DFARS § 252.227-7014 requires defense contractors to identify in their proposals any computer software that will be delivered to the government with “restricted rights.” But what happens if you forgot to identify your restricted rights software in your proposal? Have you inadvertently given the government “unlimited rights” to use, copy, and distribute your software?
DFARS § 252.227-7014(e)(3) provides the following guidance:
In addition to the assertions made in the Attachment, other assertions may be identified after award when based on new information or inadvertent omissions unless the inadvertent omissions would have materially affected the source selection decision. Such identification and assertion shall be submitted to the Contracting Officer as soon as practicable prior to the scheduled date for delivery of the software, in the following format, and signed by an official authorized to contractually obligate the Contractor: ….
As indicated above, the DFARS provides two grounds for post-award assertions of restricted rights: (1) “new information” and (2) “inadvertent omissions.” Unfortunately, the DFARS does not provide any insight into what type of “new information” might warrant a post-award assertion of restricted rights. This ground might apply where the contractor’s failure to identify the software can be attributed to some conduct of the government, such as inadequacy in the solicitation or a post-award change of requirements.
For “inadvertent omissions,” a contractor seeking to make a post-award assertion of restricted rights will need to be ready to explain to the contracting officer why the omission was inadvertent (and not an intentional bait-and-switch) and why the omission did not materially affect the source selection decision. Unfortunately, even if the contractor succeeds in the convincing the contracting officer that the omission was entirely innocent, the contractor may still face a significant hurdle in convincing the contracting officer that the omission did not materially affect the source selection decision. Among other reasons, the contracting officer may believe that the government should not be paying as much for software that is subject to restricted rights.
Ultimately, a contractor who is unable to convince the contracting officer that the omission did not materially affect the source selection decision could find itself facing a choice between delivering the software with unlimited rights or a termination of the contract. Of course, there could be situations where terminating the contract (hopefully, for convenience, rather than for default) might be preferable to delivering the software to the government with unlimited rights.
Finally, the DFARS requires post-award assertions of restricted rights to be made “as soon as practicable prior to the scheduled date of delivery of the software ….” This behooves contractors to review any deliverables that may include software to ensure that they have made the required assertions in their proposal, as well as ensuring that such software has been marked with the required restrictive legends prior to delivery.