FAR 27.408—Cosponsored research and development activities.
Plain-English Summary
FAR 27.408 addresses how the Government may handle data rights in cosponsored research and development when both the contractor and the Government contribute substantial funds or resources and their respective contributions to a particular item, component, process, or computer software cannot be readily separated. The section explains when a contracting officer may limit the Government’s rights in data developed and delivered under the contract, including the possibility of less than unlimited rights, license rights, or other tailored data-rights arrangements. It also covers the minimum protections that any lesser-rights arrangement must provide, such as Government use for agreed purposes, reprocurement rights where appropriate, and disclosure limits. The rule recognizes that cosponsored projects vary widely, so it does not prescribe a single clause; instead, it allows tailored clauses consistent with FAR 27.402 and the facts of the acquisition. It also discusses when a clause may be appropriate as a practical guide, including the approximate 50 percent contribution benchmark, the option to apply the clause to only specific tasks or work elements, and the situations where such a clause is not appropriate, such as projects intended to produce data for public dissemination or technologies already meant for public use. Finally, paragraph (b) explains that when contractor contributions are readily segregable and identified in the contract, the resulting data may be treated as limited rights data or restricted computer software, unless that treatment would conflict with the contract’s purpose, in which case the parties may negotiate a different arrangement consistent with paragraph (a).
Key Rules
Cosponsored work may justify lesser rights
When both parties substantially fund or support the research and development and their contributions to a deliverable cannot be readily separated, the contracting officer may limit the Government’s data rights to less than unlimited rights. This authority is intended for true cosponsored efforts where the contractor has a meaningful proprietary stake.
Minimum Government use must remain
Any lesser-rights arrangement must still allow the Government to use the data for the agreed Government purpose, including reprocurement rights when appropriate. The arrangement must also spell out any disclosure limits or restrictions that will apply to the data.
Clauses must be tailored, not automatic
No specific clause is mandated because the right balance depends on the purpose of the project, the contractor’s legitimate proprietary interests, the Government’s needs, and each party’s contribution. The clause may be tailored to the circumstances, consistent with FAR 27.402, and may provide license rights or other less-than-unlimited rights.
Fifty-percent contribution is a guide
As a practical benchmark, a clause may be appropriate when the contractor contributes money or resources, or agrees to repay nonrecurring costs, at a value of about 50 percent of the total contract cost. This is only a guide, not a hard threshold, and the contributions must also be not readily segregable for the relevant work element.
Clause may apply selectively
The clause can cover the entire contract or only specifically identified tasks or work elements. If used only for certain tasks, the contract must clearly identify which data-rights clause applies to which work elements, and the special clause is used in addition to the otherwise applicable data-rights clause.
Public dissemination projects are different
This type of clause may not be appropriate when the contract’s purpose is to produce data for public dissemination or to develop or demonstrate technologies that will already be available to the public for direct use. In those cases, limiting rights may conflict with the basic purpose of the acquisition.
Segregable contributions may use standard treatment
If the contractor’s contributions are readily segregable and the contract identifies them by performance requirements and funding, the resulting data may be treated as limited rights data or restricted computer software under the applicable FAR provisions. If that standard treatment would be inconsistent with the contract purpose, the parties may negotiate a different arrangement consistent with paragraph (a).
Responsibilities
Contracting Officer
Determine whether the acquisition is a cosponsored research and development effort with substantial contractor contributions and non-segregable contributions. Decide whether to limit Government data rights, tailor a clause, identify the applicable clause by task or work element, and ensure any lesser-rights arrangement preserves Government use, reprocurement rights where appropriate, and disclosure restrictions consistent with the contract purpose and FAR 27.402.
Contractor
Identify its contributions, proprietary interests, and any work elements that are readily segregable. Negotiate and comply with any tailored data-rights clause, including any license obligations or disclosure restrictions, and ensure the contract accurately reflects which tasks or work elements are subject to special treatment.
Agency
Regulate the use of this authority through agency supplements if desired, and ensure agency policy aligns with the FAR’s limits and objectives. The agency should also ensure contracting personnel apply the rule consistently and only in appropriate cosponsored R&D situations.
Government Program/Technical Personnel
Help define the project purpose, identify whether the work is intended for public dissemination or public use, and determine whether lesser rights would still support mission needs. They should also help identify which deliverables or work elements are segregable and what Government use rights are necessary.
Practical Implications
This section is mainly about balancing innovation incentives with Government access. In practice, it lets agencies protect contractor investment in joint R&D while still preserving enough rights for mission use, reprocurement, and other agreed purposes.
A common pitfall is treating every cost-sharing arrangement as automatically eligible for reduced data rights. The rule requires substantial contributions and non-segregable contributions tied to the specific item, component, process, or software.
Another frequent issue is failing to define the scope of the special clause. If only some tasks are cosponsored, the contract must clearly say which clause applies to which work elements; otherwise, disputes over data rights are likely.
Contracting officers should be careful when the project is meant to produce public-facing data or public-use technology. In those cases, limiting rights may undermine the acquisition’s purpose and may be inappropriate even if the contractor contributes significantly.
When contributions are segregable, standard limited-rights or restricted-software treatment may be enough. The key is to document the funding and performance split clearly so the data-rights treatment matches the actual structure of the work.
Official Regulatory Text
(a) In contracts involving cosponsored research and development that require the contractor to make substantial contributions of funds or resources ( e.g. , by cost-sharing or by repayment of nonrecurring costs), and the contractor’s and the Government’s respective contributions to any item, component, process, or computer software, developed or produced under the contract are not readily segregable, the contracting officer may limit the acquisition of, or acquire less than unlimited rights to, any data developed and delivered under the contract. Agencies may regulate the use of this authority in their supplements. Lesser rights shall, at a minimum, assure use of the data for agreed-to Governmental purposes (including reprocurement rights as appropriate), and address any disclosure limitations or restrictions to be imposed on the data. Also, consideration may be given to requiring the contractor to directly license others if needed to carry out the objectives of the contract. Since the purpose of the cosponsored research and development, the legitimate proprietary interests of the contractor, the needs of the Government, and the respective contributions of both parties may vary, no specific clauses are prescribed, but a clause providing less than unlimited rights in the Government for data developed and delivered under the contract (such as license rights) may be tailored to the circumstances consistent with the foregoing and the policy set forth in 27.402 . As a guide, a clause may be appropriate when the contractor contributes money or resources, or agrees to make repayment of nonrecurring costs, of a value of approximately 50 percent of the total cost of the contract ( i.e. , Government, contractor, and/or third party paid costs), and the respective contributions are not readily segregable for any work element to be performed under the contract. A clause may be used for all or for only specifically identified tasks or work elements under the contract. In the latter instance, its use will be in addition to whatever other data rights clause is prescribed under this subpart, with the contract specifically identifying which clause is to apply to which tasks or work elements. Further, this type of clause may not be appropriate where the purpose of the contract is to produce data for dissemination to the public, or to develop or demonstrate technologies that will be available, in any event, to the public for its direct use. (b) Where the contractor’s contributions are readily segregable (by performance requirements and the funding for the contract) and so identified in the contract, any resulting data may be treated under this clause as limited rights data or restricted computer software in accordance with 27.404-2 (c) or (d), as applicable; or if this treatment is inconsistent with the purpose of the contract, rights to the data may, if so negotiated and stated in the contract, be treated in a manner consistent with paragraph (a) of this section.