FAR 27.304-2—Contracts placed by or for other Government agencies.
Plain-English Summary
FAR 27.304-2 explains how patent rights clauses are handled when one Government agency awards a contract on behalf of another agency. It covers the requesting agency’s duty to identify special circumstances, specify the patent rights clause to be used, and state when its own clause is required because of statute, a deviation, or exceptional circumstances. It also addresses how to treat contracts involving severable versus nonseverable work, including when only the requesting agency’s clause may be used and when different clauses must apply to different portions of the work. In addition, the section assigns responsibility for any needed agency determinations, reports, or deviations, limits the awarding agency’s ability to change the requesting agency’s clause, and allows the requesting agency to direct how invention disclosures and other reporting are handled. Practically, this section is meant to prevent conflicts between agencies’ patent policies, ensure the right clause is inserted up front, and make clear which agency will administer subject inventions and related reporting. It matters because interagency contracting can create ownership, reporting, and compliance problems if the agencies do not agree in advance on the governing patent rights terms.
Key Rules
Request must specify clause
When one agency asks another to award a contract, the request should describe any special circumstances and identify the patent rights clause to use. The clause must be selected and modified, if needed, under the policies of this subpart.
Agency clause controls when required
If the requesting agency says its own clause is required due to statute, a deviation, or exceptional circumstances, the awarding agency must use that clause instead of the standard clauses in this subpart.
Nonseverable work uses one clause
If the work is not severable and is funded in whole or in part by the requesting agency, the contract must include only the requesting agency’s clause and no other patent rights clause.
Severable work may be split
If the work is severable, the contracting officer must limit the requesting agency’s clause to the severable portion and apply the appropriate patent rights clause to the work for the awarding agency.
No required agency clause means standard clause
If the requesting agency says its clause is not required in the resulting contract, the awarding agency should use the appropriate patent rights clause, if any, under this subpart.
Requesting agency owns special actions
Any agency determination, report, or deviation needed because the requesting agency’s clause is used is the requesting agency’s responsibility unless the agencies agree otherwise.
No unilateral clause changes
The awarding agency may not change the requesting agency’s clause without the requesting agency’s prior approval.
Reporting and invention handling may be directed
The requesting agency may instruct how invention disclosures and other reporting requirements are to be forwarded or handled, and it normally administers subject inventions. These responsibilities should be established before any contract is awarded.
Responsibilities
Requesting Agency
Explain special circumstances in the interagency request, specify the patent rights clause to be used, and state whether its own clause is required. Handle any required determinations, reports, or deviations tied to use of its clause unless the agencies agree otherwise. May direct how invention disclosures and other reports are forwarded or handled, and normally administer subject inventions. Establish these responsibilities in advance of award.
Awarding Agency / Contracting Officer
Use the clause identified in the request and apply the correct patent rights clause based on whether the work is severable or nonseverable. Ensure the requesting agency’s clause is limited to the proper portion of work when severable, and do not alter the requesting agency’s clause without prior approval. Use the appropriate standard clause when the requesting agency says its clause is not required.
Both Agencies
Agree in advance on clause selection, reporting procedures, and administration of subject inventions when interagency contracting is used. Coordinate any exceptions, deviations, or special handling so the contract reflects the intended patent rights framework.
Practical Implications
Interagency contracts need patent rights decisions early; waiting until award can create clause conflicts, reporting gaps, or invalid terms.
The severable/nonseverable distinction is critical. Misclassifying the work can cause the wrong clause to apply to the wrong portion of performance.
The awarding agency cannot simply substitute its preferred patent clause. If the requesting agency requires its own clause, that clause controls unless the agencies agree otherwise.
Responsibility for invention disclosures and subject invention administration should be documented before award, or the agencies may later dispute who must process reports and enforce rights.
Contracting officers should confirm whether any statutory requirement, deviation, or exceptional circumstance drives the requesting agency’s clause, because that determines whether standard FAR clauses can be used at all.
Official Regulatory Text
The following procedures apply unless an interagency agreement provides otherwise: (a) When a Government agency requests another Government agency to award a contract on its behalf, the request should explain any special circumstances surrounding the contract and specify the patent rights clause to be used. The clause should be selected and modified, if necessary, in accordance with the policies and procedures of this subpart. If, however, the request states that a clause of the requesting agency is required ( e.g. , because of statutory requirements, a deviation, or exceptional circumstances), the awarding agency shall use that clause rather than those of this subpart. (1) If the request states that an agency clause is required and the work to be performed under the contract is not severable and is funded wholly or in part by the requesting agency, then include the requesting agency clause and no other patent rights clause in the contract. (2) If the request states that an agency clause is required, and the work to be performed under the contract is severable, then the contracting officer shall assure that the requesting agency clause applies only to that severable portion of the work and that the work for the awarding agency is subject to the appropriate patent rights clause. (3) If the request states that a requesting agency clause is not required in any resulting contract, the awarding agency shall use the appropriate patent rights clause, if any. (b) Any action requiring an agency determination, report, or deviation involved in the use of the requesting agency’s clause is the responsibility of the requesting agency unless the agencies agree otherwise. However, the awarding agency may not alter the requesting agency’s clause without prior approval of the requesting agency. (c) The requesting agency may require, and provide instructions regarding, the forwarding or handling of any invention disclosures or other reporting requirements of the specified clauses. Normally, the requesting agency is responsible for the administration of any subject inventions. This responsibility shall be established in advance of awarding any contracts.