by this proposed rulemaking. Accordingly, no OMB clearance is 
required under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et 
seq.).

F. Review Under the National Environmental Policy Act (NEPA)

    DOE has concluded that promulgation of this rule falls into a class 
of actions (categorical exclusion A5) that are categorically excluded 
from NEPA review because they would not individually or cumulatively 
have significant impact on the human environment, as determined by the 
Department's regulations (10 CFR Part 1021, Subpart D) implementing the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321, 4331-4335, 
4341-4347 (1976)). Therefore, this rule does not require an 
environmental impact statement or an environmental assessment pursuant 
to NEPA.

IV. Public Comments

    Interested persons are invited to participate by submitting data, 
views, or arguments with respect to the proposed Department of Energy 
Acquisition Regulation amendments set forth in this notice. Three 
copies of written comments should be submitted to the address indicated 
in the ADDRESSES section of this notice. All comments received will be 
available for public inspection in the DOE Reading Room, Room 1E-190, 
Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585, 
between the hours of 9 a.m. and 4 p.m., Monday through Friday, except 
Federal holidays. All written comments received by the date indicated 
in the DATES section of this notice and all other relevant information 
in the record will be carefully assessed and fully considered prior to 
publication of the proposed amendment as a final rule. Any information 
considered to be confidential must be so identified and submitted in 
writing, one copy only. DOE reserves the right to determine the 
confidential status of the information [[Page 27071]] and to treat it 
according to our determination (See 10 CFR 1004.11).

V. Public Hearing

    The Department has concluded that this proposed rule does not 
involve a substantial issue of fact or law and that the proposed rule 
should not have substantial impact on the nation's economy or a large 
number of individuals or businesses. Therefore, pursuant to Pub. L. 95-
91, the DOE Organization Act, and the Administrative Procedure Act (5 
U.S.C. 553), the Department does not plan to hold a public hearing on 
this proposed rule.

List of Subjects in 48 CFR Part 970

    Government procurement.

    Issued in Washington, DC on May 17, 1995.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.

    For the reasons set forth in the preamble 48 CFR Part 970 is 
proposed to be amended as set forth below:

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

    1. The authority citation for Part 970 is revised to read as 
follows:

    Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C. 
2201), Sec. 644 of the Department of Energy Organization Act, Pub. 
L. 95-91 (42 U.S.C. 7254), Sec. 201 of the Federal Civilian Employee 
and Contractor Travel Expenses Act of 1985 (41 U.S.C. 420), Sec. 
1534 of the Department of Defense Authorization Act, 1986, Pub. L. 
99-145 (42 U.S.C. 7256a), as amended; and Sec. 3131, 3132, 3133, and 
3157 of the National Competitiveness Technology Transfer Act of 
1989, Pub. L. 101-189 (15 U.S.C. 3710 et seq.), and as amended by 
Sec. 3134 and 3160 of Pub. L. 103-160.

    2. Section 970.5204-X, Technology Transfer Mission, is added to 
read as follows:


970.5204-X  Technology transfer mission.

    As prescribed in subpart 970.73, insert the following clause:

Technology Transfer Mission (Xxx, 1995)

    This clause has as its purpose implementation of the National 
Competitiveness Technology Transfer Act of 1989 (Sections 3131, 
3132, 3133, and 3157 of Pub. L. 101-189 and as amended by Pub. L. 
103-160, Sections 3134 and 3160). The Contractor shall conduct 
technology transfer activities with a purpose of providing benefit 
from Federal research to U.S. industrial competitiveness.
    (a) Authority. (1) In order to ensure the full use of the 
results of research and development efforts of, and the capabilities 
of, the Laboratory, technology transfer, including Cooperative 
Research and Development Agreements (CRADAs), is established as a 
mission of the Laboratory consistent with the policy, principles and 
purposes of Sections 11(a)(1) and 12(g) of the Stevenson-Wydler 
Technology Innovation Act of 1980, as amended (15 U.S.C. 3710a); 
Section 3132(b) of Pub. L. 101-189, Sections 3134 and 3160 of P.L. 
103-160, and of Chapter 38 of the Patent Laws (35 U.S.C. 200 et 
seq.); Section 152 of the Atomic Energy Act of 1954, as amended (42 
U.S.C. 2182); Section 9 of the Federal Nonnuclear Energy Research 
and Development Act of 1974 (42 U.S.C. 5908); and Executive Order 
12591 of April 10, 1987.
    (2) In pursuing the technology transfer mission, the Contractor 
is authorized to conduct activities including but not limited to: 
identifying and protecting Intellectual Property made, created or 
acquired at or by the Laboratory; negotiating licensing agreements 
and assignments for Intellectual Property made, created or acquired 
at or by the Laboratory that the Contractor controls or owns; 
bailments; negotiating all aspects of and entering into CRADAs; 
providing technical consulting and personnel exchanges; conducting 
science education activities and reimbursable Work for Others (WFO); 
providing information exchanges; and making available laboratory or 
weapon production user facilities. It is fully expected that the 
Contractor shall use all of the mechanisms available to it to 
accomplish this technology transfer mission, including, but not 
limited to, CRADAs, user facilities, WFO, science education 
activities, consulting, personnel, assignments, and licensing in 
accordance with this clause.
    (b) Definitions. (1) Contractor's Laboratory Director means the 
individual who has supervision over all or substantially all of the 
Contractor's operations at the Laboratory.
    (2) Intellectual Property means patents, trademarks, copyrights, 
mask works, protected CRADA information, and other forms of 
comparable property rights protected by Federal Law and other 
foreign counterparts.
    (3) Cooperative Research and Development Agreement (CRADA) means 
any agreement entered into between the Contractor as operator of the 
Laboratory, and one or more parties including at least one non-
Federal party under which the Government, through its laboratory, 
provides personnel, services, facilities, equipment, intellectual 
property, or other resources with or without reimbursement (but not 
funds to non-Federal parties) and the non-Federal parties provide 
funds, personnel, services, facilities, equipment, intellectual 
property, or other resources toward the conduct of specified 
research or development efforts which are consistent with the 
missions of the Laboratory; except that such term does not include a 
procurement contract, grant, or cooperative agreement as those terms 
are used in sections 6303, 6304, and 6305 of Title 31 of the United 
States Code.
    (4) Joint Work Statement (JWS) means a proposal for a CRADA 
prepared by the Contractor, signed by the Contractor's Laboratory 
Director or designee which describes the following:
    (i) Purpose;
    (ii) Scope of Work which delineates the rights and 
responsibilities of the Government, the Contractor and Third 
Parties, one of which must be a non-Federal party;
    (iii) Schedule for the work; and
    (iv) Cost and resource contributions of the parties associated 
with the work and the schedule.
    (5) Assignment means any agreement by which the Contractor 
transfers ownership of Laboratory Intellectual Property, subject to 
the Government's retained rights.
    (6) Laboratory Biological Materials means biological materials 
capable of replication or reproduction, such as plasmids, 
deoxyribonucleic acid molecules, ribonucleic acid molecules, living 
organisms of any sort and their progeny, including viruses, 
prokaryote and eukaryote cell lines, transgenic plants and animals, 
and any derivatives or modifications thereof or products produced 
through their use or associated biological products, made under this 
contract by Laboratory employees or through the use of Laboratory 
research facilities.
    (7) Bailment means any agreement in which the Contractor permits 
the commercial or non-commercial transfer of custody, access or use 
of Laboratory Biological Materials for a specified purpose of 
technology transfer or research and development, including without 
limitation evaluation, and without transferring ownership to the 
bailee.
    (c) Allowable Costs. (1) The Contractor shall establish and 
carry out its technology transfer efforts through appropriate 
organizational elements consistent with the requirements for an 
Office of Research and Technology Applications (ORTA) pursuant to 
paragraphs (b) and (c) of Section 11 of the Stevenson-Wydler 
Technology Innovation Act of 1980, as amended (15 U.S.C. 3710). The 
costs associated with the conduct of technology transfer through the 
ORTA including activities associated with obtaining, maintaining, 
licensing, and assigning Intellectual Property rights, increasing 
the potential for the transfer of technology, and the widespread 
notice of technology transfer opportunities, shall be deemed 
allowable provided that such costs meet the other requirements of 
the allowable costs provisions of this Contract. In addition to any 
separately designated funds, these costs in any fiscal year shall 
not exceed an amount equal to 0.5 percent of the operating funds 
included in the Federal research and development budget (including 
Work For Others) of the Laboratory for that fiscal year without 
written approval of the Contracting Officer.
    (2) The Contractor's participation in litigation to enforce or 
defend Intellectual Property claims incurred in its technology 
transfer efforts shall be as provided in the clause entitled 
``Litigation and Claims'' of this Contract.
    (d) Conflicts of Interest--Technology Transfer. The Contractor 
shall have implementing procedures that seek to avoid employee and 
organizational conflicts of interest, or the appearance of conflicts 
of interest, in the conduct of its technology 
[[Page 27072]] transfer activities. Such implementing procedures 
shall be provided to the Contracting Officer for review and approval 
within sixty (60) days after execution of this contract. The 
Contracting Officer shall have thirty (30) days thereafter to 
approve or require specific changes to such procedures. Such 
implementing procedures shall include procedures to:
    (1) Inform employees of and require conformance with standards 
of conduct and integrity in connection with the CRADA activity in 
accordance with the provisions of paragraph (n)(5) of this clause;
    (2) Review and approve employee activities so as to avoid 
conflicts of interest arising from commercial utilization activities 
relating to Contractor-developed Intellectual Property;
    (3) Conduct work performed using royalties so as to avoid 
interference with or adverse effects on ongoing DOE projects and 
programs;
    (4) Conduct activities relating to commercial utilization of 
Contractor-developed Intellectual Property so as to avoid 
interference with or adverse effects on user facility or WFO 
activities of the Contractor;
    (5) Conduct DOE-funded projects and programs so as to avoid the 
appearance of conflicts of interest or actual conflicts of interest 
with non-Government funded work;
    (6) Notify the Contracting Officer with respect to any new work 
to be performed or proposed to be performed under the Contract for 
DOE or other Federal agencies where the new work or proposal 
involves Intellectual Property in which the Contractor has obtained 
or intends to request or elect title;
    (7) Except as provided elsewhere in this Contract, obtain the 
approval of the Contracting Officer for any licensing of or 
assignment of title to Intellectual Property rights by the 
Contractor to any business or corporate affiliate of the Contractor;
    (8) Obtain the approval of the Contracting Officer prior to any 
assignment, exclusive licensing, or option for exclusive licensing, 
of Intellectual Property to any person who has been a Laboratory 
employee within the previous two years or to the company in which he 
or she is a principal; and
    (9) Notify non-Federal sponsors of WFO activities, or non-
Federal users of user facilities, of any relevant Intellectual 
Property interest of the Contractor prior to execution of WFOs or 
user agreements.
    (10) Notify DOE prior to evaluating a proposal submitted by a 
third party or DOE, when the subject matter of the proposal involves 
an elected or waived subject invention or one in which the 
Contractor intends to elect to retain title.
    (e) Fairness of Opportunity. In conducting its technology 
transfer activities, the Contractor shall prepare procedures and 
take all reasonable measures to ensure widespread notice of 
availability of technologies suited for transfer and opportunities 
for exclusive licensing and joint research arrangements. The 
requirement to widely disseminate the availability of technology 
transfer opportunities does not apply to a specific application 
originated outside of the Laboratory and by entities other than the 
Contractor.
    (f) U.S. Industrial Competitiveness. (1) In the interest of 
enhancing U.S. Industrial Competitiveness, the Contractor shall, in 
its licensing and assignments of Intellectual Property, give 
preference in such a manner as to enhance the accrual of economic 
and technological benefits to the U.S. domestic economy. The 
Contractor shall consider the following factors in all of its 
licensing and assignment decisions:
    (i) Whether any resulting design and development will be 
performed in the United States and whether resulting products, 
embodying parts, including components thereof, will be substantially 
manufactured in the United States; or
    (ii) (A) Whether the proposed licensee or assignee has a 
business unit located in the United States and whether significant 
economic and technical benefits will flow to the United States as a 
result of the license or assignment agreement; and
    (B) In licensing any entity subject to the control of a foreign 
company or government, whether such foreign government permits 
United States agencies, organizations or other persons to enter into 
cooperative research and development agreements and licensing 
agreements, and has policies to protect United States Intellectual 
Property rights.
    (2) If the Contractor determines that neither of the conditions 
in paragraphs (f)(1) (i) or (ii) of this clause are likely to be 
fulfilled, the Contractor, prior to entering into such an agreement, 
must obtain the approval of the Contracting Officer. The Contracting 
Officer shall act on any such requests for approval within thirty 
(30) days.
    (3) The Contractor agrees to be bound by the provisions of 35 
U.S.C. 204.
    (g) Indemnity--Product Liability. In entering into written 
technology transfer agreements, including but not limited to, 
research and development agreements, licenses, assignments and 
CRADAs, the Contractor agrees to include in such agreements a 
requirement that the U.S. Government and the Contractor, except for 
any negligent acts or omissions of the Contractor, be indemnified 
for all damages, costs, and expenses, including attorneys' fees, 
arising from personal injury or property damage occurring as a 
result of the making, using or selling of a product, process or 
service by or on behalf of the Participant, its assignees or 
licensees which was derived from the work performed under the 
agreement. The Contractor shall identify and obtain the approval of 
the Contracting Officer for any proposed exceptions to this 
requirement such as where State or local law expressly prohibit the 
Participant from providing indemnification or where the research 
results will be placed in the public domain.
    (h) Disposition of Income. (1) Royalties or other income earned 
or retained by the Contractor as a result of performance of 
authorized technology transfer activities herein shall be used by 
the Contractor for scientific research, development, technology 
transfer, and education at the Laboratory, consistent with the 
research and development mission and objectives of the Laboratory 
and subject to Section 12(b)(5) of the Stevenson-Wydler Technology 
Innovation Act of 1980, as amended (15 U.S.C. 3710a(b)(5)) and 
Chapter 38 of the Patent Laws (35 U.S.C. 200 et seq.) as amended 
through the effective date of this contract award or modification. 
If the amounts of such royalties and income received during any 
fiscal year exceed 5 percent of the Laboratory's budget for that 
fiscal year, 75 percent of such excess amounts shall be paid to the 
Treasury of the United States, and the remaining amount of such 
excess shall be used by the Contractor for the purposes as described 
above in this paragraph. Any inventions arising out of such 
scientific research and development activities shall be deemed to be 
``Subject Inventions'' under the Contract.
    (2) The Contractor shall include as a part of its annual 
Laboratory Institutional Plan or other such annual document a plan 
setting out those uses to which royalties and other income received 
as a result of performance of authorized technology transfer 
activities herein will be applied at the Laboratory, and at the end 
of the year, provide a separate accounting for how the funds were 
actually used. Under no circumstances shall these royalties and 
income be used for an illegal augmentation of funds furnished by the 
U.S. Government.
    (3) The Contractor shall establish subject to the approval of 
the Contracting Officer a policy for making awards or sharing of 
royalties with Contractor employees, other coinventors and 
coauthors, including Federal employee coinventors when deemed 
appropriate by the Contracting Officer.
    (i) Transfer to Successor Contractor In the event of termination 
or upon the expiration of this Contract, any unexpended balance of 
income received for use at the Laboratory shall be transferred, at 
the Contracting Officer's request, to a successor contractor, or in 
the absence of a successor contractor, to such other entity as 
designated by the Contracting Officer. The Contractor shall transfer 
title, as one package, to the extent the Contractor retains title, 
in all patents and patent applications, licenses, accounts 
containing royalty revenues from such license agreements, including 
equity positions in third party entities, and other Intellectual 
Property rights which arose at the Laboratory, to the successor 
contractor or to the Government as directed by the Contracting 
Officer.
    (j) Technology Transfer Affecting the National Security. (1) The 
Contractor shall notify and obtain the approval of the Contracting 
Officer, prior to entering into any technology transfer arrangement, 
when such technology or any part of such technology is classified or 
sensitive under Section 148 of the Atomic Energy Act (42 U.S.C. 
2168). Such notification shall include sufficient information to 
enable DOE to determine the extent that commercialization of such 
technology would enhance or diminish security interests of the 
United States, or diminish communications within DOE's nuclear 
weapon production complex. DOE shall use its best efforts to 
complete its determination within sixty (60) days of the 
Contractor's notification, and provision of any supporting 
information, and DOE shall promptly notify the Contractor as to 
whether the technology is transferable. [[Page 27073]] 
    (2) The Contractor shall include in all of its technology 
transfer agreements with third parties, including, but not limited 
to, CRADAs, licensing agreements and assignments, notice to such 
third parties that the export of goods and/or Technical Data from 
the United States may require some form of export control license or 
other authority from the U.S. Government and that failure to obtain 
such export control license may result in criminal liability under 
U.S. laws.
    (3) For other than fundamental research as defined in National 
Security Decision Directive 189, the Contractor is responsible to 
conduct internal export control reviews and assure that technology 
is transferred in accordance with applicable law.
    (k) Records. The Contractor shall maintain records of its 
technology transfer activities in a manner and to the extent 
satisfactory to the DOE and specifically including, but not limited 
to, the licensing agreements, assignments and the records required 
to implement the requirements of paragraphs (e), (f), and (h) of 
this clause and shall provide reports to the Contracting Officer to 
enable DOE to maintain the reporting requirements of Section 
12(c)(6) of the Stevenson-Wydler Technology Innovation Act of 1980, 
as amended (15 U.S.C. 3710a(c)(6)). Such reports shall be made 
annually in a format to be agreed upon between the Contractor and 
DOE and in such a format which will serve to adequately inform DOE 
of the Contractor's technology transfer activities while protecting 
any data not subject to disclosure under the Rights in Technical 
Data clause and paragraph (n) of this clause. Such records shall be 
made available in accordance with the clauses of this Contract 
pertaining to inspection, audit and examination of records.
    (l) Reports to Congress. To facilitate DOE's reporting to 
Congress, the Contractor is required to submit annually to DOE a 
technology transfer plan for conducting its technology transfer 
function for the upcoming year, including plans for securing 
Intellectual Property rights in Laboratory innovations with 
commercial promise and plans for managing such innovations so as to 
benefit the competitiveness of United States industry. This plan 
shall be provided to the Contracting Officer on or before October 
1st of each year.
    (m) Oversight and Appraisal. The Contractor is responsible for 
developing and implementing effective internal controls for all 
technology transfer activities consistent with the audit and record 
requirements of this Contract. Laboratory Contractor performance in 
implementing the technology transfer mission and the effectiveness 
of the Contractor's procedures will be evaluated by the Contracting 
Officer as part of the annual appraisal process, with input from the 
cognizant Secretarial Officer or program office.
    (n) Technology Transfer Through Cooperative Research and 
Development Agreements. Upon approval of the Contracting Officer and 
as provided in a DOE approved Joint Work Statement (JWS), the 
Laboratory Director or his designee may enter into CRADAs on behalf 
of the DOE subject to the requirements set forth herein.
    (1) Review and Approval of CRADAs. (i) Except as otherwise 
directed in writing by the Contracting Officer, each JWS shall be 
submitted to the Contracting Officer for approval. The Contractor's 
Laboratory Director or designee shall provide a program mission 
impact statement and shall include an impact statement regarding 
related Intellectual Property rights known by the Contractor to be 
owned by the Government to assist the Contracting Officer in his 
approval determination.
    (ii) The Contractor shall also include (specific to the proposed 
CRADA), a statement of compliance with the Fairness of Opportunity 
requirements of paragraph (e) of this clause.
    (iii) Within ninety (90) days after submission of a JWS, the 
Contracting Officer shall approve, disapprove or request 
modification to the JWS. If a modification is required, the 
Contracting Officer shall approve or disapprove any resubmission of 
the JWS within thirty (30) days of its resubmission, or ninety (90) 
days from the date of the original submission, whichever is later. 
The Contracting Officer shall provide a written explanation to the 
Contractor's Laboratory Director or designee of any disapproval or 
requirement for modification of a JWS.
    (iv) Upon approval of a JWS, the Contractor's Laboratory 
Director or designee may submit a CRADA, based upon the approved 
JWS, to the Contracting Officer. The Contracting Officer, within 
thirty (30) days of receipt of the CRADA, shall approve or request 
modification of the CRADA. If the Contracting Officer requests a 
modification of the CRADA, an explanation of such request shall be 
provided to the Laboratory Director or designee.
    (v) Except as otherwise directed in writing by the Contracting 
Officer, the Contractor shall not enter into, or begin work under, a 
CRADA until approval of the CRADA has been granted by the 
Contracting Officer. The Contractor may submit its proposed CRADA to 
the Contracting Officer at the time of submitting its proposed JWS 
or any time thereafter. However, the Contracting Officer is not 
obligated to respond under paragraph (n)(1)(iv) of this clause until 
within thirty (30) days after approval of the JWS or thirty (30) 
days after submittal of the CRADA, whichever is later.
    (2) Selection of Participants The Contractor's Laboratory 
Director or designee in deciding what CRADA to enter into shall:
    (i) Give special consideration to small business firms, and 
consortia involving small business firms;
    (ii) Give preference to business units located in the United 
States which agree that products or processes embodying Intellectual 
Property will be substantially manufactured or practiced in the 
United States and, in the case of any industrial organization or 
other person subject to the control of a foreign company or 
government, take into consideration whether or not such foreign 
government permits United States agencies, organizations, or other 
persons to enter into cooperative research and development 
agreements and licensing agreements;
    (iii) Provide Fairness of Opportunity in accordance with the 
requirements of paragraph (e) of this clause; and
    (iv) Give consideration to the Conflicts of Interest 
requirements of paragraph (d) of this clause.
    (3) Withholding of Data
    (i) Data that is first produced as a result of research and 
development activities conducted under a CRADA and that would be a 
trade secret or commercial or financial data that would be 
privileged or confidential, if such data had been obtained from a 
non-Federal third party, may be protected from disclosure under the 
Freedom of Information Act as provided in the Stevenson-Wydler 
Technology Innovation Act of 1980, as amended (15 U.S.C. 
3710a(c)(7)) for a period as agreed in the CRADA of up to five (5) 
years from the time the data is first produced. The DOE shall 
cooperate with the Contractor in protecting such data.
    (ii) Unless otherwise expressly approved by the Contracting 
Officer in advance for a specific CRADA, the Contractor agrees, at 
the request of the Contracting Officer, to transmit such data to 
other DOE facilities for use by DOE or its Contractors by or on 
behalf of the Government. When data protected pursuant to paragraph 
(n)(3)(i) of this clause is so transferred, the Contractor shall 
clearly mark the data with a legend setting out the restrictions 
against private use and further dissemination, along with the 
expiration date of such restrictions.
    (iii) In addition to its authority to license Intellectual 
Property, the Contractor may enter into licensing agreements with 
third parties for data developed by the Contractor under a CRADA 
subject to other provisions of this Contract. However, the 
Contractor shall neither use the protection against dissemination 
nor the licensing of data as an alternative to the submittal of 
invention disclosures which include data protected pursuant to 
paragraph (n)(3)(i) of this clause.
    (4) Work For Others and User Facility Programs. (i) WFO and User 
Facility Agreements (UFAs) are not CRADAs and will be available for 
use by the Contractor in addition to CRADAs for achieving 
utilization of employee expertise and unique facilities for 
maximizing technology transfer. The Contractor agrees to inform 
prospective CRADA participants, which are intending to substantially 
pay full cost recovery for the effort under a proposed CRADA, of the 
availability of alternative forms of agreements, i.e., WFO and UFA, 
and of the Class Patent Waiver provisions associated therewith.
    (ii) Where the Contractor believes that the transfer of 
technology to the U. S. domestic economy will benefit from, or other 
equity considerations dictate, an arrangement other than the Class 
Waiver of patent rights to the sponsor in WFO and UFAs, a request 
may be made to the Contracting Officer for an exception to the Class 
Waivers.
    (iii) Rights to inventions made under agreements other than 
funding agreements with third parties shall be governed by the 
appropriate provisions incorporated, with DOE approval, in such 
agreements, and the provisions in such agreements take precedence 
over any disposition of rights [[Page 27074]] contained in this 
Contract. Disposition of rights under any such agreement shall be in 
accordance with any DOE class waiver (including Work for Others and 
User Class Waivers) or individually negotiated waiver which applies 
to the agreement.
    (5) Conflicts of Interest. (i) Except as provided in paragraph 
(n)(5)(iii) of this clause, the Contractor shall assure that no 
employee of the Contractor shall have a substantial role (including 
an advisory role) in the preparation, negotiation, or approval of a 
CRADA, if, to such employee's knowledge:
    (A) Such employee, or the spouse, child, parent, sibling, or 
partner of such employee, or an organization (other than the 
Contractor) in which such employee serves as an officer, director, 
trustee, partner, or employee--
    (1) Holds financial interest in any entity, other than the 
Contractor, that has a substantial interest in the preparation, 
negotiation, or approval of the CRADA;
    (2) Receives a gift or gratuity from any entity, other than the 
Contractor, that has a substantial interest in the preparation, 
negotiation, or approval of the CRADA; or
    (B) A financial interest in any entity, other than the 
Contractor, that has a substantial interest in the preparation, 
negotiation, or approval of the CRADA, is held by any person or 
organization with whom such employee is negotiating or has any 
arrangement concerning prospective employment.
    (ii) The Contractor shall require that each employee of the 
Contractor who has a substantial role (including an advisory role) 
in the preparation, negotiation, or approval of a CRADA certify 
through the Contractor to the Contracting Officer that the 
circumstances described in paragraph (n)(5)(i) of this clause do not 
apply to that employee.
    (iii) The requirements of paragraphs (n)(5)(i) and (n)(5)(ii) of 
this clause shall not apply in a case where the Contracting Officer 
is advised by the Contractor in advance of the participation of an 
employee described in those paragraphs in the preparation, 
negotiation or approval of a CRADA of the nature of and extent of 
any financial interest described in paragraph (n)(5)(i) of this 
clause, and the Contracting Officer determines that such financial 
interest is not so substantial as to be considered likely to affect 
the integrity of the Contractor employee's participation in the 
process of preparing, negotiating, or approving the CRADA.
    (o) Technology Transfer in Other Cost-Sharing Agreements. In 
conducting research and development activities in cost-shared 
agreements not covered by paragraph (n) of this clause, the 
Contractor, with prior written permission of the Contracting 
Officer, may provide for the withholding of data produced thereunder 
in accordance with the applicable provisions of paragraph (n)(3) of 
this clause.

(End of clause)

    Alternate I (Xxx 1995). As prescribed in 970.7330(b), add the 
following definition under paragraph (b) and new paragraph (p):
    (b)(8) Privately funded technology transfer means the 
prosecuting, maintaining, licensing, and marketing of inventions 
which are not owned by the Government (and not related to CRADAs) 
when such activities are conducted entirely without the use of 
Government funds.
    (p) Nothing in paragraphs (c) Allowable Costs, (e) Fairness of 
Opportunity, (f) U.S. Industrial Competitiveness, (g) Indemnity--
Product Liability, (h) Disposition of Income, and (i) Transfer to 
Successor Contractor above are intended to apply to the contractor's 
privately funded technology transfer activities if such privately 
funded activities are addressed elsewhere in the contract.
    Alternate II (Xxx 1995). As prescribed in 970.7330(c), the 
phrase ``weapon production facility'' may be substituted wherever 
the word ``laboratory'' appears in the clause.

    3. A new subpart 970.73, Technology Transfer, consisting of 
sections 970.7310, 970.7320, and 970.7330, is added to read as follows:

Subpart 970.73 Technology Transfer

Secs.
970.7310  General.
970.7320  Policy.
970.7330  Contract Clause.

Subpart 970.73--Technology Transfer


970.7310  General.

    This subpart prescribes policies and procedures for implementing 
the National Competitiveness Technology Transfer Act of 1989. The Act 
required that technology transfer be established as a mission of each 
Government-owned laboratory operated under contract by a non-Federal 
entity. The National Defense Authorization Act for Fiscal Year 1994 
expanded the definition of laboratory to include weapon production 
facilities that are operated for national security purposes and are 
engaged in the production, maintenance, testing, or dismantlement of a 
nuclear weapon or its components.


970.7320  Policy.

    All new awards for or extensions of existing DOE laboratory or 
weapon production facility management and operating contracts shall 
have technology transfer, including authorization to award Cooperative 
Research and Development Agreements (CRADAs), as a laboratory or 
facility mission under Section 11(a)(1) of the Stevenson-Wydler 
Technology Innovation Act of 1980, as amended. A management and 
operating contractor for a facility not deemed to be a laboratory or 
weapon production facility may be authorized on a case-by-case basis to 
support the DOE technology transfer mission including, but not limited 
to, participating in CRADAs awarded by DOE laboratories and weapon 
production facilities.


970.7330  Contract clause.

    (a) The contracting officer shall insert the clause at 970.5204-X, 
Technology transfer mission, in each solicitation for a new or an 
extension of an existing laboratory or weapon production facility 
management and operating contract.
    (b) If the contractor is a nonprofit organization or small business 
eligible under 35 U.S.C. 200 et seq., to receive title to any 
inventions under the contract and proposes to fund at private expense 
the maintaining, licensing, and marketing of the inventions, the 
contracting officer shall use the basic clause with its Alternate I.
    (c) The contracting officer may substitute the Alternate II phrase 
``weapon production facility'' wherever the word ``laboratory'' appears 
in the clause where the facility is operated for national security 
purposes and engaged in the production, maintenance, testing, or 
dismantlement of a nuclear weapon or its components.

[FR Doc. 95-12849 Filed 5-19-95; 8:45 am]
BILLING CODE 6450-01-P