This week’s blog will be short and to the point. If you submit one of your contractual USG deliverables marked “Proprietary” or “Company Confidential” you are in breach of contract and the USG has every right to remove that marking and not pay you.
By adding either of these two types of markings, not only have you violated your agreement with the United States Government but you have also attempted to inappropriately restrict the DoD’s ability to use or share data deliverables that they have paid you to deliver. This results in what can be a time-consuming and cost-incurring back and forth between the USG and company’s contracting teams. Additionally, depending on the contract type, any expenses incurred when trying to sort out the markings could be incurred by the company.
Title 10 United States Code (U.S.C.) §2320 and the DFARS Clauses that implement this statute are the two governing authorities for proper marking of technical data. Specifically, DFARS 252.227-7013 Rights in Technical Data – Other Than Commercial Products and Commercial Services and DFARS 252.227-7014 - Rights in Other Than Commercial Computer Software and Other Than Commercial Computer Software Documentation. DFARS 252.227-7013 states:
Nonconforming technical data markings. A nonconforming marking is a marking placed on technical data delivered or otherwise furnished to the Government under this contract that is not in the format authorized by this contract. Correction of nonconforming markings is not subject to the Validation of Restrictive Markings on Technical Data clause of this contract. If the Contracting Officer notifies the Contractor of a nonconforming marking and the Contractor fails to remove or correct such marking within sixty (60) days, the Government may ignore or, at the Contractor's expense, remove or correct any nonconforming marking.
To reiterate, if you put nonconforming technical data markings on your USG deliverables, the USG has the right to cancel or ignore the markings and not pay you until you correct the non-compliance, and submit according to your contract. Two examples of nonconforming markings, and the ones I saw most frequently in USG, were “Proprietary” and “Company Confidential.”
Why am I writing about this?
Because when I was a USG PM, it happened all the time. The result was a long drawn out battle about what the Company thinks the USG can and cannot do with the information delivered. Waiting to turn in a deliverable is not the time to have that debate. There are ample opportunities during contract proposals and negotiation to discuss the protection and use of data. Putting a nonconforming technical data marking on a USG deliverable after the contract is in place, is not the time nor is it proper. It would be better to submit the deliverable and leave out information you are unsure about than to deliver the product improperly marked or not deliver the product at all.
Why should you care?
Violating these DFARS clauses results in a breach of contract, which you don’t want. It can also delay or result in no payment, which you also don’t want. It can delay contract execution as the acceptance of the deliverable is delayed or rejected entirely, which you don’t want.
Even if a CDRL doesn’t require formal acceptance (delivery only), a nonconforming marking still puts you in breach.
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Fellow Auxo founder Megan VanHorn has written about this in various forms in various blog posts from a contracting perspective so check those out as well!
If you have questions or want to know more, leave a comment!
Keep Moving Forward,
