[USC03] 10 USC 2321: Validation of proprietary data restrictions
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10 USC 2321: Validation of proprietary data restrictions Text contains those laws in effect on December 16, 2018
From Title 10-ARMED FORCESSubtitle A-General Military LawPART IV-SERVICE, SUPPLY, AND PROCUREMENTCHAPTER 137-PROCUREMENT GENERALLY

§2321. Validation of proprietary data restrictions

(a) Contracts Covered by Section.-This section applies to any contract for supplies or services entered into by the Department of Defense that includes provisions for the delivery of technical data.

(b) Contractor Justification for Restrictions.-A contract subject to this section shall provide that a contractor under the contract and any subcontractor under the contract at any tier shall be prepared to furnish to the contracting officer a written justification for any use or release restriction (as defined in subsection (i)) asserted by the contractor or subcontractor.

(c) Review of Restrictions.-(1) The Secretary of Defense shall ensure that there is a thorough review of the appropriateness of any use or release restriction asserted with respect to technical data by a contractor or subcontractor at any tier under a contract subject to this section.

(2) The review of an asserted use or release restriction under paragraph (1) shall be conducted before the end of the three-year period beginning on the later of-

(A) the date on which final payment is made on the contract under which the technical data is required to be delivered; or

(B) the date on which the technical data is delivered under the contract.


(d) Challenges to Restrictions.-(1) The Secretary of Defense may challenge a use or release restriction asserted with respect to technical data by a contractor or subcontractor at any tier under a contract subject to this section if the Secretary finds that-

(A) reasonable grounds exist to question the current validity of the asserted restriction; and

(B) the continued adherence by the United States to the asserted restriction would make it impracticable to procure the item to which the technical data pertain competitively at a later time.


(2)(A) A challenge to a use or release restriction asserted by the contractor in accordance with applicable regulations may not be made under paragraph (1) after the end of the six-year period described in subparagraph (B) unless the technical data involved-

(i) are publicly available;

(ii) have been furnished to the United States without restriction;

(iii) have been otherwise made available without restriction; or

(iv) are the subject of a fraudulently asserted use or release restriction.


(B) The six-year period referred to in subparagraph (A) is the six-year period beginning on the later of-

(i) the date on which final payment is made on the contract under which the technical data are required to be delivered; or

(ii) the date on which the technical data are delivered under the contract.


(3) If the Secretary challenges an asserted use or release restriction under paragraph (1), the Secretary shall provide written notice of the challenge to the contractor or subcontractor asserting the restriction. Any such notice shall-

(A) state the specific grounds for challenging the asserted restriction;

(B) require a response within 60 days justifying the current validity of the asserted restriction; and

(C) state that evidence of a justification described in paragraph (4) may be submitted.


(4) It is a justification of an asserted use or release restriction challenged under paragraph (1) that, within the three-year period preceding the challenge to the restriction, the Department of Defense validated a restriction identical to the asserted restriction if-

(A) such validation occurred after a challenge to the validated restriction under this subsection; and

(B) the validated restriction was asserted by the same contractor or subcontractor (or a licensee of such contractor or subcontractor).


(e) Time for Contractors to Submit Justifications.-If a contractor or subcontractor asserting a use or release restriction submits to the contracting officer a written request, showing the need for additional time to comply with the requirement to justify the current validity of the asserted restriction, additional time to adequately permit the submission of such justification shall be provided by the contracting officer as appropriate. If a party asserting a restriction receives notices of challenges to restrictions on technical data from more than one contracting officer, and notifies each contracting officer of the existence of more than one challenge, the contracting officer initiating the first in time challenge, after consultation with the party asserting the restriction and the other contracting officers, shall formulate a schedule of responses to each of the challenges that will afford the party asserting the restriction with an equitable opportunity to respond to each such challenge.

(f) Presumption of Development Exclusively at Private Expense.-In the case of a challenge to a use or release restriction that is asserted with respect to technical data of a contractor or subcontractor under a contract for commercial items, the contracting officer shall presume that the contractor or subcontractor has justified the restriction on the basis that the item was developed exclusively at private expense, whether or not the contractor or subcontractor submits a justification in response to the notice provided pursuant to subsection (d)(3). In such a case, the challenge to the use or release restriction may be sustained only if information provided by the Department of Defense demonstrates that the item was not developed exclusively at private expense.

(g) Decision by Contracting Officer.-(1) Upon a failure by the contractor or subcontractor to submit any response under subsection (d)(3), the contracting officer shall issue a decision pertaining to the validity of the asserted restriction.

(2) After review of any justification submitted in response to the notice provided pursuant to subsection (d)(3), the contracting officer shall, within 60 days of receipt of any justification submitted, issue a decision or notify the party asserting the restriction of the time within which a decision will be issued.

(h) Claims.-If a claim pertaining to the validity of the asserted restriction is submitted in writing to a contracting officer by a contractor or subcontractor at any tier, such claim shall be considered a claim within the meaning of chapter 71 of title 41.

(i) Rights and Liability Upon Final Disposition.-(1) If, upon final disposition, the contracting officer's challenge to the use or release restriction is sustained-

(A) the restriction shall be cancelled; and

(B) if the asserted restriction is found not to be substantially justified, the contractor or subcontractor asserting the restriction shall be liable to the United States for payment of the cost to the United States of reviewing the asserted restriction and the fees and other expenses (as defined in section 2412(d)(2)(A) of title 28) incurred by the United States in challenging the asserted restriction, unless special circumstances would make such payment unjust.


(2) If, upon final disposition, the contracting officer's challenge to the use or release restriction is not sustained-

(A) the United States shall continue to be bound by the restriction; and

(B) the United States shall be liable for payment to the party asserting the restriction for fees and other expenses (as defined in section 2412(d)(2)(A) of title 28) incurred by the party asserting the restriction in defending the asserted restriction if the challenge by the United States is found not to be made in good faith.


(j) Use or Release Restriction Defined.-In this section, the term "use or release restriction", with respect to technical data delivered to the United States under a contract subject to this section, means a restriction by the contractor or subcontractor on the right of the United States-

(1) to use such technical data; or

(2) to release or disclose such technical data to persons outside the Government or permit the use of such technical data by persons outside the Government.

(Added Pub. L. 98–525, title XII, §1216(a), Oct. 19, 1984, 98 Stat. 2597 ; amended Pub. L. 99–500 §101(c) [title X, §953(b)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–171, and Pub. L. 99–591, §101(c) [title X, §953(b)], Oct. 30, 1986, 100 Stat. 3341–82 , 3341-171; Pub. L. 99–661, div. A, title IX, formerly title IV, §953(b), Nov. 14, 1986, 100 Stat. 3951 , renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273 , Pub. L. 100–26, §7(a)(5), Apr. 21, 1987, 101 Stat. 276 ; Pub. L. 100–180, div. A, title XII, §1231(6), Dec. 4, 1987, 101 Stat. 1160 ; Pub. L. 103–35, title II, §201(g)(4), May 31, 1993, 107 Stat. 100 ; Pub. L. 103–355, title VIII, §8106(b), Oct. 13, 1994, 108 Stat. 3393 ; Pub. L. 109–364, div. A, title VIII, §802(b), Oct. 17, 2006, 120 Stat. 2313 ; Pub. L. 110–181, div. A, title VIII, §815(a)(2), Jan. 28, 2008, 122 Stat. 223 ; Pub. L. 111–350, §5(b)(18), Jan. 4, 2011, 124 Stat. 3844 ; Pub. L. 111–383, div. A, title VIII, §824(c), Jan. 7, 2011, 124 Stat. 4269 ; Pub. L. 112–81, div. A, title VIII, §815(b), Dec. 31, 2011, 125 Stat. 1492 ; Pub. L. 113–291, div. A, title X, §1071(a)(5), Dec. 19, 2014, 128 Stat. 3504 ; Pub. L. 114–92, div. A, title VIII, §813(a), Nov. 25, 2015, 129 Stat. 891 ; Pub. L. 115–232, div. A, title VIII, §§836(c)(8), 865, 866(a), Aug. 13, 2018, 132 Stat. 1866 , 1901.)

Amendment of Section

Pub. L. 115–232, div. A, title VIII, §836(c)(8), (h), Aug. 13, 2018, 132 Stat. 1866 , 1874, provided that, effective Jan. 1, 2020, subject to a savings provision, subsection (f) of this section is amended as follows:

(1) in paragraph (1), by striking "commercial items" and inserting "commercial products" and by striking "the item" both places it appears and inserting "commercial products"; and

(2) in paragraph (2)(A), in clauses (i) and (ii), by striking "commercial item" and inserting "commercial product".

Pub. L. 115–232, div. A, title VIII, §866(a), (c), Aug. 13, 2018, 132 Stat. 1901 , provided that, effective on the date of publication of the interim or final rule (whichever is earlier) revising the Defense Federal Acquisition Regulation Supplement, subsection (i) of this section is amended as follows:

(1) in heading, by inserting "Prior to and" after "Rights and Liability";

(2) by redesignating paragraphs (1) and (2) as paragraphs (2) and (3), respectively; and

(3) by inserting before paragraph (2), as so redesignated, the following new paragraph:

(1) Upon filing of a suit or appeal under the contract dispute statute by a contractor or subcontractor in an agency Board of Contract Appeals or United States Claims Court related to a decision made by a contracting officer under subsection (g), the Secretary of Defense, or a Secretary of a military department for programs for which milestone decision authority has been delegated, on a nondelegable basis, may, following notice to the contractor or subcontractor, authorize use of the technical data in dispute if the Secretary determines in writing that compelling mission readiness requirements will not permit awaiting the final decision by the agency Board of Contract Appeals or the United States Claims Court.

See 2018 Amendment notes below.

Codification

Pub. L. 99–591 is a corrected version of Pub. L. 99–500.

Another section 2321 of this title was contained in chapter 138 and was renumbered section 2341 of this title.

Amendments

2018-Subsec. (f). Pub. L. 115–232, §865, struck out par. (1) designation, substituted "In" for "Except as provided in paragraph (2), in", and struck out par. (2) which related to a challenge to a use or release restriction regarding technical data for a major weapon system, subsystem, or component developed exclusively at private expense.

Pub. L. 115–232, §836(c)(8)(B), which directed the amendment of par. (2)(A) by substituting "commercial product" for "commercial item" in cls. (i) and (ii), could not be executed because of the intervening amendment by Pub. L. 115–232, §865, which struck out par. (2). See above.

Pub. L. 115–232, §836(c)(8)(A), which directed the amendment of par. (1) by substituting "commercial products" for "commercial items" and, in two places, "commercial products" for "the item", was executed to subsec. (f) to reflect the probable intent of Congress and the intervening amendment by Pub. L. 115–232, §865, which struck out the par. (1) designation. See above.

Subsec. (i). Pub. L. 115–232, §866(a), inserted "Prior to and" after "Rights and Liability" in heading, added par. (1), and redesignated former pars. (1) and (2) as (2) and (3), respectively.

2015-Subsec. (f)(2). Pub. L. 114–92 amended par. (2) generally. Prior to amendment, par. (2) read as follows: "In the case of a challenge to a use or release restriction that is asserted with respect to technical data of a contractor or subcontractor (other than technical data for a commercially available off-the-shelf item as defined in section 104 of title 41) for a major system or a subsystem or component thereof on the basis that the major system, subsystem or component was developed exclusively at private expense, the challenge to the use or release restriction shall be sustained unless information provided by the contractor or subcontractor demonstrates that the item was developed exclusively at private expense."

2014-Subsec. (f)(2). Pub. L. 113–291 substituted "section 104 of title 41" for "section 35(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 431(c))".

2011-Subsec. (d)(2)(A). Pub. L. 112–81, §815(b)(1)(A), substituted "A challenge to a use or release restriction asserted by the contractor in accordance with applicable regulations may not be made under paragraph (1) after the end of the six-year period" for "Except as provided in subparagraph (C), a challenge to an asserted use or release restriction may not be made under paragraph (1) after the end of the three-year period" in introductory provisions.

Pub. L. 111–383, §824(c)(1), substituted "Except as provided in subparagraph (C), a challenge" for "A challenge" in introductory provisions.

Subsec. (d)(2)(A)(iv). Pub. L. 112–81, §815(b)(1)(B)–(D), added cl. (iv).

Subsec. (d)(2)(B). Pub. L. 112–81, §815(b)(2), substituted "six-year period" for "three-year period" in two places in introductory provisions.

Subsec. (d)(2)(C). Pub. L. 112–81, §815(b)(3), struck out subpar. (C) which read as follows: "The limitation in this paragraph shall not apply to a case in which the Secretary finds that reasonable grounds exist to believe that a contractor or subcontractor has erroneously asserted a use or release restriction with regard to technical data described in section 2320(a)(2)(A) of this title."

Pub. L. 111–383, §824(c)(2), added subpar. (C).

Subsec. (h). Pub. L. 111–350 substituted "chapter 71 of title 41" for "the Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.)".

2008-Subsec. (f)(2). Pub. L. 110–181 substituted "(other than technical data for a commercially available off-the-shelf item as defined in section 35(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 431(c)))" for "(whether or not under a contract for commercial items)".

2006-Subsec. (f). Pub. L. 109–364 substituted "Expense" for "Expense for Commercial Items Contracts" in heading, designated existing provisions as par. (1), substituted "Except as provided in paragraph (2), in" for "In", and added par. (2).

1994-Subsecs. (f) to (j). Pub. L. 103–355 added subsec. (f) and redesignated former subsecs. (f) to (i) as (g) to (j), respectively.

1993-Subsec. (d)(1)(B). Pub. L. 103–35 substituted "adherence" for "adherance".

1987-Subsec. (a). Pub. L. 100–26, §7(a)(5)(A)(ii), added subsec. (a) and struck out former subsec. (a) which read as follows: "A contract for supplies or services entered into by the Department of Defense which provides for the delivery of technical data shall provide that a contractor or subcontractor at any tier shall be prepared to furnish to the contracting officer a written justification for any restriction asserted by the contractor or subcontractor on the right of the United States to use such technical data."

Subsec. (b). Pub. L. 100–26, §7(a)(5)(A)(ii), added subsec. (b) and struck out former subsec. (b) which read as follows:

"(1) The Secretary of Defense shall ensure that there is a thorough review of the appropriateness of any restriction on the right of the United States to release or disclose technical data delivered under a contract to persons outside the Government, or to permit the use of such technical data by such persons. Such review shall be conducted before the end of the three-year period beginning on the date on which final payment is made on a contract under which technical data is required to be delivered, or the date on which the technical data is delivered under such contract, whichever is later.

"(2)(A) If the Secretary determines, at any time before the end of the three-year period beginning on the date on which final payment is made on a contract under which technical data is required to be delivered, or the date on which the technical data is delivered under such contract, whichever is later, that a challenge to a restriction is warranted, the Secretary shall provide written notice to the contractor or subcontractor asserting the restriction. Such a determination shall be based on a finding by the Secretary that reasonable grounds exist to question the current validity of the asserted restriction and that the continued adherence to the asserted restriction by the United States would make it impracticable to procure the item competitively at a later time. Such notice shall-

"(i) state the specific grounds for challenging the asserted restriction;

"(ii) require a response within 60 days justifying the current validity of the asserted restriction; and

"(iii) state that evidence of a validation by the Department of Defense of a restriction identical to the asserted restriction within the three-year period preceding the challenge shall serve as justification for the asserted restriction if-

"(I) the validation occurred after a review of the validated restriction under this subsection; and

"(II) the validated restriction was asserted by the same contractor or subcontractor (or any licensee of such contractor or subcontractor) to which such notice is being provided.

"(B) Notwithstanding subparagraph (A), the United States may challenge a restriction on the release, disclosure, or use of technical data delivered under a contract at any time if such technical data-

"(i) is publicly available;

"(ii) has been furnished to the United States without restriction; or

"(iii) has been otherwise made available without restriction."

Subsec. (c). Pub. L. 100–26, §7(a)(5)(A)(ii), added subsec. (c). Former subsec. (c) redesignated (e).

Subsec. (d). Pub. L. 100–26, §7(a)(5)(A)(ii), added subsec. (d). Former subsec. (d) redesignated (f).

Subsec. (d)(4)(A). Pub. L. 99–180, §1231(6)(A), substituted "subsection" for "paragraph".

Subsec. (e). Pub. L. 100–26, §7(a)(5)(A)(i), (B), redesignated former subsec. (c) as (e), inserted heading, and substituted "If a contractor or subcontractor asserting a use or release restriction" for "If a contractor or subcontractor asserting a restriction subject to this section". Former subsec. (e) redesignated (g).

Subsec. (f). Pub. L. 100–26, §7(a)(5)(A)(i), (C), redesignated former subsec. (d) as (f), inserted heading, and substituted "subsection (d)(3)" for "subsection (b)" in two places. Former subsec. (f) redesignated (h).

Subsec. (g). Pub. L. 100–26, §7(a)(5)(A)(i), (D), redesignated former subsec. (e) as (g) and inserted heading.

Subsec. (h). Pub. L. 100–26, §7(a)(5)(A)(i), (E)(i), redesignated former subsec. (f) as (h) and inserted heading.

Subsec. (h)(1). Pub. L. 100–26, §7(a)(5)(E)(ii)–(iv), substituted "the use or release restriction" for "the restriction on the right of the United States to use such technical data" in introductory provisions, struck out "on the right of the United States to use the technical data" after "the restriction" in subpar. (A), and substituted "asserting the restriction" for ", as appropriate," in subpar. (B).

Subsec. (h)(2). Pub. L. 100–26, §7(a)(5)(E)(v), substituted "the use or release restriction" for "the restriction on the right of the United States to use such technical data" in introductory provisions.

Subsec. (i). Pub. L. 100–180, §1231(6)(B), inserted "or subcontractor" in introductory provisions.

Pub. L. 100–26, §7(a)(5)(F), added subsec. (i).

1986-Subsecs. (a), (b). Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 amended generally subsecs. (a) and (b) identically. Prior to amendment, subsecs. (a) and (b) read as follows:

"(a) A contract for supplies or services entered into by the Department of Defense which provides for the delivery of technical data shall provide that-

"(1) a contractor or subcontractor at any tier shall be prepared to furnish to the contracting officer a written justification for any restriction asserted by the contractor or subcontractor on the right of the United States to use such technical data; and

"(2) the contracting officer may review the validity of any restriction asserted by the contractor or by a subcontractor under the contract on the right of the United States to use technical data furnished to the United States under the contract if the contracting officer determines that reasonable grounds exist to question the current validity of the asserted restriction and that the continued adherence to the asserted restriction by the United States would make it impracticable to procure the item competitively at a later time.

"(b) If after such review the contracting officer determines that a challenge to the asserted restriction is warranted, the contracting officer shall provide written notice to the contractor or subcontractor asserting the restriction. Such notice shall-

"(1) state the grounds for challenging the asserted restriction; and

"(2) require a response within 60 days justifying the current validity of the asserted restriction."

Effective Date of 2018 Amendment

Amendment by section 836(c)(8) of Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

Pub. L. 115–232, div. A, title VIII, §866(c), Aug. 13, 2018, 132 Stat. 1901 , provided that: "The amendments made by subsection (a) [amending this section] and the revision required by subsection (b) [see note below] shall become effective on the date of publication of the interim or final rule (whichever is earlier) required by subsection (b) and shall apply to solicitations issued by Department of Defense contracting activities after that date unless the senior procurement executive of the agency concerned grants a waiver on a case-by-case basis."

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 2302 of this title.

Effective Date of 1987 Amendment

Pub. L. 100–26, §12(d)(1), Apr. 21, 1987, 101 Stat. 289 , provided that: "The amendments to section 2321 of title 10, United States Code, made by section 7(a)(5) shall apply to contracts for which solicitations are issued after the end of the 210-day period beginning on October 18, 1986."

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 applicable to contracts for which solicitations are issued after end of 210-day period beginning Oct. 18, 1986, see section 101(c) of Pub. L. 99–500 and Pub. L. 99–591, and section 953(e) of Pub. L. 99–661, set out as a note under section 2320 of this title.

Effective Date

Section applicable with respect to solicitations issued after the end of the one-year period beginning Oct. 19, 1984, see section 1216(c)(2) of Pub. L. 98–525, set out as a note under section 2319 of this title.

Revision of the Defense Federal Acquisition Regulation Supplement

Pub. L. 115–232, div. A, title VIII, §866(b), Aug. 13, 2018, 132 Stat. 1901 , provided that: "Not later than 180 days after the date of the enactment of this Act [Aug. 13, 2018], the Secretary of Defense shall revise the Defense Federal Acquisition Regulation Supplement, by interim or final rule, to implement the amendments made by subsection (a) [amending this section]."

Guidance on Technical Data Right Negotiation

Pub. L. 115–232, div. A, title VIII, §866(d), Aug. 13, 2018, 132 Stat. 1901 , provided that: "The Secretary of Defense shall develop policies on the negotiation of technical data rights for noncommercial software that reflects the Department of Defense's needs for technical data rights in the event of a protest or replacement of incumbent contractor to meet defense requirements in the most cost effective manner."