Government purpose rights and the nondisclosure form

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1. Where government purpose rights come from

Government purpose rights are one of three standard licenses in the Defense Federal Acquisition Regulation Supplement (DFARS). The government obtains them in technical data pertaining to items, components or processes developed with mixed funding (DFARS 227.7103-5(b)(1)). The exception is where the government is entitled to unlimited rights under one of the listed categories, such as form, fit and function data. Government purpose rights also apply to data created with mixed funding under a contract that does not require developing or producing items, components or processes.

The license has two parts (DFARS 252.227-7013(a)). The government may use, modify, reproduce, release, perform, display or disclose the data within the government without restriction. It may also release or disclose the data outside the government, and authorize the recipients to use it, for United States government purposes.

2. What counts as a government purpose

A government purpose is any activity in which the United States government is a party (DFARS 252.227-7013(a)). The definition expressly includes cooperative agreements with international or multinational defense organizations. It also includes sales or transfers by the United States government to foreign governments or international organizations. Government purposes include competitive procurement. They do not include any right to use or disclose technical data for commercial purposes, or to authorize others to do so.

3. A negotiable period

The period during which government purpose rights apply is negotiable (DFARS 227.7103-5(b)(2)). The clause at DFARS 252.227-7013 provides a nominal five-year period, and either party may ask for a different one. Changes may be made at any time before the data are delivered, without consideration from either side. The DFARS says longer periods should be negotiated when five years is not enough time to apply the data commercially, or when needed to recognize subcontractors’ interests in the data.

The period begins when the contract, subcontract, letter contract, modification or option exercise that required the development is executed (DFARS 227.7103-5(b)(3)). When it ends, the government has unlimited rights in the data, including the right to authorize others to use it commercially. During the period, the contractor has the exclusive right, including the right to license others, to use the data for any commercial purpose for the time stated in the legend (DFARS 252.227-7013(c)(2)(iv)).

4. Limits during the period

While the period runs, the government may not use, or authorize others to use, data marked with government purpose rights legends for commercial purposes (DFARS 227.7103-5(b)(4)). It may not release or disclose the data to anyone, or authorize others to, unless one of two conditions is met. The intended recipient must first become subject to the use and nondisclosure agreement in DFARS 227.7103-7. Or the recipient must be a government contractor receiving the data to perform a contract that contains DFARS 252.227-7025, the clause limiting use and disclosure of government-furnished information marked with restrictive legends.

Where data will go to a contractor whose contract lacks that clause, the contract may be modified before release to add it, instead of having the contractor sign an agreement (DFARS 227.7103-5(b)(5)). Contracting activities must set procedures so that marked data, including data released through a solicitation, go only to persons bound by the use and nondisclosure restrictions (DFARS 227.7103-5(b)(6)). Public announcements in the System for Award Management or elsewhere must give notice of those requirements. Class agreements, such as one covering all solicitations a company receives within a reasonable period, are authorized and may be obtained at any time before release.

5. The use and nondisclosure agreement

Technical data or software delivered with restrictions may not be given to third parties unless the intended recipient first signs the prescribed agreement (DFARS 227.7103-7(a) and DFARS 227.7103-7(b)). The exception is a government contractor that needs a third party’s data or software to perform a contract containing the DFARS 252.227-7025 clause. The specific conditions for using limited rights data, restricted rights software or small business research data must be set out in an attachment to the agreement (DFARS 227.7103-7(a)(1)). For data under special license rights, the contracting officer completes the agreement with conditions consistent with the license (DFARS 227.7103-7(a)(2)).

Under the agreement, the recipient may use data marked with government purpose rights legends only for government purposes and not for any commercial purpose (DFARS 227.7103-7(c)). Without the contractor’s written permission, it may release the data only to its own subcontractors or suppliers, actual or prospective, who need them to offer for or perform its contracts. Those subcontractors and suppliers must sign a consistent agreement first. Data marked with limited rights legends may be used only as the attachment specifies, and the recipient must promptly notify the contractor that it has signed and what data it is receiving. Software marked with restricted rights may be used only to perform the named contract, and may not be enhanced, decompiled, disassembled or reverse engineered.

6. The recipient’s other promises

The recipient agrees to adopt operating procedures and physical security measures to protect the data from inadvertent release (DFARS 227.7103-7(c)). It accepts the data as provided, without any government representation or warranty as to suitability. It may make its own agreement directly with the contractor about use of the data. It also indemnifies the government against claims arising from misuse or unauthorized disclosure by the recipient or anyone it released the data to.

The agreement is signed for the benefit of the contractor, which is a third party beneficiary with the right of direct action against the recipient or anyone the recipient released the data to (DFARS 227.7103-7(c)). The agreement runs from signature to a stated end date, and its obligations survive expiry or termination. The recipient must destroy the data and all copies no later than 30 days after that end date. It must have everyone it released the data to do the same, and notify the contractor. The funding rules behind the license are covered in how funding sets technical data rights.

Key terms

Government purpose rights	Unrestricted use within the government, and release outside it for government purposes.
Government purpose	Any activity in which the United States government is a party, including foreign sales and transfers.
Rights period	A nominal five-year period, negotiable, after which the government has unlimited rights.
Use and nondisclosure agreement	The DFARS 227.7103-7 agreement third parties sign before receiving restricted data.
Third party beneficiary	The contractor’s status under the agreement, with a right of direct action.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

Support contractors often handle data under these terms. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.