DFARS

DFARS

Change Number: DFARS Change 08/26/2022
Effective Date: 08/26/2022

Defense Federal Acquisition Regulation

Part 227 - PATENTS, DATA, AND COPYRIGHTS

      Subpart 227.3 - PATENT RIGHTS UNDER GOVERNMENT CONTRACTS

           227.303 Contract clauses.

           227.304 Procedures.

                227.304-1 General.

      Subpart 227.4 - RIGHTS IN DATA AND COPYRIGHTS

           227.400 Scope of subpart.

      Subpart 227.6 - FOREIGN LICENSE AND TECHNICAL ASSISTANCE AGREEMENTS

           227.670 Scope.

           227.671 General.

           227.672 Policy.

           227.673 Foreign license and technical assistance agreements between the Government and domestic concerns.

           227.674 Supply contracts between the Government and a foreign government or concern.

           227.675 Foreign license and technical assistance agreements between a domestic concern and a foreign government or concern.

                227.675-1 International Traffic in Arms Regulations.

                227.675-2 Review of agreements.

           227.676 Foreign patent interchange agreements.

      Subpart 227.70 - INFRINGEMENT CLAIMS, LICENSES, AND ASSIGNMENTS

           227.7000 Scope.

           227.7001 Policy.

           227.7002 Statutes pertaining to administrative claims of infringement.

           227.7003 Claims for copyright infringement.

           227.7004 Requirements for filing an administrative claim for patent infringement.

           227.7005 Indirect notice of patent infringement claims.

           227.7006 Investigation and administrative disposition of claims.

           227.7007 Notification and disclosure to claimants.

           227.7008 Settlement of indemnified claims.

           227.7009 Patent releases, license agreements, and assignments.

                227.7009-1 Required clauses.

                227.7009-2 Clauses to be used when applicable.

                227.7009-3 Additional clauses—contracts except running royalty contracts.

                227.7009-4 Additional clauses—contracts providing for payment of a running royalty.

           227.7010 Assignments.

           227.7011 Procurement of rights in inventions, patents, and copyrights.

           227.7012 Contract format.

           227.7013 Recordation.

      Subpart 227.71 - RIGHTS IN TECHNICAL DATA

           227.7100 Scope of subpart.

           227.7101 Definitions.

           227.7102 Commercial items, components, or processes.

                227.7102-1 Policy.

                227.7102-2 Rights in technical data.

                227.7102-3 Government right to review, verify, challenge and validate asserted restrictions.

                227.7102-4 Contract clauses.

           227.7103 Noncommercial items or processes.

                227.7103-1 Policy.

                227.7103-2 Acquisition of technical data.

                227.7103-3 Early identification of technical data to be furnished to the Government with restrictions on use, reproduction or disclosure.

                227.7103-4 License rights.

                227.7103-5 Government rights.

                227.7103-6 Contract clauses.

                227.7103-7 Use and non-disclosure agreement.

                227.7103-8 Deferred delivery and deferred ordering of technical data.

                227.7103-9 Copyright.

                227.7103-10 Contractor identification and marking of technical data to be furnished with restrictive markings.

                227.7103-11 Contractor procedures and records.

                227.7103-12 Government right to establish conformity of markings.

                227.7103-13 Government right to review, verify, challenge, and validate asserted restrictions.

                227.7103-14 Conformity, acceptance, and warranty of technical data.

                227.7103-15 Subcontractor rights in technical data.

                227.7103-16 Providing technical data to foreign governments, foreign contractors, or international organizations.

                227.7103-17 Overseas contracts with foreign sources.

           227.7104 Contracts under the Small Business Innovation Research (SBIR) Program.

           227.7105 Contracts for the acquisition of existing works.

                227.7105-1 General.

                227.7105-2 Acquisition of existing works without modification.

                227.7105-3 Acquisition of modified existing works.

           227.7106 Contracts for special works.

           227.7107 Contracts for architect-engineer services.

                227.7107-1 Architectural designs and data clauses for architect-engineer or construction contracts.

                227.7107-2 Contracts for construction supplies and research and development work.

                227.7107-3 Approval of restricted designs.

           227.7108 Contractor data repositories.

      Subpart 227.72 - RIGHTS IN COMPUTER SOFTWARE AND COMPUTER SOFTWARE DOCUMENTATION

           227.7200 Scope of subpart.

           227.7201 Definitions.

           227.7202 Commercial computer software and commercial computer software documentation.

                227.7202-1 Policy.

                227.7202-2 Reserved.

                227.7202-3 Rights in commercial computer software or commercial computer software documentation.

                227.7202-4 Contract clause.

           227.7203 Noncommercial computer software and noncommercial computer software documentation.

                227.7203-1 Policy.

                227.7203-2 Acquisition of noncommercial computer software and computer software documentation.

                227.7203-3 Early identification of computer software or computer software documentation to be furnished to the Government with restrictions on use, reproduction or disclosure.

                227.7203-4 License rights.

                227.7203-5 Government rights.

                227.7203-6 Contract clauses.

                227.7203-8 Deferred delivery and deferred ordering of computer software and computer software documentation.

                227.7203-9 Copyright.

                227.7203-10 Contractor identification and marking of computer software or computer software documentation to be furnished with restrictive markings.

                227.7203-11 Contractor procedures and records.

                227.7203-12 Government right to establish conformity of markings.

                227.7203-13 Government right to review, verify, challenge, and validate asserted restrictions.

                227.7203-14 Conformity, acceptance, and warranty of computer software and computer software documentation.

                227.7203-15 Subcontractor rights in computer software or computer software documentation.

                227.7203-16 Providing computer software or computer software documentation to foreign governments, foreign contractors, or international organizations.

                227.7203-17 Overseas contracts with foreign sources.

           227.7204 Contracts under the Small Business Innovation Research Program.

           227.7205 Contracts for special works.

           227.7206 Contracts for architect-engineer services.

           227.7207 Contractor data repositories.

Part 228 - BONDS AND INSURANCE

Part 229 - TAXES

      Subpart 229.1 - GENERAL

           229.101 Resolving tax problems.

           229.170 Reporting of foreign taxation on U.S. assistance programs.

                229.170-1 Definition.

                229.170-2 Policy.

                229.170-3 Reports.

                229.170-4 Contract clause.

      Subpart 229.4 - CONTRACT CLAUSES

           229.402 Foreign contracts.

                229.402-70 Additional provisionsand clauses.

      Subpart 229.70 - SPECIAL PROCEDURES FOR OVERSEAS CONTRACTS

Subpart 229.70 - SPECIAL PROCEDURES FOR OVERSEAS CONTRACTS

To obtain tax relief for overseas contracts, follow the procedures at PGI 229.70.

Part 231 - CONTRACT COST PRINCIPLES AND PROCEDURES

Part 232 - CONTRACT FINANCING

      232.001 Definitions.

      232.006 Reduction or suspension of contract payments upon finding of fraud.

           232.006-5 Reporting.

      232.007 Contract financing payments.

      232.009 Providing accelerated payments to small business subcontractors.

           232.009-1 General.

           232.009-2 Contract clause.

      232.070 Responsibilities.

      232.071 Reserved.

      232.072 Financial responsibility of contractors.

           232.072-1 Required financial reviews.

           232.072-2 Appropriate information.

           232.072-3 Cash flow forecasts.

      Subpart 232.1 - NON-COMMERCIAL ITEM PURCHASE FINANCING

           232.102 Description of contract financing methods.

                232.102-70 Provisional delivery payments.

           232.104 Providing contract financing.

      Subpart 232.2 - COMMERCIAL ITEM PURCHASE FINANCING

           232.202 RESERVED

                232.202-4 Security for Government financing.

           232.206 Solicitation provisions and contract clauses.

      Subpart 232.3 - LOAN GUARANTEES FOR DEFENSE PRODUCTION

           232.302 Authority.

      Subpart 232.4 - ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMS

           232.404 Exclusions.

           232.409 Contracting officer action.

                232.409-1 Recommendation for approval.

           232.410 Findings, determination, and authorization.

           232.412 Contract clause.

                232.412-70 Additional clauses.

           232.470 Advance payment pool.

      Subpart 232.5 - PROGRESS PAYMENTS BASED ON COSTS

           232.501 General.

                232.501-1 Customary progress payment rates.

                232.501-2 Unusual progress payments.

                232.501-3 Contract price.

           232.502 Preaward matters.

                232.502-4 Contract clauses.

                     232.502-4-70 Additional clauses.

           232.503 Postaward matters.

                232.503-6 Suspension or reduction of payments.

                232.503-15 Application of Government title terms.

      Subpart 232.6 - CONTRACT DEBTS

           232.602 Responsibilities.

           232.603 Debt determination.

           232.604 Demand for payment.

           232.610 Compromising debts.

           232.611 Contract clause.

           232.670 Transfer of responsibility for debt collection.

           232.671 Bankruptcy reporting.

      Subpart 232.7 - CONTRACT FUNDING

           232.702 Policy.

           232.703 Contract funding requirements.

                232.703-1 General.

                232.703-3 Contracts crossing fiscal years.

                232.703-70 Military construction appropriations act restriction.

           232.704 Limitation of cost or funds.

                232.704-70 Incrementally funded fixed-price contracts.

           232.706 Contract clauses.

                232.706-70 Clausefor limitation of Governments obligation.

      Subpart 232.8 - ASSIGNMENT OF CLAIMS

           232.803 Policies.

           232.805 Procedure.

           232.806 Contract clauses.

      Subpart 232.9 - PROMPT PAYMENT

           232.901 Applicability.

           232.903 Responsibilities.

           232.904 Determining payment due dates.

           232.905 Payment documentation and process.

           232.906 Making payments.

           232.908 Contract clauses.

      Subpart 232.10 - PERFORMANCE-BASED PAYMENTS

           232.1001 Policy.

                232.1003-70 Criteria for use.

           232.1004 Procedures.

                232.1005-70 Solicitation provisions and contract clauses.

      Subpart 232.11 - ELECTRONIC FUNDS TRANSFER

           232.1110 Solicitation provision and contract clauses.

      Subpart 232.70 - ELECTRONIC SUBMISSION AND PROCESSING OF PAYMENT REQUESTS AND RECEIVING REPORTS

           232.7000 Scope of subpart.

           232.7001 Definitions.

           232.7002 Policy.

           232.7003 Procedures.

           232.7004 Contract clauses.

      Subpart 232.71 - LEVIES ON CONTRACT PAYMENTS

           232.7100 Scope of subpart.

           232.7101 Policy and procedures.

           232.7102 Contract clause.

      Subpart 232.72 - Reserved

232.001 Definitions.

“Incremental funding” means the partial funding of a contract or an exercised option, with additional funds anticipated to be provided at a later time.

232.006 Reduction or suspension of contract payments upon finding of fraud.

232.006-5 Reporting.

Departments and agencies, in accordance with department/agency procedures, shall prepare and submit to the Under Secretary of Defense (Acquisition, Technology, and Logistics), through the Director of Defense Procurement and Acquisition Policy, annual reports (Report Control Symbol DD-AT&L(A)1891) containing the information required by FAR 32.006-5.

232.007 Contract financing payments.

(a) DoD policy is to make contract financing payments as quickly as possible. Generally, the contracting officer shall insert the standard due dates of 7 days for progress payments, and 14 days for performance-based payments and interim payments on cost-type contracts, in the appropriate paragraphs of the respective payment clauses. For interim payments on cost-reimbursement contracts for services, see 232.906 (a)(i).

(b) The contracting officer should coordinate contract financing payment terms with offices that will be involved in the payment process to ensure that specified terms can be met. Where justified, the contracting officer may insert a due date greater than, but not less than, the standard. In determining payment terms, consider—

(i) Geographical separation;

(ii) Workload;

(iii) Contractor ability to submit a proper request; and

(iv) Other factors that could affect timing of payment.

232.009 Providing accelerated payments to small business subcontractors.

232.009-1 General.

Section 852 of the National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232) requires DoD to provide accelerated payments to small business contractors and subcontractors, to the fullest extent permitted by law, with a goal of 15 days.

232.009-2 Contract clause.

Use the clause at 252.232-7017 , Accelerating Payments to Small Business Subcontractors—Prohibition on Fees and Consideration, in solicitations and contracts, including those using FAR part 12 procedures for the acquisition of commercial items, that include the clause at FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors.

232.070 Responsibilities.

(a) The Director of Defense Procurement and Acquisition Policy, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (OUSD(AT&L)DPAP) is responsible for ensuring uniform administration of DoD contract financing, including DoD contract financing policies and important related procedures. Agency discretion under FAR Part 32 is at the DoD level and is not delegated to the departments and agencies. Proposals by the departments and agencies, to exercise agency discretion, shall be submitted to OUSD(AT&L)DPAP.

(b) Departments and agencies are responsible for their day-to-day contract financing operations. Refer specific cases involving financing policy or important procedural issues to OUSD(AT&L)DPAP for consideration through the department/agency Contract Finance Committee members (also see Subpart 201.4 for deviation request and approval procedures).

(c) See PGI 232.070 (c) for information on department/agency contract financing offices.

232.071 Reserved.

232.072 Financial responsibility of contractors.

Use the policies and procedures in this section in determining the financial capability of current or prospective contractors.

232.072-1 Required financial reviews.

The contracting officer shall perform a financial review when the contracting officer does not otherwise have sufficient information to make a positive determination of financial responsibility. In addition, the contracting officer shall consider performing a financial review—

(a) Prior to award of a contract, when—

(1) The contractor is on a list requiring preaward clearance or other special clearance before award;

(2) The contractor is listed on the Consolidated List of Contractors Indebted to the Government (Hold-Up List), or is otherwise known to be indebted to the Government;

(3) The contractor may receive Government assets such as contract financing payments or Government property;

(4) The contractor is experiencing performance difficulties on other work; or

(5) The contractor is a new company or a new supplier of the item.

(b) At periodic intervals after award of a contract, when—

(1) Any of the conditions in paragraphs (a)(2) through (a)(5) of this subsection are applicable; or

(2) There is any other reason to question the contractor’s ability to finance performance and completion of the contract.

232.072-2 Appropriate information.

(a) The contracting officer shall obtain the type and depth of financial and other information that is required to establish a contractor’s financial capability or disclose a contractor’s financial condition. While the contracting officer should not request information that is not necessary for protection of the Government’s interests, the contracting officer must insist upon obtaining the information that is necessary. The unwillingness or inability of a contractor to present reasonably requested information in a timely manner, especially information that a prudent business person would be expected to have and to use in the professional management of a business, may be a material fact in the determination of the contractor’s responsibility and prospects for contract completion.

(b) The contracting officer shall obtain the following information to the extent required to protect the Government’s interest. In addition, if the contracting officer concludes that information not listed in paragraphs (b)(1) through (b)(10) of this subsection is required to comply with 232.072-1 , that information should be requested. The information must be for the person(s) who are legally liable for contract performance. If the contractor is not a corporation, the contracting officer shall obtain the required information for each individual/joint venturer/partner:

(1) Balance sheet and income statement—

(i) For the current fiscal year (interim);

(ii) For the most recent fiscal year and, preferably, for the 2 preceding fiscal years. These should be certified by an independent public accountant or by an appropriate officer of the firm; and

(iii) Forecasted for each fiscal year for the remainder of the period of contract performance.

(2) Summary history of the contractor and its principal managers, disclosing any previous insolvencies—corporate or personal, and describing its products or services.

(3) Statement of all affiliations disclosing—

(i) Material financial interests of the contractor;

(ii) Material financial interests in the contractor;

(iii) Material affiliations of owners, officers, directors, major stockholders; and

(iv) The major stockholders if the contractor is not a widely-traded, publicly-held corporation.

(4) Statement of all forms of compensation to each officer, manager, partner, joint venturer, or proprietor, as appropriate—

(i) Planned for the current year;

(ii) Paid during the past 2 years; and

(iii) Deferred to future periods.

(5) Business base and forecast that—

(i) Shows, by significant markets, existing contracts and outstanding offers, including those under negotiation; and

(ii) Is reconcilable to indirect cost rate projections.

(6) Cash forecast for the duration of the contract (see 232.072-3 ).

(7) Financing arrangement information that discloses—

(i) Availability of cash to finance contract performance;

(ii) Contractor’s exposure to financial crisis from creditor’s demands;

(iii) Degree to which credit security provisions could conflict with Government title terms under contract financing;

(iv) Clearly stated confirmations of credit with no unacceptable qualifications; and

(v) Unambiguous written agreement by a creditor if credit arrangements include deferred trade payments or creditor subordinations/repayment suspensions.

(8) Statement of all state, local, and Federal tax accounts, including special mandatory contributions, e.g., environmental superfund.

(9) Description and explanation of the financial effect of issues such as—

(i) Leases, deferred purchase arrangements, or patent or royalty arrangements;

(ii) Insurance, when relevant to the contract;

(iii) Contemplated capital expenditures, changes in equity, or contractor debt load;

(iv) Pending claims either by or against the contractor;

(v) Contingent liabilities such as guarantees, litigation, environmental, or product liabilities;

(vi) Validity of accounts receivable and actual value of inventory, as assets; and

(vii) Status and aging of accounts payable.

(10) Significant ratios such as—

(i) Inventory to annual sales;

(ii) Inventory to current assets;

(iii) Liquid assets to current assets;

(iv) Liquid assets to current liabilities;

(v) Current assets to current liabilities; and

(vi) Net worth to net debt.

232.072-3 Cash flow forecasts.

(a) A contractor must be able to sustain a sufficient cash flow to perform the contract. When there is doubt regarding the sufficiency of a contractor’s cash flow, the contracting officer should require the contractor to submit a cash flow forecast covering the duration of the contract.

(b) A contractor’s inability or refusal to prepare and provide cash flow forecasts or to reconcile actual cash flow with previous forecasts is a strong indicator of serious managerial deficiencies or potential contract cost or performance problems.

(c) Single or one-time cash flow forecasts are of limited forecasting power. As such, they should be limited to preaward survey situations. Reliability of cash flow forecasts can be established only by comparing a series of previous actual cash flows with the corresponding forecasts and examining the causes of any differences.

(d) Cash flow forecasts must—

(1) Show the origin and use of all material amounts of cash within the entire business unit responsible for contract performance, period by period, for the length of the contract (or until the risk of a cash crisis ends); and

(2) Provide an audit trail to the data and assumptions used to prepare it.

(e) Cash flow forecasts can be no more reliable than the assumptions on which they are based. Most important of these assumptions are—

(1) Estimated amounts and timing of purchases and payments for materials, parts, components, subassemblies, and services;

(2) Estimated amounts and timing of payments for purchase or production of capital assets, test facilities, and tooling;

(3) Amounts and timing of fixed cash charges such as debt installments, interest, rentals, taxes, and indirect costs;

(4) Estimated amounts and timing of payments for projected labor, both direct and indirect;

(5) Reasonableness of projected manufacturing and production schedules;

(6) Estimated amounts and timing of billings to customers (including progress payments), and customer payments;

(7) Estimated amounts and timing of cash receipts from lenders or other credit sources, and liquidation of loans; and

(8) Estimated amounts and timing of cash receipts from other sources.

(f) The contracting officer should review the assumptions underlying the cash flow forecasts. In determining whether the assumptions are reasonable and realistic, the contracting officer should consult with—

(1) The contractor;

(2) Government personnel in the areas of finance, engineering, production, cost, and price analysis; or

(3) Prospective supply, subcontract, and loan or credit sources.

Subpart 232.72 - Reserved

Part 233 - PROTESTS, DISPUTES, AND APPEALS

DFARS Parts

DFARS Appendix