FAR 27.406-1—General.
Plain-English Summary
FAR 27.406-1 explains how the Government should identify, minimize, and specify contract data requirements, and how those requirements interact with data rights. It covers when data needs should be identified, the preference for including them in solicitations, the possibility of revising them during negotiations, and the need to keep data requirements to the minimum necessary for the contract’s purpose. It also addresses the contracting officer’s duty to state all known data requirements in the contract, including delivery timing, delivery location, and any handling limits or restrictions, with special attention to major system acquisitions where data items should be set out as separate line items when feasible. The section further recognizes that agencies may use their own schedule provisions and procedures to organize, identify, and manage required data. Finally, it limits the Government’s ability to demand unlimited rights in data that are otherwise limited rights data or restricted computer software, and it requires that any greater rights be clearly stated in the solicitation and fairly compensated.
Key Rules
Identify data early
The Government should determine its data requirements as early as feasible so they can be included in the solicitation. Those requirements may still be revised during negotiations if needed.
Keep data needs minimal
Data requirements should be limited to what is consistent with the contract’s purpose. The rule reflects the cost and burden of preparing, reformatting, maintaining, cataloging, and storing data for both parties.
State all known requirements
The contracting officer must specify all known data requirements in the contract, including when and where delivery is due and any restrictions on how the contractor must handle the data.
Use separate line items for major systems
For major system acquisitions, the contracting officer should, to the extent feasible, identify data requirements as separate line items. This improves visibility, pricing, and administration.
Agency procedures may organize data
Agencies may develop their own schedule provisions and procedures for listing, identifying, sourcing, assuring delivery of, and handling required data, as long as they remain consistent with the general rule to minimize unnecessary data demands.
Do not demand unlimited rights by default
Data delivery requirements should normally not force a contractor to give the Government unlimited rights in limited rights data or restricted computer software as a condition of award. If form, fit, and function data will satisfy the need, those should be used instead.
Pay for greater rights
If the Government needs greater rights than the contractor would otherwise provide, the solicitation must clearly say so and the contractor must be fairly compensated for those greater rights.
Responsibilities
Contracting Officer
Identify all known data requirements in the contract, including delivery schedule, delivery location, and any handling restrictions. In major system acquisitions, set out data requirements as separate line items when feasible, and ensure any request for greater data rights is clearly stated in the solicitation and priced appropriately.
Agency
Develop and use schedule provisions or procedures, if desired, to manage data requirements consistently with FAR policy. Ensure internal processes support listing, identifying, sourcing, delivering, and handling required data without imposing unnecessary burdens.
Contractor
Prepare, reformat, maintain, catalog, store, and deliver required data as specified in the contract, subject to any stated limitations or restrictions. When greater rights are requested, price and negotiate those rights based on the solicitation terms.
Government
Determine data needs early, minimize unnecessary data demands, and avoid requiring unlimited rights in protected data as a default condition of procurement. Where greater rights are necessary, compensate the contractor fairly.
Practical Implications
Contractors should watch for data requirements in the solicitation, because late changes can affect pricing, schedule, and technical approach.
Contracting officers should avoid vague data language; if the contract does not clearly state what data is needed, when, where, and under what restrictions, disputes are more likely.
For major systems, separate line items for data can make pricing and administration easier and reduce confusion about what is being bought.
A common pitfall is overreaching on data rights by demanding unlimited rights when form, fit, and function data would meet the Government’s need; that can create negotiation problems and pricing impacts.
If the Government truly needs broader rights, it should say so up front and expect the contractor to charge for them rather than assuming those rights come with the base requirement.
Official Regulatory Text
(a) It is the Government’s practice to determine, to the extent feasible, its data requirements in time for inclusion in solicitations. The data requirements may be subject to revision during contract negotiations. Since the preparation, reformatting, maintenance and updating, cataloging, and storage of data represents an expense to both the Government and the contractor, efforts should be made to keep the contract data requirements to a minimum, consistent with the purposes of the contract. (b) The contracting officer shall specify in the contract all known data requirements, including the time and place for delivery and any limitations and restrictions to be imposed on the contractor in the handling of the data. Further, and to the extent feasible, in major system acquisitions, the contracting officer shall set out data requirements as separate line items. In establishing the contract data requirements and in specifying data items to be delivered by a contractor, agencies may, consistent with paragraph (a) of this subsection, develop their own contract schedule provisions. Agency procedures may, among other things, provide for listing, specifying, identifying source, assuring delivery, and handling any data required to be delivered, first produced, or specifically used in the performance of the contract. (c) Data delivery requirements should normally not require that a contractor provide the Government, as a condition of the procurement, unlimited rights in data that qualify as limited rights data or restricted computer software. Rather, form, fit, and function data may be furnished with unlimited rights instead of the qualifying data, or the qualifying data may be furnished with limited rights or restricted rights if needed (see 27.404-2 (c) and (d)). If greater rights are needed, they should be clearly set forth in the solicitation and the contractor fairly compensated for the greater rights.