[Federal Register Volume 74, Number 248 (Tuesday, December 29, 2009)]
[Rules and Regulations]
[Pages 68699-68701]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30672]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 207 and 227

[DFARS Case 2006-D055]


Defense Federal Acquisition Regulation Supplement; Technical Data 
and Computer Software Requirements for Major Weapon Systems

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD is adopting as final, with a minor change, the interim 
rule that amended the Defense Federal Acquisition Regulation Supplement 
(DFARS) to implement Section 802(a) of the National Defense 
Authorization Act for Fiscal Year 2007 and DoD policy requirements. 
Section 802(a) contains requirements for DoD to assess long-term 
technical data needs when acquiring major weapon systems and 
subsystems. DoD policy requires similar assessment for computer 
software needs.

DATES: Effective Date: December 29, 2009.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition 
Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone 703-602-0328; facsimile 
703-602-7887. Please cite DFARS Case 2006-D055.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD published an interim rule at 72 FR 51188 on September 6, 2007, 
to implement Section 802(a) of the National Defense Authorization Act 
for Fiscal Year 2007 (Pub. L. 109-364). Section 802(a) adds a new 
subsection (e) to 10 U.S.C. 2320 regarding technical data needs for 
sustainment of major weapon systems. DoD received one response to the 
interim rule. This response provided general comments, specific 
comments, and a proposed alternative.

1. General Comments

    a. The rule should better articulate selected policy points. The 
respondent comments that the rule should better articulate policy 
points in order to provide insight into the intent of the statute and 
the program managers' responsibilities--primarily by referencing or 
reinforcing existing statements of policy and practice, such as those 
found in the USD (AT&L) Guidebook ``Intellectual Property: Navigating 
Through Commercial Waters''. The respondent suggests that contractors 
rely strongly on these existing policy guidelines and that any 
``fundamental change to the DoD policy'' in the rule could negatively 
impact contractors' long-term plans for participation in DoD weapons 
systems programs.
    Response: There is no fundamental change in long-standing policy in 
this rule, only a clarified and enhanced requirement to expressly 
address specific data rights considerations in the acquisition strategy 
documentation.
    b. The new rule may increase the potential for contractors to 
``walk away from the Government market.'' The respondent notes that 
small or medium sized companies would be more likely to avoid 
Government contracts ``[if they] had to turn all their data over to the 
Government with the possibility that it would then be given to a 
competitor * * *''
    Response: Contractors of any size might avoid business 
opportunities with the Government--or with any other party for that 
matter--that would require the uncompensated relinquishment of valuable 
intellectual property assets. However, nothing in the interim rule 
alters the Government's ability to require delivery of data or 
software, nor expands (nor limits nor affects in any way) the 
Government's ability to disclose proprietary or other sensitive 
information to a competitor. Nothing in the interim rule changes long-
standing, statutorily-based, DoD policy that contractors shall not be 
required to relinquish proprietary rights as a condition of responding 
to or receiving award of a DoD solicitation. No revisions have been 
made in the final rule in response to this comment.
    c. Clarify the effect on pre-existing statutory requirements. The 
respondent requests clarification of whether the rule is intended to 
affect preexisting statutory requirements such as ``march-in rights'' 
under the Bayh-Dole Act.
    Response: This rule does not conflict with any pre-existing 
statutory, policy, or regulatory requirements. For example, the rule 
covers pre-contractual requirements to address technical data and 
computer software in acquisition strategies, and has absolutely no 
relationship, express or implied, to the Government's post-contractual 
interest or ability in exercising its statutory ``march-in rights'' for 
patented inventions made during the contract. Accordingly, no 
clarification in the final rule is necessary.

2. Specific Comments

    a. Extension of rule to cover computer software. The respondent 
objects to the extension of the precepts of section 802(a) to computer 
software documentation.
    Response: This issue was anticipated and expressly addressed in the 
background materials published with the interim rule. DoD strongly 
reaffirms the policy-based application of these new requirements to 
computer software, in addition to the mandatory implementation of the 
statutorily-based requirements for technical data.
    The respondent correctly notes that section 802(a) does not 
expressly apply to computer software--it amends 10 U.S.C. 2320, which 
applies only to technical data. Accordingly, the mandatory statutory 
changes could, technically, be implemented without affecting in any way 
the detailed requirements for documenting software-specific 
considerations in acquisition

[[Page 68700]]

strategies. There is no other Title 10 statute that establishes 
requirements for the acquisition of computer software (e.g., equivalent 
10 U.S.C. 2320). Similarly, there is nothing in the legislative history 
of section 802(a) that indicates congressional intent that these 
requirements should not apply to computer software.
    It is long-standing DoD policy to treat computer software and 
technical data in the same manner, to the maximum extent practicable. 
During the 1980s and early 1990s, technical data and computer software 
were both covered by the same combined rules in DFARS Subpart 227.40. 
In 1995, this coverage was completely reworked and the materials were 
split into two separate subparts--227.71 for technical data, and 227.72 
for computer software. However, the substance and language of these two 
subparts was, and continues to be, nearly identical except for the 
interchangeable use of the terms ``technical data'' and ``computer 
software.'' This unnecessary split, resulting in unnecessary 
duplication of DFARS language, was noted and proposed for elimination 
in the DFARS Transformation of Part 227 (DFARS Case 2003-D049, approved 
by the DARC, and currently in pre-publication review), which proposes 
to recombine the coverage for technical data and computer software into 
a single subpart to eliminate the massive redundancy, while staunchly 
maintaining all of the substantive distinctions in the detailed 
coverage. The rule in the current case also follows this model: 
Applying the same policies and rules for both technical data and 
computer software when appropriate, and recognizing any instance in 
which technical data and computer software should be treated 
differently.
    In the current case, the new statutory-based requirements for 
technical data are equally applicable to computer software--both under 
the long-standing policy of equivalent treatment for technical data and 
computer software, and in view of the most current acquisition 
policies. In fact, the new requirements are so top-level, and so 
consistent with existing policy objectives for both technical data and 
computer software, that it would be inconsistent with the current DFARS 
coverage if the new rule did not apply equally to computer software.
    In review of this issue, DoD has noted and corrected an apparent 
typographical error/omission in the interim rule: The requirements 
specified at DFARS 207.106(S-70)(1)(ii) inadvertently omitted the 
phrase ``and computer software'' prior to the term ``deliverables.'' 
This error is remedied by inserting the omitted text in the final rule.
    b. Impact on acquisition of computer software. The respondent also 
comments in some detail on the differences required for maintenance of 
software as opposed to hardware, and that there is danger that Program 
Managers may seek to acquire computer software in the same manner they 
acquire technical data, even when this does not make sense.
    Response: The DFARS rule establishes only top-level requirements to 
assess long-term needs, establish acquisition strategies to meet those 
needs, and to expressly address more specific considerations in the 
acquisition strategy documentation. The interim rule is directed 
towards the acquisition planning stage. At this preliminary planning 
stage, both computer software and technical data needs can be assessed 
and both have similar issues and needs that can be accounted for. DoD 
acquisition personnel have always been required to consider 
intellectual property requirements and costs when determining 
acquisition strategies.
    c. Acquisition of rights. The respondent notes that Government 
personnel could become confused about the requirements of the interim 
rule when creating the acquisition strategy. In particular, the 
respondent notes that a program manager could ``unnecessarily 
interpret'' the rule as requiring the acquisition of more rights than 
required under the current ``Limited Rights'' regime.
    Response: DoD does find the respondent's argument persuasive that 
Government personnel will become confused. The respondent notes that 
such an interpretation would be unnecessary. The simple requirement to 
address technical data and computer software in acquisition strategies 
for major weapon systems does not override any current policies on 
acquiring limited rights.
    d. Information regarding the data sought by the Government. The 
respondent also raises numerous issues regarding the language contained 
in Part 227.106 of the interim rule, including the information which 
the contractor would possess regarding the data being sought by the 
Government, who would access the data, and the future value of the 
data.
    Response: This information would usually be routinely provided in 
the solicitation or in the course of communications with the 
Government. It is unnecessary to amend the rule to include this 
information.
    e. Term ``option.'' The respondent requests clarification of the 
term ``option,'' as used in the phrase ``priced contract option'' in 
both the interim rule and the statutory requirement.
    Response: DoD considers that this term/phrase is unambiguous in 
this context.
    f. Change orders. Another issue raised by the respondent involves 
the ability of the Government to issue change orders modifying the 
option following contract award. The respondent notes that these 
changes would entitle the contractor to request equitable adjustments 
and that such an ability to issue change orders would remove many of 
the guidelines governing the contracting officer's behavior.
    Response: Nothing in the interim rule eliminates, limits, or 
affects in any way any preexisting requirements, rules, or procedures--
including those governing change orders.
    g. Desired license options. The last issue raised by the respondent 
in its ``Specific Comments'' section is a request to amend the interim 
rule to require program managers to provide detailed guidance on the 
details of their desired license options. It is also requested that the 
interim rule be amended to limit the scope of the desired license 
option to the sustainment of the system or subsystems underlying the 
solicitation.
    Response: DoD does not agree that amendments of this sort are 
warranted. The DFARS does not provide direction to program managers.

3. Alternative Proposal

    The respondent provides an alternate proposal for consideration, in 
which the DoD approach to technical data needed for sustainment would 
be modeled after a commercial model used for FAA-certified aircraft.
    Response: Nothing in the rule would prohibit the use of such a 
model in appropriate circumstances. Although this approach, or a 
variation thereof, may be useful in individual or specific 
circumstances, it would be unnecessarily restrictive (and in some cases 
likely inapplicable or unworkable) for other DoD weapon systems 
programs.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD certifies that this final rule will not have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.

[[Page 68701]]

because this rule pertains to acquisition planning that is performed by 
the Government.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply, because the rule does 
not impose any information collection requirements that require 
approval by the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

List of Subjects in 48 CFR Parts 207 and 227

    Government procurement.

Amy G. Williams,
Editor, Defense Acquisition Regulations System.

0
Accordingly, the interim rule amending 48 CFR parts 207 and 227, which 
was published at 72 FR 51188 on September 6, 2007, is adopted as a 
final rule with the following changes:

PART 207--ACQUISITION PLANNING

0
1. The authority citation for 48 CFR part 207 continues to read as 
follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

0
2. Section 207.106 is amended by revising paragraph (S-70)(1)(ii) to 
read as follows:

207.106  Additional requirements for major systems.

* * * * *
(S-70)(1) * * *
    (ii) Establish acquisition strategies that provide for the 
technical data and computer software deliverables and associated 
license rights needed to sustain those systems and subsystems over 
their life cycle. The strategy may include--
* * * * *
[FR Doc. E9-30672 Filed 12-28-09; 8:45 am]
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