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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: July 12, 2002

SUBJECT: Department of Defense; Treatment of Proprietary Data Meeting

SOURCE: Federal Register, July 12, 2002, Vol. 67, No. 134, page 46183

AGENCIES: Department of Defense (DOD)

ACTION: Notice of Public Meeting

SYNOPSIS: Director of Defense Procurement Deidre Lee is sponsoring a public meeting to discuss the treatment of proprietary data during all phases of DOD procurements.

DATES: The meeting will be held on July 26, 2002, from 9:00 a.m. to 5:00 p.m., with an hour break for lunch at 12:00 p.m.

If necessary to insure that all the views of interested parties are heard, subsequent public meetings may be held concerning this issue. The dates and times of any subsequent meetings will be published after the initial meeting, on the Defense Procurement Internet home page at http://www.acq.osd.mil/dp/.

ADDRESSES: The meeting will be held in Room C-43, Crystal Mall, Building 4, 1941 Jefferson Davis Highway, Arlington, VA 22202.

FOR FURTHER INFORMATION CONTACT: William H. Anderson, Chair, Defense Acquisition Regulations Council Committee on Patents, Data, and Copyrights, at 703-588-5090, fax: 703-588-8037, or e-mail: William.Anderson@pentagon.af.mil.

SUPPLEMENTAL INFORMATION: The Defense Federal Acquisition Regulation Supplement (DFARS) sections that address the treatment of contractors' proprietary data are sometimes inadequate for the needs of DOD. The prescriptive text and clauses in the DFARS do not adequately explain to contracting officers how to treat proprietary data obtained from commercial companies in the context of today's procurement environment. Therefore, the Director of Defense Procurement is holding a public meeting to discuss various aspects of the issue.

A background paper to be discussed at the public meeting is available on the Defense Procurement Internet home page at http://www.acq.osd.mil/dp/. It states the following:

           "Currently, the FAR only addresses the treatment of information (bid and proposal information, source selection information (as defined in [FAR] 3.104 [Procurement Integrity]), and data (as defined in [FAR] Part 27 [Patents, Data, and Copyrights])) submitted by contractors. [FAR] Section 3.104, as supplemented by DFARS Section 203.104, describes how the Government must treat bid and proposal information as well as other source selection information in order to comply with the Procurement Integrity Act. [FAR] Sections 14.401 [Receipt and Safeguarding of Bids] and [FAR] 15.207 [Handling Proposals and Information] describe how the government should handle sealed bids and proposals, respectively, in accordance with [FAR] Section 3.104. [FAR] Subpart 27.400 [Scope of Subpart] addresses the rights in data delivered to the government. For DOD, DFARS Section 227.7100 [Scope of Subpart] addresses the rights in data delivered to it. These subparts and sections of the FAR and DFARS, however, only address how the government should treat and handle information submitted to it solely for purposes of source selections (or future source selections) and for technical data actually delivered as a requirement under a contract.
           "The FAR and DFARS do not describe how DOD contracting officers should/may treat commercial proprietary information needed by the government for reasons such as: (1) assessing or evaluating on-going contracts, (2) maintaining competition, (3) conforming to reasonable industry standards and practices regarding confidentiality of information (4) developing acquisition strategies or approaches for future acquisitions, or (5) performing study efforts to support future acquisitions or acquisition reform initiatives. Typically, government personnel need this information to assess the applicability of commercial systems to government mission requirements. In order to make these assessments, the government does not need any rights in the technical data other than to review and/or evaluate the information.
           "The Under Secretary of Defense for Acquisition, Technology, and Logistics (OUSD AT&L) has stressed the importance of protecting commercial companies' intellectual property and has stated that the DOD must find ways of acquiring research services from the broadest possible scope of industry so the department can leverage industry's advances and ultimately acquire the best commercial products and technology for insertion in defense systems. One of the barriers to acquiring the best commercial research services is the limited and inconsistent manner in which the DOD treats commercial companies' trade secrets and the government's analyses and reports derived from this data. There is no appropriate guidance for contracting officers regarding how to handle, protect, and limit access to this type of data or analyses of the data. Congress has also expressed a concern about the lack of guidance in this regard. Accordingly, the DOD is looking for solutions to provide contracting officers together with DOD engineers and scientists the flexibility to deal with a company's trade secrets and still comply with the law concerning the treatment of technical data and provide other oversight entities, like the DOD Inspector General, the General Accounting Office and the Legislature, the appropriate rights to view this data."

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2002 by Panoptic Enterprises. All Rights Reserved.

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