The performance of Government contracts often requires the use of contractors’ preexisting data. Your rights in this data are frequently very valuable – sometimes even indispensable to your continued existence. It should come as no surprise, therefore, that when submitting a proposal for a government contract it is crucial that you understand and articulate your rights and those of the Government. A recent decision by the GAO reminds contractors that while these clauses can be confusing, you must understand them, and the government’s discretion regarding their use, before you pick a fight about which clause is appropriate in a particular procurement. Gallup, Inc., B-410126, September 24, 2014.
In Gallup, the RFQ incorporated FAR Clause 52.227-14, Rights in Data - General. Prior to submission of bids, a bidder asked whether the agency would consider “an alternate intellectual property clause” which would allow for use of items independently developed at private expense. The agency responded that under FAR Clause 52.227-14 the contractor (i) could and should assert “rights to any work first produced”, and (ii) has all the necessary protections for asserting “its rights regarding any work performed under this acquisition”. Gallup was not satisfied with this response, hence its protest.
Gallup believed that FAR Clause 52.227-14 was overly restrictive (exceeded the Government’s needs), and argued that the RFQ should contain a less restrictive clause that would protect pre-existing data developed at private expense, namely FAR Clause 52.227-17, Rights in Data – Special Works or, in the alternative, FAR 52.227-14 Alt. II. According to Gallup, the balance between the Government’s needs and contractors’ legitimate proprietary interests weighed in favor of the alternative data rights clause.
It appears, however, that Gallup really did not understand the differences between the various Data Rights clauses and the protections afforded to bidders under each. As a result, Gallup based its protest on the incorrect assertion that FAR 52.227-14 did not provide protections to items developed at private expense (limited rights data). As GAO notes, “Gallup fail[ed] to explain how the clause [52.227-17] provides a greater degree of protection for its proprietary data.” In fact, unlike the clause chosen by the agency, FAR 52.227-17 “does not contain any provisions for the identification and delivery or withholding of limited rights data.” Similarly, while FAR 52.227-14 Alt. II would allow offerors to deliver limited rights data to the Government, Gallup “identifie[d] nothing that requires DHS to accept the delivery of limited rights data.”
The GAO denied the protest, stating that Gallup’s “disagreement” with the Government’s judgment “does not provide a basis to sustain the protest.” According to the GAO, “[a] contracting agency generally has the discretion to determine its needs and the best method to accommodate them . . . . The fact that a requirement may be burdensome or even impossible for a particular firm to meet does not make it objectionable if the requirement properly reflects the agency’s needs.”
A more accurate understanding of the FAR data rights clauses – and a better appreciation of agencies’ broad discretion to choose the means of meeting their needs (including data rights needs) – would have helped Gallup assess whether it made sense to protest in this case. Lesson: don’t waste your valuable resources on mistaken believes – understand the often nuanced differences between data rights clauses.
Heather Joyce is responsible for the contents of this article.
© Jackson Kelly PLLC, 2014