Cooperative Agreements with Commercial Firms

Federal RegisterJun 27, 1995

Ask Donna

What actually matters in this document.

Text

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

14 CFR Part 1274

RIN 2700-AC07

Cooperative Agreements with Commercial Firms

AGENCY: Office of Procurement, Contract Management Division, National

Aeronautics and Space Administration.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: Current NASA regulations at 14 CFR part 1260 describe the use

of cooperative agreements with educational institutions and non-profit

organizations. The proposed regulation will establish the requirements

for cooperative agreements with commercial firms.

DATES: Comments are due on or before August 28, 1995.

ADDRESSES: Headquarters, NASA, Washington, DC 20546, ATTN: CODE HK/MR.

T. Deback. Comments on the paperwork burden should also be addressed to

the Office of Information and Regulatory Affairs, Attention: Desk

Officer for NASA, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Mr. T. Deback, (202) 358-0431.

SUPPLEMENTARY INFORMATION:

Background

As a result of the National Performance Review, participation in

ARPA's Technology Reinvestment Program, the High Performance Computing

Initiative, and a strong sense within NASA that cooperative agreements

with industry are an appropriate way to carry out certain assistance

type activities, use of cooperative agreements is being increased. As

part of this increase, cooperative agreements with industry are being

utilized for the first time.

Regulatory Flexibility Act

NASA certifies that this regulation will not have a significant

economic effect on a substantial number of small entities under the

Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

Paperwork Reduction Act

The information collection requirements in this proposed rule have

been submitted to the Office of Management and Budget for review under

44 U.S.C. 3504(h). NASA requires certain reporting and recordkeeping of

commercial firms in order to determine eligibility for selection and

compliance with the provisions of the cooperative agreements. The

estimated total annual reporting and recordkeeping burden is 6680

hours. The estimated average burden hours per response is 6 hours. The

rule proposes annual reporting for patents, property, and technical

results. Other reports are required at the conclusion of the agreement

or the occurrence of other events. The estimated number of likely

respondents is 175 firms submitting proposals per year resulting in the

award of 50 cooperative agreements per year.

List of Subjects in 14 CFR Part 1274

Grant programs, Business and industry.

Tom Luedtke,

Deputy Associate Administrator for Procurement.

Accordingly, 14 CFR part 1274 is proposed to be added as follows.

PART 1274--COOPERATIVE AGREEMENTS WITH COMMERCIAL FIRMS

Subpart A--General

1274.101 Purpose.

1274.102 Definitions.

1274.103 Effect on other issuances.

1274.104 Deviations.

1274.105 Approval of Cooperative Agreement Notices (CANs) and

cooperative agreements.

Subpart B--Pre-Award Requirements

1274.201 Purpose.

1274.202 Solicitations and proposals.

1274.203 Invention and patent rights.

1274.204 Evaluation and selection. [[Page 33164]]

1274.205 Award procedures.

1274.206 Document format and numbering.

1274.207 Distribution of cooperative agreements.

Subpart C--Administration

1274.301 Delegation of administration.

1274.302 Transfers, novations, and change of name agreements.

Subpart D--Government Property

1274.401 Government property.

Subpart E--Procurement Standards

1274.501 Subcontracts.

Subpart F--Reports and Records

1274.601 Retention and access requirements for records.

Subpart G--Suspension or Revocation

1274.701 Suspension or revocation.

Subpart H--After-the-Award Requirements

1274.801 Purpose.

1274.802 Closeout procedures.

1274.803 Subsequent adjustments and continuing responsibilities.

Subpart I--Other Provisions and Special Conditions

1274.901 Other provisions and special conditions.

1274.902 Purpose (XXX 1995)

1274.903 Responsibilities (XXX 1995)

1274.904 Resource Sharing Requirements (XXX 1995)

1274.905 Rights in Data (XXX 1995)

1274.906 Designation of New Technology Representative and Patent

Representative (XXX 1995)

1274.907 Disputes (XXX 1995)

1274.908 Milestone Payments (XXX 1995)

1274.909 Term of this Agreement (XXX 1995)

1274.910 Authority (XXX 1995)

1274.911 Patent Rights (XXX 1995)

1274.912 Patent Rights--Retention by the Contractor (Large

Business) (XXX 1995)

1274.913 Patent Rights--Retention by the Contractor (Small

Business) (XXX 1995)

1274.914 Requests for Waiver of Rights--Large Business (XXX 1995)

1274.915 Restrictions on Sale or Transfer of Technology to Foreign

Firms or Institutions (XXX 1995)

1274.916 Liability and Risk of Loss (XXX 1995)

1274.917 Additional Funds (XXX 1995)

1274.918 Incremental Funding (XXX 1995)

1274.919 Cost Principles and Accounting Standards (XXX 1995)

1274.920 Responsibilities of the NASA Technical Officer (XXX 1995)

1274.921 Publications and Reports: Non-Proprietary Research Results

(XXX 1995)

1274.922 Suspension or Revocation (XXX 1995)

1274.923 Equipment and Other Property (XXX 1995)

1274.924 Civil Rights (XXX 1995)

1274.925 Subcontracts (XXX 1995)

1274.926 Clean Air-Water Pollution Control Acts (XXX 1995)

1274.927 Debarment and Suspension and Drug-Free Workplace (XXX

1995)

1274.928 Foreign National Employee Investigative Requirements (XXX

1995)

1274.929 Restrictions on Lobbying (XXX 1995)

1274.930 Travel and Transportation (XXX 1995)

1274.931 Officials Not to Benefit (XXX 1995)

1274.932 Electronic Funds Transfer Payment Methods (XXX 1995)

1274.933 Retention and Examination of Records (XXX 1995)

Appendix A--Contract Provisions

Appendix B--Reports

Appendix C--Listing of Exhibits

Authority: 31 U.S.C. 6301 to 6308; 42 U.S.C. 2451, et seq.

Subpart A--General

Sec. 1274.101 Purpose.

This regulation establishes uniform administrative requirements for

NASA cooperative agreements awarded to commercial firms. Cooperative

agreements are ordinarily entered into with commercial firms to--

(1) Support research and development,

(2) Provide technology transfer from the Government to the

recipient, or

(3) Develop a capability among U.S. firms to potentially enhance

U.S. competitiveness.

(b) Award to foreign firms is not precluded; however, an award may

not be made to a foreign government.

Sec. 1274.102 Definitions.

Administrator. The Administrator or Deputy Administrator of NASA.

Associate Administrator for Procurement. The head of the Office of

Procurement, NASA Headquarters (Code H).

Cash contributions. The recipient's cash outlay, including the

outlay of money contributed to the recipient by third parties.

Closeout. The process by which a NASA determines that all

applicable administrative actions and all required work of the award

have been completed by the recipient and NASA.

Cooperative agreement. As defined by 31 U.S.C. 6305, cooperative

agreements are financial assistance instruments used to stimulate or

support activities for authorized purposes and in which the Government

participates substantially in the performance of the effort. This

regulation covers only cooperative agreements with commercial firms.

Cooperative agreements with universities and non-profit organizations

are covered by 14 CFR part 1260.

Cost sharing or matching. That portion of project or program costs

not borne by the Federal Government except that the recipient's

contribution may be reimbursable under other Government awards as

allowable IR&D costs pursuant to 48 CFR (NFS) 1831.205-18 (59 FR 22521,

May 2, 1994).

Date of completion. The date on which all work under an award is

completed or the date on the award document, or any supplement or

amendment thereto, on which NASA sponsorship ends.

Days. Calendar days, unless otherwise indicated.

Government furnished equipment. Equipment in the possession of, or

acquired directly by, the Government and subsequently delivered, or

otherwise made available, to a Recipient.

Grant Officer. A Government employee who has been delegated the

authority to negotiate, award, or administer grants or cooperative

agreements.

Incremental funding. A method of funding a cooperative agreement

where the funds initially allotted to the cooperative agreement are

less than the award amount. Additional funding is added as described in

Sec. 1274.918.

Recipient. An organization receiving financial assistance under a

cooperative agreement to carry out a project or program. A recipient

may be an individual firm, a consortium, a partnership, etc.

Resource contribution. The total value of resources provided by

either party to the cooperative agreement including both cash and in-

kind contributions.

Revocation. The cancellation of NASA sponsorship, in whole or in

part, under an agreement at any time prior to the date of completion.

Support contractor means a NASA contractor performing part or all

of the NASA responsibilities under a cooperative agreement.

Suspension. An action by NASA that temporarily withdraws

sponsorship under an award, pending corrective action by the recipient

or pending a decision to revoke the award by NASA. Suspension of an

award is a separate action from suspension under Federal agency

regulations implementing E.O.'s 12549 and 12689, ``Debarment and

Suspension.''

Technical officer. The official of the cognizant NASA office who is

responsible for monitoring the technical aspects of the work under a

cooperative agreement.

Sec. 1274.103 Effect on other issuances.

For awards subject to this regulation, all administrative

requirements of codified program regulations, program manuals,

handbooks and other nonregulatory materials which are

[[Page 33165]] inconsistent with the requirements of this Regulation

shall be superseded, except to the extent they are required by statute,

or authorized in accordance with the deviations provision in

Sec. 1274.104.

Sec. 1274.104 Deviations.

(a) The Associate Administrator for Procurement may grant

exceptions for classes of or individual cooperative agreements from the

requirements of this Regulation when exceptions are not prohibited by

statute.

(b) Applicability. A deviation is required for any of the

following:

(1) When a prescribed provision set forth in this regulation for

use verbatim is modified or omitted.

(2) When a provision is set forth in this regulation, but not

prescribed for use verbatim, and the installation substitutes a

provision which is inconsistent with the intent, principle, and

substance of the prescribed provision.

(3) When a NASA form or other form is prescribed by this

regulation, and that form is altered or another form is used in its

place.

(4) When limitations, imposed by this regulation upon the use of a

provision, form, procedure, or any other action, are not adhered to.

this regulation will be forwarded to Headquarters, Program Operations

Division (Code HS). Such requests, signed by the Procurement Officer,

shall contain as a minimum:

(1) A full description of the deviation and identification of the

regulatory requirement from which a deviation is sought.

(2) Detailed rationale for the request, including any pertinent

background information.

(3) The name of the recipient and identification of the cooperative

agreement affected, including the dollar value.

(4) A statement as to whether the deviation has been requested

previously, and, if so, circumstances of the previous request(s).

(5) A description of the intended effect of the deviation.

(6) A copy of legal counsel's concurrence or comments.

Sec. 1274.105 Approval of Cooperative Agreement Notices (CANs) and

cooperative agreements.

(a) As soon as possible after the initial decision is made by

program or procurement personnel to use the CAN process, the cognizant

program office or procurement office, shall notify the Associate

Administrator for Procurement (Code HS), of the intent to use a CAN in

all cases where the total Government funds to be awarded in response to

CAN proposals is expected to equal or exceed $10 million. All such

notifications, as described below, shall be concurred in by the

Procurement Officer. This requirement also applies in those cases where

an unsolicited proposal is received and a decision is made to award a

cooperative agreement in which the recipient (or one or more of a

``team'' of recipients) is a commercial firm and the total Government

funds are expected to equal or exceed $10 million.

(b) The required notification is to be accomplished by sending an

electronic mail (e-mail) message to the following address at NASA

Headquarters: [email protected]. The notification must include

the following information, as a minimum:

(1) Identification of the cognizant center and program office,

(2) Description of the proposed program for which proposals are to

be solicited,

(3) Rationale for decision to use a CAN rather than other types of

solicitations,

(4) The amount of Government funding to be available for awards,

(5) Estimate of the number of cooperative agreements to be awarded

as a result of the CAN,

(6) The percentage of cost-sharing to be required, and

(7) Tentative schedule for release of CAN and award of cooperative

agreements

copy of the message to the Procurement Officer, within 5 working days

of receipt of this initial notification. The response will address the

following:

(1) Whether Code HS agrees or disagrees with the appropriateness

for using a CAN for the effort described,

(2) Whether Code HS will require review and approval of the CAN

before its issuance,

(3) Whether Code HS will require review and approval of the

selected offeror's cost sharing arrangement (e.g., cost sharing

percentage; type of contribution (cash, labor, intellectual property,

etc.)), and

(4) Whether Code HS will require review and approval of the

resulting cooperative agreement(s).

(d) If a response from Code HS is not received within 5 working

days of notification, the program office or center may proceed with

release of the CAN and award of the cooperative agreements as

described.

Subpart B--Pre-Award Requirements

Sec. 1274.201 Purpose.

Sections 1274.202 through 1274.207 prescribe forms and instructions

and addresses other pre-award matters.

Sec. 1274.202 Solicitations and proposals.

(a) Consistent with 31 U.S.C. 6301(3), NASA uses competitive

procedures to award cooperative agreements whenever possible. An award

will normally be made as a result of a Cooperative Agreement Notice

(CAN) which envisions a cooperative agreement as the award instrument.

A Commerce Business Daily synopsis will be used to publicize the CAN.

(b) Unsolicited proposals.

(1) An award may be made as a result of an unsolicited proposal.

The unsolicited proposal must evidence a unique and innovative idea or

approach which is not the subject of a current or anticipated

solicitation. When a cooperative agreement is awarded as a result of an

unsolicited proposal, a Commerce Business Daily synopsis must be

published to provide an opportunity for other firms/consortia to

express an interest in the agreement unless the exception in 48 CFR

(FAR) 5.202(a)(8) applies. Respondents should be given a minimum of

thirty days to respond. If interest is expressed, a decision must be

made to proceed with the award or to issue a solicitation for

competitive proposals.

(2) Prior to an award made as the result of an unsolicited

proposal, the award must be approved by the Procurement Officer if

NASA's total resource contribution is below $5 million. Center Director

approval is required if NASA's total resource contribution is $5

million or more. For Headquarters cooperative agreements, approval by

the Associate Administrator for Procurement is required if NASA's total

resource contribution is $5 million or more.

(1) The allowability of costs incurred by the recipient is

determined in accordance with 48 CFR (FAR) Part 31, ``Contract Cost

Principles and Procedures.''

(2) Cost sharing. A substantial resource contribution on the part

of the Recipient is required. The Recipient is expected to contribute

at least 50% of the total resources required to accomplish the

cooperative agreement. Recipient contributions may be in either cash or

in-kind or both. In those cases in which a contribution of less than

50% is anticipated from the Recipient, approval of the Associate

Administrator for Procurement (Code HS) is required

[[Page 33166]] prior to award. The request for approval should address

the evaluation factor in the solicitation and how the proposal

accomplishes those objectives to such a degree that a share ratio of

less than 50% is warranted.

(3) Fixed Funding. Cooperative agreements are funded by NASA in a

fixed amount. Payments in fixed amounts will be made by NASA in

accordance with ``Milestone Billings'' which are discussed in paragraph

(c)(4) of this section. If the Recipient completes the final milestone,

final payment is made, and NASA will have completed its financial

responsibilities under the agreement. However, if the cooperative

agreement is revoked prior to achievement of all milestones, NASA's

funding will be limited to milestone payments already made plus NASA's

share of costs incurred by the Recipient since the last milestone

payment as reflected in the cost share agreement. In no event shall

these additional costs or payment exceed the amount of the next payable

milestone billing amount.

(4) Milestone billings is the method of payment to the Recipient

under cooperative agreements. Performance based milestones are used as

the basis of establishing a set of verifiable milestones for payment

purposes. Each milestone payment shall be established so that the

Government payment is at the same share ratio as the cooperative

agreement share ratio. If the Recipient is a consortium, the Articles

of Collaboration is required to contain an extensive list of

performance based milestones that the consortium has agreed to.

Generally, payments should not be made more than once monthly; ideally,

payments will be made about every 60 to 90 days but in all cases should

be made on the basis of verifiable, significant events as opposed to

the passage of time. The last payment milestone should be large enough

to ensure that the Recipient completes its responsibilities under the

cooperative agreement (or funds should be reserved for payment until

after completion of the cooperative agreement). The Government

technical officer must verify completion of each milestone to the

Grants Officer as part of the payment process. If the Government's

projected cash contribution to a cooperative agreement exceeds $5

million, approval of the Milestone Payment clause, including the

milestones and anticipated payments, by the Associate Administrator for

Procurement (Code HS)is required prior to award. The request for

approval should contain substantially the same information required by

48 CFR (NFS) 1832.7006.

(5) Incremental funding. Cooperative agreements with anticipated

annual funding exceeding $5 million may be incrementally funded subject

to the following:

(i) Two increments per fiscal year are authorized. The second

increment will be the balance of funding for the year.

(ii) The incremental funding provision contained in Sec. 1274.918

is included in the cooperative agreement.

(6) Cost sharing. Cost sharing requirements on cooperative

agreements with commercial firms are based on section 23 of the

Attachment to OMB Circular A-110, November 23, 1993 (58 FR 62992,

November 29, 1993). Only cash or cash equivalent resources are

acceptable sources for the Recipient contribution to a cooperative

agreement. This includes such items as purchased equipment, equipment,

labor, office space, etc. The actual or imputed value of intellectual

property such as patent rights, data rights, trade secrets, etc., are

not acceptable as sources for the Recipient contribution.

(7) Recipients shall not be paid a profit under cooperative

agreements. Profit may be paid by the Recipient to subcontractors, if

the subcontractor is not part of the offering team and the subcontract

is an arms-length relationship.

(8) The Recipient's resource share of the cooperative agreement may

be allocated as part of its IR&D program in accordance with a class

deviation pursuant to 48 CFR (NFS) 1831.205-18 (59 FR 22521, May 2,

1994).

(9) The CAN must provide a description of the non-cash Government

contribution (personnel, equipment, facilities, etc.) as part of the

Government's contribution to the cooperative agreement in addition to

funding. The offeror may propose that additional non-monetary

Government resources be provided under two conditions. First, the

offeror is responsible for verifying the availability of the resources

and their suitability for their intended purpose and, second, those

resources are considered part of the Government contribution and paid

for directly by the awarding organization.

(d) Consortia as recipients.

(1) The use of consortia as Recipients for cooperative agreements

is encouraged. Consortia will tend to bring to a cooperative agreement

a broader range of capabilities and resources. A consortium is a group

of organizations that enter into an agreement to collaborate for the

purposes of the cooperative agreement with NASA. The agreement to

collaborate can take the form of a legal entity such as a partnership

or joint venture but it is not necessary that such an entity be

created. A consortium may be made up of firms which normally compete

for commercial or Government business or may be made up of firms which

perform complementary functions in a given industry. The inclusion of a

non-profit or educational institutions, small businesses, or small

disadvantaged businesses in the consortium could be particularly

valuable in ensuring that the results of the consortium's activities

are disseminated.

(2) Key to the success of the cooperative agreement with a

consortium is the consortium's Articles of Collaboration, which is a

definitive description of the roles and responsibilities of the

consortium's members. It should also address to the extent appropriate:

commitments of financial, personnel, facilities and other resources, a

detailed milestone chart of consortium activities, accounting

requirements, subcontracting procedures, disputes, term of the

agreement, insurance and liability issues, internal and external

reporting requirements, management structure of the consortium,

obligations of organizations withdrawing from the consortia, allocation

of data and patent rights among the consortia members, agreements, if

any, to share existing technology and data, the firm which is

responsible for the completion of the consortium's responsibilities

under the cooperative agreement and has the authority to commit the

consortium and receive payments from NASA, employee policy issues, etc.

(3) An outline of the Articles of Collaboration should be required

as part of the proposal and evaluated during the source selection

process.

(e) Metric system of measurement. The Metric Conversion Act, as

amended by the Omnibus Trade and Competitiveness Act (15 U.S.C. 205)

declares that the metric system is the preferred measurement system for

U.S. trade and commerce. NASA's policy with respect to the metric

measurement system is stated in NMI 8010.2A, Use of the Metric System

of Measurement in NASA Programs, dated June 11, 1991.

Sec. 1274.203 Invention and patent rights.

(a) A cooperative agreement covers the disposition of rights

relating to inventions and patents between NASA and the Recipient. If

the Recipient is a consortium or partnership, rights flowing between

multiple organizations in a consortium must be negotiated separately

and formally documented, preferably in the Articles of Collaboration.

[[Page 33167]]

(b) Patent rights clauses exist for Recipients of the Agreement

whether they are:

(1) other than small business or nonprofit organizations (generally

referred to as large businesses) or

(2) small businesses or nonprofit organizations. The clauses are

required by statute and regulation.

cooperative agreement: Recipient Inventions, Subcontractor Inventions,

NASA Inventions, NASA Support Contractor Inventions, and Joint

Inventions with Recipient.

(d)(1) Recipient inventions.

(i) A Recipient, if a large business, is subject to section 305 of

the National Aeronautics and Space Act of 1958 (42 U.S.C. 2457)

relating to property rights in inventions. The term ``invention''

includes any invention, discovery, improvement, or innovation. Title to

an invention made under a cooperative agreement by a large business

Recipient initially vests with NASA. The Recipient may request a waiver

under the NASA Patent Waiver Regulations to obtain title to inventions

made under the Agreement. Such a request may be made in advance of the

Agreement (or 30 days thereafter) for all inventions made under the

Agreement. Alternatively, requests may be made on a case-by-case basis

any time an individual invention is made. Such waivers are liberally

and expeditiously granted after review by NASA's Invention and

Contribution Board and approval by NASA's General Counsel. When a

waiver is granted, any inventions made in the performance of work under

the Agreement are subject to certain reporting, election and filing

requirements, a royalty-free license to the Government, march-in

rights, and certain other reservations.

(ii) A Recipient, if a small business or nonprofit organization,

may elect to retain title to its inventions. The term ``nonprofit

organization'' is defined in 35 U.S.C. 201(i) and includes universities

and other institutions of higher education or an organization of the

type described in section 501(c)(3) of the Internal Revenue Code. The

Government obtains an irrevocable, nonexclusive, royalty-free license.

(2) Subcontractor Inventions.

(i) Large Business. If a Recipient enters a subcontract (or similar

arrangement) with a large business organization for experimental,

developmental, research, design or engineering work in support of the

Agreement to be done in the United States, its possessions, or Puerto

Rico, Subpart 305 of the Space Act applies. The clause applicable to

large business organizations is to be used (suitably modified to

identify the parties) in any subcontract. The subcontractor may request

a waiver under the NASA Patent Waiver Regulations to obtain rights to

inventions made under the subcontract just as a large business

Recipient can (see paragraph (d)(1)(i) of this section). It is strongly

recommended that a prospective large business subcontractor contact the

NASA installation Patent Counsel or Intellectual Property Counsel to

assure that the right procedures are followed. Just like the Recipient,

any inventions made in the performance of work under the Agreement are

subject to certain reporting, election and filing requirements, a

royalty-free license to the Government, march-in rights, and certain

other reservations.

(ii) Non-profit organization or Small Business. In the event the

Recipient enters into a subcontract (or similar arrangement) with a

domestic nonprofit organization or a small business firm for

experimental, developmental, or research work to be performed under the

Agreement, the requirements of 35 U.S.C. 200 et seq. regarding ``Patent

Rights in Inventions Made With Federal Assistance,'' apply. The

subcontractor has the first option to elect title to any inventions

made in the performance of work under the Agreement, subject to

specific reporting, election and filing requirements, a royalty-free

license to the Government, march-in rights, and certain other

reservations that are specifically set forth.

(iii) Work outside the United States. If the Recipient subcontracts

for work to be done outside the United States, its possessions or

Puerto Rico, the NASA installation Patent Counsel or Intellectual

Property Counsel should be contacted for the proper patent rights

clause to use and the procedures to follow.

(iv) Notwithstanding the above, and in recognition of the

Recipient's substantial contribution, the Recipient is authorized,

subject to rights of NASA set forth elsewhere in the Agreement, to:

(A) Acquire by negotiation and mutual agreement rights to a

subcontractor's subject inventions as the Recipient may deem necessary,

(B) If unable to reach agreement pursuant to paragraph

(d)(2)(iv)(A) of this section, request that NASA invoke exceptional

circumstances as necessary pursuant to 37 CFR 401.3(a)(2) if the

prospective subcontractor is a small business firm or nonprofit

organization, or for all other organizations, request that such rights

for the Recipient be included as an additional reservation in a waiver

granted pursuant to 14 CFR 1245.1. The exercise of this exception does

not change the flow down of the applicable patent rights clause to

subcontractors. Applicable laws and regulations require that title to

inventions made under a subcontract must initially reside in either the

subcontractor or NASA, not the Recipient. This exception does not

change that. The exception does authorize the Recipient to negotiate

and reach mutual agreement with the subcontractor for the grant-back of

rights. Such grant-back could be an option for an exclusive license or

an assignment, depending on the circumstances.

(3) NASA Inventions. NASA will use reasonable efforts to report

inventions made by its employees as a consequence of, or which bear a

direct relation to, the performance of specified NASA activities under

an Agreement. Upon timely request, NASA will use its best efforts to

grant Recipient first option to acquire either an exclusive or

partially-exclusive, revocable, royalty-bearing license, on terms to be

negotiated, for any patent applications and patents covering such

inventions. This exclusive or partially-exclusive license to the

Recipient will be subject to the retention of rights by or on behalf of

the Government for Government purposes.

(4) NASA Support Contractor Inventions. It is preferred that NASA

support contractors be excluded from performing any of NASA's

responsibilities under the Agreement since the rights obtained by a

NASA support contractor could work against the rights needed by the

Recipient. In the event NASA support contractors are tasked to work

under the Agreement and inventions are made by support contractor

employees, the support contractor will normally obtain rights in such

inventions. However, if NASA has the right to acquire or has acquired

title to such inventions, upon timely request, NASA will use its best

efforts to grant Recipient first option to acquire either an exclusive

or partially exclusive, revocable, royalty-bearing license, upon terms

to be negotiated, for any patent applications and patents covering such

inventions. This exclusive or partially-exclusive license to the

Recipient will be subject to the retention of rights by or on behalf of

the Government for Government purposes.

(5) Joint Inventions.

(i) NASA and the Recipient agree to use reasonable efforts to

identify and report to each other any inventions made jointly between

NASA employees (or employees of NASA support contractors) and employees

of Recipient. For large businesses, the [[Page 33168]] Headquarters

General Counsel may agree that the United States will refrain, for a

specified period, from exercising its undivided interest in a manner

inconsistent with Recipient's commercial interest. For small business

firms and nonprofit organizations, the Associate General Counsel

(Intellectual Property) may agree to assign or transfer whatever rights

NASA may acquire in a subject invention from its employee to the

Recipient as authorized by 35 U.S.C. 202(e). The grant officer

negotiating the Agreement with small business firms and nonprofit

organizations can agree, up front, that NASA will assign whatever

rights it may acquire in a subject invention from its employee to the

small business firm or nonprofit organization. Requests under this

paragraph shall be made through the Center Patent Counsel.

(ii) NASA support contractors may be joint inventors. If a NASA

support contractor employee is a joint inventor with a NASA employee,

the same provisions apply as those for NASA Support Contractor

Inventions. The NASA support contractor will retain or obtain

nonexclusive licenses to those inventions in which NASA obtains title.

If a NASA support contractor employee is a joint inventor with a

Recipient employee, the NASA support contractor and Recipient will

become joint owners of those inventions in which they have elected to

retain title or requested and have been granted waiver of title. Where

the NASA support contractor has not elected to retain title or has not

been granted waiver of title, NASA will jointly own the invention with

the Recipient.

(e) Licenses to Recipient(s).

(1) Any exclusive or partially exclusive commercial licenses are to

be royalty-bearing consistent with Government-wide policy in licensing

its inventions. It also provides an opportunity for royalty-sharing

with the employee-inventor, consistent with Government-wide policy

under the Federal Technology Transfer Act.

(2) Upon application in compliance with 37 CFR part 404--Licensing

of Government Owned Inventions, all Recipients shall be granted a

revocable, nonexclusive, royalty-free license in each patent

application filed in any country on a subject invention and any

resulting patent in which the Government obtains title. Because

cooperative agreements are cost sharing cooperative arrangements with a

purpose of benefiting the public by improving the competitiveness of

the Recipient and the Government receives an irrevocable, nonexclusive,

royalty-free license in each Recipient subject invention, it is only

equitable that the Recipient receive, at a minimum, a revocable,

nonexclusive, royalty-free license in NASA inventions and NASA

contractor inventions where NASA has acquired title.

(3) Notice Requirements. Once a Recipient has exercised its option

to apply for an exclusive or partially exclusive license, a notice,

identifying the invention and the Recipient, is published in the

Federal Register, providing the public opportunity for filing written

objections for 60 days.

(f) Preference for United States Manufacture. Despite any other

provision, the Recipient agrees that any products embodying subject

inventions or produced through the use of subject inventions shall be

manufactured substantially in the United States. The intent of this

provision is to support manufacturing jobs in the United States

regardless of the status of the Recipient as a domestic or foreign

controlled company. However, in individual cases, the requirement to

manufacture substantially in the United States, may be waived by the

Associate Administrator for Procurement (Code HS) upon a showing by the

Recipient that under the circumstances domestic manufacture is not

commercially feasible.

(g) Space Act Agreements. Invention and patent rights in

cooperative agreements must comply with statutory and regulatory

provisions. Where circumstances permit, a Space Act Agreement is

available as an alternative instrument which can be more flexible in

the area of invention and patent rights.

(h) Data Rights. Data rights provisions can and should be tailored

to best achieve the needs and objectives of the respective parties

concerned.

(1) The data rights clause at Sec. 1274.905 assumes a substantially

equal cost sharing relationship where collaborative research,

experimental, developmental, engineering, demonstration, or design

activities are to be carried out, such that it is likely that

``proprietary'' information will be developed and/or exchanged under

the agreement. If cost sharing is unequal or no extensive research,

experimental, developmental, engineering, demonstration, or design

activities are likely, a different set of clauses may be appropriate.

(2) The primary question that must be answered when developing data

clauses is what does each party need or intend to do with the data

developed under the agreement. Accordingly, the data rights clauses may

be tailored to fit the circumstances. Where conflicting goals of the

parties result in incompatible data provisions, grant officers for the

Government must recognize that private companies entering into

cooperative agreements bring resources to that relationship and must be

allowed to reap an appropriate benefit for the expenditure of those

resources. However, since serving a public purpose is a major objective

of a cooperative agreement, care must be exercised to ensure the

Recipient is not established as a long term sole source supplier of an

item or service and is not in a position to take unfair advantage of

the results of the cooperative agreement. Therefore, a reasonable time

period (two to seven years depending on the technology) should be

established after which the data rights will be made public.

(3) Data can be generated from different sources and can have

various restrictions placed on its dissemination. Recipient data

furnished to NASA can exist prior to, or be produced outside of, the

agreement or be produced under the agreement. NASA can also produce

data in carrying out its responsibilities under the agreement. Each of

these areas need to be covered.

(4) For data, including software, first produced by the Recipient

under the agreement, the Recipient may assert copyright. Data exchanged

with a notice showing that the data is protected by copyright must

include appropriate licenses in order for NASA to use the data as

needed.

(5) Recognizing that the dissemination of the results of NASA's

activities is a primary objective of a cooperative agreement, the

parties should specifically delineate what results will be published

and under what conditions. This should be set forth in the clause of

the cooperative agreement entitled ``Publication and Reports.'' Any

such agreement on the publication of results should be stated to take

precedence over any other clause in the cooperative agreement.

(6) In accordance with section 303(b) of the Space Act, any data

first produced by NASA under the agreement which embodies trade secrets

or financial information that would be privileged or confidential if it

had been obtained from a private participant, will be marked with an

appropriate legend and maintained in confidence for an agreed to period

of up to five years (the maximum allowed by law). This does not apply

to data other than that for which there has been agreement regarding

publication or distribution. Also, NASA itself may use the marked data

(under suitable protective conditions) for agreed-to purposes.

[[Page 33169]]

Sec. 1274.204 Evaluation and selection.

(a) A single technical evaluation factor is typically used for

CANs. That evaluation factor may be one of the following: providing

research and development or technology transfer, enhancing U.S.

competitiveness, or developing a capability among U.S. firms. Award to

foreign firms is not precluded if the evaluation factor is satisfied.

Subfactors could include such things as fostering U.S. leadership,

potential to advance technologies anticipated to enhance U.S.

competitiveness, timeliness of proposed accomplishments, private sector

commitment to commercialization, identification of specific potential

commercial markets, appropriateness of business risk, potential for

broad impact on the U.S. technology and knowledge base, level of

commitment (contribution of private resources to the project),

appropriateness of team member participation and relationships,

appropriateness of management planning, relevant experience,

qualifications and depth of management and technical staff, quality and

appropriateness of resources committed to the project, performance

bench marks, technical approach, business approach/resource sharing,

past performance, the articles of collaboration, etc.

(b) Technical evaluation.

(1) The technical officer will evaluate proposals in accordance

with the criteria in the CAN. Proposals selected for award will be

supported by documentation as described in paragraph (c)(1) of this

section. When evaluation results in a proposal not being selected, the

proposer will be notified in accordance with the CAN.

(2) The technical evaluation of proposals may include peer reviews.

Since the business sense of a cooperative agreement proposal is

critical to its success, NASA should reserve the right to utilize

appropriate outside evaluators to assist in the evaluation of such

proposal elements as the business base projections, the market for

proposed products, and/or the impact of anticipated product price

reductions. The use of outside evaluators shall be approved in

accordance with 48 CFR (NFS) 1815.413-2(c)(2). It is strongly

recommended that a numerical scoring system be established to rank

proposals.

(3) Unsolicited proposals. Evaluation of unsolicited proposals must

consider whether: the subject of the proposal is available to NASA from

another source without restriction; the proposal closely resembles a

pending competitive acquisition; and the research proposed demonstrates

an innovative and unique method, approach, or concept. Organizations

submitting unaccepted proposals will be notified in writing.

the technical officer will prepare and furnish to the grant officer the

following documentation:

(1) For a competitively selected proposal, a signed selection

statement and technical evaluation based on the evaluation criteria

stated in the solicitation.

(2) For an unsolicited proposal, a justification for acceptance of

an unsolicited proposal (JAUP) prepared by the cognizant technical

office. The JAUP shall be submitted for the approval of the grant

officer after review and concurrence at a level above the technical

officer. The evaluator shall consider the following factors, in

addition to any others appropriate for the particular proposal:

(i) Unique and innovative methods, approaches or concepts

demonstrated by the proposal.

(ii) Overall scientific or technical merits of the proposal.

(iii) The offeror's capabilities, related experience, facilities,

techniques, or unique combinations of these which are integral factors

for achieving the proposal objectives.

(iv) The qualifications, capabilities, and experience of the

proposed key personnel who are critical in achieving the proposal

objectives.

(v) Current, open solicitations under which the unsolicited

proposal could be evaluated.

(d) Cost evaluation.

(1) The grant officer and technical team will determine whether the

overall proposed cost of the project is reasonable and that the

Recipient's contribution is valid, verifiable, and available.

Commitments should be obtained and verified to the extent practical

from the offeror or members of the consortia that the proposed

contributions can and will be made as specified in the proposal or

statement of work.

(i) If the Recipient's verified share on a cooperative agreement

equals or exceeds 50% of the total cost of the agreement and the total

value of the agreement is less than $5 million, the cost evaluation of

the offeror's proposal should focus on the overall reasonableness and

timing of the proposer's contribution. Cost and pricing data should not

normally be required.

(ii) If the Recipient's share is projected to be less than 50% or

the total value of the agreement is more than $5 million, a more in-

depth analysis of the proposed costs should be undertaken. Cost and

pricing data should be required although certification is not required.

An analysis consistent with 48 CFR (FAR) 15.805-3 through 15.805-5

should be performed.

(e) If the cooperative agreement is to be awarded to a consortium,

a completed, formally executed Articles of Collaboration is required

prior to award.

(f) Printing, binding, and duplicating. Proposals for effort which

involve printing, binding, and duplicating in excess of 25,000 pages

are subject to the regulations of the Congressional Joint Committee on

Printing. The technical office will refer such proposals to the

Installation Central Printing Management Officer (ICPMO) to ensure

compliance with NMI 1490.1. The grant officer will be advised in

writing of the results of the ICPMO review.

Sec. 1274.205 Award procedures.

(a) General. Multiple year cooperative agreements are encouraged,

but normally they should not extend beyond two years.

(b) Award above proposed amount. Awards of cooperative agreements

in response to competitive solicitations will not result in providing

more NASA funds or resources than was anticipated in the Recipient's

proposal. If additional funds or resources are deemed necessary, they

will be provided by the Recipient and the Government cost share will be

adjusted downward.

changes shall not increase the amount of NASA's contribution.

Additional costs which arise during the performance of the cooperative

agreement are the responsibility of the Recipient. Funding for work

required beyond the scope of the cooperative agreement must be sought

through the submission of a proposal which will be treated as an

unsolicited proposal.

(d) Bilateral award. All cooperative agreements awarded under this

regulation will be awarded on a bilateral basis.

(e) Certifications and representations. (1) Unless prohibited by

statute or codified regulation, Recipients will be encouraged to submit

certifications and representations required by statute, executive

order, or regulation on an annual basis, if the Recipients have ongoing

and continuing relationships with the agency. Annual certifications and

representations shall be signed by responsible officials with the

authority to ensure Recipients' compliance with the pertinent

requirements. [[Page 33170]]

(2) Civil rights requirements--nondiscrimination in certain

Federally-funded programs. Recipients must furnish assurances of

compliance with civil rights statutes specified in 14 CFR parts 1250

through 1252. Such assurances are not required for each cooperative

agreement, if they have previously been furnished and remain current

and accurate. Certifications to NASA are normally made on NASA Form

1206, which may be obtained from the grant officer. Upon acceptance,

the grant officer will forward assurances to the NASA Office of Equal

Opportunity Programs for recording and retention purposes.

(3) NASA cooperative agreements are subject to the provisions of 14

CFR part 1265, Governmentwide Debarment and Suspension (Nonprocurement)

and Governmentwide requirements for Drug-Free Workplace (Grants),

unless excepted by Secs. 1265.110 1265.610.

(4) Lobbying Certification. A Lobbying Certification in accordance

with 14 CFR part 1271 will be obtained prior to award.

(f) Indemnification under Pub. L. 85-804 is not authorized for

cooperative agreements.

Sec. 1274.206 Document format and numbering.

(a) Formats. Grant officers are authorized to use the format in

Exhibit A of Appendix C to this part 1274 for the award of all

cooperative agreements. Computer-generated versions and omission of

inapplicable items are allowed.

(b) Cooperative agreement numbering. The identification numbering

system for all cooperative agreements shall conform to 48 CFR (NFS)

1804.7102-3, except that a NCC prefix will be used in lieu of the NAS

prefix.

Sec. 1274.207 Distribution of cooperative agreements.

Copies of cooperative agreements and modifications will be provided

to: Payment office, technical officer, administrative grant officer

when delegation has been made, NASA Center for Aerospace Information

(CASI), Attn: Document Processing Subpart, 800 Elkridge Landing Road,

Linthicum Heights, Maryland 21090-2934, and any other appropriate

recipient. Copies of the statement of work, contained in the

Recipient's proposal and accepted by NASA, will be provided to the

administrative grant officer and CASI. The cooperative agreement file

will contain a record of the addresses for distributing agreements and

supplements.

Subpart C--Administration

Sec. 1274.301 Delegation of administration.

Normally, cooperative agreements will be administered by the

awarding activity.

Sec. 1274.302 Transfers, novations, and change of name agreements.

(a) Transfer of cooperative agreements. Novation is the only means

by which a cooperative agreement may be transferred from one Recipient

to another.

(b) Novation and change of name. All novation agreements and change

of name agreements of the Recipient, prior to execution, shall be

reviewed by NASA legal counsel for legal sufficiency prior to approval.

Subpart D--Government Property

Sec. 1274.401 Government property.

The accomplishment of a cooperative agreement may require the

purchase of equipment for a wide range of purposes. If this equipment

is purchased with Government funds, i.e., as part of the Government

contribution to the cooperative agreement, it becomes Government

property and must be disposed of in accordance with 48 CFR (FAR) Part

45 at the conclusion of the cooperative agreement. In some cases, this

may meet the needs of the parties. If, however, the Recipient may need

the equipment to continue commercial efforts following the cooperative

agreement, it should be purchased by the Recipient and included as an

in-kind contribution of the Recipient. In this way, it is not procured,

not even in part, with Government funds and the Government acquires no

ownership interest. Procurement by the Recipient may be before or

during the performance of the cooperative agreement.

Subpart E--Procurement Standards

Sec. 1274.501 Subcontracts.

All contracts, including small purchases, awarded by Recipients and

their contractors shall contain the procurement provisions of Appendix

A to this part, as applicable.

Subpart F--Reports and Records

Sec. 1274.601 Retention and access requirements for records.

(a) This Subpart sets forth requirements for record retention and

access to records for awards to Recipients.

(b) Financial records, supporting documents, statistical records,

and all other records pertinent to an award shall be retained for a

period of three years from the date of submission of the final invoice.

The only exceptions are the following:

(1) If any litigation, claim, or audit is started before the

expiration of the 3-year period, the records shall be retained until

all litigation, claims or audit findings involving the records have

been resolved and final action taken.

(2) Records for real property and equipment acquired with Federal

funds shall be retained for 3 years after final disposition.

(3) When records are transferred to or maintained by NASA, the 3-

year retention requirement is not applicable to the Recipient.

(4) Indirect cost rate proposals, cost allocations plans, etc. as

specified in paragraph (g) of this section.

records if authorized by NASA.

(d) NASA shall request transfer of certain records to its custody

from Recipients when it determines that the records possess long term

retention value. However, in order to avoid duplicate record keeping,

NASA may make arrangements for Recipients to retain any records that

are continuously needed for joint use.

(e) NASA, the Inspector General, Comptroller General of the United

States, or any of their duly authorized representatives, have the right

of timely and unrestricted access to any books, documents, papers, or

other records of Recipients that are pertinent to the awards, in order

to make audits, examinations, excerpts, transcripts and copies of such

documents. This right also includes timely and reasonable access to a

Recipient's personnel for the purpose of interview and discussion

related to such documents. The rights of access in this paragraph are

not limited to the required retention period, but shall last as long as

records are retained.

(f) Unless required by statute, NASA shall not place restrictions

on Recipients that limit public access to the records of Recipients

that are pertinent to an award, except when NASA can demonstrate that

such records shall be kept confidential and would have been exempted

from disclosure pursuant to the Freedom of Information Act (5 U.S.C.

552) if the records had belonged to NASA.

(g) Indirect cost rate proposals, cost allocations plans, etc. This

paragraph applies to the following types of documents, and their

supporting records: indirect cost rate computations or proposals, cost

allocation plans, and any similar accounting computations of

[[Page 33171]] the rate at which a particular group of costs is

chargeable (such as computer usage chargeback rates or composite fringe

benefit rates).

(1) If submitted for negotiation. If the Recipient submits to NASA

or the subrecipient submits to the Recipient the proposal, plan, or

other computation to form the basis for negotiation of the rate, then

the 3-year retention period for its supporting records starts on the

date of such submission.

(2) If not submitted for negotiation. If the Recipient is not

required to submit to NASA or the subrecipient is not required to

submit to the Recipient the proposal, plan, or other computation for

negotiation purposes, then the 3-year retention period for the

proposal, plan, or other computation and its supporting records starts

at the end of the fiscal year (or other accounting period) covered by

the proposal, plan, or other computation.

Subpart G--Suspension or Revocation

Sec. 1274.701 Suspension or revocation.

A cooperative agreement provides both NASA and the Recipient the

ability to revoke the agreement if it is in their best interests to do

so. For example, NASA may revoke the agreement if the Recipient is not

making anticipated technical progress or if the Recipient materially

fails to comply with the terms of the agreement. Similarly, the

Recipient may revoke the agreement if technical progress is not being

made, if the firms are shifting their technical emphasis, or if other

technological advances have made the effort obsolete. NASA may also

suspend the cooperative agreement for a short period of time if an

assessment needs to be made as to whether the agreement should be

revoked or not.

Subpart H--After-the-Award Requirements

Sec. 1274.801 Purpose.

Sections 1274.802 and 1274.803 contain closeout procedures and

other procedures for subsequent disallowances and adjustments.

Sec. 1274.802 Closeout procedures.

(a) Recipients shall submit, within 90 calendar days after the date

of completion of the cooperative agreement, all financial, performance,

and other reports as required by the terms and conditions of the award.

Extensions may be approved when requested by the Recipient.

(b) The Recipient shall account for any real and personal property

acquired with Federal funds or received from the Federal Government in

accordance with Subpart D of this part.

Sec. 1274.803 Subsequent adjustments and continuing responsibilities.

The closeout of an award does not affect any of the following:

(a) Audit requirements in Sec. 1274.933.

(b) Property management requirements in subpart D of this part.

Subpart I--Other Provisions and Special Conditions

Sec. 1274.901 Other provisions and special conditions.

The provisions set forth in this subpart are to be incorporated in

and made a part of all cooperative agreements. The provisions at

Secs. 1274.902 through 1274.909 are to be incorporated in full text

substantially as stated in this regulation. The provisions at

Secs. 1274.910 through 1274.933 will be incorporated by reference in an

enclosure to each cooperative agreement (see Exhibit A as listed in

Appendix C to this part). For inclusion of provisions in subcontracts,

see Subpart E--Procurement Standards of this part.

Sec. 1274.902 Purpose (XXX 1995)

The purpose of this cooperative agreement is to conduct a shared

resource project that will lead to ____________. This cooperative

agreement will advance the technology developments and research which

have been performed on ____________. The specific objective is to

____________. This work will culminate in ____________.

Sec. 1274.903 Responsibilities (XXX 1995).

(a) This cooperative agreement will include substantial NASA

participation during performance of the effort. NASA and the Recipient

agree to the following Responsibilities, a statement of cooperative

interactions to occur during the performance of this effort. NASA and

the Recipient shall exert all reasonable efforts to fulfill the

responsibilities stated below.

(b) NASA Responsibilities. Since NASA contractors may obtain

certain intellectual property rights arising from work for NASA in

support of this agreement, NASA will inform Recipient whenever NASA

intends to use NASA contractors to perform technical engineering

services in support of this agreement. The following responsibilities

are hereby set forth with anticipated start and ending dates, as

appropriate:

------------------------------------------------------------------------

Responsibility Start End

------------------------------------------------------------------------

for particular aspects of project performance as set forth in the

technical proposal dated ____________, attached hereto (or Statement of

Work dated ____________, attached hereto.) The following

responsibilities are hereby set forth with anticipated start and ending

dates, as appropriate:

------------------------------------------------------------------------

Responsibility Start End

------------------------------------------------------------------------

Sec. 1274.904 Resource Sharing Requirements (XXX 1995).

(a) NASA and the Recipient will share in providing the resources

necessary to perform the agreement. NASA funding and non-cash

contributions (personnel, equipment, facilities, etc.) and the dollar

value of the Recipient's cash and/or in-kind contribution will be on a

________ (NASA)-________ (Recipient) basis. Criteria and procedures for

the allowability and allocability of cash and in-kind contributions

shall be governed by Section 23, ``Cost Sharing or Matching,'' of the

Attachment to OMB Circular A-110 (58 FR 62992, November 29, 1993). The

``applicable federal cost principles'' cited in OMB Circular A-110 are

48 CFR (FAR) Part 31, entitled ``Contract Cost Principles and

Procedures.''

(b) The Recipient's share shall not be charged to the Government

under this agreement or under any other contract, grant, or cooperative

agreement, except that the Recipient's contribution may be considered

as allowable IR&D costs pursuant to 48 CFR (NFS) 1831.205-18.

Sec. 1274.905 Rights in Data (XXX 1995)

(a) Definitions.

Data means recorded information, regardless of form, the media on

which it may be recorded, or the method of recording. The term

includes, but is not limited to, data of a scientific or technical

nature, computer software and documentation thereof, and data

comprising commercial and financial information.

(b) Data Categories.

(1) General: Data exchanged between NASA and Recipient under this

cooperative agreement will be exchanged without restriction as to its

disclosure, use or duplication except as otherwise provided below in

this provision. [[Page 33172]]

(2) Background Data: In the event it is necessary for Recipient to

furnish NASA with Data which existed prior to, or produced outside of,

this cooperative agreement, and such Data embodies trade secrets or

comprises commercial or financial information which is privileged or

confidential, and such Data is so identified with a suitable notice or

legend, the Data will be maintained in confidence and disclosed and

used by NASA and its contractors (under suitable protective conditions)

only for the purpose of carrying out NASA's responsibilities under this

cooperative agreement. Upon completion of activities under this

agreement, such Data will be disposed of as requested by Recipient.

(3) Data first produced by Recipient: In the event Data first

produced by Recipient in carrying out Recipient's responsibilities

under this cooperative agreement is furnished to NASA, and Recipient

considers such Data to embody trade secrets or to comprise commercial

or financial information which is privileged or confidential, and such

Data is so identified with a suitable notice or legend, the Data will

be maintained in confidence and disclosed and used by [``NASA'' or

``the Government,'' as appropriate] and its contractors (under suitable

protective conditions) only for [insert appropriate purpose; for

example: experimental; evaluation; research; development, etc.] by or

on behalf of [``NASA'' or ``the Government'' as appropriate]. In order

that [``NASA'' or the ``Government'', as appropriate] and its

contractors may exercise the right to use such Data for the purposes

designated above, NASA, upon request to the Recipient, shall have the

right to review and request delivery of Data first produced by

Recipient. Delivery shall be made within a time period specified by

NASA.

(4) Data first produced by NASA: As to Data first produced by NASA

in carrying out NASA's responsibilities under this cooperative

agreement and which Data would embody trade secrets or would comprise

commercial or financial information that is privileged or confidential

if obtained from the Recipient, such Data will, to the extent permitted

by law, be appropriately marked with a notice or legend and maintained

in confidence for a period of ( ) years [INSERT A PERIOD UP TO 5

YEARS] after development of the information, with the express

understanding that during the aforesaid period such Data may be

disclosed and used (under suitable protective conditions) by or on

behalf of the Government for Government purposes only, and thereafter

for any purpose whatsoever without restriction on disclosure and use.

Recipient agrees not to disclose such Data to any third party without

NASA's written approval until the aforementioned restricted period

expires.

(5) Copyright. In the event Data is exchanged with a notice

indicating the Data is protected under copyright as a published

copyrighted work, or are deposited for registration as a published work

in the U.S. Copyright Office, the following paid-up licenses shall

apply:

(i) If it is indicated on the Data that the Data existed prior to,

or was produced outside of, this agreement, the receiving party and

others acting on its behalf, may reproduce, distribute, and prepare

derivative works for the purpose of carrying out the receiving party's

responsibilities under this cooperative agreement; and

(ii) If the furnished Data does not contain the indication of

paragraph (b)(5)(i) of this section, it will be assumed that the Data

was first produced under this agreement, and the receiving party and

others acting on its behalf, shall be granted a paid up, nonexclusive,

irrevocable, world-wide license for all such Data to reproduce,

distribute copies to the public, prepare derivative works, distribute

copies to the public, and perform publicly and display publicly, by or

on behalf of the receiving party. For Data that is computer software,

the right to distribute shall be limited to potential users in the

United States. When claim is made to copyright, the Recipient shall

affix the applicable copyright notice of 17 U.S.C. 401 or 402 and

acknowledgment of Government sponsorship to the data when and if the

data are delivered to the Government.

(6) Oral and visual information. If information which the Recipient

considers to embody trade secrets or to comprise commercial or

financial information which is privileged or confidential is disclosed

orally or visually to NASA, such information must be reduced to

tangible, recorded form (i.e., converted into Data as defined herein),

identified and marked with a suitable notice or legend, and furnished

to NASA within 10 days after such oral or visual disclosure, or NASA

shall have no duty to limit or restrict, and shall not incur any

liability for, any disclosure and use of such information.

(7) Disclaimer of Liability. Notwithstanding the above, NASA shall

not be restricted in, nor incur any liability for, the disclosure and

use of:

(i) Data not identified with a suitable notice or legend as set in

paragraph (b)(2) of this section; nor

(ii) Information contained in any Data for which disclosure and use

is restricted under paragraphs (b)(2) or (3) of this section, if such

information is or becomes generally known without breach of the above,

is known to or is generated by NASA independently of carrying out

responsibilities under this agreement, is rightfully received from a

third party without restriction, or is included in data which

Participant has, or is required to furnish to the U.S. Government

without restriction on disclosure and use.

agreement, by NASA or the Recipient, shall be marked with a suitable

notice or legend indicating the data was generated under this

cooperative agreement.

(d) Lower Tier Agreements. The Recipient shall include this

provision, suitably modified to identify the parties, in all

subcontracts or lower tier agreements, regardless of tier, for

experimental, developmental, or research work.

Sec. 1274.906 Designation of New Technology Representative and Patent

Representative (XXX 1995).

(a) For purposes of administration of the clause of this

cooperative agreement entitled ``PATENT RIGHTS--RETENTION BY THE

CONTRACTOR (LARGE BUSINESS)'' or ``PATENT RIGHTS--RETENTION BY THE

CONTRACTOR (SMALL BUSINESS)'' the following named representatives are

hereby designated by the Grant Officer to administer such clause:

------------------------------------------------------------------------

Title Office code Address

------------------------------------------------------------------------

New Technology

Representative

Patent

Representative

------------------------------------------------------------------------

(b) Reports of reportable items, and disclosure of subject

inventions, interim reports, final reports, utilization reports, and

other reports required by the clause, as well as any correspondence

with respect to such matters, should be directed to the New Technology

Representative unless transmitted in response to correspondence or

request from the Patent Representative. Inquiries or requests regarding

disposition of rights, election of rights, or related matters should be

directed to the Patent Representative. This clause shall be included in

any subcontract hereunder requiring ``PATENT RIGHTS--RETENTION BY THE

CONTRACTOR (LARGE BUSINESS)'' [[Page 33173]] clause or ``PATENT

RIGHTS--RETENTION BY THE CONTRACTOR (SMALL BUSINESS)'' clause, unless

otherwise authorized or directed by the Grant Officer. The respective

responsibilities and authorities of the above-named representatives are

set forth in 48 CFR (NFS) 1827.375-3.

Sec. 1274.907 Disputes (XXX 1995).

(a) The parties to this agreement shall communicate with one

another in good faith and in a timely and cooperative manner when

raising issues under this provision.

(b) Any dispute, which for the purposes of this provision includes

any disagreement or claim, between NASA and the Recipient concerning

questions of fact or law arising from or in connection with this

agreement and whether or not involving alleged breach of this

agreement, may be raised only under this provision.

the issues involved by discussion and mutual agreement as soon as

practicable. In no event shall a dispute which arose more than three

(3) months prior to the notification made under the following paragraph

of this provision constitute the basis for relief under this article

unless NASA waives this requirement.

(d) Failing resolution by mutual agreement, the aggrieved party

shall document the dispute by notifying the other party in writing of

the relevant facts, identify unresolved issues, and specify the

clarification or remedy sought. Within five (5) working days after

providing written notice to the other party, the aggrieved party may,

in writing, request a decision by ______________ [Suggest this be the

Center Director], the Dispute Resolution Official. The other party

shall submit a written position on the matters in dispute within thirty

(30) calendar days after being notified that a decision has been

requested. The dispute resolution official shall conduct a review of

the matters in dispute and render a decision in writing within thirty

(30) calendar days of receipt of such written position. Such resolution

is not subject to further administrative review and, to the extent

permitted by law, shall be final and binding.

Sec. 1274.908 Milestone Payments (XXX 1995)

(a) By submission of the first invoice, the Recipient is certifying

that it has an established accounting system which complies with

generally accepted accounting principles, with the requirements of this

agreement, and that appropriate arrangements have been made for

receiving, distributing, and accounting for Federal funds received

under this agreement.

(b) Payments will be made upon the following milestones: [The

schedule for obligation may be based upon the Recipient's completion of

specific tasks, submission of specified reports, or whatever is

appropriate.]

------------------------------------------------------------------------

Date Payment milestone Amount

------------------------------------------------------------------------

the provisions of the agreement and upon certification by NASA of

completion of the payable milestone, the grant officer shall authorize

payment.

(d) A payment milestone may be successfully completed in advance of

the date appearing in paragraph (b) of this section. However, payment

shall not be made prior to that date without the written consent of the

Grant Officer.

(e) The contractor is not entitled to partial payment for partial

completion of a payment milestone.

(f) All preceding payment milestones must be completed before

payment can be made for the next payment milestone.

(g) Invoices hereunder shall be submitted in the original and five

copies to the grant officer for certification.

Sec. 1274.909 Term of this Agreement (XXX 1995).

The agreement commences on the effective date indicated on the

attached cover sheet and continues until the expiration date indicated

on the attached cover. If all resources are expended prior to the

duration, the parties have no obligation to continue performance and

may elect to cease at that point. The parties may extend the expiration

date if additional time is required to complete the milestones at no

increase in Government resources. Provisions of this Agreement, which,

by their express terms or by necessary implication, apply for periods

of time other than that specified as the agreement term, shall be given

effect, notwithstanding expiration of the term of the agreement.

Sec. 1274.910 Authority (XXX 1995).

This is a cooperative agreement as defined in 31 U.S.C. 6305 (the

Chiles Act) and is entered into pursuant to the authority of 42 U.S.C.

2451, et seq. (the Space Act).

Sec. 1274.911 Patent Rights (XXX 1995).

(a) Definitions.

(1) Contract means any actual or proposed contract, cooperative

agreement, agreement, understanding, or other arrangement, and includes

any assignment, substitution of parties, or subcontract executed or

entered into thereunder.

(2) Contracting Officer means the contracting officer or grant

officer executing this agreement on behalf of the Government.

(3) Invention means any invention or discovery which is or may be

patentable or otherwise protectable under Title 35 of the United States

Code.

(4) Made when used in relation to any invention means the

conception or first actual reduction to practice such invention.

(5) Nonprofit organization means a domestic university or other

institution of higher education or an organization of the type

described in Subpart 501(c)(3) of the Internal Revenue Code of 1954 (26

U.S.C. 501(c)) and exempt from taxation under Subpart 501(a) of the

Internal Revenue Code (26 U.S.C. 501(a)), or any domestic nonprofit

scientific or educational organization qualified under a State

nonprofit organization statute.

(6) Practical application means to manufacture, in the case of a

composition or product; to practice, in the case of a process or

method; or to operate, in the case of a machine or system; and, in each

case, under such conditions as to establish that the invention is being

utilized and that its benefits are, to the extent permitted by law or

Government regulations, available to the public on reasonable terms.

(7) Recipient means:

(i) [Identify the signatory party or parties] or;

(ii) The [identify the Consortium], where the Consortium has been

formed for carrying out their responsibilities under this agreement.

(8) Small Business Firm means a domestic small business concern as

defined at 15 U.S.C. 632 and implementing regulations of the

Administrator of the Small Business Administration. (For the purpose of

this definition, the size standard contained in 13 CFR 121.3-8 for

small business contractors and in 13 CFR 121.3-12 for small business

subcontractors will be used.)

(9) Subject Invention means any invention of a Recipient and/or

Government employee conceived or first actually reduced to practice in

the performance of work under this contract.

(b) Allocation of Principal Rights. [[Page 33174]]

(1) Contractor Inventions. For other than Small Business Firm or

Nonprofit organization Recipients, the ``PATENT RIGHTS--RETENTION BY

CONTRACTOR (LARGE BUSINESS)'' provision applies. For Small Business

Firm and Nonprofit organization Recipients, the ``PATENT RIGHTS--

RETENTION BY CONTRACTOR (SMALL BUSINESS)'' provision applies.

(2) NASA Inventions. NASA will use reasonable efforts to report

inventions made by NASA employees as a consequence of, or which bear a

direct relation to, the performance of specified NASA activities under

this cooperative agreement and, upon timely request, will grant the

Recipient, the first option to acquire either an exclusive or partially

exclusive, revocable, royalty-bearing license, on terms to be

subsequently negotiated, for any patent applications and patents

covering such inventions, and subject to the license reserved in

paragraph (b)(5)(i) of this section. Upon application in compliance

with 37 CFR Part 404--Licensing of Government Owned Inventions, the

Recipient or each Consortium Member (if applicable), shall be granted a

revocable, nonexclusive, royalty-free license in each patent

application filed in any country on a subject invention and any

resulting patent in which the Government acquires title. Each

nonexclusive license may extend to subsidiaries and affiliates, if any,

within the corporate structure of the licensee and includes the right

to grant sublicenses of the same scope to the extent the licensee was

legally obligated to do so at the time the cooperative agreement was

signed.

(3) NASA Contractor Inventions. In the event NASA contractors are

tasked to perform work in support of specified NASA activities under

this cooperative agreement and inventions are made by contractor

employees, and NASA has the right to acquire or has acquired title to

such inventions, NASA will use reasonable efforts to report such

inventions and, upon timely request, will grant the Recipient or

designated Consortium Member (if applicable), the first option to

acquire either an exclusive or partially exclusive, revocable, royalty-

bearing license, upon terms to be subsequently negotiated, for any

patent applications and patents covering such inventions, and subject

to the license reserved in paragraph (b)(5)(ii) of this section. Upon

application in compliance with 37 CFR part 404--Licensing of Government

Owned Inventions, the Recipient or each Consortium Member (if

applicable), shall be granted a revocable, nonexclusive, royalty-free

license in each patent application filed in any country on a subject

invention and any resulting patent in which the Government acquires

title. Each nonexclusive license may extend to subsidiaries and

affiliates, if any, within the corporate structure of the licensee and

includes the right to grant sublicenses of the same scope to the extent

the licensee was legally obligated to do so at the time the cooperative

agreement was signed.

(4) Joint NASA and Recipient Inventions. NASA and Recipient agree

to use reasonable efforts to identify and report to each other any

inventions made jointly between NASA employees (or employees of NASA

contractors) and employees of Recipient.

(i) For other than small business firms and nonprofit organizations

the Administrator may agree that the United States will refrain from

exercising its undivided interest in a manner inconsistent with

Recipient's commercial interest and to cooperate with Recipient in

obtaining patent protection on its undivided interest on any waived

inventions subject, however, to the condition that Recipient makes its

best efforts to bring the invention to the point of practical

application at the earliest practicable time. In the event that the

Administrator determines that such efforts are not undertaken, the

Administrator may void NASA's agreement to refrain from exercising its

undivided interest and grant licenses for the practice of the invention

so as to further its development. In the event that the Administrator

decides to void NASA's agreement to refrain from exercising its

undivided interest and grant licenses for this reason, notice shall be

given to the Inventions and Contributions Board as to why such action

should not be taken. Either alternative will be subject to the

applicable license or licenses reserved in paragraph (b)(5) of this

section.

(ii) For small business firms and nonprofit organization, NASA may

assign or transfer whatever rights it may acquire in a subject

invention from its employee to the Recipient as authorized by 35 U.S.C.

202(e).

(5) Minimum rights reserved by the Government. Any license or

assignment granted Recipient pursuant to paragraphs (b)(2), (b)(3), or

(b)(4) of this section will be subject to the reservation of the

following licenses:

(i) As to inventions made solely or jointly by NASA employees, the

irrevocable, royalty-free right of the Government of the United States

to practice and have practiced the invention by or on behalf of the

United States; and

(ii) As to inventions made solely by, or jointly with, employees of

NASA contractors, the rights in the Government of the United States as

set forth in paragraph (b)(5)(i) of this section, as well as the

revocable, nonexclusive, royalty-free license in the contractor as set

forth in 14 CFR 1245.108.

(6) Preference for United States manufacture. The Recipient agrees

that any products embodying subject inventions or produced through the

use of subject inventions shall be manufactured substantially in the

United States. However, in individual cases, the requirement to

manufacture substantially in the United States may be waived by NASA

upon a showing by the Recipient that under the circumstances domestic

manufacture is not commercially feasible.

(7) Work performed by the Recipient under this cooperative

agreement is considered undertaken to carry out a public purpose of

support and/or stimulation rather than for acquiring property or

services for the direct benefit or use of the Government. Accordingly,

such work by the Recipient is not considered ``by or for the United

States'' and the Government assumes no liability for infringement by

the Recipient under 28 U.S.C. 1498.

Sec. 1274.912 Patent Rights--Retention by the Contractor (Large

Business) (XXX 1995)

(a) Definitions.

(1) Administrator, as used in this clause, means the Administrator

of the National Aeronautics and Space Administration (NASA) or duly

authorized representative.

(2) Contract, as used in this clause, means any actual or proposed

contract, cooperative agreement, agreement, under-standing, or other

arrangement, and includes any assignment, substitution of parties, or

subcontract executed or entered into thereunder.

(3) Contracting Officer means the contracting officer or grant

officer executing this agreement on behalf of the Government.

(4) Invention, as used in this clause, means any invention or

discovery which is or may be patentable or otherwise protectable under

title 35 of the U.S.C.

(5) Made, as used in relation to any invention, means the

conception or first actual reduction to practice such invention.

(6) Nonprofit organization, as used in this clause, means a

domestic university or other institution of higher education or an

organization of the type described [[Page 33175]] in section 501(c)(3)

of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and exempt from

taxation under section 501(a) of the Internal Revenue Code (26 U.S.C.

501(a)), or any domestic nonprofit scientific or educational

organization qualified under a State nonprofit organization statute.

(7) Practical application, as used in this clause, means to

manufacture, in the case of a composition or product; to practice, in

the case of a process or method; or to operate, in case of a machine or

system; and, in each, case, under such conditions as to establish that

the invention is being utilized and that its benefits are, to the

extent permitted by law or Government regulations, available to the

public on reasonable terms.

(8) Reportable item, as used in this clause, means any invention,

discovery, improvement, or innovation of the contractor, whether or not

the same is or may be patentable or otherwise protectable under Title

35 of the United States Code, conceived or first actually reduced to

practice in the performance of any work under this contract or in the

performance of any work that is reimbursable under any clause in this

contract providing for reimbursement of costs incurred prior to the

effective date of this contract.

(9) Small business firm, as used in this clause, means a domestic

small business concern as defined at 15 U.S.C. 632 and implementing

regulations of the Administrator of the Small Business Administration.

(For the purpose of this definition, the size standard contained in 13

CFR 121.3-8 for small business contractors and in 13 CFR 121.3-12 for

small business subcontractors will be used.)

(10) Subject invention, as used in this clause, means any

reportable item which is or may be patentable or otherwise protectable

under Title 35 of the United States Code, or any novel variety of plant

that is or may be protectable under the Plant Variety Protection Act (7

U.S.C. 2321, et seq).

(b) Allocation of principal rights.--(1) Presumption of title. (i)

Any reportable item that the Administrator considers to be a subject

invention shall be presumed to have been made in the manner specified

in paragraph (1) or (2) of Section 305(a) of the National Aeronautics

and Space Act of 1958 (42 U.S.C. 2457(a)) (hereinafter called ``the

Act''), and the above presumption shall be conclusive unless at the

time of reporting the reportable item the Recipient submits to the

Contracting Officer a written statement, containing supporting details,

demonstrating that the reportable item was not made in the manner

specified in paragraph (1) or (2) of Section 305(a) of the Act.

(ii) Regardless of whether title to a given subject invention would

otherwise be subject to an advance waiver or is the subject of a

petition for waiver, the Contractor may nevertheless file the statement

described in paragraph (b)(1)(i) of this section. The Administrator

will review the information furnished by the Contractor in any such

statement and any other available information relating to the

circumstances surrounding the making of the subject invention and will

notify the Contractor whether the Administrator has determined that the

subject invention was made in the manner specified in paragraph (1) or

(2) of Section 305(a) of the Act.

(2) Property rights in subject inventions. Each subject invention

for which the presumption of paragraph (b)(1)(i) of this section is

conclusive or for which there has been a determination that it was made

in the manner specified in paragraph (1) or (2) of section 305(a) of

the Act shall be the exclusive property of the United States as

represented by NASA unless the Administrator waives all or any part of

the rights of the United States, as provided in paragraph (b)(3) of

this section.

(3) Waiver of rights. (i) Section 305(f) of the Act provides for

the promulgation of regulations by which the Administrator may waive

the rights of the United States with respect to any invention or class

of inventions made or that may be made under conditions specified in

paragraph (1) or (2) of section 305(a) of the Act. The promulgated NASA

Patent Waiver Regulations, 14 CFR part 1245, subpart 1, have adopted

the Presidential memorandum on Government Patent Policy of February 18,

1983, as a guide in acting on petitions (requests) for such waiver of

rights.

(ii) As provided in 14 CFR part 1245, subpart 1, Contractors may

petition, either prior to execution of the contract or within 30 days

after execution of the contract, for advance waiver of rights to any or

all of the inventions that may be made under a contract. If such a

petition is not submitted, or if after submission it is denied, the

Contractor (or an employee inventor of the Contractor may petition for

waiver of rights to an identified subject invention within eight months

of first disclosure of invention in accordance with paragraph (e)(2) of

this section or within such longer period as may be authorized in

accordance with 14 CFR 1245.105. Further procedures are provided in the

REQUESTS FOR WAIVER OF RIGHTS--LARGE BUSINESS provision.

each contractor subject invention for which a waiver of rights is

applicable in accordance with 14 CFR part 1245, subpart 1, the

Government reserves--

(i) An irrevocable, royalty-free license for the practice of such

invention throughout the world by or on behalf of the United States or

any foreign government in accordance with any treaty or agreement with

the United States; and

(ii) Such other rights as stated in 14 CFR 1245.107.

(2) Nothing contained in this paragraph shall be considered to

grant to the Government any rights with respect to any invention other

than a subject invention.

(d) Minimum rights to the Contractor. (1) The Contractor is hereby

granted a revocable, nonexclusive, royalty-free license in each patent

application filed in any country on a contractor subject invention and

any resulting patent in which the Government acquires title, unless the

Contractor fails to disclose the subject invention within the times

specified in paragraph (e)(2) of this section. The Contractor's license

extends to its domestic subsidiaries and affiliates, if any, within the

corporate structure ofich the Contractor is a party and includes the

right to grant sublicenses of the same scope to the extent the

Contractor was legally obligated to do so at the time the contract was

awarded. The license is transferable only with the approval of the

Administrator except when transferred to the successor of that part of

the Contractor's business to which the invention pertains.

(2) The Contractor's domestic license may be revoked or modified by

the Administrator to the extent necessary to achieve expeditious

practical application of the subject invention pursuant to an

application for an exclusive license submitted in accordance with 14

CFR part 1245, subpart 2, Licensing of NASA Inventions. This license

will not be revoked in that field of use or the geographical areas in

which the Recipient has achieved practical application and continues to

make the benefits of the invention reasonably accessible to the public.

The license in any foreign country may be revoked or modified at the

discretion of the Administrator to the extent the Recipient, its

licensees, or its domestic subsidiaries or affiliates have failed to

achieve practical application in that foreign country. [[Page 33176]]

(3) Before revocation or modification of the license, the

Contractor will be provided a written notice of the Administrator's

intention to revoke or modify the license, and the Contractor will be

allowed 30 days (or such other time as may be authorized by the

Administrator for good cause shown by the Contractor) after the notice

to show cause why the license should not be revoked or modified. The

Contractor has the right to appeal, in accordance with 14 CFR 1245.211,

any decision concerning the revocation or modification of its license.

(e) Invention identification, disclosures, and reports. (1) The

Contractor shall establish and maintain active and effective procedures

to assure that reportable items are promptly identified and disclosed

to Contractor personnel responsible for the administration of this

clause within six months of conception and/or first actual reduction to

practice, whichever occurs first in the performance of work under this

contract. These procedures shall include the maintenance of laboratory

notebooks or equivalent records and other records as are reasonably

necessary to document the conception and/or the first actual reduction

to practice of the reportable items, and records that show that the

procedures for identifying and disclosing reportable items are

followed. Upon request, the Contractor shall furnish the Contracting

Officer a description of such procedures for evaluation and for

determination as to their effectiveness.

(2) The Contractor will disclose each reportable item to the

Contracting Officer within two months after the inventor discloses it

in writing to Contractor personnel responsible for the administration

of this clause or, if earlier, within six months after the Recipient

becomes aware that a reportable item has been made, but in any event

for subject inventions before any on sale, public use, or publication

of such invention known to the Recipient. The disclosure to the agency

shall be in the form of a written report and shall identify the

contract under which the reportable item was made and the inventor(s)

or innovator(s). It shall be sufficiently complete in technical detail

to convey a clear understanding, to the extent known at the time of the

disclosure, of the nature, purpose, operation, and physical, chemical,

biological, or electrical characteristics of the reportable item. The

disclosure shall also identify any publication, on sale, or public use

of any subject invention and whether a manuscript describing such

invention has been submitted for publication and, if so, whether it has

been accepted for publication at the time of disclosure. In addition,

after disclosure to the agency, the Contractor will promptly notify the

agency of the acceptance of any manuscript describing a subject

invention for publication or of any on sale or public use planned by

the Contractor for such invention.

(3) The Contractor shall furnish the Contracting Officer the

following:

(i) Interim reports every 12 months (or such longer period as may

be specified by the Contracting Officer) from the date of the contract,

listing reportable items during that period, and certifying that all

reportable items have been disclosed (or that there are no such

inventions) and that the procedures required by paragraph (e)(1) of

this section have been followed.

(ii) A final report, within three months after completion of the

contracted work, listing all reportable items or certifying that there

were no such reportable items, and listing all subcontracts at any tier

containing a patent rights clause or certifying that there were no such

subcontracts.

(4) The Contractor agrees, upon written request of the Contracting

Officer, to furnish additional technical and other information

available to the Recipient as is necessary for the preparation of a

patent application on a subject invention and for the prosecution of

the patent application, and to execute all papers necessary to file

patent applications on subject inventions and to establish the

Government's rights in the subject inventions.

(5) The Contractor agrees, subject to 48 CFR (FAR) 27.302(j), that

the Government may duplicate and disclose subject invention disclosures

and all other reports and papers furnished or required to be furnished

pursuant to this clause.

(f) Examination of records relating to inventions. (1) The

Contracting Officer or any authorized representative shall, pursuant to

the Retention and Examination of Records provision of this cooperative

agreement, have the right to examine any books (including laboratory

notebooks), records, and documents of the Recipient relating to the

conception or first actual reduction to practice of inventions in the

same field of technology as the work under this contract to determine

whether--

(i) Any such inventions are subject inventions;

(ii) The Contractor has established and maintained the procedures

required by paragraph (e)(1) of this section; and

(iii) The Contractor and its inventors have complied with the

procedures.

(2) If the Contracting Officer learns of an unreported Contractor

invention that the Contracting Officer believes may be a subject

invention, the Contractor may be required to disclose the invention to

the agency for a determination of ownership rights.

(3) Any examination of records under this paragraph will be subject

to appropriate conditions to protect the confidentiality of the

information involved.

(g) Subcontracts. (1) Unless otherwise authorized or directed by

the Contracting Officer, the Contractor shall--

(i) Include this provision PATENT RIGHTS--RETENTION BY THE

CONTRACTOR--(LARGE BUSINESS) (suitably modified to identify the

parties) in any subcontract hereunder (regardless of tier) with other

than a small business firm or nonprofit organization for the

performance of experimental, developmental, or research work; and

(ii) Include the provision PATENT RIGHT--RETENTION BY THE

CONTRACTOR--(SMALL BUSINESS) (suitably modified to identify the

parties) in any subcontract hereunder (regardless of tier) with a small

business firm or nonprofit organization for the performance of

experimental, developmental, or research work.

(2) In the event of a refusal by a prospective subcontractor to

accept such a clause the Contractor--

(i) Shall promptly submit a written notice to the Contracting

Officer setting forth the subcontractor's reasons for such refusal and

other pertinent information that may expedite disposition of the

matter; and

(ii) Shall not proceed with such subcontract without the written

authorization of the Contracting Officer.

(3) The Contractor shall promptly notify the Contracting Officer in

writing upon the award of any subcontract at any tier containing a

patent rights clause by identifying the subcontractor, the applicable

patent rights clause, the work to be performed under the subcontract,

and the dates of award and estimated completion. Upon request of the

Contracting Officer, the Contractor shall furnish a copy of such

subcontract, and, no more frequently than annually, a listing of the

subcontracts that have been awarded.

(4) The subcontractor will retain all rights provided for the

Contractor in the clause of paragraph (g)(1)(i) or (1)(ii) of this

section, whichever is included in the subcontract, and the Contractor

will not, as part of the consideration for awarding the subcontract,

obtain rights [[Page 33177]] in the subcontractor's subject inventions.

(5) Notwithstanding paragraph (g)(4) of this section, and in

recognition of the contractor's substantial contribution of funds,

facilities and/or equipment to the work performed under this

cooperative agreement, the contractor is authorized, subject to the

rights of NASA set forth elsewhere in this clause, to:

(i) Acquire by negotiation and mutual agreement rights to a

subcontractor's subject inventions as the contractor may deem necessary

to obtaining and maintaining of such private support; and

(ii) Request, in the event of inability to reach agreement pursuant

to paragraph (g)(5)(i) of this section, that NASA invoke exceptional

circumstances as necessary pursuant to 37 CFR 401.3(a)(2) if the

prospective subcontractor is a small business firm or organization, or

for all other organizations, request that such rights for the

contractor be included as an additional reservation in a waiver granted

pursuant to 14 CFR part 1245, subpart 1. Any such requests to NASA

should be prepared in consideration of the following guidance and

submitted to the contract officer.

(A) Exceptional circumstances: A request that NASA make an

``exceptional circumstances'' determination pursuant to 37 CFR

401.3(a)(2) must state the scope of rights sought by the contractor

pursuant to such determination; identify the proposed subcontractor and

the work to be performed under the subcontract; and state the need for

the determination.

(B) Waiver petition: The subcontractor should be advised that

unless it requests a waiver of title pursuant to the NASA Patent Waiver

Regulations (14 CFR part 1245, subpart 1), NASA will acquire title to

the subject invention (42 U.S.C. 2457, as amended, Sec. 305). If a

waiver is not requested or granted, the contractor may request a

license from NASA (see licensing of NASA inventions, 14 CFR part 1245,

subpart 2). A subcontractor requesting a waiver must follow the

procedures set forth in the attached clause REQUESTS FOR WAIVER OF

RIGHTS--LARGE BUSINESS.

(h) Preference for United States manufacture. The Contractor agrees

that any products embodying subject inventions or produced through the

use of subject inventions shall be manufactured substantially in the

United States. However, in individual cases, the requirement to

manufacture substantially in the United States may be waived by NASA

upon a showing by the Contractor that under the circumstances domestic

manufacture is not commercially feasible.

(i) March-in rights. The Contractor agrees that, with respect to

any subject invention in which it has acquired title, NASA has the

right in accordance with the procedures in 37 CFR 401.6 and any

supplemental regulations of the agency to require the Contractor, an

assignee or exclusive licensee of a subject invention to grant a

nonexclusive, partially exclusive, or exclusive license in any field of

use to a responsible applicant or applicants, upon terms that are

reasonable under the circumstances, and if the Subcontractor, assignee,

or exclusive licensee refuses such a request NASA has the right to

grant such a license itself if the Federal agency determines that--

(1) Such action is necessary because the Contractor or assignee has

not taken, or is not expected to take within a reasonable time,

effective steps to achieve practical application of the subject

invention in such field of use;

(2) Such action is necessary to alleviate health or safety needs

which are not reasonably satisfied by the Contractor, assignee, or

their licensees;

(3) Such action is necessary to meet requirements for public use

specified by Federal regulations and such requirements are not

reasonably satisfied by the Contractor, assignee, or licensees; or

(4) Such action is necessary because the agreement required by

paragraph (i) of this clause has not been obtained or waived or because

a licensee of the exclusive right to use or sell any subject invention

in the United States is in breach of such agreement.

Sec. 1274.913 Patent Rights--Retention by the Contractor (Small

Business) (XXX 1995)

(a) Definitions.

(1) Contract, as used in this clause, means any actual or proposed

contract, cooperative agreement, agreement, under-standing, or other

arrangement, and includes any assignment, substitution of parties, or

subcontract executed or entered into thereunder.

(2) Contracting Officer means the contracting officer or grant

officer executing this agreement on behalf of the Government.

(3) Invention, as used in this clause, means any invention or

discovery which is or may be patentable or otherwise protectable under

title 35 of the U.S.C.

(4) Made, as used in this clause, when used in relation to any

invention means the conception or first actual reduction to practice

such invention.

(5) Nonprofit organization, as used in this clause, means a

university or other institution of higher education or an organization

of the type described in section 501(c)(3) of the Internal Revenue Code

of 1954 (26 U.S.C. 501(c)) and exempt from taxation under section

501(a) of the Internal Revenue Code (26 U.S.C. 501(a)) or any nonprofit

scientific or educational organization qualified under a state

nonprofit organization statute.

(6) Practical application, as used in this clause, means to

manufacture, in the case of a composition of product; to practice, in

the case of a process or method, or to operate, in the case of a

machine or system; and, in each case, under such conditions as to

establish that the invention is being utilized and that its benefits

are, to the extent permitted by law or Government regulations,

available to the public on reasonable terms.

(7) Small business firm, as used in this clause, means a small

business concern as defined at Subpart 2 of Pub. L. 85-536 (15 U.S.C.

632) and implementing regulations of the Administrator of the Small

Business Administration. For the purpose of this clause, the size

standards for small business concerns involved in Government

procurement and subcontracting at 13 CFR 121.3-8 and 13 CFR 121.3-12,

respectively, will be used.

(8) Subject invention, as used in this clause, means any invention

of the Subcontractor conceived or first actually reduced to practice in

the performance of work under this contract.

(b) Allocation of principal rights. The Contractor may retain the

entire right, title, and interest throughout the world to each subject

invention subject to the provisions of this clause and 35 U.S.C. 203.

With respect to any subject invention in which the Contractor retains

title, the Federal Government shall have a nonexclusive,

nontransferable, irrevocable, paid-up license to practice or have

practiced for or on behalf of the United States the subject invention

throughout the world.

application by Contractor. (1) The Contractor will disclose subject

invention to NASA within two months after the inventor discloses it in

writing to Contractor personnel responsible for patent matters. This

disclosure to the agency shall be in the form of a written report and

shall identify the contract under which the invention was made and the

inventor(s). It shall be sufficiently complete in technical detail to

convey a clear understanding to the extent known at the time of the

disclosure, of the nature, purpose, operation, and the

[[Page 33178]] physical, chemical, biological or electrical

characteristics of the invention. The disclosure shall also identify

any publication, on sale or public use of the invention and whether a

manuscript describing the invention has been submitted for publication

and, if so, whether it has been accepted for publication at the time of

disclosure. In addition, after disclosure to the agency, the Contractor

will promptly notify the agency of the acceptance of any manuscript

describing the invention for publication or of any sale or public use

planned by the Contractor.

(2) The Contractor will elect in writing whether or not to retain

title to any such invention by notifying NASA within two years of

disclosure to the Federal agency. However, in any case where

publication, on sale or public use has initiated the one-year statutory

period wherein valid patent protection can still be obtained in the

United States, the period for election of title may be shortened by the

agency to a date that is no more than 60 days prior to the end of the

statutory period.

(3) The Contractor will file its initial patent application on a

subject invention to which it elects to retain title within one year

after election of title or, if earlier, prior to the end of any

statutory period wherein valid patent protection can be obtained in the

United States after a publication, on sale, or public use. The

Contractor will file patent applications in additional countries or

international patent offices within either 10 months of the

corresponding initial patent application of six months from the date

permission is granted by the Commissioner of Patents and Trademarks to

file foreign patent applications where such filing has been prohibited

by a Secrecy Order.

(4) Requests for extension of the time for disclosure election, and

filing under paragraphs (c)(1), (2), and (3) of this section may, at

the discretion of the agency, be granted.

(d) Conditions when the Government may obtain title. The Contractor

will convey to NASA, upon written request, title to any subject

invention--

(1) If the Contractor fails to disclose or elect title to the

subject invention within the times specified in paragraph (c) of this

section, or elects not to retain title; provided that the agency may

only request title within 60 days after learning of the failure of the

Contractor to disclose or elect within the specified times.

(2) In those countries in which the Contractor fails to file patent

applications within the times specified in paragraph (c) of this

section; provided, however, that if the Contractor has filed a patent

application in a country after the times specified in paragraph (c) of

this section, but prior to its receipt of the written request of the

Federal agency, the Contractor shall continue to retain title in that

country.

(3) In any country in which the Contractor decides not to continue

the prosecution of any application for, to pay the maintenance fees on,

or defend in reexamination or opposition proceeding on, a patent on a

subject invention.

(e) Minimum rights to Contractor and protection of the Contractor

right to file. (1) The Contractor will retain a nonexclusive, royalty-

free license throughout the world in each subject invention to which

the Government obtains title, except if the Contractor fails to

disclose the invention within the times specified in paragraph (c) of

this section. The Contractor's license extends to its domestic

subsidiary and affiliates, if any, within the corporate structure of

which the Contractor is a party and includes the right to grant

sublicenses of the same scope to the extent the Contractor was legally

obligated to do so at the time the contract was awarded. The license is

transferable only with the approval of NASA, except when transferred to

the successor of that part of the Contractor's business to which the

invention pertains.

(2) The Contractor's domestic license may be revoked or modified by

NASA to the extent necessary to achieve expeditious practical

application of subject invention pursuant to an application for an

exclusive license submitted in accordance with applicable provisions at

37 CFR part 404 and agency licensing regulations (if any). This license

will not be revoked in that field of use or the geographical areas in

which the Subcontractor has achieved practical application and

continues to make the benefits of the invention reasonable accessible

to the public. The license in any foreign country may be revoked or

modified at the discretion of NASA to the extent the Subcontractor, its

licensees, or the domestic subsidiaries or affiliates have failed to

achieve practical application in that foreign country.

(3) Before revocation or modification of the license NASA will

furnish the Contractor a written notice of its intention to revoke or

modify the license, and the Contractor will be allowed 30 days (or such

other time as may be authorized by NASA for good cause shown by the

Contractor) after the notice to show cause why the license should not

be revoked or modified. The Contractor has the right to appeal, in

accordance with applicable regulations in 37 CFR part 404 and NASA Reg

14 CFR subpart 1245.2, concerning the licensing of Government-owned

inventions, any decision concerning the revocation or modification of

the license.

(f) Contractor action to protect the Government's interest. (1) The

Contractor agrees to execute or to have executed and promptly deliver

to NASA all instruments necessary to:

(i) establish or confirm the rights the Government has throughout

the world in those subject inventions to which the Subcontractor elects

to retain title, and,

(ii) convey title to the Federal agency when requested under

paragraph (d) of this section to enable the Government to obtain patent

protection throughout the world in that subject invention.

(2) The Contractor agrees to require, by written agreement, its

employees, other than clerical and nontechnical employees, to disclose

promptly in writing to personnel identified as responsible for the

administration of patent matters and in a format suggested by the

Contractor each subject invention made under contract in order that the

Contractor can comply with the disclosure provisions of paragraph (c)

of this section, and to execute all papers necessary to file patent

applications on subject inventions and to establish the Government's

rights in the subject inventions. This disclosure format should

require, as a minimum, the information required by paragraph (c)(1) of

this section. The Contractor shall instruct such employees, through

employee agreements or other suitable educational programs, on the

importance of reporting inventions in sufficient time to permit the

filing of patent applications prior to U.S. or foreign statutory bars.

(3) The Contractor will notify NASA of any decisions not to

continue the prosecution of a patent application, pay maintenance fees,

or defend in a reexamination or opposition proceeding on a patent, in

any country, not less than 30 days before the expiration of the

response period required by the relevant patent office.

(4) The Contractor agrees to include, within the specification of

the United States patent application and any patent issuing thereon

covering a subject invention the following statement, ``This invention

was made with Government support under (identify the agreement) awarded

by NASA. The Government has certain rights in the invention.''

(5) The Contractor shall provide the Contracting Officer the

following: [[Page 33179]]

(i) A listing every 12 months (or such longer period as the

Contracting Officer may specify) from the date of the contract, of all

subject inventions required to be disclosed during the period.

(ii) A final report prior to closeout of the contract listing all

subject inventions or certifying that there were none.

(iii) Upon request, the filing date, serial number, and title, a

copy of the patent application, and patent number and issue date for

any subject invention in any country in which the contractor has

applied for patents.

(iv) An irrevocable power to inspect and make copies of the patent

application file, by the Government, when a Federal Government employee

is a co-inventor.

(g) Subcontracts. (1) Unless otherwise authorized or directed by

the Contracting Officer, the Contractor shall--

(i) Include this provision (PATENT RIGHTS--RETENTION BY THE

CONTRACTOR (SMALL BUSINESS)), suitably modified to identify the

parties, in all subcontracts, regardless of tier, for experimental,

developmental, or research work to be performed by a small business

firm or domestic nonprofit organization.

(ii) Include in all other subcontracts, regardless of tier, for

experimental, developmental, or research work the patent rights clause

(PATENT RIGHTS--RETENTION BY THE CONTRACTOR (LARGE BUSINESS)).

(2) In the event of a refusal by a prospective subcontractor to

accept such a clause the Contractor--

(i) Shall promptly submit a written notice to the Contracting

Officer setting forth the subcontractor's reasons for such refusal and

other pertinent information that may expedite disposition of the

matter; and

(ii) Shall not proceed with such subcontract without the written

authorization of the Contracting Officer.

(3) The Contractor shall promptly notify the Contracting Officer in

writing upon the award of any subcontract at any tier containing a

patent rights clause by identifying the subcontractor, the applicable

patent rights clause, the work to be performed under the subcontract,

and the dates of award and estimated completion. Upon request of the

Contracting Officer, the Contractor shall furnish a copy of such

subcontract, and, no more frequently than annually, a listing of the

subcontracts that have been awarded.

(4) The subcontractor will retain all rights provided for the

Contractor in the clause under paragraph (g)(1)(i) or (g)(1)(ii) of

this section, whichever is included in the subcontract, and the

Contractor will not, as part of the consideration for awarding the

subcontract, obtain rights in the subcontractor's subject inventions.

(5) Notwithstanding paragraph (g)(4) of this section, and in

recognition of the contractor's substantial contribution of funds,

facilities and/or equipment to the work performed under this

cooperative agreement, the contractor is authorized, subject to the

rights of NASA set forth elsewhere in this clause, to:

(i) Acquire by negotiation and mutual agreement rights to a

subcontractor's subject inventions as the contractor may deem necessary

to obtaining and maintaining of such private support; and

(ii) Request, in the event of inability to reach agreement pursuant

to paragraph (g)(5)(i) of this section that NASA invoke exceptional

circumstances as necessary pursuant to 37 CFR 401.3(a)(2) if the

prospective subcontractor is a small business firm or organization, or

for all other organizations, request that such rights for the

contractor be included as an additional reservation in a waiver granted

pursuant to 14 CFR part 1245, subpart 1. Any such requests to NASA

should be prepared in consideration of the following guidance and

submitted to the contract officer.

(A) Exceptional circumstances: A request that NASA make an

``exceptional circumstances'' determination pursuant to 37 CFR

401.3(a)(2) must state the scope of rights sought by the contractor

pursuant to such determination; identify the proposed subcontractor and

the work to be performed under the subcontract; and state the need for

the determination.

(B) Waiver petition: The subcontractor should be advised that

unless it requests a waiver of title pursuant to the NASA Patent Waiver

Regulations (14 CFR part 1245, subpart 1), NASA will acquire title to

the subject invention (42 U.S.C. 2457, as amended, Sec. 305). If a

waiver is not requested or granted, the contractor may request a

license from NASA (see licensing of NASA inventions, 14 CFR part 1245,

subpart 2). A subcontractor requesting a waiver must follow the

procedures set forth in the REQUESTS FOR WAIVER OF RIGHTS--LARGE

BUSINESS provision.

(h) Reporting on utilization of subject inventions. The Contractor

agrees to submit, on request, periodic reports no more frequently than

annually on the utilization of a subject invention or on efforts at

obtaining such utilization that are being made by the Contractor or its

licensees or assignees. Such reports shall include information

regarding the status of development, date of first commercial sale or

use, gross royalties received by the Contractor, and such other data

and information as the agency may reasonably specify. The Contractor

also agrees to provide additional reports as may be requested by the

agency in connection with any march-in proceeding undertaken by the

agency in accordance with paragraph (i) of this section. As required by

35 U.S.C. 202(c)(5), the agency agrees it will not disclose such

information to persons outside the Government without permission of the

Contractor.

(i) Preference for United States manufacture. The Contractor agrees

that any products embodying subject inventions or produced through the

use of subject inventions shall be manufactured substantially in the

United States. However, in individual cases, the requirement to

manufacture substantially in the United States may be waived by NASA

upon a showing by the Contractor that under the circumstances domestic

manufacture is not commercially feasible.

(j) March-in rights. The Contractor agrees that, with respect to