Understanding Updates to DFARS Supplement on Technical Data and Software

The Defense Federal Acquisition Regulation Supplement (DFARS) has been amended by the Department of Defense (DoD) to incorporate several key updates. These changes, effective January 17, 2025, aim to enhance clarity, consistency, and alignment with statutory language. The updates primarily involve adjustments to rules governing technical data and computer software in government procurement contracts.

One of the significant changes is the extension of the validation period for asserted restrictions on technical data and computer software. Under the new rule, this period increases from three to six years, allowing the government more time to challenge and validate assertions made by contractors. This adjustment aligns with the statutory changes in the National Defense Authorization Act for Fiscal Year 2012, which emphasized extending these timeframes to ensure comprehensive review. The rule also introduces an exception to the six-year limit for cases involving fraudulently asserted use or release restrictions. The intent is to safeguard government interests by addressing instances where technical data or software rights have been misrepresented.

Public comments on the proposed changes were considered before finalizing the rule. Some concerns revolved around the consistency of language and definitions within the DFARS clauses. For instance, the phrase "restrictive markings" was replaced with "asserted restrictions" to align with statutory terminology. This change ensures that the clauses are not only legally consistent but also operationally clear for contractors and government officials alike.

The DoD also addressed issues related to the applicability of these updates to commercial products and services. Clarifications were made to ensure that challenges related to funding for the development of commercial products or services align with the original statutory language. The government requires sufficient information to verify whether these items were developed exclusively at private expense.

Another critical area of focus in the amendments involves the procedural steps for validating asserted restrictions. Contractors are now mandated to maintain robust records to justify their claims over technical data and software rights. If a challenge is raised, the contracting officer will follow a structured process to resolve disputes, which may include issuing a final decision or escalating the matter to a higher authority. These procedures aim to create a more transparent and efficient resolution process while ensuring the government’s rights are protected.

The amendments also highlight the government's discretion to challenge restrictions even after the six-year period under specific circumstances, such as public availability or fraudulent assertions. This ensures that the government retains flexibility to address unforeseen issues that may arise beyond the standard validation period.

Despite these comprehensive updates, some stakeholders expressed concerns during the public comment period. They suggested that certain language changes might lead to confusion and called for more precise definitions, especially regarding terms like "fraudulently asserted." However, the DoD maintained that the existing definitions, informed by legal precedents and statutory language, are sufficient to guide the implementation of the rules.

These changes are not expected to impose new reporting or compliance burdens on small entities. However, they underscore the importance of meticulous record-keeping and compliance with data and software rights clauses for all contractors. The amendments also reflect a commitment to ensuring fair and equitable treatment of contractors while safeguarding the government’s interests in procurement processes.

In summary, the updates to the DFARS represent a critical step toward modernizing the rules governing technical data and software rights in government contracts. By extending the validation period and clarifying the associated procedures, the DoD aims to foster a more transparent and accountable procurement environment. Contractors are encouraged to familiarize themselves with these changes and ensure their practices align with the updated requirements to avoid potential disputes.

Disclaimer: This blog post is for informational purposes only and is not guaranteed to be accurate. It does not constitute legal advice. Readers should consult qualified professionals for specific legal guidance.