FAR 27.404-2—Limited rights data and restricted computer software.
Plain-English Summary
FAR 27.404-2 explains how the Government protects and, when necessary, obtains delivery of two sensitive categories of technical information: limited rights data and restricted computer software. It describes the basic protection framework under the Rights in Data-General clause at 52.227-14, including the contractor’s ability to withhold qualifying data and instead provide form, fit, and function information. It also covers the alternate definition of limited rights data that may be used in certain contracts, the use of Alternate II to require delivery of limited rights data, and the Limited Rights Notice that limits Government use and disclosure. The section further explains the role of the representation at 52.227-15 in deciding whether Alternate II is needed, the special treatment of limited rights data delivered as a computer database, and the use of Alternate III to require delivery of restricted computer software. Finally, it sets out the Government’s minimum restricted rights in delivered software, including use on acquired, backup, replacement, and transferred computers, reproduction for backup or safekeeping, modification and derivative use, and disclosure to support service contractors under controlled conditions. In practice, this section matters because it determines whether the Government receives data/software, what rights it gets, and how contracting officers should structure solicitations and contracts to avoid disputes over proprietary information and mission needs.
Key Rules
Basic data protection
The standard clause at 52.227-14 lets contractors protect qualifying limited rights data and restricted computer software by withholding it from the Government and providing form, fit, and function data instead. This is the default protection approach unless the contract requires delivery of the protected material.
Alternate definition for data
For contracts that do not involve items, components, or processes intended to be acquired by or for the Government, an agency may use Alternate I’s definition of limited rights data. Under that definition, the data must be developed at private expense and either embody a trade secret or be commercial or financial and confidential or privileged.
Alternate II for data delivery
Alternate II allows the Government to require delivery of limited rights data instead of allowing the contractor to withhold it. The contract may identify deliverable data up front, or the contracting officer may later request delivery in writing of data withheld or identified to be withheld under paragraph (g)(1).
Limited rights notice controls use
When limited rights data is delivered under Alternate II, the Government’s rights are limited by the Limited Rights Notice in paragraph (g)(3). The Government may not use the data for manufacture or disclose it outside the Government except as the notice allows, and any permitted disclosure must carry restrictions on further use and disclosure.
Permitted special uses of data
Agency supplements may expand the Limited Rights Notice to allow specific uses such as support service contractor use, nongovernment evaluation, use by other program contractors, emergency repair or overhaul, or release to a foreign government when needed to serve U.S. interests. These are exceptions to the general prohibition on Government use and disclosure.
Representation helps decide Alternate II
The provision at 52.227-15 asks offerors whether limited rights data are likely to be delivered, helping the contracting officer decide whether Alternate II should be included. If the need for Alternate II is discovered later in an unsolicited proposal or during performance, it may be added by modification if necessary.
Database treatment rule
If data that would otherwise qualify as limited rights data is delivered as a computer database, it is treated as limited rights data—not restricted computer software—for purposes of paragraph (g) of 52.227-14. This prevents the form of delivery from changing the underlying rights analysis.
Alternate III for software delivery
Alternate III allows the Government to require delivery of restricted computer software instead of letting the contractor withhold it. The contracting officer must either identify the software in the contract or request delivery in writing during performance of software withheld or identified to be withheld.
Software is an end item
Unlike most data, computer software can be a deliverable end item in itself, so contracting officers should use Alternate III whenever delivery of restricted computer software is needed to meet agency requirements. This makes software delivery a mission-driven decision, not just a data-rights issue.
Minimum restricted rights in software
Unless otherwise agreed, delivered restricted computer software comes with the minimum restricted rights in paragraph (d)(3). Those rights generally allow use on the acquired computers, backup computers, replacement computers, and transferred installations; reproduction for backup or safekeeping; modification or combination with other software; and disclosure to support service contractors under controlled conditions.
Responsibilities
Contracting Officer
Determine whether limited rights data or restricted computer software is likely to be delivered and select the proper clause alternates. Identify deliverable data or software in the contract when delivery is required, issue written requests during performance when authorized, and ensure the contract reflects any agency-specific permitted uses or special restrictions.
Agency
Decide whether to adopt the alternate definition of limited rights data and whether to supplement the Limited Rights Notice with approved special-purpose uses. Ensure any disclosure to third parties is controlled and that recipients are bound not to further use or disclose the protected information except as allowed.
Contractor
Identify qualifying limited rights data or restricted computer software, withhold it when permitted, and provide form, fit, and function data instead when appropriate. When delivery is required, provide the data or software subject to the applicable notice and rights structure, and protect proprietary information consistent with the clause.
Offeror
Respond to the representation at 52.227-15 by stating whether limited rights data are likely to be delivered. This helps the contracting officer determine whether Alternate II should be included in the solicitation or contract.
Support Service Contractor or Other Recipient
Use any disclosed limited rights data or restricted software only within the scope of the permitted purpose and comply with restrictions on further use, reproduction, and disclosure. Do not treat the information as unrestricted or share it beyond the authorized channel.
Practical Implications
Contracting officers should decide early whether the Government truly needs delivery of protected data or software; if so, the correct alternate must be included up front or added later by modification when allowed.
The biggest pitfall is confusing the right to receive information with the right to use it. Delivery under Alternate II or III does not give the Government unlimited rights; the applicable notice still controls use, reproduction, and disclosure.
Offeror responses under 52.227-15 are important planning tools, but they are not a substitute for careful review of the actual technical requirements and deliverables.
Software needs special attention because it can be both data and an end item. If the agency needs to operate, maintain, or transfer the software, Alternate III may be necessary even when the contractor would prefer to withhold it.
Any disclosure to support contractors, evaluators, foreign governments, or other program contractors should be tightly controlled and documented, because downstream recipients must also be restricted from further use or disclosure.
Official Regulatory Text
(a) General . The basic clause at 52.227-14 , Rights in Data-General, enables the contractor to protect qualifying limited rights data and restricted computer software by withholding the data from the Government and instead delivering form, fit, and function data. (b) Alternate definition of limited rights data . For contracts that do not require the development, use, or delivery of items, components, or processes that are intended to be acquired by or for the Government, an agency may adopt the alternate definition of limited rights data set forth in Alternate I to the clause at 52.227-14 . The alternate definition does not require that the data pertain to items, components, or processes developed at private expense; but rather that the data were developed at private expense and embody a trade secret or are commercial or financial and confidential or privileged. (c) Protection of limited rights data specified for delivery. (1) The clause at 52.227-14 with its Alternate II enables the Government to require delivery of limited rights data rather than allow the contractor to withhold the data. To obtain delivery, the contract may identify and specify data to be delivered, or the contracting officer may require, by written request during contract performance, the delivery of data that has been withheld or identified to be withheld under paragraph (g)(1) of the clause. In addition, the contract may specifically identify data that are not to be delivered under Alternate II or which, if delivered, will be delivered with limited rights. The limited rights obtained by the Government are set forth in the Limited Rights Notice contained in paragraph (g)(3) of Alternate II. Agencies shall not, without permission of the contractor, use limited rights data for purposes of manufacture or disclose the data outside the Government except as set forth in the Notice. Any disclosure by the Government shall be subject to prohibition against further use and disclosure by the recipient. The following are examples of specific purposes that may be adopted by an agency in its supplement and added to the Limited Rights Notice of paragraph (g)(3) of Alternate II of the clause: (i) Use (except for manufacture) by support service contractors. (ii) Evaluation by nongovernment evaluators. (iii) Use (except for manufacture) by other contractors participating in the Government’s program of which the specific contract is a part. (iv) Emergency repair or overhaul work. (v) Release to a foreign government, or its instrumentalities, if required to serve the interests of the U.S. Government, for information or evaluation, or for emergency repair or overhaul work by the foreign government. (2) The provision at 52.227-15 , Representation of Limited Rights Data and Restricted Computer Software, helps the contracting officer to determine whether the clause at 52.227-14 should be used with its Alternate II. This provision requests that an offeror state whether limited rights data are likely to be delivered. Where limited rights data are expected to be delivered, use Alternate II. Where negotiations are based on an unsolicited proposal, the need for Alternate II of the clause at 52.227-14 should be addressed during negotiations or discussions, and if Alternate II was not included initially it may be added by modification, if needed, during contract performance. (3) If data that would otherwise qualify as limited rights data is delivered as a computer database, the data shall be treated as limited rights data, rather than restricted computer software, for the purposes of paragraph (g) of the clause at 52.227-14 . (d) Protection of restricted computer software specified for delivery. (1) Alternate III of the clause at 52.227-14 , enables the Government to require delivery of restricted computer software rather than allow the contractor to withhold such restricted computer software. To obtain delivery of restricted computer software the contracting officer shall- (i) Identify and specify the deliverable computer software in the contract; or (ii) Require by written request during contract performance, the delivery of computer software that has been withheld or identified to be withheld under paragraph (g)(1) of the clause. (2) In considering whether to use Alternate III, contracting officers should note that, unlike other data, computer software is also an end item in itself. Thus, the contracting officer shall use Alternate III if delivery of restricted computer software is required to meet agency needs. (3) Unless otherwise agreed (see paragraph (d)(4) of this subsection), the restricted rights obtained by the Government are set forth in the Restricted Rights Notice contained in paragraph (g)(4) (Alternate III). Such restricted computer software will not be used or reproduced by the Government, or disclosed outside the Government, except that the computer software may be- (i) Used or copied for use with the computers for which it was acquired, including use at any Government installation to which the computers may be transferred; (ii) Used or copied for use with a backup computer if any computer for which it was acquired is inoperative; (iii) Reproduced for safekeeping (archives) or backup purposes; (iv) Modified, adapted, or combined with other computer software, provided that the modified, adapted, or combined portions of the derivative software incorporating any of the delivered, restricted computer software shall be subject to the same restricted rights; (v) Disclosed to and reproduced for use by support service contractors or their subcontractors, in accordance with paragraphs (3)(i) through (iv) of this section; and (vi) Used or copied for use with a replacement computer. (4) The restricted rights set forth in paragraph (d)(3) of this subsection are the minimum rights the Government normally obtains with restricted computer software and will automatically apply when such software is acquired under the Restricted Rights Notice of paragraph (g)(4) of Alternate III of the clause at 52.227-14 . However, the contracting officer may specify different rights in the contract, consistent with the purposes and needs for which the software is to be acquired. For example, the contracting officer should consider any networking needs or any requirements for use of the computer software from remote terminals. Also, in addressing such needs, the scope of the restricted rights may be different for the documentation accompanying the computer software than for the programs and databases. Any additions to, or limitations on, the restricted rights set forth in the Restricted Rights Notice of paragraph (g)(4) of Alternate III of the clause at 52.227-14 shall be expressly stated in the contract or in a collateral agreement incorporated in and made part of the contract, and the notice modified accordingly. (5) The provision at 52.227-15 , Representation of Limited Rights Data and Restricted Computer Software, helps the contracting officer determine whether to use the clause at 52.227-14 with its Alternate III. This provision requests that an offeror state whether restricted computer software is likely to be delivered under the contract. In addition, the need for Alternate III should be addressed during negotiations or discussions with an offeror, particularly where negotiations are based on an unsolicited proposal. However, if Alternate III is not used initially, it may be added by modification, if needed, during contract performance.