Restricted rights in computer software

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1. The license for privately funded code

Restricted rights are one of the standard software licenses in the Defense Federal Acquisition Regulation Supplement (DFARS). The government obtains restricted rights in other than commercial computer software, required to be delivered or otherwise provided under a contract, that was developed exclusively at private expense (DFARS 227.7203-5(c)(1)). Restricted rights apply only to other than commercial computer software (DFARS 252.227-7014(a)).

Under the clause at DFARS 252.227-7014, the contractor grants or obtains for the government a royalty free, worldwide, nonexclusive, irrevocable license in the software and documentation it covers (DFARS 252.227-7014(c)). The restricted rights definition then lists exactly what the government may do with privately funded code. There are seven rights, each with its own conditions.

2. One computer, transfers and copies

The first right is to use a computer program with one computer at one time (DFARS 252.227-7014(a)). The program may not be accessed by more than one terminal or central processing unit, or time shared, unless the contract permits it. The second is to transfer a program to another government agency without the contractor’s further permission. That is allowed if the transferring agency destroys all its copies of the program and related documentation and notifies the licensor, and the transferred program stays subject to the clause.

The third right is to make a reasonable number of copies for safekeeping, backup, modification or other authorized activities (DFARS 252.227-7014(a)). The fourth is to modify the software. The government may then use the modified software only on one computer at a time and for copies, and may release it only in the ways the definition allows.

3. Repair, integration and urgent needs

The fifth right lets the government use, and let service contractors supporting the contract or a related contract use, the software for three purposes (DFARS 252.227-7014(a)). They are diagnosing and correcting deficiencies in a program, and modifying software so a program can be combined, adapted or merged with other programs. The third is when necessary to respond to urgent tactical situations. The government must notify the party that granted restricted rights of any such release.

The service contractors need either a signed use and nondisclosure agreement or a contract that carries the DFARS 252.227-7025 clause (DFARS 252.227-7014(a)). The government shall not permit the recipient to decompile, disassemble or reverse engineer the software, or to use software the government reverse engineered for any other purpose. The use remains subject to the first four rights’ limits.

The sixth right covers contractors performing emergency repairs or overhaul of items bought under the contract or a related one (DFARS 252.227-7014(a)). The government may let them use the software when necessary for the repair or overhaul, or to modify it to reflect the work done. The same agreement or clause requirement applies, the same bar on reverse engineering, and the same limits.

4. Oversight and support contractors

The seventh right allows use and release of the software to a person authorized to receive restricted rights software for management and oversight of a program (DFARS 252.227-7014(a)). It also lets covered government support contractors, under contracts containing DFARS 252.227-7025, use the software and release it to such persons. The government may not permit a support contractor to reverse engineer the software, and the first four rights’ limits apply.

In the clause the contractor accepts that its restricted software may go to covered support contractors, and that it will be told when that happens (DFARS 252.227-7014(c)(3)(iii)). It can insist on a direct nondisclosure agreement with each of them, or give that up in writing. Such an agreement has to reflect the DFARS 252.227-7025 restrictions, with other terms only if both sides agree.

5. No duty to give more

A contractor that delivers software with restricted rights does not have to grant more (DFARS 227.7203-5(c)(2)). If the government needs more, it has to negotiate, and any extra rights it obtains are listed in a license agreement attached to the contract. Under the clause, the contractor agrees to enter promptly into such negotiations if the government asks (DFARS 252.227-7014(c)(3)(ii)).

6. Negotiating software licenses

A specific software license is negotiated in two situations: where both sides agree to change the standard rights, and where the government wants rights it does not have (DFARS 227.7203-5(d)). In negotiating, the government considers the planned software maintenance philosophy, expected time or user sharing needs and other relevant factors. If it is negotiating to give up rights in documentation, it considers the administrative burden of protecting restricted documentation from unauthorized release. The negotiated license must state the government’s rights to use and disclose the software or documentation, and how far it may authorize others to do so. Every negotiated right is recorded in that license agreement.

The clause also allows the standard rights, including the government purpose rights period, to be modified by mutual agreement (DFARS 252.227-7014(c)(4)). How funding decides which license applies is covered in how funding sets software rights. Those changes may never leave the government with less than restricted rights in software, or less than limited rights in software documentation (DFARS 252.227-7014(c)(4)(i)).

7. Foreign recipients

Software or documentation may be released to foreign governments, foreign contractors or international organizations only if federal export controls and other national security laws also permit it (DFARS 227.7203-16). Subject to those laws, the Defense Department may release software in which it has unlimited rights to such entities, or authorize them to use it. It may not release software with asserted restrictions to them unless the recipient is bound by the same terms as the use and nondisclosure agreement, and the requirements of the software clause have been met.

Key terms

Restricted rights	The license in privately funded other than commercial software, defined by seven rights.
One computer at one time	The basic use right, with no time sharing unless the contract permits.
Agency transfer	Moving a program to another agency after destroying all copies and notifying the licensor.
Reverse engineering bar	The rule that recipients may not decompile, disassemble or reverse engineer the software.
Urgent tactical situation	One of the purposes for which service contractors may use and modify the software.

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

Systems in the field rely on software support that works within these limits. 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.