FAR 27.406-3—Major system acquisition.
Plain-English Summary
FAR 27.406-3 addresses technical data requirements in major system acquisitions, with a special focus on civilian-agency contracts other than NASA and the U.S. Coast Guard. It covers the use of the clause at 52.227-21, Technical Data Declaration, Revision, and Withholding of Payment—Major Systems, including how the contract must identify the specific technical data line items to which the clause applies, how the contracting officer must review delivered data and the contractor’s declaration, and when payment may be withheld or final payment delayed. It also covers the separate major-system rule for civilian agencies that require delivery of technical data developed exclusively with Federal funds when needed to support future competition for supplies or services in substantial quantities. In addition, it explains the use of the clause at 52.227-22, Major System—Minimum Rights, together with 52.227-14 and other required clauses, to ensure the Government receives at least the minimum rights required by statute in federally developed technical data. Finally, it limits the Government’s ability to require certain technical data from vendors whose products or processes are also offered commercially, except to the extent needed for Government operation or maintenance. In practice, this section is about balancing Government data rights, future competition needs, contractor protection for commercial technology, and payment controls tied to satisfactory technical data delivery.
Key Rules
Identify covered data line items
When using 52.227-21, the contract’s data delivery section must expressly identify the specific line items of technical data to which the clause applies. This prevents ambiguity about what must be delivered and what is subject to declaration review and payment withholding.
Review data and declaration
After delivery, the contracting officer must review both the technical data and the contractor’s declaration to confirm the data are complete, accurate, and compliant with contract requirements. If deficiencies exist, the contracting officer should ask the contractor to correct them and may withhold payment.
Delay final payment if unmet
Final payment cannot be made until the Government determines that the delivery requirements for the covered technical data line items have been satisfactorily met. This makes technical data delivery a condition tied directly to contract closeout and payment.
Require data for future competition
For civilian-agency major systems other than NASA and the Coast Guard, the contracting officer must require delivery of technical data developed exclusively with Federal funds when that data is needed to ensure competitive future acquisition of supplies or services expected in substantial quantities. The rule is aimed at preserving competition and avoiding vendor lock-in.
Use minimum-rights clause
The clause at 52.227-22 is used with 52.227-14 and other required clauses to ensure the Government obtains at least the statutory minimum rights in technical data developed exclusively with Federal funds. This protects the Government’s ability to use the data as allowed by law.
Do not demand commercial product data as a condition
The Government may not require technical data relating to products or processes offered or to be offered for sale to the public as a condition of procuring those products or processes, except for data necessary for Government operation or maintenance when the Government obtains the item or process under the contract. This protects commercial suppliers from having to surrender broader design or manufacturing data just to win a sale.
Responsibilities
Contracting Officer
Must ensure the contract identifies the technical data line items covered by 52.227-21, review delivered data and the contractor’s declaration for completeness, accuracy, and compliance, request correction of deficiencies, and withhold payment when appropriate. For civilian-agency major systems, must require delivery of federally funded technical data when needed for future competition and must use the minimum-rights clause and other required clauses to secure the Government’s statutory rights.
Contractor
Must deliver the technical data required by the contract, provide the required declaration under 52.227-21, and ensure the data are complete, accurate, and compliant with contract requirements. If deficiencies are identified, the contractor must correct them to support payment and contract closeout.
Agency
Must apply the major-system technical data rules consistently in covered civilian-agency acquisitions and ensure the required clauses are included where applicable. The agency must also respect the limitation on demanding commercial product or process data as a procurement condition, except where operation or maintenance data are legitimately needed.
Practical Implications
Contract drafting matters a lot here: if the data line items are not clearly identified, the Government may have trouble enforcing delivery, reviewing declarations, or tying payment to compliance.
Contracting officers should treat technical data review as a real acceptance step, not a paperwork formality, because incomplete or inaccurate data can justify withholding payment and delaying closeout.
For civilian major systems, acquisition teams should think early about future competition needs; if the Government will need technical data to compete follow-on buys, that requirement should be built into the contract up front.
Contractors should watch for overbroad data requests, especially where the Government is asking for information tied to commercial products or processes; the rule limits those demands unless the data are needed for operation or maintenance.
A common pitfall is assuming all technical data developed with Federal funds is automatically deliverable in full; the clause structure and statutory minimum-rights framework still matter, and the contract must specify what is required and why.
Official Regulatory Text
(a) The clause at 52.227-21 , Technical Data Declaration, Revision, and Withholding of Payment-Major Systems, implements 41 U.S.C. 2302(e) . When using the clause at 52.227-21 , the section of the contract specifying data delivery requirements (see 27.406-1 (b)) shall expressly identify those line items of technical data to which the clause applies. Upon delivery of the technical data, the contracting officer shall review the technical data and the contractor’s declaration relating to it to assure that the data are complete, accurate, and comply with contract requirements. If the data are not complete, accurate, or compliant, the contracting officer should request the contractor to correct the deficiencies, and may withhold payment. Final payment shall not be made under the contract until it has been determined that the delivery requirements of those line items of data to which the clause applies have been satisfactorily met. (b) In a contract for, or in support of, a major system awarded by a civilian agency other than NASA or the U.S. Coast Guard, the following applies: (1) The contracting officer shall require the delivery of any technical data relating to the major system or supplies for the major system, that are to be developed exclusively with Federal funds if the delivery of the technical data is needed to ensure the competitive acquisition of supplies or services that will be required in substantial quantities in the future. The clause at 52.227-22 , Major System-Minimum Rights, is used in addition to the clause at 52.227-14 , Rights in Data-General, and other required clauses, to ensure that the Government acquires at least those rights required by Pub. L. 98-577 in technical data developed exclusively with Federal funds. (2) Technical data, relating to a major system or supplies for a major system, procured or to be procured by the Government and also relating to the design, development, or manufacture of products or processes offered or to be offered for sale to the public (except for such data as may be necessary for the Government to operate or maintain the product, or use the process if obtained by the Government as an element of performance under the contract), shall not be required to be provided to the Government from persons who have developed such products or processes as a condition for the procurement of such products or processes by the Government.