FAR 52.227-6—Royalty Information.
Plain-English Summary
FAR 52.227-6, Royalty Information, is a solicitation provision that requires offerors to disclose royalty and license-fee costs when those costs exceed a specified threshold, so the Government can evaluate whether the proposed price includes reasonable, identifiable royalty charges. The provision covers the required disclosure items for each royalty or license fee, including the licensor’s name and address, the license date, the patent or other legal basis for the royalty, a description of the affected contract item or component, the royalty rate, unit price, quantity, and total royalty amount. It also allows the Contracting Officer to request a copy of the current license agreement and identification of applicable patent claims before contract execution. The alternate version changes the opening scope of the disclosure requirement for solicitations involving special construction or special assembly that include royalty costs. In practice, this provision helps the Government understand what portion of an offer price is driven by intellectual property rights, supports price analysis, and reduces the risk of paying unsupported or duplicative royalty charges.
Key Rules
Disclose royalties over threshold
If the response to the solicitation includes costs or charges for royalties totaling more than $250, the offeror must provide the required royalty information. The rule applies to each separate royalty or license fee item, not just the total package price.
Provide specific royalty details
For each royalty item, the offeror must identify the licensor, license date, patent numbers or other basis for payment, a brief description of the affected item or component, the royalty rate, unit price, quantity, and total royalty amount. This gives the Government enough information to evaluate the charge and its relationship to the contract price.
Submit license copy if requested
If the Contracting Officer specifically requests it before contract execution, the offeror must furnish a copy of the current license agreement and identify the applicable claims of specific patents. This is an additional disclosure obligation beyond the basic royalty data.
Alternate I narrows the opening scope
Under Alternate I, the introductory language is changed so the disclosure requirement applies when the solicitation covers charges for special construction or special assembly that include royalty costs over $250. The alternate is used when the acquisition context is construction/assembly rather than the basic provision’s broader wording.
Disclosure is tied to solicitation response
The information must be included in the offeror’s response to the solicitation, meaning it is part of the proposal or quotation package. Failure to provide the required information can affect the Government’s ability to evaluate the offer and may create compliance issues during award review.
Responsibilities
Offeror / Contractor
Identify any royalty or license-fee charges exceeding $250 and include all required details for each separate item in the solicitation response. If the Contracting Officer requests it before award, provide the current license agreement and identify the applicable patent claims.
Contracting Officer
Include the provision when prescribed, review royalty disclosures for completeness and relevance, and request the current license agreement or patent-claim identification when needed before execution of the contract. The Contracting Officer also uses the information to assess price reasonableness and potential royalty exposure.
Agency / Government
Use the disclosed royalty information to support price analysis, determine whether royalty charges are properly identified and attributable to the contract items, and ensure the correct basic provision or Alternate I is inserted based on the acquisition type.
Practical Implications
Offerors should track royalty and license-fee components early, because the disclosure threshold is low and the Government may ask for supporting license documents before award.
A common pitfall is failing to break out royalties by separate item or component; lumping them together can make the response incomplete even if the total amount is disclosed.
Contracting Officers should verify that the correct version is used, especially the Alternate I language for special construction or special assembly acquisitions.
The provision does not itself authorize payment of royalties; it requires disclosure so the Government can evaluate the pricing and understand the basis for the charge.
Incomplete or vague patent references, missing license dates, or omitted unit/quantity data can delay award or trigger follow-up questions from the Contracting Officer.
Official Regulatory Text
As prescribed in 27.202-5 (a)(1) , insert the following provision: Royalty Information (Apr 1984) (a) Cost or charges for royalties . When the response to this solicitation contains costs or charges for royalties totaling more than $250, the following information shall be included in the response relating to each separate item of royalty or license fee: (1) Name and address of licensor. (2) Date of license agreement. (3) Patent numbers, patent application serial numbers, or other basis on which the royalty is payable. (4) Brief description, including any part or model numbers of each contract item or component on which the royalty is payable. (5) Percentage or dollar rate of royalty per unit. (6) Unit price of contract item. (7) Number of units. (8) Total dollar amount of royalties. (b) Copies of current licenses . In addition, if specifically requested by the Contracting Officer before execution of the contract, the offeror shall furnish a copy of the current license agreement and an identification of applicable claims of specific patents. (End of Provision) Alternate I (Apr 1984) . As prescribed in 27.202-5 (a)(2), substitute the following for the introductory portion of paragraph (a) of the basic provision: When the response to this solicitation covers charges for special construction or special assembly that contain costs or charges for royalties totaling more than $250, the following information shall be included in the response relating to each separate item of royalty or license fee: