When the government may challenge a restriction

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1. Assertions are not the last word

Under the Defense Federal Acquisition Regulation Supplement (DFARS), an offeror’s assertion of restrictions on technical data does not, by itself, determine the extent of the government’s rights in the data (DFARS 227.7103-13(a)). Under 10 U.S.C. 3782, the government may challenge an asserted restriction on two conditions. There must be reasonable grounds to question the assertion’s validity, and continued adherence to it must make later competitive procurement of the item impractical. All challenges follow the validation clause at DFARS 252.227-7037 (DFARS 227.7103-13(d)).

The contractor, or a subcontractor at any tier, must keep records sufficient to justify the validity of its asserted restrictions on technical data delivered or to be delivered (DFARS 252.227-7037(c)). Except for the commercial item presumption described below, it must be ready to give the contracting officer a written justification in response to a challenge.

2. Avoid challenges before a competitive award

The DFARS notes that the statutory challenge procedures could significantly delay awards under competitive procurements (DFARS 227.7103-13(b)). It therefore directs contracting officers to avoid challenging asserted restrictions before a competitive award, unless resolving the assertion is essential to completing the procurement. Asserted restrictions should be reviewed before technical data deliverable under the contract are accepted (DFARS 227.7103-13(d)(1)).

Contracting officers must have reasonable grounds to challenge an assertion, and must carefully consider all available information about it first (DFARS 227.7103-13(c)(1)).

3. The commercial item presumption

For technical data related to commercial products or services, contracting officers must presume that the item was developed exclusively at private expense (DFARS 227.7103-13(c)(2)). That presumption holds whether or not the contractor or subcontractor submits a justification in response to a challenge. The contracting officer may not challenge the assertion unless the government can specifically state reasonable grounds to question it. The challenge notice must include enough information to reasonably show that the item was not developed exclusively at private expense. To sustain the challenge, the contracting officer must provide information demonstrating that.

The challenge notice and all related correspondence are handled under the procedures for classified information and controlled unclassified information (DFARS 227.7103-13(c)(2)). A contractor’s or subcontractor’s failure to respond cannot be the sole basis for a final decision denying the validity of an assertion about a commercial item. The clause states the same presumption (DFARS 252.227-7037(b)).

4. Asking before challenging

Before a challenge, the contracting officer may ask the contractor or subcontractor for a written explanation of any asserted restriction (DFARS 252.227-7037(d)(1)). If the basis is still unclear, the contracting officer may ask for more information in, or reasonably available from, its records, such as a statement of facts with supporting documents. The contractor or subcontractor must provide it within the time required or a mutually agreed longer period. The DFARS adds that if the person fails to respond, or the information does not justify the restriction, a challenge should be considered (DFARS 227.7103-13(d)(2)(ii)).

The contracting officer moves to a formal challenge after finding two things (DFARS 252.227-7037(d)(2)). There must be reasonable grounds to question the restriction’s current validity, and continued adherence to it must make impracticable the later competitive acquisition of the item or process. If the contractor or subcontractor does not answer the request for information, the contracting officer may challenge on the second finding alone (DFARS 252.227-7037(d)(3)).

5. Dealing directly with subcontractors

Under the clause, the contractor agrees that the government may deal directly with subcontractors at any tier that assert restrictions, without creating or implying privity of contract (DFARS 252.227-7037(k)). Contracting officers should let a subcontractor or supplier handle challenge and validation matters directly with the government in three situations (DFARS 227.7103-13(d)(3)). One is where its business interests in its data would be compromised by disclosure to a higher tier contractor. Another is where there is reason to believe the prime will not respond in time and delay would jeopardize the subcontractor’s right to assert restrictions. The third is where the subcontractor or supplier asks.

6. When the right to challenge runs out

The DFARS and the clause state the challenge period differently. The DFARS says assertions must be challenged within three years after final payment under the contract, or three years after delivery of the data, whichever is later (DFARS 227.7103-13(d)(1)). The clause says the contracting officer may review and decide in writing to challenge a restriction within six years of final payment or six years of delivery, whichever is later (DFARS 252.227-7037(i)(1)).

Both texts allow a challenge at any time if the data are publicly available, have been furnished to the United States without restriction, or have otherwise been made available without restriction. The DFARS does not count a release resulting only from the sale or transfer of an interest in the data, or of all or part of a business (DFARS 227.7103-13(d)(1) and DFARS 252.227-7037(i)(1)). The clause adds data that are the subject of a fraudulently asserted use or release restriction. The notice, response and decision steps are covered in the challenge notice and the final decision.

7. Challenges to software restrictions

Software documentation is technical data, so restrictions on it are challenged under the technical data validation clause (DFARS 227.7203-13(d)(2)). Computer software itself follows a separate validation clause, DFARS 252.227-7019. The government may require an offeror or contractor to submit enough information to evaluate a software assertion, and may challenge it on reasonable grounds to believe it is not valid (DFARS 227.7203-13(a)). Contracting officers should have a reason to suspect an assertion before asking for information, and must tell the offeror or contractor that reason (DFARS 227.7203-13(b)). A need for more license rights is not, by itself, a sufficient basis for such a request. For software, the right to challenge expires three years after final payment or three years after delivery, whichever is later, except for software that is publicly available or was furnished or otherwise made available without restrictions (DFARS 227.7203-13(d)(3)(i)).

Key terms

Challenge	A formal government contest of an asserted restriction under DFARS 252.227-7037.
Reasonable grounds	The basis a contracting officer must have before challenging an assertion.
Commercial item presumption	The presumption that a commercial item was developed exclusively at private expense.
Prechallenge request	A request for a written explanation and supporting records before any challenge.
Privity of contract	A direct contract relationship, which direct dealing with subcontractors does not create.

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

Data disputes can delay support for fielded equipment. 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.