Health and Human Services Acquisition Regulation, 2229-2236 [2012-31490]

Agencies

• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 78, Number 7 (Thursday, January 10, 2013)]
[Proposed Rules]
[Pages 2229-2236]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31490]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

48 CFR Parts 327 and 352

RIN 0991-AB87


Health and Human Services Acquisition Regulation

AGENCY: Department of Health and Human Services; Office of the 
Assistant Secretary for Financial Resources and Office of Grants and 
Acquisition Policy and Accountability, Division of Acquisition.

ACTION: Proposed rule.

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SUMMARY: The Department of Health and Human Services (HHS) is proposing 
to amend its Federal Acquisition Regulation (FAR) Supplement--the HHS 
Acquisition Regulation (HHSAR)--to add two clauses, ``Patent Rights--
Exceptional Circumstances'' and ``Rights in Data--Exceptional 
Circumstances,'' and their prescriptions.

DATES: Comments are due on or before March 11, 2013.

ADDRESSES: Submit comments in response to ``Health and Human Services 
Acquisition Regulation, Clauses 352.227-11 and 352.227-14'' by any of 
the following methods:
     Regulations.gov: https://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by entering ``Health and 
Human Services Acquisition Regulation, Clauses 352.227-11 and 352.227-
14'' under the heading ``Enter Keyword or ID'' and selecting 
``Search.'' Select the link ``Submit a Comment'' that corresponds with 
``Health and Human Services Acquisition Regulation, Clauses 352.227-11 
and 352.227-14.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``Health and Human Services Acquisition Regulation, Clauses 352.227-11 
and 352.227-14'' on your attached document.
     Fax: 202-690-6902.
     Mail: HHS/ASFR/OGAPA/Division of Acquisition, ATTN: Cheryl 
Howe, Room 537H, HHH Building, 200 Independence Avenue SW., Washington, 
DC 20201.
    Instructions: Please submit comments only and cite Health and Human 
Services Acquisition Regulation, Clauses 352.227-11 and 352.227-14, in 
all correspondence related to this case. All comments received will be 
posted without change to https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Cheryl Howe, Procurement Analyst, U.S. 
Department of Health and Human Services, Office of the Assistant 
Secretary for Financial Resources, Office of Grants and Acquisition 
Policy and Accountability, Division of Acquisition, telephone (202) 
690-5552.

SUPPLEMENTARY INFORMATION: 

I. Background

    The purpose of this proposed rule is to ensure that providers of 
proprietary material(s) to the government will retain all their 
preexisting rights to their material(s), and rights to any inventions 
made under a contract or subcontract (at all tiers), when a 
Determination of Exceptional Circumstances (DEC) has been executed. 
``Material'' means any proprietary material, method, product, 
composition, compound or device, whether patented or unpatented. A DEC 
is executed consistent with the policy and objectives of the Bayh-Dole 
Act, 35 U.S.C. 200, et seq., to ensure that subject inventions made 
under contracts and subcontracts (at all tiers) are used in a manner to 
promote free competition and enterprise without unduly encumbering 
future research and discovery; to encourage maximum participation of 
small business firms in federally supported research and development 
efforts; to promote collaboration between commercial concerns and 
nonprofit organizations including universities; to ensure that the 
Government obtains sufficient rights in federally supported inventions 
to meet its needs; to protect the public against nonuse or unreasonable 
use of inventions; and in the case of fulfilling the mission of the 
U.S. Department of Health and Human Services, to ultimately to benefit 
the public health.
    Under certain circumstances, in order to ensure that pharmaceutical 
companies, academia, and others will collaborate with HHS in 
identifying, testing, developing, and commercializing new drugs, 
therapeutics, diagnostics, prognostics and prophylactic measures 
affecting human health, a Determination of Exceptional Circumstances 
(DEC) must be executed, and Contractor's and subcontractor's rights (at 
all tiers) in subject inventions should be limited accordingly, 
consistent with DEC requirements and through appropriate contract 
clauses.

II. Proposed Rule

    The proposed changes would amend the HHSAR by adding two new 
clauses, 352.227-11 Patent Rights--Exceptional Circumstances and 
352.227-14 Rights in Data--Exceptional Circumstances, and their 
respective prescriptions at 327.303 and 327.409.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, is not 
subject to review under section 6 of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    This change may 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. The Initial Regulatory 
Flexibility Analysis (IRFA) is summarized as follows:
    A. This action is being implemented to amend the Health and Human 
Services Acquisition Regulation (HHSAR) by adding two new clauses, 
352.227-11 Patent Rights--Exceptional Circumstances and 352.227-14 
Rights in Data--Exceptional Circumstances, and their respective 
prescriptions at 327.303 and 327.409.
    B. These changes are proposed to ensure that providers of 
proprietary materials to the government will retain their preexisting 
rights to their material(s), and rights to any inventions made under a 
contract or subcontract (at all tiers), in which the provider has a 
proprietary interest when a Determination of Exceptional Circumstances 
(DEC) has been executed.
    C. This proposed rule applies to all Federal contractors and 
subcontractors at all tiers as applicable, regardless of size or 
business ownership. The resultant cost impact is considered 
$444,990.42. There are no known significant alternatives to the rule 
that would further minimize any economic impact of the rule on small 
entities.
    D. A copy of the IRFA shown in V. below has been submitted to the 
Chief Counsel for Advocacy of the Small Business Administration. HHS 
invites comments from small entities and other interested parties on 
the expected impact of this rule on small entities.
E. IRFA
    1. Description of the reasons why action is being taken.

[[Page 2230]]

    This proposed rule will amend the Health and Human Services 
Acquisition Regulation (HHSAR) to add two new clauses, Patent Rights--
Exceptional Circumstances and 352.227-14 Rights in Data--Exceptional 
Circumstances. These clauses will be used in lieu of FAR clause 52.227-
14 Rights in Data--General and FAR clause 52.227-11 Patent Rights--
Ownership by the Contractor to address the patent and data rights of 
the Government, the prime contractor, the subcontractors at all tiers) 
and the providers of proprietary materials to the Government 
(providers).
    2. Statement of the objectives of, and the legal basis for, the 
rule.
    This action is being taken to ensure that providers, the majority 
of which are small businesses, will retain their preexisting rights to 
material and subject inventions in which the provider has a proprietary 
interest when a Determination of Exceptional Circumstances (DEC) has 
been executed. A DEC promotes the policy and objectives of the Bayh-
Dole Act, 35 U.S.C. 200, et seq., to ensure that subject inventions 
made under contracts and subcontracts (at all tiers) are used in a 
manner to promote free competition and enterprise without unduly 
encumbering future research and discovery; to ensure that the 
Government obtains sufficient rights in federally supported inventions 
to meet its needs; to protect the public against nonuse or unreasonable 
use of inventions; and ultimately to benefit the public health. In 
order to ensure that pharmaceutical companies, academia, and others 
will collaborate with the Department of Health and Human Services (HHS) 
under certain conditions in identifying, testing, developing, and 
commercializing new drugs, therapeutics, diagnostics, prognostics and 
prophylactic measures affecting human health, a determination that 
exceptional circumstances must be executed, and Contractor's and 
subcontractor's rights (at all tiers) in subject inventions should be 
limited accordingly through appropriate contract clauses.
    3. Description of and, where feasible, an estimate of the number of 
small entities to which the rule will apply.
    The affected contracts are usually awarded using NAICS code 541711, 
Research and Development in Biotechnology, or NAICS code 541712 
Research and Development in the Physical, Engineering, and Life 
Sciences (except Biotechnology). Both NAICS have a small business size 
standard of 500 employees. It is estimated that this rule will affect 
61 prime contractors of which 4 will be small businesses (6.5%); 76 
subcontractors of which 21 will be small businesses (27.6%); and 379 
providers of which 189 will be small businesses (49.87%). The 
aforementioned figures are based on historical data from one operating 
division of HHS. It is anticipated that numbers will increase 
proportionally as the proposed clauses will be used on an HHS-wide 
basis. Using the proposed HHSAR clauses better addresses the 
requirements of the Bayh-Dole Act and provides appropriate legal 
protection for the proprietary rights of providers to ensure providers 
will collaborate with the Government and provide access to their 
promising proprietary material(s) to meet HHS program goals. Comments 
will be solicited from small businesses and other interested parties. 
Comments will be considered from small entities on the impact of this 
rule.
    4. Description and estimate of compliance requirements including 
differences in cost, if any, for different groups of small entities.
    The projected reporting, recordkeeping, or other compliance 
requirements projected for this rule will be carried out by the prime 
contractor. Only a small percentage (6.5%) of the prime contractors 
will be small businesses. The projected cost for compliance 
requirements for those small businesses will be $28,924.38.
    5. Identification, to the extent practicable, of all relevant 
Federal rules which may duplicate, overlap, or conflict with the rule.
    The proposed rule does not duplicate, overlap, or conflict with any 
other Federal rules. These clauses will be used in lieu of FAR clause 
52.227-14 Rights in Data--General and with FAR clause 52.227-11 Patent 
Rights--Ownership by the Contractor.
    6. Description of any significant alternatives to the rule which 
accomplish the stated objectives of applicable statutes and which 
minimize any significant economic impact of the rule on small entities.
    In the past a significant number of FAR deviations were processed 
each time a DEC was executed. Using the proposed HHSAR clauses better 
addresses the requirements of the Bayh-Dole Act and provides solid 
legal protection for the proprietary rights of providers to ensure 
providers will collaborate with the Government and provide access to 
their promising proprietary material(s) to meet HHS program goals. 
Therefore, it is believed that the approach outlined in the proposed 
rule is the most practical and provides benefits to the Government, the 
public health and industry to ensure HHS program goals can be achieved.
    F. HHS will also consider comments from small entities concerning 
the existing regulations in subparts affected by this rule consistent 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite HHS Acquisition Regulation in 
correspondence.

V. Paperwork Reduction Act

    The Paperwork Reduction Act (PRA) (44 U.S.C. Chapter 35) applies 
because this proposed rule contains information collection requirements 
under the proposed clauses HHSAR 352.227-11 Patent Rights--Exceptional 
Circumstances, and HHSAR 352.227-14 Rights in Data--Exceptional 
Circumstances. This requirement has been submitted to the Office of 
Management and Budget for approval. Public reporting burden for this 
collection of information is estimated to average 11 hours per response 
under 352.227-11 and 6 hours under 352.227-14, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed and completing and reviewing the collection 
of information. Although this requirement is new to the HHSAR, 
collection of this information is not new as it has been collected 
through use of deviated FAR clauses 52.227-11 Patent Rights--Ownership 
and 52.227-14 Rights in Data--General in the past.
    Data from Fiscal Years 2007 through 2012 contract awards using 
approved FAR deviations was used to determine the burden. If this 
proposed reporting requirement had been in place during those Fiscal 
Years, it would have covered 63 cost-reimbursement contracts above the 
simplified acquisition threshold. For 352.227-11 Patent Rights--
Exceptional Circumstances, we estimate that it will take approximately 
9009 hours to prepare and submit the reports. For 352.227-14 Rights in 
Data--Exceptional Circumstances, we estimate that it will take 
approximately 2,268 hours to prepare and submit the reports. The annual 
reporting burden is estimated as follows for each clause:

HHSAR 352.227-11
Respondents..................  63

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Responses/respondent.........  13 x 63
                              ------------------------------------------
    Total annual Responses...  819
Preparation hours per          140 hours/13 responses = 11 hours AVG
 response.
                              ------------------------------------------
    Total response burden      9009
     hours.
 


HHSAR 352.227-14
Respondents..................  63
Responses/respondent.........  6 x 63
                              ------------------------------------------
    Total annual Responses...  378
Preparation hours per          33 hours/6 responses = 6 hours AVG
 response.
                              ------------------------------------------
    Total response burden      2268
     hours.
 

    Public reporting burdens indicated above for submission of the data 
required includes the time for gathering the data needed, and 
completing and reviewing the collection of information.
    Public comment is sought regarding: Whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the Agency, including whether the information shall 
have practical utility; the accuracy of the burden estimate; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways to minimize the burden of the collection of 
information, including through the use of automated collection 
techniques or other forms of information technology. To obtain copies 
of the supporting statement and any related forms for the proposed 
paperwork collections referenced above, email your request, including 
your address, phone number, and document identifier, to 
Sherette.funncoleman@hhs.gov, or call the Reports Clearance Office on 
(202) 690-6162. Written comments and recommendations for the proposed 
information collections must be directed to the OS Paperwork Clearance 
Officer at the above email address within 60-days of this notice.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

List of Subjects in 48 CFR Parts 327 and 352

    Government procurement.
    For the reasons stated in the preamble, HHS proposes to amend 48 
CFR parts 327 and 352 as follows:

PART 327--PATENTS, DATA, AND COPYRIGHTS

0
1. The authority citation for 48 CFR parts 327 and 352 continues to 
read as follows:

    Authority:  5 U.S.C. 301; 40 U.S.C. 486(c).

0
2. Add subpart 327.3 to read as follows:

Subpart 327.3--Patent Rights under Government Contracts


327.303  Solicitation provision and contract clause.

    The Contracting Officer shall insert the clause at 352.227-11 
Patent Rights--Exceptional Circumstances and any appropriate alternates 
in lieu of FAR 52.227-14 whenever a Determination of Exceptional 
Circumstances (DEC) involving the provision of materials has been 
executed in accordance with Agency policy and procedures calls for its 
use and 352.227-11 appropriately covers the circumstances. The 
Contracting Officer should reference the DEC in the solicitation and 
shall attach a copy of the executed DEC to the contract.
0
3. Add subpart 327.4 to read as follows:

Subpart 327.4--Rights in Data and Copyrights


327.409  Solicitation provision and contract clause.

    The Contracting Officer shall insert the clause at 352.227-14 
Rights in Data--Exceptional Circumstances and any appropriate 
alternates in lieu of FAR 52.227-14 whenever a Determination of 
Exceptional Circumstances (DEC) executed in accordance with Agency 
policy and procedures calls for its use. Prior to using this clause a 
Determination of Exceptional Circumstances (DEC) must be executed in 
accordance with Agency policy and procedures. The Contracting Officer 
should reference the DEC in the solicitation and shall attach a copy of 
the executed DEC to the contract.

PART 352--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Add section 352.227-11 to read as follows:


352.227-11  Patent rights-exceptional circumstances.

    Patent Rights-Exceptional Circumstances (abbreviated month and year 
of Final Rule publication)
    This clause applies to all Contractor and subcontractor (at all 
tiers) Subject Inventions.

    (a) Definitions.
    ``Agency'' means the Agency of the U.S. Department of Health and 
Human Services that is entering into this contract.
    ``Class 1 Subject Invention'' means a Subject Invention 
described and defined in the DEC that will be assigned to a third 
party assignee, or assigned as directed by the Agency.
    ``Class 2 Subject Invention'' means a Subject Invention 
described and defined in the DEC.
    ``Class 3 Subject Invention'' means a Subject Invention that 
does not fall into Class 1 or Class 2 as defined in this clause.
    ``DEC'' means the Determination of Exceptional Circumstances 
signed by [insert approving official]---- on ---- [insert date]---- 
and titled ``[insert description]''
    ``Invention'' means any invention or discovery which is or may 
be patentable or otherwise protectable under title 35 of United 
States Code, or any novel variety of plant that is or may be 
protectable under the Plant Variety Protection Act (7 U.S.C. 2321, 
et. seq.)
    ``Made'' means: When used in relation to any invention other 
than a plant variety, the conception or first actual reduction to 
practice of such invention; or when used in relation to a plant 
variety, that the Contractor has at least tentatively determined 
that the variety has been reproduced with recognized 
characteristics.
    ``Material'' means any proprietary material, method, product, 
composition, compound or device, whether patented or unpatented, 
which is provided to the Contractor under this contract.

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    ``Nonprofit organization'' means a university or other 
institution of higher education or an organization of the type 
described in section 501(c)(3) of the Internal Revenue Code of 1954 
(26 U.S.C. 501(c)) and exempt from taxation under section 501(a) of 
the Internal Revenue Code (26 U.S.C. 501(a)) or any nonprofit 
scientific or educational organization qualified under a state 
Nonprofit organization statute.
    ``Practical application'' means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or 
method, or to operate, in the case of a machine or system; and, in 
each case, under such conditions as to establish that the invention 
is being utilized and that its benefits are, to the extent permitted 
by law or Government regulations, available to the public on 
reasonable terms.
    ``Small business firm'' means a small business concern as 
defined at section 2 of Public Law 85-536 (15 U.S.C. 632) and 
implementing regulations of the Administrator of the Small Business 
Administration. For the purpose of this clause, the size standards 
for small business concerns involved in Government procurement and 
subcontracting at 13 CFR 121.3-8 and 13 CFR 121.3-12, respectively, 
will be used.
    ``Subject Invention'' means any invention of the Contractor made 
in the performance of work under this contract.
    ``Third party assignee'' means any entity or organization that 
may, as described in the DEC, be assigned Class 1 inventions.
    (b) Allocation of principal rights. (1) Retention of pre-
existing rights. Third party assignees shall retain all preexisting 
rights to Material in which the Third party assignee has a 
proprietary interest.
    (2) Allocation of Subject Invention rights. (i) Disposition of 
Class 1 Subject Inventions. (A) Assignment to the Third party 
assignee or as directed by the Agency. The Contractor shall assign 
to the Third party assignee designated by the Agency the entire 
right, title, and interest throughout the world to each Subject 
Invention, or otherwise dispose of or transfer those rights as 
directed by the Agency, except to the extent that rights are 
retained by the Contractor under paragraph (b)(3) of this clause. 
Any such assignment or other disposition or transfer of rights will 
be subject to a nonexclusive, nontransferable, irrevocable, paid-up 
license to the United States government to practice or have 
practiced the Subject Invention for or on behalf of the United 
States throughout the world. Any assignment shall additionally be 
subject to the ``March-in rights'' of 35 U.S.C. 203 space. If the 
Contractor is a U.S. nonprofit educational institution. If the 
Contractor is a U.S. nonprofit educational, institution it may 
retain a royalty free, nonexclusive, nontransferable license solely 
to practice the invention for noncommercial internal research.
    (B) [Reserved]
    (ii) Disposition of Class 2 and 3 Subject Inventions. Class 2 
Subject Inventions shall be governed by FAR Clause 52.227-11, Patent 
Rights-Ownership (December 2007) (incorporated herein by reference). 
However, the Contractor shall grant a license in the Class 2 Subject 
Inventions to the Third party assignee or other party designated by 
the Agency as set forth in Alternate I.
    (iii) Class 3 Subject Inventions shall be governed by FAR Clause 
52.227-11, Patent Rights-Ownership by the Contractor (December 2007) 
(previously incorporated herein by reference).
    (3) Greater Rights Determinations. The Contractor, or an 
employee-inventor after consultation by the Agency with the 
Contractor, may request greater rights than are provided in 
paragraph (b)(1) of this clause in accordance with the procedures of 
FAR paragraph 27.304-1(c) . In addition to the considerations set 
forth in section 27.304-1(c), the Agency may consider whether 
granting the requested greater rights will interfere with rights of 
the Government or any Third party assignee or otherwise impede the 
ability of the Government or the Third party assignee to, for 
example, develop and commercialize new compounds, dosage forms, 
therapies, preventative measures, technologies or other approaches 
with potential for the diagnosis, prognosis, prevention and 
treatment of human diseases. A request for a determination of 
whether the Contractor or the employee-inventor is entitled to 
retain such greater rights must be submitted to the Agency 
Contracting Officer at the time of the first disclosure of the 
invention pursuant to paragraph (c)(1) of this clause, or not later 
than eight (8) months thereafter, unless a longer period is 
authorized in writing by the Contracting Officer for good cause 
shown in writing by the Contractor. Each determination of greater 
rights under this contract shall be subject to paragraph (c) of the 
FAR clause at 52.227-13 (incorporated herein by reference), and to 
any reservations and conditions deemed to be appropriate by the 
Agency such as the requirement to assign or exclusively license the 
rights to Subject Inventions to the Third party assignee. A 
determination by the Agency denying a request by the Contractor for 
greater rights in a Subject Invention may be appealed within thirty 
(30) days of the date the Contractor is notified of the 
determination to an Agency official at a level above the individual 
who made the determination. If greater rights are granted, the 
Contractor must file a patent application on the invention. Upon 
request, the Contractor shall provide the filing date, serial number 
and title, a copy of the patent application (including an English-
language version if filed in a language other than English), and 
patent number and issue date for any Subject Invention in any 
country for which the Contractor has retained title. Upon request, 
the Contractor shall furnish the Government an irrevocable power to 
inspect and make copies of the patent application file.
    (c) Invention disclosure by Contractor. The Contractor shall 
disclose in writing each Subject Invention to the Agency Contracting 
Officer and to the Director, Division of Extramural Inventions and 
Technology Resources (DEITR), if directed by the Contracting 
Officer, as provided in paragraph (j) of this clause within two 
months after the inventor discloses it in writing to Contractor 
personnel responsible for patent matters. The disclosure to the 
Agency Contracting Officer shall be in the form of a written report 
and shall identify the contract under which the invention was Made 
and all inventors. It shall be sufficiently complete in technical 
detail to convey a clear understanding to the extent known at the 
time of the disclosure, of the nature, purpose, operation, and the 
physical, chemical, biological or electrical characteristics of the 
invention. The disclosure shall also identify any publication, on 
sale (offer for sale), or public use of the invention and whether a 
manuscript describing the invention has been submitted for 
publication and, if so, whether it has been accepted for publication 
at the time of disclosure. In addition, after disclosure to the 
Agency, the Contractor will promptly notify the Contracting Officer 
and DEITR of the acceptance of any manuscript describing the 
invention for publication or of any on sale or public use planned by 
the Contractor. If the Contractor assigns a Subject Invention to the 
Third party assignee, the Contractor and its employee inventors 
shall assist the Third party assignee in securing patent protection.
    (d) Contractor action to protect the Third party assignee's and 
the Government's interest. (1) The Contractor agrees to execute or 
to have executed and promptly deliver to the Agency all instruments 
necessary to: establish or confirm the rights the Government has 
throughout the world in Subject Inventions pursuant to paragraph (b) 
of this clause; and convey title to a Third party assignee in 
accordance with paragraph (b) of this clause and enable the Third 
party assignee to obtain patent protection throughout the world in 
that Subject Invention.
    (2) The Contractor agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to 
disclose promptly in writing to personnel identified as responsible 
for the administration of patent matters and in a format suggested 
by the Contractor, each Subject Invention Made under contract in 
order that the Contractor can comply with the disclosure provisions 
of paragraph (c) of this clause, and to execute all papers necessary 
to file patent applications on Subject Inventions and to establish 
the Government's rights or a Third party assignee's rights in the 
Subject Inventions. This disclosure format should require, as a 
minimum, the information required by subparagraph (c)(1) of this 
clause. The Contractor shall instruct such employees, through 
employee agreements or other suitable educational programs, on the 
importance of reporting inventions in sufficient time to permit the 
filing of patent applications prior to U.S. or foreign statutory 
bars.
    (3) If the Contractor is granted greater rights, the Contractor 
agrees to include, within the specification of any United States 
non-provisional patent application it files, and any patent issuing 
thereon, covering a Subject Invention the following statement, 
``This invention was made with Government support under (identify 
the Contract) awarded by (identify the specific Agency). The 
Government has certain rights in the invention.''

[[Page 2233]]

    (4) The Contractor agrees to provide a final invention statement 
and certification prior to the close-out of the contract listing all 
Subject Inventions or stating that there were none.
    (e) Subcontracts. (1) The Contractor will include this clause in 
all subcontracts, regardless of tier, for experimental, 
developmental, or research work. At all tiers, the clause must be 
modified to identify the parties as follows: references to the 
Government are not changed, and the subcontractor has all rights and 
obligations of the Contractor in the clause. The Contractor will 
not, as part of the consideration for awarding the contract, obtain 
rights in the subcontractor's Subject Inventions.
    (2) In subcontracts, at any tier, the Agency, the subcontractor, 
and the Contractor agree that the mutual obligations of the parties 
created by this clause constitute a contract between the 
subcontractor and the Agency with respect to the matters covered by 
the clause; provided, however, that nothing in this paragraph is 
intended to confer any jurisdiction under the Contract Disputes Act 
in connection with proceedings under paragraph (c)(1)(ii) of FAR 
clause 52.227-13 which is incorporated by reference in paragraph 
(b)(2)(ii) of this clause.
    (f) Reporting on utilization of Subject Inventions in the event 
greater rights are granted to the Contractor. The Contractor agrees 
to submit, on request, periodic reports no more frequently than 
annually on the utilization of a Subject Invention or on efforts at 
obtaining such utilization that are being made by the Contractor or 
its licensees or assignees when a request under subparagraph b.3. 
has been granted by the Agency. Such reports shall include 
information regarding the status of development, date of first 
commercial sale or use, gross royalties received by the Contractor, 
and such other data and information as the Agency may reasonably 
specify. The Contractor also agrees to provide additional reports as 
may be requested by the Agency in connection with any march-in 
proceeding undertaken by the Agency in accordance with paragraph (h) 
of this clause. As required by 35. U.S.C. 202(c)(5), the Agency 
agrees it will not disclose such information to persons outside the 
Government without permission of the Contractor.
    (g) Preference for United States industry in the event greater 
rights are granted to the Contractor. Notwithstanding any other 
provision of this clause, the Contractor agrees that neither it nor 
any assignee will grant to any person the exclusive right to use or 
sell any Subject Invention in the United States unless such person 
agrees that any product embodying the Subject Invention or produced 
through the use of the Subject Invention will be manufactured 
substantially in the United States. However, in individual cases, 
the requirement for such an agreement may be waived by the Agency 
upon a showing by the Contractor or its assignee that reasonable but 
unsuccessful efforts have been made to grant licenses on similar 
terms to potential licensees that would be likely to manufacture 
substantially in the United States or that under the circumstances 
domestic manufacture is not commercially feasible.
    (h) March-in rights in the event greater rights are granted to 
the Contractor. The Contractor acknowledges that, with respect to 
any Subject Invention in which it has acquired ownership through the 
exercise of the rights specified in paragraph (b)(3) of this clause, 
the Agency has the right to require licensing pursuant to 35 U.S.C. 
203 and 210(c), and in accordance with the procedures in 37 CFR 
401.6 and any supplemental regulations of Agency in effect on the 
date of contract award.
    (i) Special provisions for contracts with Nonprofit 
organizations in the event greater rights are granted to the 
Contractor. If the Contractor is a Nonprofit organization, it shall:
    (1) Not assign rights to a Subject Invention in the United 
States without the written approval of the Agency, except where an 
assignment is made to an organization that has as one of its primary 
functions the management of inventions, provided, that the assignee 
shall be subject to the same provisions as the Contractor;
    (2) Share royalties collected on a Subject Invention with the 
inventor, including Federal employee co-inventors (but through their 
Agency if the Agency deems it appropriate) when the Subject 
Invention is assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 
401.10;
    (3) Use the balance of any royalties or income earned by the 
Contractor with respect to Subject Inventions, after payment of 
expenses (including payments to inventors) incidental to the 
administration of Subject Inventions for the support of scientific 
research or education;
    (4) Make efforts that are reasonable under the circumstances to 
attract licensees of Subject Inventions that are small business 
concerns, and give a preference to a small business concern when 
licensing a Subject Invention if the Contractor determines that the 
small business concern has a plan or proposal for marketing the 
invention which, if executed, is equally as likely to bring the 
invention to Practical application as any plans or proposals from 
applicants that are not small business concerns; provided, that the 
Contractor is also satisfied that the small business concern has the 
capability and resources to carry out its plan or proposal. The 
decision whether to give a preference in any specific case will be 
at the discretion of the Contractor; and
    (5) Allow the Secretary of Commerce to review the Contractor's 
licensing program and decisions regarding small business applicants, 
and negotiate changes to its licensing policies, procedures, or 
practices with the Secretary of Commerce when the Secretary's review 
discloses that the Contractor could take reasonable steps to more 
effectively implement the requirements of paragraph (i)(4) of this 
clause.
    (j) Communications. All invention disclosures and requests for 
greater rights shall be sent to the Agency Contracting Officer, as 
directed by the Contracting Officer. Additionally, a copy of all 
disclosures, confirmatory licenses to the Government, face page of 
the patent applications, waivers and other routine communications 
under this funding agreement at all tiers must be sent to:
    [INSERT Agency ADDRESS]
    Agency Invention Reporting Web site: https://www.iEdison.gov

Alternate I

    As prescribed in 327.303, the license to Class 2 inventions 
recited in 352.227-11(b)(2)(a) is as follows:
    [insert description of license to Class 2 inventions]

    (End of clause)


352.227-14   Rights in data--exceptional circumstances.

    As prescribed in 327.409(b)(1), insert the following clause with 
any appropriate alternates:

Rights in Data--Exceptional Circumstances (abbreviated month and year 
of Final Rule publication)

    (a) Definitions. As used in this clause--[Definitions may be 
added or modified in paragraph (a) as applicable.]
    ``Computer database'' or ``database means'' a collection of 
recorded information in a form capable of, and for the purpose of, 
being stored in, processed, and operated on by a computer. The term 
does not include computer software.
    ``Computer software''--
    (i) Means
    (A) Computer programs that comprise a series of instructions, 
rules, routines, or statements, regardless of the media in which 
recorded, that allow or cause a computer to perform a specific 
operation or series of operations; and
    (B) Recorded information comprising source code listings, design 
details, algorithms, processes, flow charts, formulas, and related 
material that would enable the computer program to be produced, 
created, or compiled.
    (ii) Does not include computer databases or computer software 
documentation.
    ``Computer software documentation'' means owner's manuals, 
user's manuals, installation instructions, operating instructions, 
and other similar items, regardless of storage medium, that explain 
the capabilities of the computer software or provide instructions 
for using the software.
    ``Data'' means recorded information, regardless of form or the 
media on which it may be recorded. The term includes technical data 
and computer software. The term does not include information 
incidental to contract administration, such as financial, 
administrative, cost or pricing, or management information.
    ``Form, fit, and function data'' means data relating to items, 
components, or processes that are sufficient to enable physical and 
functional interchangeability, and data identifying source, size, 
configuration, mating and attachment characteristics, functional 
characteristics, and performance requirements. For computer software 
it means data identifying source, functional characteristics, and 
performance requirements but specifically excludes the source code, 
algorithms, processes, formulas, and flow charts of the software.
    ``Limited rights'' means the rights of the Government in limited 
rights data as set forth

[[Page 2234]]

in the Limited Rights Notice in Alternate II paragraph (g)(3) if 
included in this clause.
    ``Limited rights data'' means data, other than computer 
software, that embody trade secrets or are commercial or financial 
and confidential or privileged, to the extent that such data pertain 
to items, components, or processes developed at private expense, 
including minor modifications.
    ``Restricted computer software'' means computer software 
developed at private expense and that is a trade secret, is 
commercial or financial and confidential or privileged, or is 
copyrighted computer software, including minor modifications of the 
computer software.
    ``Restricted rights,'' as used in this clause, means the rights 
of the Government in restricted computer software, as set forth in a 
Restricted Rights Notice of Alternate III paragraph (g)(4) if 
included in this clause, or as otherwise may be provided in a 
collateral agreement incorporated in and made part of this contract, 
including minor modifications of such computer software.
    ``Technical data'' means recorded information (regardless of the 
form or method of the recording) of a scientific or technical nature 
(including computer databases and computer software documentation). 
This term does not include computer software or financial, 
administrative, cost or pricing, or management data or other 
information incidental to contract administration. The term includes 
recorded information of a scientific or technical nature that is 
included in computer databases (See 41 U.S.C. 403(8)).
    ``Unlimited rights'' means the rights of the Government to use, 
disclose, reproduce, prepare derivative works, distribute copies to 
the public, and perform publicly and display publicly, in any manner 
and for any purpose, and to have or permit others to do so.
    (b) Allocation of rights. (1) Except as provided in paragraph 
(c) of this clause, the Government shall have unlimited rights in--
    (i) Data first produced in the performance of this contract;
    (ii) Form, fit, and function data delivered under this contract;
    (iii) Data delivered under this contract (except for restricted 
computer software) that constitute manuals or instructional and 
training material for installation, operation, or routine 
maintenance and repair of items, components, or processes delivered 
or furnished for use under this contract; and
    (iv) All other data delivered under this contract unless 
provided otherwise for limited rights data or restricted computer 
software in accordance with paragraph (g) of this clause.
    (2) The Contractor shall have the right to--
    (i) Assert copyright in data first produced in the performance 
of this contract to the extent provided in paragraph (c)(1) of this 
clause;
    (ii) Use, release to others, reproduce, distribute, or publish 
any data first produced or specifically used by the Contractor in 
the performance of this contract, unless provided otherwise in 
paragraph (d) of this clause;
    (iii) Substantiate the use of, add, or correct limited rights, 
restricted rights, or copyright notices and to take other 
appropriate action, in accordance with paragraphs (e) and (f) of 
this clause; and
    (iv) Protect from unauthorized disclosure and use those data 
that are limited rights data or restricted computer software to the 
extent provided in paragraph (g) of this clause.
    (c) Copyright. (1) Data first produced in the performance of 
this contract. (i) Unless provided otherwise in paragraph (d) of 
this clause, the Contractor may, without prior approval of the 
Contracting Officer, assert copyright in scientific and technical 
articles based on or containing data first produced in the 
performance of this contract and published in academic, technical or 
professional journals, symposia proceedings, or similar works. The 
prior, express written permission of the Contracting Officer is 
required to assert copyright in all other data first produced in the 
performance of this contract.
    (ii) When authorized to assert copyright to the data, the 
Contractor shall affix the applicable copyright notices of 17 U.S.C. 
401 or 402, and an acknowledgment of Government sponsorship 
(including contract number).
    (iii) For data other than computer software, the Contractor 
grants to the Government, and others acting on its behalf, a paid-
up, nonexclusive, irrevocable, worldwide license in such copyrighted 
data to reproduce, prepare derivative works, distribute copies to 
the public, and perform publicly and display publicly by or on 
behalf of the Government. For computer software, the Contractor 
grants to the Government, and others acting on its behalf, a paid-
up, nonexclusive, irrevocable, worldwide license in such copyrighted 
computer software to reproduce, prepare derivative works, and 
perform publicly and display publicly (but not to distribute copies 
to the public) by or on behalf of the Government.
    (2) Data not first produced in the performance of this contract. 
The Contractor shall not, without the prior written permission of 
the Contracting Officer, incorporate in data delivered under this 
contract any data not first produced in the performance of this 
contract unless the Contractor--
    (i) Identifies the data; and
    (ii) Grants to the Government, or acquires on its behalf, a 
license of the same scope as set forth in paragraph (c)(1) of this 
clause or, if such data are restricted computer software, the 
Government shall acquire a copyright license as set forth in 
paragraph (g)(4) of this clause (if included in this contract) or as 
otherwise provided in a collateral agreement incorporated in or made 
part of this contract.
    (3) Removal of copyright notices. The Government will not remove 
any authorized copyright notices placed on data pursuant to this 
paragraph (c), and will include such notices on all reproductions of 
the data.
    (d) Release, publication, and use of data. The Contractor shall 
have the right to use, release to others, reproduce, distribute, or 
publish any data first produced or specifically used by the 
Contractor in the performance of this contract, except--
    (1) As prohibited by Federal law or regulation (e.g., export 
control or national security laws or regulations);
    (2) As expressly set forth in this contract; or
    (3) If the Contractor receives or is given access to data 
necessary for the performance of this contract that contain 
restrictive markings, the Contractor shall treat the data in 
accordance with such markings unless specifically authorized 
otherwise in writing by the Contracting Officer or in the following 
paragraphs.
    (4) In addition to any other provisions set forth in this 
contract, the Contractor shall ensure that information concerning 
possible inventions made under this contract is not prematurely 
published thereby adversely affecting the ability to obtain patent 
protection on such inventions. Accordingly, the Contractor will 
provide the Contracting Officer a copy of any proposed publication 
or other public disclosure relating to the work performed under this 
contract at least 30 days in advance of the disclosure. Upon the 
Contracting Officer's request the Contractor agrees to delay the 
public disclosure of such data or publication of a specified paper 
for a reasonable time specified by the Contracting Officer, not to 
exceed 6 months, to allow for the filing of domestic and 
international patent applications in accordance with Clause 352.227-
11, Patent Rights--Exceptional Circumstances (abbreviated month and 
year of Final Rule publication).
    (5) Data on Material(s). The Contractor agrees that in 
accordance with paragraph (d)(2), proprietary data on Material(s) 
provided to the Contractor under or through this contract shall be 
used only for the purpose for which they were provided, including 
screening, evaluation or optimization and for no other purpose.
    (6) Confidentiality. (i) The Contractor shall take all 
reasonable precautions to maintain Confidential Information as 
confidential, but no less than the steps Contractor takes to secure 
its own confidential information.
    (ii) Contractor shall maintain Confidential Information as 
confidential unless specifically authorized otherwise in writing by 
the Contracting Officer. Confidential Information includes/does not 
include: [Government may define confidential information here.]
    (e) Unauthorized marking of data. (1) Notwithstanding any other 
provisions of this contract concerning inspection or acceptance, if 
any data delivered under this contract are marked with the notices 
specified in paragraph (g)(3) or (4) of this clause (if those 
alternate paragraphs are included in this clause), and use of the 
notices is not authorized by this clause, or if the data bears any 
other restrictive or limiting markings not authorized by this 
contract, the Contracting Officer may cancel or ignore the markings. 
However, pursuant to 41 U.S.C. 253d, the following procedures shall 
apply prior to canceling or ignoring the markings.
    (i) The Contracting Officer will make written inquiry to the 
Contractor affording the Contractor 60 days from receipt of the 
inquiry to provide written justification to substantiate the 
propriety of the markings;
    (ii) If the Contractor fails to respond or fails to provide 
written justification to substantiate the propriety of the markings 
within the 60-day period (or a longer time approved in writing by 
the Contracting

[[Page 2235]]

Officer for good cause shown), the Government shall have the right 
to cancel or ignore the markings at any time after said period and 
the data will no longer be made subject to any disclosure 
prohibitions.
    (iii) If the Contractor provides written justification to 
substantiate the propriety of the markings within the period set in 
paragraph (e)(1)(i) of this clause, the Contracting Officer will 
consider such written justification and determine whether or not the 
markings are to be cancelled or ignored. If the Contracting Officer 
determines that the markings are authorized, the Contractor will be 
so notified in writing. If the Contracting Officer determines, with 
concurrence of the head of the contracting activity, that the 
markings are not authorized, the Contracting Officer will furnish 
the Contractor a written determination, which determination will 
become the final Agency decision regarding the appropriateness of 
the markings unless the Contractor files suit in a court of 
competent jurisdiction within 90 days of receipt of the Contracting 
Officer's decision. The Government will continue to abide by the 
markings under this paragraph (e)(1)(iii) until final resolution of 
the matter either by the Contracting Officer's determination 
becoming final (in which instance the Government will thereafter 
have the right to cancel or ignore the markings at any time and the 
data will no longer be made subject to any disclosure prohibitions), 
or by final disposition of the matter by court decision if suit is 
filed.
    (2) The time limits in the procedures set forth in paragraph 
(e)(1) of this clause may be modified in accordance with Agency 
regulations implementing the Freedom of Information Act (5 U.S.C. 
552) if necessary to respond to a request there under.
    (3) Except to the extent the Government's action occurs as the 
result of final disposition of the matter by a court of competent 
jurisdiction, the Contractor is not precluded by this paragraph (e) 
from bringing a claim, in accordance with the Disputes clause of 
this contract, that may arise as the result of the Government 
removing or ignoring authorized markings on data delivered under 
this contract.
    (f) Omitted or incorrect markings. (1) Data delivered to the 
Government without any restrictive markings shall be deemed to have 
been furnished with unlimited rights. The Government is not liable 
for the disclosure, use, or reproduction of such data.
    (2) If the unmarked data has not been disclosed without 
restriction outside the Government, the Contractor may request, 
within 6 months (or a longer time approved by the Contracting 
Officer in writing for good cause shown) after delivery of the data, 
permission to have authorized notices placed on the data at the 
Contractor's expense. The Contracting Officer may agree to do so if 
the Contractor--
    (i) Identifies the data to which the omitted notice is to be 
applied;
    (ii) Demonstrates that the omission of the notice was 
inadvertent;
    (iii) Establishes that the proposed notice is authorized; and
    (iv) Acknowledges that the Government has no liability for the 
disclosure, use, or reproduction of any data made prior to the 
addition of the notice or resulting from the omission of the notice.
    (3) If data has been marked with an incorrect notice, the 
Contracting Officer may--
    (i) Permit correction of the notice at the Contractor's expense 
if the Contractor identifies the data and demonstrates that the 
correct notice is authorized; or
    (ii) Correct any incorrect notices.
    (g) Protection of limited rights data and restricted computer 
software. (1) The Contractor may withhold from delivery qualifying 
limited rights data or restricted computer software that are not 
data identified in paragraphs (b)(1)(i) through (iii) of this 
clause. As a condition to this withholding, the Contractor shall--
    (i) Identify the data being withheld; and
    (ii) Furnish form, fit, and function data instead.
    (2) Limited rights data that are formatted as a computer 
database for delivery to the Government shall be treated as limited 
rights data and not restricted computer software.
    (3) [Reserved]
    (h) Subcontracting. The Contractor shall obtain from its 
subcontractors all data and rights therein necessary to fulfill the 
Contractor's obligations to the Government under this contract. If a 
subcontractor refuses to accept terms affording the Government those 
rights, the Contractor shall promptly notify the Contracting Officer 
of the refusal and shall not proceed with the subcontract award 
without authorization in writing from the Contracting Officer.
    (i) Relationship to patents or other rights. Nothing contained 
in this clause shall imply a license to the Government under any 
patent or be construed as affecting the scope of any license or 
other right otherwise granted to the Government.

    (End of clause)
    Alternate I (abbreviated month and year of Final Rule publication). 
As prescribed in 327.409, substitute the following definition for 
``limited rights data'' in paragraph (a) of the basic clause:

    ``Limited rights data'' means data, other than computer 
software, developed at private expense that embody trade secrets or 
are commercial or financial and confidential or privileged.

    Alternate II (abbreviated month and year of Final Rule 
publication). As prescribed in 327.409, insert the following paragraph 
(g)(3) in the basic clause:

    (g)(3) Notwithstanding paragraph (g)(1) of this clause, the 
contract may identify and specify the delivery of limited rights 
data, or the Contracting Officer may require by written request the 
delivery of limited rights data that has been withheld or would 
otherwise be entitled to be withheld. If delivery of that data is 
required, the Contractor shall affix the following ``Limited Rights 
Notice'' to the data and the Government will treat the data, subject 
to the provisions of paragraphs (e) and (f) of this clause, in 
accordance with the notice:

Limited Rights Notice (abbreviated month and year of Final Rule 
publication)

    (a) These data are submitted with limited rights under 
Government Contract No. ---------- (and subcontract ----------, if 
appropriate). These data may be reproduced and used by the 
Government with the express limitation that they will not, without 
written permission of the Contractor, be used for purposes of 
manufacture nor disclosed outside the Government; except that the 
Government may disclose these data outside the Government for the 
following purposes, if any; provided that the Government makes such 
disclosure subject to prohibition against further use and 
disclosure: [Agencies may list additional purposes or if none, so 
state.]
    (b) This notice shall be marked on any reproduction of these 
data, in whole or in part.
    (End of notice)

    Alternate III (abbreviated month and year of Final Rule 
publication). As prescribed in 327.409, insert the following paragraph 
(g)(4) in the basic clause:

    (g)(4)(i) Notwithstanding paragraph (g)(1) of this clause, the 
contract may identify and specify the delivery of restricted 
computer software, or the Contracting Officer may require by written 
request the delivery of restricted computer software that has been 
withheld or would otherwise be entitled to be withheld. If delivery 
of that computer software is required, the Contractor shall affix 
the following ``Restricted Rights Notice'' to the computer software 
and the Government will treat the computer software, subject to 
paragraphs (e) and (f) of this clause, in accordance with the 
notice:

Restricted Rights Notice (abbreviated month and year of Final Rule 
publication)

    (a) This computer software is submitted with restricted rights 
under Government Contract No. ---------- (and subcontract ----------
, if appropriate). It may not be used, reproduced, or disclosed by 
the Government except as provided in paragraph (b) of this notice or 
as otherwise expressly stated in the contract.
    (b) This computer software may be--
    (1) Used or copied for use with the computer(s) for which it was 
acquired, including use at any Government installation to which the 
computer(s) may be transferred;
    (2) Used or copied for use with a backup computer if any 
computer for which it was acquired is inoperative;
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that the modified, adapted, or combined portions of the 
derivative software incorporating any of the delivered, restricted 
computer software shall be subject to the same restricted rights;
    (5) Disclosed to and reproduced for use by support service 
Contractors or their subcontractors in accordance with paragraphs 
(b)(1) through (4) of this notice; and
    (6) Used or copied for use with a replacement computer.

[[Page 2236]]

    (c) Notwithstanding the foregoing, if this computer software is 
copyrighted computer software, it is licensed to the Government with 
the minimum rights set forth in paragraph (b) of this notice.
    (d) Any other rights or limitations regarding the use, 
duplication, or disclosure of this computer software are to be 
expressly stated in, or incorporated in, the contract.
    (e) This notice shall be marked on any reproduction of this 
computer software, in whole or in part.
    (End of notice)
    (ii) Where it is impractical to include the Restricted Rights 
Notice on restricted computer software, the following short-form 
notice may be used instead:

Restricted Rights Notice Short Form (abbreviated month and year of 
Final Rule publication)

    Use, reproduction, or disclosure is subject to restrictions set 
forth in Contract No. ---------- (and subcontract, if appropriate) 
with ---------- (name of Contractor and subcontractor).
    (End of notice)
    (iii) If restricted computer software is delivered with the 
copyright notice of 17 U.S.C. 401, it will be presumed to be 
licensed to the Government without disclosure prohibitions, with the 
minimum rights set forth in paragraph (b) of this clause.
    Alternate IV (abbreviated month and year of Final Rule 
publication). As prescribed in 327.409, substitute the following 
paragraph (c)(1) for paragraph (c)(1) of the basic clause:

    (c) Copyright--(1) Data first produced in the performance of the 
contract. Except as otherwise specifically provided in this 
contract, the Contractor may assert copyright in any data first 
produced in the performance of this contract. When asserting 
copyright, the Contractor shall affix the applicable copyright 
notice of 17 U.S.C. 401 or 402, and an acknowledgment of Government 
sponsorship (including contract number), to the data when such data 
are delivered to the Government, as well as when the data are 
published or deposited for registration as a published work in the 
U.S. Copyright Office. For data other than computer software, the 
Contractor grants to the Government, and others acting on its 
behalf, a paid-up, nonexclusive, irrevocable, worldwide license for 
all such data to reproduce, prepare derivative works, distribute 
copies to the public, and perform publicly and display publicly, by 
or on behalf of the Government. For computer software, the 
Contractor grants to the Government and others acting on its behalf, 
a paid-up, nonexclusive, irrevocable, worldwide license for all such 
computer software to reproduce, prepare derivative works, and 
perform publicly and display publicly (but not to distribute copies 
to the public), by or on behalf of the Government.

    Alternate V (abbreviated month and year of Final Rule publication). 
As prescribed in 327.409, add the following paragraph (j) to the basic 
clause:

    (j) The Contractor agrees, except as may be otherwise specified 
in this contract for specific data deliverables listed as not 
subject to this paragraph, that the Contracting Officer may, up to 
three years after acceptance of all deliverables under this 
contract, inspect at the Contractor's facility any data withheld 
pursuant to paragraph (g)(1) of this clause, for purposes of 
verifying the Contractor's assertion of limited rights or restricted 
rights status of the data or for evaluating work performance. When 
the Contractor whose data are to be inspected demonstrates to the 
Contracting Officer that there would be a possible conflict of 
interest if a particular representative made the inspection, the 
Contracting Officer shall designate an alternate inspector.

    Dated: September 18, 2012.
Angela Billups,
Associate Deputy Assistant Secretary for Acquisition.
[FR Doc. 2012-31490 Filed 1-9-13; 8:45 am]
BILLING CODE 4150-24-P