Medicare Program; June 12, 1995 Meeting of the Practicing Physicians Advisory Council

DEPARTMENT OF ENERGY

48 CFR Part 970

RIN 1991-AA63

Acquisition Regulation; Technology Transfer Activities of

Department of Energy (DOE) Management and Operating Contractors

AGENCY: Department of Energy.

ACTION: Proposed rule.

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SUMMARY: The Department of Energy (DOE) today proposes an amendment to

codify DOE's implementation of its technology transfer mission for DOE

laboratories (including weapon production facilities) operated by

management and operating contractors. The National Competitiveness

Technology Transfer Act of 1989 required that technology transfer be

established as a mission of each Government-owned laboratory operated

under contract by a non-Federal entity. The National Defense

Authorization Act for Fiscal Year 1994 expanded the Stevenson-Wydler

Technology Innovation Act of 1980 definition of laboratory to include

weapon production facilities of the Department of Energy that are

operated for national security purposes and are engaged in the

production, maintenance, testing, or dismantlement of a nuclear weapon

or its components. DOE is proposing to amend the Department of Energy

Acquisition Regulation to specify that each new award for or renewal of

an existing management and operating contract for the operation of a

DOE laboratory or weapon production facility shall have technology

transfer as a mission.

DATES: Written comments must be received by July 21, 1995.

ADDRESSES: Comments should be addressed to: Howard K. Mitchell, Policy

Analyst, Office of Policy (HR-51), Office of the Deputy Assistant

Secretary for Procurement and Assistance Management, Washington, D.C.,

20585, (202) 586-8190.

FOR FURTHER INFORMATION CONTACT: Howard K. Mitchell, (202) 586-8190.

SUPPLEMENTARY INFORMATION:

I. Background

II. Section by Section Analysis of the Proposed Rule

III. Procedural Requirements

A. Regulatory Review Under Executive Order 12866

B. Review Under Executive Order 12612

C. Review Under Executive Order 12778

D. Review Under the Regulatory Flexibility Act

E. Review Under the Paperwork Reduction Act

F. Review Under the National Environmental Policy Act (NEPA)

IV. Public Comments

V. Public Hearing

I. Background

Under Section 644 of the Department of Energy Organization Act,

Pub. L. 95-91 (42 U.S.C. 7254), the Secretary of Energy is authorized

to prescribe such procedural rules and regulations as may be deemed

necessary or appropriate to accomplish the functions vested in the

position. Accordingly, the Department of Energy Acquisition Regulation

was promulgated with an effective date of April 1, 1984, (49 FR 11922,

March 28, 1984), 48 CFR chapter 9. With this rule, DOE is proposing an

addition amending part 970 of the Department of Energy Acquisition

Regulation to codify DOE's implementation of its technology transfer

mission for DOE laboratories and weapon production facilities operated

by management and operating contractors.

Technology advancement is a key component in the growth of the

United States industrial economy, and a strong industrial base is an

essential element of national security. Further, there is a continuing

need to enhance United States competitiveness in both domestic and

international markets. DOE laboratories and weapon production

facilities, operated by DOE management and operating contractors, have

developed outstanding capabilities in a wide variety of advanced

technologies and are staffed with scientists, engineers, technicians

and other personnel associated with those technologies. The deployment

of these resources to work with the private sector through cooperative

efforts, consistent with the laboratory's or facility's program mission

assignments, can make a substantial contribution to the competitive

posture of United States industry.

In recognition of such capabilities, Congress enacted the National

Competitiveness Technology Transfer Act of 1989. This Act extended to

Government-owned contractor-operated laboratories the same authority to

enter into cooperative research and development agreements (CRADAs)

which the Federal Technology Transfer Act of 1986 had given to

Government-owned Government-operated laboratories and also provided for

the protection from dissemination of certain types of information

generated under CRADAs. Section 3133(d) of the Act required, by April

30, 1990, each agency which had contracted with a non-Federal entity to

operate a Government-owned laboratory to propose for inclusion in that

laboratory's operating contract, appropriate contract provisions to

implement the requirements of the Act. The National Competitiveness

Technology Transfer Act of 1989, as amended by Sections 3134 and 3160

of the National Defense Authorization Act for Fiscal Year 1994,

established technology transfer as a mission for Government-owned,

contractor-operated laboratories as well as for weapon production

facilities. It also authorized such laboratories and weapon facilities

to negotiate and award CRADAs with other Federal agencies, State and

local governments, industrial organizations, public and private

foundations, nonprofit organizations and other persons for the purposes

of transferring technology and conducting research and development.

Additionally, Sec. 3133(a)(7) of the Act allows certain types of

information generated under CRADAs to be protected from disclosure

under the Freedom of Information Act for a period of up to five years.

The promulgation and use of a final version of a technology

transfer contract clause for DOE laboratories and weapon production

facilities operated by [[Page 27070]] management and operating

contractors, which is proposed in this rulemaking, will minimize

unnecessary differences in policies and procedural requirements among

various laboratories and weapon production facilities. This is expected

to benefit the prospective CRADA or other industrial participants by

improving both the speed and certainty of the technology transfer

process.

The clause requires that the availability of technology transfer

opportunities be well publicized with enough general detail to quickly

attract private sector participants with the capabilities to fully

exploit the technology's commercial applications while benefitting the

U.S. economy. It requires that all aspects of the technology transfer

program are handled to avoid real or perceived conflict of interest and

that commercially valuable data, including marketing and financial

data, are appropriately handled and protected. As required by the Act,

the proposed rule requires that all new awards for or extensions of

existing DOE laboratory or weapon production facility management and

operating contracts will have technology transfer as a laboratory or

facility mission.

II. Section-by-Section Analysis

A detailed list of additions and changes follows.

1. The authority citation for part 970 is revised to add a

reference to the authorities provided by the National Competitiveness

Technology Transfer Act of 1989, as amended by Sections 3134 and 3160

of Public Law 103-160.

2. The clause for a laboratory or weapon production facility

management and operating contract is added as a new section 970.5204-X,

Technology Transfer Mission.

3. A new subpart 970.73, Technology Transfer, and a new section

thereunder, 970.7310, General, are added to summarize the DOE

technology transfer mission and its conduct in DOE owned-facilities.

Two additional new sections, 970.7320, Policy, and 970.7330, Contract

Clause, are added to describe the circumstances when technology

transfer is to be made a contract requirement of a management and

operating contract for the operation of a laboratory or weapon

production facility and the clause reference to be used in a

solicitation and contract award.

III. Procedural Requirements

A. Regulatory Review Under Executive Order 12866

Today's regulatory action has been determined not to be a

``significant regulatory action'' under Executive Order 12866,

``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993).

Accordingly, today's action was not subject to review under the

Executive Order by the Office of Information and Regulatory Affairs.

B. Review Under Executive Order 12612

Executive Order 12612 (52 FR 41285, October 30, 1987) requires that

regulations, rules, legislation, and any other policy actions be

reviewed for any substantial direct effects on States, on the

relationship between the national government and the States, or in the

distribution of power and responsibilities among various levels of

government. If there are sufficient substantial direct effects, then

the Executive Order requires preparation of a federalism assessment to

be used in all decisions involved in promulgating and implementing a

policy action.

Today's proposed rule, when finalized, will revise certain policy

and procedural requirements. However, DOE has determined that none of

the revisions will have a substantial direct effect on the

institutional interests or traditional functions of the States.

C. Review Under Executive Order 12778

Section 2 of Executive Order 12778 instructs each agency to adhere

to certain requirements in promulgating new regulations and reviewing

existing regulations. These requirements, set forth in sections 2(a)

and (b)(2), include eliminating drafting errors and needless ambiguity,

drafting the regulations to minimize litigation, providing clear and

certain legal standards for affected conduct, and promoting

simplification and burden reduction. Agencies are also instructed to

make every reasonable effort to ensure that the regulation: specifies

clearly any preemptive effect, effect on existing Federal law or

regulation, and retroactive effect; describes any administrative

proceedings to be available prior to judicial review and any provisions

for the exhaustion of such administrative proceedings; and defines key

terms. DOE certifies that today's proposal meets the requirements of

sections 2(a) and (b) of Executive Order 12778.

D. Review Under the Regulatory Flexibility Act

This proposed rule was reviewed under the Regulatory Flexibility

Act of 1980, Pub. L. 96-354, which requires preparation of a regulatory

flexibility analysis for any rule which is likely to have significant

economic impact on a substantial number of small entities. This

proposed rule will have no impact on interest rates, tax policies or

liabilities, the cost of goods or services, or other direct economic

factors. It will also not have any indirect economic consequences, such

as changed construction rates. DOE certifies that this proposed rule

will not have a significant economic impact on a substantial number of

small entities and, therefore, no regulatory flexibility analysis has

been prepared.

E. Review Under the Paperwork Reduction Act

No new information collection or recordkeeping requirements are

imposed by this proposed rulemaking. Accordingly, no OMB clearance is

required under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et

seq.).

F. Review Under the National Environmental Policy Act (NEPA)

DOE has concluded that promulgation of this rule falls into a class

of actions (categorical exclusion A5) that are categorically excluded

from NEPA review because they would not individually or cumulatively

have significant impact on the human environment, as determined by the

Department's regulations (10 CFR Part 1021, Subpart D) implementing the

National Environmental Policy Act of 1969 (42 U.S.C. 4321, 4331-4335,

4341-4347 (1976)). Therefore, this rule does not require an

environmental impact statement or an environmental assessment pursuant

to NEPA.

IV. Public Comments

Interested persons are invited to participate by submitting data,

views, or arguments with respect to the proposed Department of Energy

Acquisition Regulation amendments set forth in this notice. Three

copies of written comments should be submitted to the address indicated

in the ADDRESSES section of this notice. All comments received will be

available for public inspection in the DOE Reading Room, Room 1E-190,

Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585,

between the hours of 9 a.m. and 4 p.m., Monday through Friday, except

Federal holidays. All written comments received by the date indicated

in the DATES section of this notice and all other relevant information

in the record will be carefully assessed and fully considered prior to

publication of the proposed amendment as a final rule. Any information

considered to be confidential must be so identified and submitted in

writing, one copy only. DOE reserves the right to determine the

confidential status of the information [[Page 27071]] and to treat it

according to our determination (See 10 CFR 1004.11).

V. Public Hearing

The Department has concluded that this proposed rule does not

involve a substantial issue of fact or law and that the proposed rule

should not have substantial impact on the nation's economy or a large

number of individuals or businesses. Therefore, pursuant to Pub. L. 95-

91, the DOE Organization Act, and the Administrative Procedure Act (5

U.S.C. 553), the Department does not plan to hold a public hearing on

this proposed rule.

List of Subjects in 48 CFR Part 970

Government procurement.

Issued in Washington, DC on May 17, 1995.

Richard H. Hopf,

Deputy Assistant Secretary for Procurement and Assistance Management.

For the reasons set forth in the preamble 48 CFR Part 970 is

proposed to be amended as set forth below:

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

1. The authority citation for Part 970 is revised to read as

follows:

Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C.

2201), Sec. 644 of the Department of Energy Organization Act, Pub.

L. 95-91 (42 U.S.C. 7254), Sec. 201 of the Federal Civilian Employee

and Contractor Travel Expenses Act of 1985 (41 U.S.C. 420), Sec.

1534 of the Department of Defense Authorization Act, 1986, Pub. L.

99-145 (42 U.S.C. 7256a), as amended; and Sec. 3131, 3132, 3133, and

3157 of the National Competitiveness Technology Transfer Act of

1989, Pub. L. 101-189 (15 U.S.C. 3710 et seq.), and as amended by

Sec. 3134 and 3160 of Pub. L. 103-160.

2. Section 970.5204-X, Technology Transfer Mission, is added to

read as follows:

970.5204-X Technology transfer mission.

As prescribed in subpart 970.73, insert the following clause:

Technology Transfer Mission (Xxx, 1995)

This clause has as its purpose implementation of the National

Competitiveness Technology Transfer Act of 1989 (Sections 3131,

3132, 3133, and 3157 of Pub. L. 101-189 and as amended by Pub. L.

103-160, Sections 3134 and 3160). The Contractor shall conduct

technology transfer activities with a purpose of providing benefit

from Federal research to U.S. industrial competitiveness.

(a) Authority. (1) In order to ensure the full use of the

results of research and development efforts of, and the capabilities

of, the Laboratory, technology transfer, including Cooperative

Research and Development Agreements (CRADAs), is established as a

mission of the Laboratory consistent with the policy, principles and

purposes of Sections 11(a)(1) and 12(g) of the Stevenson-Wydler

Technology Innovation Act of 1980, as amended (15 U.S.C. 3710a);

Section 3132(b) of Pub. L. 101-189, Sections 3134 and 3160 of P.L.

103-160, and of Chapter 38 of the Patent Laws (35 U.S.C. 200 et

seq.); Section 152 of the Atomic Energy Act of 1954, as amended (42

U.S.C. 2182); Section 9 of the Federal Nonnuclear Energy Research

and Development Act of 1974 (42 U.S.C. 5908); and Executive Order

12591 of April 10, 1987.

(2) In pursuing the technology transfer mission, the Contractor

is authorized to conduct activities including but not limited to:

identifying and protecting Intellectual Property made, created or

acquired at or by the Laboratory; negotiating licensing agreements

and assignments for Intellectual Property made, created or acquired

at or by the Laboratory that the Contractor controls or owns;

bailments; negotiating all aspects of and entering into CRADAs;

providing technical consulting and personnel exchanges; conducting

science education activities and reimbursable Work for Others (WFO);

providing information exchanges; and making available laboratory or

weapon production user facilities. It is fully expected that the

Contractor shall use all of the mechanisms available to it to

accomplish this technology transfer mission, including, but not

limited to, CRADAs, user facilities, WFO, science education

activities, consulting, personnel, assignments, and licensing in

accordance with this clause.

(b) Definitions. (1) Contractor's Laboratory Director means the

individual who has supervision over all or substantially all of the

Contractor's operations at the Laboratory.

(2) Intellectual Property means patents, trademarks, copyrights,

mask works, protected CRADA information, and other forms of

comparable property rights protected by Federal Law and other

foreign counterparts.

(3) Cooperative Research and Development Agreement (CRADA) means

any agreement entered into between the Contractor as operator of the

Laboratory, and one or more parties including at least one non-

Federal party under which the Government, through its laboratory,

provides personnel, services, facilities, equipment, intellectual

property, or other resources with or without reimbursement (but not

funds to non-Federal parties) and the non-Federal parties provide

funds, personnel, services, facilities, equipment, intellectual

property, or other resources toward the conduct of specified

research or development efforts which are consistent with the

missions of the Laboratory; except that such term does not include a

procurement contract, grant, or cooperative agreement as those terms

are used in sections 6303, 6304, and 6305 of Title 31 of the United

States Code.

(4) Joint Work Statement (JWS) means a proposal for a CRADA

prepared by the Contractor, signed by the Contractor's Laboratory

Director or designee which describes the following:

(i) Purpose;

(ii) Scope of Work which delineates the rights and

responsibilities of the Government, the Contractor and Third

Parties, one of which must be a non-Federal party;

(iii) Schedule for the work; and

(iv) Cost and resource contributions of the parties associated

with the work and the schedule.

(5) Assignment means any agreement by which the Contractor

transfers ownership of Laboratory Intellectual Property, subject to

the Government's retained rights.

(6) Laboratory Biological Materials means biological materials

capable of replication or reproduction, such as plasmids,

deoxyribonucleic acid molecules, ribonucleic acid molecules, living

organisms of any sort and their progeny, including viruses,

prokaryote and eukaryote cell lines, transgenic plants and animals,

and any derivatives or modifications thereof or products produced

through their use or associated biological products, made under this

contract by Laboratory employees or through the use of Laboratory

research facilities.

(7) Bailment means any agreement in which the Contractor permits

the commercial or non-commercial transfer of custody, access or use

of Laboratory Biological Materials for a specified purpose of

technology transfer or research and development, including without

limitation evaluation, and without transferring ownership to the

bailee.

(c) Allowable Costs. (1) The Contractor shall establish and

carry out its technology transfer efforts through appropriate

organizational elements consistent with the requirements for an

Office of Research and Technology Applications (ORTA) pursuant to

paragraphs (b) and (c) of Section 11 of the Stevenson-Wydler

Technology Innovation Act of 1980, as amended (15 U.S.C. 3710). The

costs associated with the conduct of technology transfer through the

ORTA including activities associated with obtaining, maintaining,

licensing, and assigning Intellectual Property rights, increasing

the potential for the transfer of technology, and the widespread

notice of technology transfer opportunities, shall be deemed

allowable provided that such costs meet the other requirements of

the allowable costs provisions of this Contract. In addition to any

separately designated funds, these costs in any fiscal year shall

not exceed an amount equal to 0.5 percent of the operating funds

included in the Federal research and development budget (including

Work For Others) of the Laboratory for that fiscal year without

written approval of the Contracting Officer.

(2) The Contractor's participation in litigation to enforce or

defend Intellectual Property claims incurred in its technology

transfer efforts shall be as provided in the clause entitled

``Litigation and Claims'' of this Contract.

(d) Conflicts of Interest--Technology Transfer. The Contractor

shall have implementing procedures that seek to avoid employee and

organizational conflicts of interest, or the appearance of conflicts

of interest, in the conduct of its technology

[[Page 27072]] transfer activities. Such implementing procedures

shall be provided to the Contracting Officer for review and approval

within sixty (60) days after execution of this contract. The

Contracting Officer shall have thirty (30) days thereafter to

approve or require specific changes to such procedures. Such

implementing procedures shall include procedures to:

(1) Inform employees of and require conformance with standards

of conduct and integrity in connection with the CRADA activity in

accordance with the provisions of paragraph (n)(5) of this clause;

(2) Review and approve employee activities so as to avoid

conflicts of interest arising from commercial utilization activities

relating to Contractor-developed Intellectual Property;

(3) Conduct work performed using royalties so as to avoid

interference with or adverse effects on ongoing DOE projects and

programs;

(4) Conduct activities relating to commercial utilization of

Contractor-developed Intellectual Property so as to avoid

interference with or adverse effects on user facility or WFO

activities of the Contractor;

(5) Conduct DOE-funded projects and programs so as to avoid the

appearance of conflicts of interest or actual conflicts of interest

with non-Government funded work;

(6) Notify the Contracting Officer with respect to any new work

to be performed or proposed to be performed under the Contract for

DOE or other Federal agencies where the new work or proposal

involves Intellectual Property in which the Contractor has obtained

or intends to request or elect title;

(7) Except as provided elsewhere in this Contract, obtain the

approval of the Contracting Officer for any licensing of or

assignment of title to Intellectual Property rights by the

Contractor to any business or corporate affiliate of the Contractor;

(8) Obtain the approval of the Contracting Officer prior to any

assignment, exclusive licensing, or option for exclusive licensing,

of Intellectual Property to any person who has been a Laboratory

employee within the previous two years or to the company in which he

or she is a principal; and

(9) Notify non-Federal sponsors of WFO activities, or non-

Federal users of user facilities, of any relevant Intellectual

Property interest of the Contractor prior to execution of WFOs or

user agreements.

(10) Notify DOE prior to evaluating a proposal submitted by a

third party or DOE, when the subject matter of the proposal involves

an elected or waived subject invention or one in which the

Contractor intends to elect to retain title.

(e) Fairness of Opportunity. In conducting its technology

transfer activities, the Contractor shall prepare procedures and

take all reasonable measures to ensure widespread notice of

availability of technologies suited for transfer and opportunities

for exclusive licensing and joint research arrangements. The

requirement to widely disseminate the availability of technology

transfer opportunities does not apply to a specific application

originated outside of the Laboratory and by entities other than the

Contractor.

(f) U.S. Industrial Competitiveness. (1) In the interest of

enhancing U.S. Industrial Competitiveness, the Contractor shall, in

its licensing and assignments of Intellectual Property, give

preference in such a manner as to enhance the accrual of economic

and technological benefits to the U.S. domestic economy. The

Contractor shall consider the following factors in all of its

licensing and assignment decisions:

(i) Whether any resulting design and development will be

performed in the United States and whether resulting products,

embodying parts, including components thereof, will be substantially

manufactured in the United States; or

(ii) (A) Whether the proposed licensee or assignee has a

business unit located in the United States and whether significant

economic and technical benefits will flow to the United States as a

result of the license or assignment agreement; and

(B) In licensing any entity subject to the control of a foreign

company or government, whether such foreign government permits

United States agencies, organizations or other persons to enter into

cooperative research and development agreements and licensing

agreements, and has policies to protect United States Intellectual

Property rights.

(2) If the Contractor determines that neither of the conditions

in paragraphs (f)(1) (i) or (ii) of this clause are likely to be

fulfilled, the Contractor, prior to entering into such an agreement,

must obtain the approval of the Contracting Officer. The Contracting

Officer shall act on any such requests for approval within thirty

(30) days.

(3) The Contractor agrees to be bound by the provisions of 35

U.S.C. 204.

(g) Indemnity--Product Liability. In entering into written

technology transfer agreements, including but not limited to,

research and development agreements, licenses, assignments and

CRADAs, the Contractor agrees to include in such agreements a

requirement that the U.S. Government and the Contractor, except for

any negligent acts or omissions of the Contractor, be indemnified

for all damages, costs, and expenses, including attorneys' fees,

arising from personal injury or property damage occurring as a

result of the making, using or selling of a product, process or

service by or on behalf of the Participant, its assignees or

licensees which was derived from the work performed under the

agreement. The Contractor shall identify and obtain the approval of

the Contracting Officer for any proposed exceptions to this

requirement such as where State or local law expressly prohibit the

Participant from providing indemnification or where the research

results will be placed in the public domain.

(h) Disposition of Income. (1) Royalties or other income earned

or retained by the Contractor as a result of performance of

authorized technology transfer activities herein shall be used by

the Contractor for scientific research, development, technology

transfer, and education at the Laboratory, consistent with the

research and development mission and objectives of the Laboratory

and subject to Section 12(b)(5) of the Stevenson-Wydler Technology

Innovation Act of 1980, as amended (15 U.S.C. 3710a(b)(5)) and

Chapter 38 of the Patent Laws (35 U.S.C. 200 et seq.) as amended

through the effective date of this contract award or modification.

If the amounts of such royalties and income received during any

fiscal year exceed 5 percent of the Laboratory's budget for that

fiscal year, 75 percent of such excess amounts shall be paid to the

Treasury of the United States, and the remaining amount of such

excess shall be used by the Contractor for the purposes as described

above in this paragraph. Any inventions arising out of such

scientific research and development activities shall be deemed to be

``Subject Inventions'' under the Contract.

(2) The Contractor shall include as a part of its annual

Laboratory Institutional Plan or other such annual document a plan

setting out those uses to which royalties and other income received

as a result of performance of authorized technology transfer

activities herein will be applied at the Laboratory, and at the end

of the year, provide a separate accounting for how the funds were

actually used. Under no circumstances shall these royalties and

income be used for an illegal augmentation of funds furnished by the

U.S. Government.

(3) The Contractor shall establish subject to the approval of

the Contracting Officer a policy for making awards or sharing of

royalties with Contractor employees, other coinventors and

coauthors, including Federal employee coinventors when deemed

appropriate by the Contracting Officer.

(i) Transfer to Successor Contractor In the event of termination

or upon the expiration of this Contract, any unexpended balance of

income received for use at the Laboratory shall be transferred, at

the Contracting Officer's request, to a successor contractor, or in

the absence of a successor contractor, to such other entity as

designated by the Contracting Officer. The Contractor shall transfer

title, as one package, to the extent the Contractor retains title,

in all patents and patent applications, licenses, accounts

containing royalty revenues from such license agreements, including

equity positions in third party entities, and other Intellectual

Property rights which arose at the Laboratory, to the successor

contractor or to the Government as directed by the Contracting

Officer.

(j) Technology Transfer Affecting the National Security. (1) The

Contractor shall notify and obtain the approval of the Contracting

Officer, prior to entering into any technology transfer arrangement,

when such technology or any part of such technology is classified or

sensitive under Section 148 of the Atomic Energy Act (42 U.S.C.

2168). Such notification shall include sufficient information to

enable DOE to determine the extent that commercialization of such

technology would enhance or diminish security interests of the

United States, or diminish communications within DOE's nuclear

weapon production complex. DOE shall use its best efforts to

complete its determination within sixty (60) days of the

Contractor's notification, and provision of any supporting

information, and DOE shall promptly notify the Contractor as to

whether the technology is transferable. [[Page 27073]]

(2) The Contractor shall include in all of its technology

transfer agreements with third parties, including, but not limited

to, CRADAs, licensing agreements and assignments, notice to such

third parties that the export of goods and/or Technical Data from

the United States may require some form of export control license or

other authority from the U.S. Government and that failure to obtain

such export control license may result in criminal liability under

U.S. laws.

(3) For other than fundamental research as defined in National

Security Decision Directive 189, the Contractor is responsible to

conduct internal export control reviews and assure that technology

is transferred in accordance with applicable law.

(k) Records. The Contractor shall maintain records of its

technology transfer activities in a manner and to the extent

satisfactory to the DOE and specifically including, but not limited

to, the licensing agreements, assignments and the records required

to implement the requirements of paragraphs (e), (f), and (h) of

this clause and shall provide reports to the Contracting Officer to

enable DOE to maintain the reporting requirements of Section

12(c)(6) of the Stevenson-Wydler Technology Innovation Act of 1980,

as amended (15 U.S.C. 3710a(c)(6)). Such reports shall be made

annually in a format to be agreed upon between the Contractor and

DOE and in such a format which will serve to adequately inform DOE

of the Contractor's technology transfer activities while protecting

any data not subject to disclosure under the Rights in Technical

Data clause and paragraph (n) of this clause. Such records shall be

made available in accordance with the clauses of this Contract

pertaining to inspection, audit and examination of records.

(l) Reports to Congress. To facilitate DOE's reporting to

Congress, the Contractor is required to submit annually to DOE a

technology transfer plan for conducting its technology transfer

function for the upcoming year, including plans for securing

Intellectual Property rights in Laboratory innovations with

commercial promise and plans for managing such innovations so as to

benefit the competitiveness of United States industry. This plan

shall be provided to the Contracting Officer on or before October

1st of each year.

(m) Oversight and Appraisal. The Contractor is responsible for

developing and implementing effective internal controls for all

technology transfer activities consistent with the audit and record

requirements of this Contract. Laboratory Contractor performance in

implementing the technology transfer mission and the effectiveness

of the Contractor's procedures will be evaluated by the Contracting

Officer as part of the annual appraisal process, with input from the

cognizant Secretarial Officer or program office.

(n) Technology Transfer Through Cooperative Research and

Development Agreements. Upon approval of the Contracting Officer and

as provided in a DOE approved Joint Work Statement (JWS), the

Laboratory Director or his designee may enter into CRADAs on behalf

of the DOE subject to the requirements set forth herein.

(1) Review and Approval of CRADAs. (i) Except as otherwise

directed in writing by the Contracting Officer, each JWS shall be

submitted to the Contracting Officer for approval. The Contractor's

Laboratory Director or designee shall provide a program mission

impact statement and shall include an impact statement regarding

related Intellectual Property rights known by the Contractor to be

owned by the Government to assist the Contracting Officer in his

approval determination.

(ii) The Contractor shall also include (specific to the proposed

CRADA), a statement of compliance with the Fairness of Opportunity

requirements of paragraph (e) of this clause.

(iii) Within ninety (90) days after submission of a JWS, the

Contracting Officer shall approve, disapprove or request

modification to the JWS. If a modification is required, the

Contracting Officer shall approve or disapprove any resubmission of

the JWS within thirty (30) days of its resubmission, or ninety (90)

days from the date of the original submission, whichever is later.

The Contracting Officer shall provide a written explanation to the

Contractor's Laboratory Director or designee of any disapproval or

requirement for modification of a JWS.

(iv) Upon approval of a JWS, the Contractor's Laboratory

Director or designee may submit a CRADA, based upon the approved

JWS, to the Contracting Officer. The Contracting Officer, within

thirty (30) days of receipt of the CRADA, shall approve or request

modification of the CRADA. If the Contracting Officer requests a

modification of the CRADA, an explanation of such request shall be

provided to the Laboratory Director or designee.

(v) Except as otherwise directed in writing by the Contracting

Officer, the Contractor shall not enter into, or begin work under, a

CRADA until approval of the CRADA has been granted by the

Contracting Officer. The Contractor may submit its proposed CRADA to

the Contracting Officer at the time of submitting its proposed JWS

or any time thereafter. However, the Contracting Officer is not

obligated to respond under paragraph (n)(1)(iv) of this clause until

within thirty (30) days after approval of the JWS or thirty (30)

days after submittal of the CRADA, whichever is later.

(2) Selection of Participants The Contractor's Laboratory

Director or designee in deciding what CRADA to enter into shall:

(i) Give special consideration to small business firms, and

consortia involving small business firms;

(ii) Give preference to business units located in the United

States which agree that products or processes embodying Intellectual

Property will be substantially manufactured or practiced in the

United States and, in the case of any industrial organization or

other person subject to the control of a foreign company or

government, take into consideration whether or not such foreign

government permits United States agencies, organizations, or other

persons to enter into cooperative research and development

agreements and licensing agreements;

(iii) Provide Fairness of Opportunity in accordance with the

requirements of paragraph (e) of this clause; and

(iv) Give consideration to the Conflicts of Interest

requirements of paragraph (d) of this clause.

(3) Withholding of Data

(i) Data that is first produced as a result of research and

development activities conducted under a CRADA and that would be a

trade secret or commercial or financial data that would be

privileged or confidential, if such data had been obtained from a

non-Federal third party, may be protected from disclosure under the

Freedom of Information Act as provided in the Stevenson-Wydler

Technology Innovation Act of 1980, as amended (15 U.S.C.

3710a(c)(7)) for a period as agreed in the CRADA of up to five (5)

years from the time the data is first produced. The DOE shall

cooperate with the Contractor in protecting such data.

(ii) Unless otherwise expressly approved by the Contracting

Officer in advance for a specific CRADA, the Contractor agrees, at

the request of the Contracting Officer, to transmit such data to

other DOE facilities for use by DOE or its Contractors by or on

behalf of the Government. When data protected pursuant to paragraph

(n)(3)(i) of this clause is so transferred, the Contractor shall

clearly mark the data with a legend setting out the restrictions

against private use and further dissemination, along with the

expiration date of such restrictions.

(iii) In addition to its authority to license Intellectual

Property, the Contractor may enter into licensing agreements with

third parties for data developed by the Contractor under a CRADA

subject to other provisions of this Contract. However, the

Contractor shall neither use the protection against dissemination

nor the licensing of data as an alternative to the submittal of

invention disclosures which include data protected pursuant to

paragraph (n)(3)(i) of this clause.

(4) Work For Others and User Facility Programs. (i) WFO and User

Facility Agreements (UFAs) are not CRADAs and will be available for

use by the Contractor in addition to CRADAs for achieving

utilization of employee expertise and unique facilities for

maximizing technology transfer. The Contractor agrees to inform

prospective CRADA participants, which are intending to substantially

pay full cost recovery for the effort under a proposed CRADA, of the

availability of alternative forms of agreements, i.e., WFO and UFA,

and of the Class Patent Waiver provisions associated therewith.

(ii) Where the Contractor believes that the transfer of

technology to the U. S. domestic economy will benefit from, or other

equity considerations dictate, an arrangement other than the Class

Waiver of patent rights to the sponsor in WFO and UFAs, a request

may be made to the Contracting Officer for an exception to the Class

Waivers.

(iii) Rights to inventions made under agreements other than

funding agreements with third parties shall be governed by the

appropriate provisions incorporated, with DOE approval, in such

agreements, and the provisions in such agreements take precedence

over any disposition of rights [[Page 27074]] contained in this

Contract. Disposition of rights under any such agreement shall be in

accordance with any DOE class waiver (including Work for Others and

User Class Waivers) or individually negotiated waiver which applies

to the agreement.

(5) Conflicts of Interest. (i) Except as provided in paragraph

(n)(5)(iii) of this clause, the Contractor shall assure that no

employee of the Contractor shall have a substantial role (including

an advisory role) in the preparation, negotiation, or approval of a

CRADA, if, to such employee's knowledge:

(A) Such employee, or the spouse, child, parent, sibling, or

partner of such employee, or an organization (other than the

Contractor) in which such employee serves as an officer, director,

trustee, partner, or employee--

(1) Holds financial interest in any entity, other than the

Contractor, that has a substantial interest in the preparation,

negotiation, or approval of the CRADA;

(2) Receives a gift or gratuity from any entity, other than the

Contractor, that has a substantial interest in the preparation,

negotiation, or approval of the CRADA; or

(B) A financial interest in any entity, other than the

Contractor, that has a substantial interest in the preparation,

negotiation, or approval of the CRADA, is held by any person or

organization with whom such employee is negotiating or has any

arrangement concerning prospective employment.

(ii) The Contractor shall require that each employee of the

Contractor who has a substantial role (including an advisory role)

in the preparation, negotiation, or approval of a CRADA certify

through the Contractor to the Contracting Officer that the

circumstances described in paragraph (n)(5)(i) of this clause do not

apply to that employee.

(iii) The requirements of paragraphs (n)(5)(i) and (n)(5)(ii) of

this clause shall not apply in a case where the Contracting Officer

is advised by the Contractor in advance of the participation of an

employee described in those paragraphs in the preparation,

negotiation or approval of a CRADA of the nature of and extent of

any financial interest described in paragraph (n)(5)(i) of this

clause, and the Contracting Officer determines that such financial

interest is not so substantial as to be considered likely to affect

the integrity of the Contractor employee's participation in the

process of preparing, negotiating, or approving the CRADA.

(o) Technology Transfer in Other Cost-Sharing Agreements. In

conducting research and development activities in cost-shared

agreements not covered by paragraph (n) of this clause, the

Contractor, with prior written permission of the Contracting

Officer, may provide for the withholding of data produced thereunder

in accordance with the applicable provisions of paragraph (n)(3) of

this clause.

(End of clause)

Alternate I (Xxx 1995). As prescribed in 970.7330(b), add the

following definition under paragraph (b) and new paragraph (p):

(b)(8) Privately funded technology transfer means the

prosecuting, maintaining, licensing, and marketing of inventions

which are not owned by the Government (and not related to CRADAs)

when such activities are conducted entirely without the use of

Government funds.

(p) Nothing in paragraphs (c) Allowable Costs, (e) Fairness of

Opportunity, (f) U.S. Industrial Competitiveness, (g) Indemnity--

Product Liability, (h) Disposition of Income, and (i) Transfer to

Successor Contractor above are intended to apply to the contractor's

privately funded technology transfer activities if such privately

funded activities are addressed elsewhere in the contract.

Alternate II (Xxx 1995). As prescribed in 970.7330(c), the

phrase ``weapon production facility'' may be substituted wherever

the word ``laboratory'' appears in the clause.

3. A new subpart 970.73, Technology Transfer, consisting of

sections 970.7310, 970.7320, and 970.7330, is added to read as follows:

Subpart 970.73 Technology Transfer

Secs.

970.7310 General.

970.7320 Policy.

970.7330 Contract Clause.

Subpart 970.73--Technology Transfer

970.7310 General.

This subpart prescribes policies and procedures for implementing

the National Competitiveness Technology Transfer Act of 1989. The Act

required that technology transfer be established as a mission of each

Government-owned laboratory operated under contract by a non-Federal

entity. The National Defense Authorization Act for Fiscal Year 1994

expanded the definition of laboratory to include weapon production

facilities that are operated for national security purposes and are

engaged in the production, maintenance, testing, or dismantlement of a

nuclear weapon or its components.

970.7320 Policy.

All new awards for or extensions of existing DOE laboratory or

weapon production facility management and operating contracts shall

have technology transfer, including authorization to award Cooperative

Research and Development Agreements (CRADAs), as a laboratory or

facility mission under Section 11(a)(1) of the Stevenson-Wydler

Technology Innovation Act of 1980, as amended. A management and

operating contractor for a facility not deemed to be a laboratory or

weapon production facility may be authorized on a case-by-case basis to

support the DOE technology transfer mission including, but not limited

to, participating in CRADAs awarded by DOE laboratories and weapon

production facilities.

970.7330 Contract clause.

(a) The contracting officer shall insert the clause at 970.5204-X,

Technology transfer mission, in each solicitation for a new or an

extension of an existing laboratory or weapon production facility

management and operating contract.

(b) If the contractor is a nonprofit organization or small business

eligible under 35 U.S.C. 200 et seq., to receive title to any

inventions under the contract and proposes to fund at private expense

the maintaining, licensing, and marketing of the inventions, the

contracting officer shall use the basic clause with its Alternate I.

(c) The contracting officer may substitute the Alternate II phrase

``weapon production facility'' wherever the word ``laboratory'' appears

in the clause where the facility is operated for national security

purposes and engaged in the production, maintenance, testing, or

dismantlement of a nuclear weapon or its components.

[FR Doc. 95-12849 Filed 5-19-95; 8:45 am]

BILLING CODE 6450-01-P