# Cooperative Agreements With Commercial Firms

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URL: https://www.frixlaw.com/law-library/documents/fr%3A96-6535

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** March 27, 1996
- **Citation:** 61 FR 13395

## Text

[[Page 13396]]

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

14 CFR Part 1274

RIN 2700-AC07

Cooperative Agreements With Commercial Firms

AGENCY: Office of Procurement, Contract Management Division, NASA.

ACTION: Final rule.

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SUMMARY: Current NASA regulations at 14 CFR part 1260 describe the use
of cooperative agreements with educational institutions and non-profit
organizations. This final regulation establishes the requirements for
cooperative agreements with commercial firms.

EFFECTIVE DATE: March 27, 1996.

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

SUPPLEMENTARY INFORMATION:

Background

NASA published a proposed rule in the Federal Register on June 27,
1995 (60 FR 33163). Interested parties were invited to submit comments.
Almost 100 comments were received. All comments were considered in
developing this final revision. The following section presents a
summary of the major comments received and a response to each comment.
Other changes have been made to improve clarity and readability.
Comment: The draft coverage requires synopsizing cooperative
agreements awarded as a result of unsolicited proposals. This is not
required by statute and may result in informing competitors of planned
R&D and give them an opportunity to submit competing proposals thereby
discouraging submission of innovative proposals from industry.
Response: As a general rule, it is important to be as open as
possible about the expenditure of public funds and this principal led
to requiring synopses of unsolicited proposals. It is recognized,
however, that innovative proposals must be protected; therefore the
policy allows the same exclusions as FAR 5.202(a)(8) which addresses a
waiver to synopses requirements in the case of unique or innovative
concepts.
Comment: The coverage requires that FAR cost principles be utilized
for cooperative agreements. There is no statutory requirement for this
and it will require commercial firms to establish special accounting
procedures. Recommend flexible tracking of costs.
Response: Government policy is expressed in OMB Circular A-110
which states in Paragraph 27 that ``The allowability of costs incurred
by commercial organizations and those nonprofit organizations listed in
Attachment C to Circular A-122 is determined in accordance with the
provisions of the Federal Acquisition Regulation (FAR) at 48 CFR part
31''.
Comment: Proposed rule appears to incorporate many features of a
contract vs an assistance instrument. Proposed rule should be
substantially rewritten.
Response: The proposed rule does contain some contractual aspects,
but only those that are required by law or to ensure that public funds
are appropriately expended. For example, the preaward certification
requirements, treatment of property in a cooperative agreement, and
much of the intellectual property coverage are required by law. Other
aspects of the policy such as milestone payments, technical officer
responsibilities, and liability and risk of loss are adaptations of
contract language deemed necessary to protect both the recipient and
NASA.
Comment: We note that the proposed rule provides for milestone
billings. While this is a reasonable approach to managing the flow of
funds, we are concerned that some may view these milestones as ``go-no-
go'' decision points rather than a measure of progress against a
recipient's best efforts. This area of the proposed regulation requires
careful crafting so as to avoid inadvertently introducing a level of
certainty that is not appropriate to cooperative agreements.
Response: The milestones are, in fact, ``go-no-go'' decision
points. If a milestone cannot be met, the recipient should carefully
consider revoking the agreement.
Comment: The proposed rule should be further clarified to provide
that IR&D can be used for work performed under subcontracts issued
pursuant to the cooperative agreement. This clarification is required
to eliminate potential IR&D unallowability due to the interpretation
that second tier work is required by contract. The definition should
also recognize the possibility that the company's contribution may be
Manufacturing and Production Engineering (M&PE) costs.
Response: IR&D costs may be recovered under other Government awards
as an allowable cost only by the recipient (an individual firm or
members of a consortium). While these costs of the recipient may be
expended under subcontracts, the subcontractor may not recover any
expenditures as IR&D costs.
Costs incurred by a recipient which may be classified as M&PE costs
will generally not be permitted to be recovered under other Government
awards.
Comment: ``Resource Contribution'' This term includes ``in-kind
contributions'' which is not defined elsewhere, even though ``cash
contributions'' are defined. The term ``in-kind'' is also used
elsewhere in the proposed rule. This is an area where significant
misunderstandings can arise and the term should be defined. We suggest
that NASA use the definition in the now superseded OMB Circular A-110,
Attachment E, Paragraph 2.d. (1976).
Response: The term ``in-kind contribution'' has been removed from
the regulation and replaced with ``non-cash'' to avoid
misunderstanding.
Comment: ``Revocation'' This definition needs to recognize
mutuality as opposed to the proposed version which describes
cancellation of NASA sponsorship, inferring one-sided activity.
Response: Agree. The definition has been amended.
Comment: A number of comments were received regarding the treatment
of patent rights issues. For the most part, the treatment of patent
rights is controlled by legislation and not within the purview of the
agency to amend.
Response: NA
Comment: Section 1274.204 Evaluation and Selection. (a) As written,
the regulation states that a typical CAN will have only one technical
evaluation factor, e.g., technology transfer, enhancing U.S.
competitiveness, etc. It then describes any number of more detailed
``subfactors'' which should be used, e.g., ``level of commitment
(contribution of private resources to the project)''. In our view the
``single'' evaluation factor described is really not an evaluation
factor, but rather the objective of the cooperative agreement. The
``subfactors'' appear to be the real evaluation factors. We recommend
the regulation be revised accordingly.
Response: Many of the subfactors stated for evaluation could be
consideration for any type of award (contract, grant, or cooperative
agreement). It is the single evaluation factor that establishes
cooperative agreement nature of the evaluation and ensures that the
subfactors are evaluated within the scope and intent of a cooperative
agreement structure.
Comment: When the total value of the agreement is less than $5m,
the regulation says ``Cost and [sic] pricing data should not normally
be required.'' We strongly recommend that the word ``normally'' be
deleted. Cost or pricing data should never be required for a

[[Page 13397]]
cooperative agreement. Such a requirement is totally inappropriate for
this type of financial arrangement.
Response: The cooperative agreement policy is structured to
minimize the bureaucratic impact on the recipient during the course of
performance. Minimal reporting of any kind is required and no cost
reporting is required (except in the event of termination). We still
must ensure that Government funds are being expended wisely. This is
accomplished through two specific means. The first is a careful
analysis of the proposed cost. The second is ensuring that the
milestones are accomplished. Other than cost or pricing data may be an
integral part of ensuring that the proposed cost is reasonable since no
other adequate means may be available. The guidance has been changed to
indicate that cost or pricing data (i.e., certified cost and pricing
data in accordance with FAR 15.8 following the changes required by
FASA) should never be required.
Comment: Section 1274.401 Government Property. The guidance
regarding the acquisition of property for use on a cooperative
agreement further shows the ``contract'' nature of this proposed rule.
This requirement indicates a NASA belief that a recipient will
structure the costing for the cooperative agreement in such a way that
NASA dollars fund certain work and the recipient's dollars will fund
other work. In reality, many recipients will account for the costs of a
total agreement, including purchases of equipment, billing only its
share of the total. In this scenario, NASA does not fund specific work,
but funds a percentage of the total. The proposed Cooperative
Agreements language would require separation of tasks that is
unnecessary for any other purpose of the recipient and only increases
costs of all work.
Response: Statutorily, equipment purchased with Government funds is
Government equipment. Since NASA has no interest in acquiring equipment
procured under a cooperative agreement, it is in both the recipient's
and NASA's best interests that equipment be provided as a non-cash
contribution of the recipient.
Comment: Section 1274.701 Suspension or Revocation. We strongly
support the language in this section which provides that either party
may revoke the agreement if acceptable technical progress is not made
or there is a shift in technical emphasis. We recommend this same
bilateral treatment be provided for suspension. The cooperative
agreement should provide like rights to both parties.
Response: Sections 1274.701 and 1274.922 have been amended to state
that either party may suspend the cooperative agreement.
Comment: Section 1274.903 Responsibilities. (b) NASA
Responsibilities. NASA must not contract with other than the recipient
without the recipient reaching a non-disclosure agreement with the
proposed NASA contractor prior to the placing of the contract.
Notification to the recipient is insufficient to protect recipient's
intellectual property.
Response: It is preferred that NASA contractors not perform NASA
duties and responsibilities under a cooperative agreement, but at
times, that may be unavoidable. Protection of the recipient's trade
secrets and other confidential data is covered by Sec. 1274.905(b)(2)
and (b)(3). A separate non-disclosure agreement should not be required.
Any inventions made by a NASA contractor as a result of doing work for
NASA will not be disclosed if doing so would compromise Recipient's
trade secrets. However, the contractor has the first option to retain
title to inventions made while doing work for NASA that do not
compromise Recipient's trade secrets.
Comment: The limitation on disputes to those arising three (3)
months prior to the written notification of paragraph (d) is too
limiting and should be expanded to six to twelve months to correct
this. It is suggested that paragraph (c) be modified to clarify when
the three (3) month period begins.
Response: Disagreements between NASA and its contractors and
recipients occur on a regular basis, but are resolved at low levels
within the respective organizations as they should be. This provision
attempts to provide another avenue for disputes in those extremely rare
instances where resolution at the lower levels fails. The clause has
been rewritten to clarify when the three (3) month period begins.
Comment: We strongly disagree with this paragraph which states that
``all preceding payment milestones must be completed before payment can
be made for the next payment milestone''. Activities captured in
milestones are not necessarily sequential in nature. Payment milestones
are supposed to provide a mechanism for triggering payment of the NASA
pre-agreed contribution at the accomplishment of the particular
milestone.
Response: In order to ensure that a cooperative agreement is
completed and that neither party ``games'' the other, it is critical
that payment for milestones be made in the order that the milestones
are established. It is important to note that the milestones are
primarily established by the recipient and negotiated with NASA, so the
recipient is able to establish milestones which represent the work to
be accomplished sequentially under the cooperative agreement.
Comment: Section 1274.911(b)(4)(i)--In this paragraph the term
``Administrator'' is used. If it is to mean the same as that in
Sec. 1272.102, then the term should be included in the ``Definition''
section of the provision. If another person is intended, the paragraph
should be revised.
Response: The definition of ``Administrator'' in
Sec. 1274.912(a)(1) has been added to the Definitions in 1274.911.
Comment: Section 1274.911(b)(6)--In line 10 it is unclear who in
NASA can approve the waiver. This should be clarified.
Response: The Associate Administrator for Procurement has been
substituted for NASA.
Comment: Section 1274.915--Restrictions on Sale or Transfer of
Technology to Foreign Firms or Institutions. This clause gives NASA the
right to, in effect, block the sale of a company to a foreign firm. We
strongly recommend this clause be deleted.
Response: The purpose of cooperative agreements is to enhance US
competitiveness, create jobs, improve the balance of payments, etc.
These objectives may or may not be advanced by sale to a foreign firm
but would form the basis of NASA's decision. The clause does not give
NASA the right to prevent the sale; it only provides for consultation
between the parties to determine how to best protect the Government's
interests. If an acceptable solution cannot be reached, the agreement
could be terminated.

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

Under 5 CFR 1320.5(b)(2)(i), NASA is required to inform potential
persons who are to respond to the collection of information that such
persons are not required to respond to the collection of information
unless it displays a currently valid OMB control number. Under 5 CFR
1320.5(b)(2)(ii)(C), this paragraph meets that requirement as follows:
information collection has been approved under OMB control number 2700-
0092.

[[Page 13398]]

List of Subjects in 14 CFR Part 1274

Grant programs, Business and industry.

Tom Luedtke,
Deputy Associate Administrator for Procurement.

Accordingly, part 1274 is added to 14 CFR chapter V to read 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 Intellectual property.
1274.204 Evaluation and selection.
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 Termination

1274.701 Suspension or termination.

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.
1274.903 Responsibilities.
1274.904 Resource Sharing Requirements.
1274.905 Rights in Data.
1274.906 Designation of New Technology Representative and Patent
Representative.
1274.907 Disputes.
1274.908 Milestone Payments.
1274.909 Term of this Agreement.
1274.910 Authority.
1274.911 Patent Rights.
1274.912 Patent Rights--Retention by the Recipient (Large
Business).
1274.913 Patent Rights--Retention by the Recipient (Small
Business).
1274.914 Requests for Waiver of Rights--Large Business.
1274.915 Restrictions on Sale or Transfer of Technology to Foreign
Firms or Institutions.
1274.916 Liability and Risk of Loss.
1274.917 Additional Funds.
1274.918 Incremental Funding.
1274.919 Cost Principles and Accounting Standards.
1274.920 Responsibilities of the NASA Technical Officer.
1274.921 Publications and Reports: Non-Proprietary Research
Results.
1274.922 Suspension or Termination.
1274.923 Equipment and Other Property.
1274.924 Civil Rights.
1274.925 Subcontracts.
1274.926 Clean Air-Water Pollution Control Acts.
1274.927 Debarment and Suspension and Drug-Free Workplace.
1274.928 Foreign National Employee Investigative Requirements.
1274.929 Restrictions on Lobbying.
1274.930 Travel and Transportation.
1274.931 Electronic Funds Transfer Payment Methods.
1274.932 Retention and Examination of Records.

Appendix A to Part 1274--Contract Provisions

Appendix B to Part 1274--Reports

Appendix C to Part 1274--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.

(a) This part 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) An award may not be made to a foreign government. Award to
foreign firms is not precluded. The approval of the Associate
Administrator for Procurement is required to exclude foreign firms from
submitting proposals.

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.
Commercial item. The definition in 48 CFR 2.101 (FAR) is
applicable.
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 1831.205-18 (NFS).
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 and equipment procured by the
Recipient with Government funds under a cooperative agreement.
Grant Officer. A Government employee who has been delegated the
authority to negotiate, award, or administer grants or cooperative
agreements. A Contracting Officer may serve as a Grant Officer if
authorized by installation procurement regulations.
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 non-
cash contributions.

[[Page 13399]]

Support contractor means a NASA contractor performing part or all
of the NASA responsibilities under a cooperative agreement.
Suspension. An action by NASA or the recipient that temporarily
discontinues efforts under an award, pending corrective action or
pending a decision to terminate the award. Suspension of an award is a
separate action from suspension under Federal agency regulations
implementing Executive Order 12549, 51 FR 6370, 3 CFR, 1986 Comp., p.
189 and Executive Order 12689, 54 FR 34131, 3 CFR, 1989 Comp., p. 235,
``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. A Contracting Officer's Technical Representative
may serve as a Technical Officer.
Termination. The cancellation of a cooperative agreement in whole
or in part, by either party at any time prior to the date of
completion.

Sec. 1274.103 Effect on other issuances.

For awards subject to this part, all administrative requirements of
codified program regulations, program manuals, handbooks and other
nonregulatory materials which are inconsistent with the requirements of
this part 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) Exceptions. The Associate Administrator for Procurement may
grant exceptions for classes of or individual cooperative agreements
from the requirements of this part 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 part, 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 part, 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.
(c) Request for deviations. Requests for authority to deviate from
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 a
Headquarters program office or Center 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
members 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.
(c) Code HS will respond by e-mail message to the sender, with a
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, 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 address 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 or a synopsis on the NASA
Acquisition Internet Service 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 or a synopsis on the NASA Acquisition Internet Service
will be used to provide an opportunity for other firms/consortia to
express an interest in the agreement

[[Page 13400]]
unless the exception in 48 CFR 5.202(a)(8) (FAR) 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.
(c) Cost and payment matters. (1) The expenditure of Government
funds by the Recipient and the allowability of costs recognized as a
resource contribution by the Recipient shall be governed by the FAR
cost principles, 48 CFR part 31. If the Recipient is a consortium which
includes non-commercial entities as members, cost allowability for
those members will be determined as follows: Allowability of costs
incurred by State, local or federally-recognized Indian tribal
governments is determined in accordance with the provisions of OMB
Circular A-87, ``Cost Principles for State and Local Governments.'' The
allowability of costs incurred by non-profit organizations is
determined in accordance with the provisions of OMB Circular A-122,
``Cost Principles for Non-Profit Organizations.'' The allowability of
costs incurred by institutions of higher education is determined in
accordance with the provisions of OMB Circular A-21, ``Cost Principles
for Educational Institutions.'' The allowability of costs incurred by
hospitals is determined in accordance with the provisions of Appendix E
of 45 CFR part 74, ``Principles for Determining Costs Applicable to
Research and Development Under Grants and Contracts with Hospitals.''
Recipient's method for accounting for the expenditure of funds must be
consistent with Generally Accepted Accounting Principles.
(2) 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 either cash or non-cash 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 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) 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
terminated prior to achievement of all milestones, NASA's funding will
be limited to milestone payments already made plus NASA's share of
costs required by the Recipient to meet commitments which had in the
judgment of NASA become firm prior to the effective date of termination
and are otherwise appropriate. 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) Cooperative agreements may be incrementally funded subject to
the following:
(i) The total value of the NASA cash contribution is $50,000 or
more.
(ii) The period of performance overlaps the succeeding fiscal year.
(iii) The funds are not available to fully fund the cooperative
agreement at the time of award.
(6) Cost sharing requirements on cooperative agreements with
commercial firms are based on section 23 of OMB Circular A-110,
November 23, 1993. Only cash or certain non-cash resources are
acceptable sources for the Recipient contribution to a cooperative
agreement. Acceptable non-cash resources include 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 1831.205-18 (NFS).
(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-cash 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
part of the Government contribution (which must be matched by the
Recipient) 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

[[Page 13401]]
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 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.

Sec. 1274.203 Intellectual property.

(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.
(b) Patent rights clauses are required by statute and regulation.
The 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.
(c) There are five situations in which inventions may arise under a
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, section 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) Additional rights. Notwithstanding paragraphs (d)(1) and
(d)(2) (i) through (iii) of this section, 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,
or
(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

[[Page 13402]]
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
Associate General Counsel (Intellectual Property) 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

[[Page 13403]]
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 (depending on the technology, two to five years after production
of the data) may be established after which the data first produced by
the Recipient in the performance of the agreement 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. The period of time during which data first
produced by NASA is maintained in confidence should be consistent with
the period of time determined in accordance with paragraph (h)(2) of
this section, before which data first produced by the Recipient will be
made public. Also, NASA itself may use the marked data (under suitable
protective conditions) for agreed-to purposes.

Sec. 1274.204 Evaluation and selection.

(a) General. A single technical evaluation factor is typically used
for CANs. That evaluation factor should 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) Competitive technical proposal
information shall be protected in accordance with 48 CFR 15.411 (FAR),
Receipt of Proposals and quotations. Unsolicited proposals shall be
protected in accordance with 48 CFR 15.508 (FAR), Prohibitions, and 48
CFR 15.509 (FAR), Limited use of data.
(2) 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.
(3) 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 1815.413-2(c)(2) (NFS). It is strongly
recommended that a numerical scoring system be established to rank
proposals. Data provided to outside evaluators should be protected in
accordance with 48 CFR 1815.413-2(e) (NFS).
(4) 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.
(c) Documentation requirements. For proposals selected for award,
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

[[Page 13404]]
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 or pricing data should not
be required and information other than cost or pricing data (defined in
48 CFR 15.801) (FAR) 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. Only
information other than cost or pricing data should be required. An
analysis consistent with 48 CFR 15.805-3 through 15.805-5 (FAR) should
be performed.
(2) As part of the evaluation of the cost proposal, the source of
the recipient's contribution should be determined. Each of the cost
elements contributed by the recipient and their amounts should be
identified. If the contribution will consist at least in part of IR&D,
the extent to which the IR&D may be recoverable from Government awards
should be established. This will involve using the estimated Government
participation rate of the recipient's General and Administrative
indirect cost base for the period of the cooperative agreement. The
results of the evaluation are to be documented in the cooperative
agreement file.
(e) Consortium. 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 Government Printing and Binding Regulations, No. 26,
February 1990, S. Pub. 101-9, U.S. Government Printing Office,
Washington, DC 20402, (202) 512-1800, published by the Congressional
Joint Committee on Printing. The technical office will refer such
proposals to the Installation Central Printing Management Officer
(ICPMO). 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
percentage will be adjusted downward.
(c) Changes to cooperative agreements. Cost growth or in-scope
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) General. 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.
(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) Debarment certification. 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 and
1265.610.
(4) Lobbying certification. A Lobbying Certification in accordance
with 14 CFR part 1271 will be obtained prior to award.
(f) Indemnification. Indemnification under Public Law 85-804, as
amended (50 U.S.C. 1431 et seq.) 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 of this part 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
1804.7102-3 (NFS), 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 Section, 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

[[Page 13405]]
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 part 45 (FAR) 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 a non-cash
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.

Recipients are not authorized to issue grants or cooperative
agreements to subrecipients. All contracts, including small purchases,
awarded by Recipients and their contractors shall contain the
procurement provisions of Appendix A to this part, as applicable and
may be subject to approval requirements cited in Sec. 1274.925.

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.
(c) Copies of original records may be substituted for the original
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) This paragraph (g) 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 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 Termination

Sec. 1274.701 Suspension or termination.

A cooperative agreement provides both NASA and the Recipient the
ability to terminate the agreement if it is in their best interests to
do so. For example, NASA may terminate the agreement if the Recipient
is not making anticipated technical progress, if the Recipient
materially fails to comply with the terms of the agreement, if the
Recipient materially changes the objective of the agreement, or if
appropriated funds are not available to support the program. Similarly,
the Recipient may terminate the agreement if, for example, 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 or the Recipient 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 terminated.

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.
(c) Records retention as required in Sec. 1274.601.

[[Page 13406]]

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 part. The provisions at Secs. 1274.910
through 1274.933 will be by reference incorporated in an enclosure to
each cooperative agreement (see Exhibit A of Appendix C of this part).
For inclusion of provisions in subcontracts, see Subpart E--Procurement
Standards of this part.

Sec. 1274.902 Purpose.

Purpose (FEB 1996)

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 ____________.

[End of provision]

Sec. 1274.903 Responsibilities.

Responsibilities (FEB 1996)

(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

(c) Recipient responsibilities. The Recipient shall be
responsible 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

[End of provision]

Sec. 1274.904 Resource Sharing Requirements.

Resource Sharing Requirements (FEB 1996)

(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 non-cash contribution
will be on a ____ (NASA) - ____ (Recipient) basis. Criteria and
procedures for the allowability and allocability of cash and non-
cash contributions shall be governed by section 23, ``Cost Sharing
or Matching,'' of OMB Circular A-110. The ``applicable federal cost
principles'' cited in OMB Circular A-110 shall be determined in
accordance with Sec. 1274.919.
(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 to the extent that the Recipient's
contribution may be allowable IR&D costs pursuant to 48 CFR
1831.205-18 (NFS).

Sec. 1274.905 Rights in Data.

Rights in Data (FEB 1996)

(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 in paragraphs (b)(2) through (6) of this
provision.
(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 for a period of
[insert ``two'' to ``five''] years after development of the data and
be 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] during
that period. 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 it had been obtained from the Recipient, will be
marked with an appropriate legend and maintained in confidence for
an agreed to period of up to (--) 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. (i) 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:
(A) 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
(B) If the furnished Data does not contain the indication of
paragraph (b)(5)(i)(A) of this provisiion, 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.
(ii) 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),

[[Page 13407]]
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 paragraphs (6)(2)
through (6) of this provision, 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 provision; nor
(ii) Information contained in any Data for which disclosure and
use is restricted under paragraphs (b)(2) or (3) of this provision,
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.
(c) Marking of data. Any Data delivered under this cooperative
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.

[End of provision]

Sec. 1274.906 Designation of New Technology Representative and Patent
Representative.

Designation of New Technology Representative and Patent Representative
(FEB 1996)

(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)''
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 1827.375-3
(NFS).

[End of provision]

Sec. 1274.907 Disputes.

Disputes (FEB 1996)

(a) In the event that a disagreement arises, representatives of
the parties shall enter into discussions in good faith and in a
timely and cooperative manner to seek resolution. If these
discussions do not result in a satisfactory solution, the aggrieved
party may seek a decision from the Dispute Resolution Official under
paragraph (b) of this provision. This request must be presented no
more than (3) three months after the events giving rise to the
disagreement have occurred.
(b) The aggrieved party may submit a written request for a
decision to the ________________ [Suggest this be the Center
Director], who is designated as the Dispute Resolution Official. The
written request shall include a statement of the relevant facts, a
discussion of the unresolved issues, and a specification of the
clarification, relief, or remedy sought. A copy of this written
request and all accompanying materials must be provided to the other
party at the same time. The other party shall submit a written
position on the matters in dispute within thirty (30) calendar days
after receiving this notification 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.

[End of provision]

Sec. 1274.908 Milestone Payments.

Milestone Payments (FEB 1996)

(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 payments may be based upon the Recipient's completion
of specific tasks, submission of specified reports, or whatever is
appropriate.] Date Payment Milestone Amount
(c) Upon submission by the Recipient of invoices in accordance
with 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 provision. However,
payment shall not be made prior to that date without the written
consent of the Grant Officer.
(e) The Recipient 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.

[End of provision]

Sec. 1274.909 Term of this Agreement.

Term of this Agreement (FEB 1996)

The agreement commences on the effective date indicated on the
attached cover sheet and continues until the expiration date
indicated on the attached cover sheet unless terminated by either
party. If all resources are expended prior to the expiration date of
the agreement, 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.

[End of provision]

Sec. 1274.910 Authority.

Authority (FEB 1996)

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).

[End of provision]

Sec. 1274.911 Patent Rights.

Patent Rights (FEB 1996)

(a) Definitions.
(1) Administrator means the Administrator or Deputy
Administrator of NASA.
(2) Invention means any invention or discovery which is or may
be patentable or otherwise protectable under title 35 of the United
States Code.
(3) Made when used in relation to any invention means the
conception or first actual reduction to practice such invention.
(4) Nonprofit organization means a domestic 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 domestic
nonprofit scientific or educational organization qualified under a
State nonprofit organization statute.
(5) Practical application means to manufacture, in the case of a
composition or product; to practice, in the case of a process

[[Page 13408]]
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.
(6) Recipient means: (i) The signatory Recipient party or
parties; or (ii) The Consortium, where a Consortium has been formed
for carrying out Recipient responsibilities under this agreement.
(7) 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 121.901
through 121.911 will be used.)
(8) 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 Agreement.
(b) Allocation of principal rights. (1) Recipient inventions.
For other than Small Business Firm or Nonprofit organization
Recipients, the ``PATENT RIGHTS--RETENTION BY RECIPIENT (LARGE
BUSINESS)'' provision applies. For Small Business Firm and Nonprofit
organization Recipients, the ``PATENT RIGHTS--RETENTION BY RECIPIENT
(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, NASA will
use its best efforts to grant the Recipient or designated Consortium
Member (if applicable) 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 provision. 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, NASA will use
its best efforts to 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 provision. 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 provision.
(ii) For small business firms and nonprofit organizations, 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 paragraph (b)(2), (b)(3),
or (b)(4) of this provision 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 provision, 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 the Associate Administrator for Procurement (Code
HS) with the concurrence of the Associate General Counsel for
Intellectual Property 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.

[End of provision]

Sec. 1274.912 Patent Rights--Retention by the Recipient (Large
Business).

Patent Rights--Retention by the Recipient (Large Business) (FEB 1996)

(a) Definitions.
(1) Administrator means the Administrator of the National
Aeronautics and Space Administration (NASA) or duly authorized
representative.
(2) Invention means any invention or discovery which is or may
be patentable or otherwise protectable under title 35 of the U.S.C.
(3) Made, as used in relation to any invention, means the
conception or first actual reduction to practice such invention.
(4) Nonprofit organization means a domestic 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 domestic
nonprofit scientific or educational organization qualified under a
State nonprofit organization statute.
(5) 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 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.
(6) Reportable item means any invention, discovery, improvement,
or innovation of the Recipient, whether or not the same is or may be
patentable or otherwise protectable under title 35 of the United
States Code, conceived

[[Page 13409]]
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.
(7) 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 121.901
through 121.911 will be used.)
(8) Subject invention 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 Grants 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 Recipient may nevertheless file the
statement described in paragraph (b)(1)(i) of this provision. The
Administrator will review the information furnished by the Recipient
in any such statement and any other available information relating
to the circumstances surrounding the making of the subject invention
and will notify the Recipient 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
provision 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
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, Recipients may
petition, either prior to execution of the contract or within 30
days after execution of the Agreement, for advance waiver of rights
to any or all of the inventions that may be made under an Agreement.
If such a petition is not submitted, or if after submission it is
denied, the Recipient (or an employee inventor of the Recipient 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 provision 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.
(c) Minimum rights reserved by the Government. (1) With respect
to each Recipient 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 (c) 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 Recipient. (1) The Recipient is hereby
granted a revocable, nonexclusive, royalty-free license in each
patent application filed in any country on a Recipient subject
invention and any resulting patent in which the Government acquires
title, unless the Recipient fails to disclose the subject invention
within the times specified in paragraph (e)(2) of this provision.
The Recipient's license extends to its domestic subsidiaries and
affiliates, if any, within the corporate structure of which the
Recipient is a party and includes the right to grant sublicenses of
the same scope to the extent the Recipient 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 Recipient's
business to which the invention pertains.
(2) The Recipient'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.
(3) Before revocation or modification of the license, the
Recipient will be provided a written notice of the Administrator's
intention to revoke or modify the license, and the Recipient will be
allowed 30 days (or such other time as may be authorized by the
Administrator for good cause shown by the Recipient) after the
notice to show cause why the license should not be revoked or
modified. The Recipient 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
Recipient shall establish and maintain active and effective
procedures to assure that reportable items are promptly identified
and disclosed to Recipient 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 Recipient shall furnish the Grants Officer a
description of such procedures for evaluation and for determination
as to their effectiveness.
(2) The Recipient will disclose each reportable item to the
Grants Officer within two months after the inventor discloses it in
writing to Recipient 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 Recipient 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 Recipient for such invention.
(3) The Recipient shall furnish the Grants Officer the
following:
(i) Interim reports every 12 months (or such longer period as
may be specified by the Grants 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

[[Page 13410]]
inventions) and that the procedures required by paragraph (e)(1) of
this provision 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 Recipient agrees, upon written request of the Grants
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 Recipient agrees, subject to 48 CFR 27.302(j) (FAR),
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
Grants 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 Recipient has established and maintained the procedures
required by paragraph (e)(1) of this provision; and
(iii) The Recipient and its inventors have complied with the
procedures.
(2) If the Grants Officer learns of an unreported Recipient
invention that the Grants Officer believes may be a subject
inventions, the Recipient 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 Grants Officer, the Recipient shall--
(i) Include this Clause Patent Rights--Retention by the
Recipient--(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 clause Patent Right--Retention by the
Recipient--(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 Recipient--
(i) Shall promptly submit a written notice to the Grants 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 Grants Officer.
(3) The Recipient shall promptly notify the Grants 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 Grants Officer, the Recipient 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
Recipient in the clause of paragraph (g)(1)(i) or (1)(ii) of this
provision, whichever is included in the subcontract, and the
Recipient 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 provision, and in
recognition of the contractor's substantial contribution of funds,
facilities and/or equipment to the work performed under this
cooperative agreement, the Recipient 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 Recipient 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 provision, 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 Recipient 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 Recipient
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). If a waiver is not
requested or granted, the Recipient 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 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 the Associate Administrator for Procurement (Code
HS) with the concurrence of the Associate General Counsel for
Intellectual Property upon a showing by the Recipient that under the
circumstances domestic manufacture is not commercially feasible.
(i) March-in rights. The Recipient 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 Recipient, 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 Recipient 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 Recipient, 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 Recipient, assignee, or licensees; or
(4) Such action is necessary because the agreement required by
paragraph (i) of this provision 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.

[End of provision]

Sec. 1274.913 Patent Rights--Retention by the Recipient (Small
Business).

Patent Rights--Retention by the Recipient (Small Business) (FEB 1996)

(a) Definitions.
(1) Invention means any invention or discovery which is or may
be patentable or otherwise protectable under title 35 of the U.S.C.
(2) Made when used in relation to any invention means the
conception or first actual reduction to practice such invention.
(3) Nonprofit organization means a university or other
institution of higher education or an organization of the type
described in section 501(c)(3) of the Internal

[[Page 13411]]
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.
(4) Practical application 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.
(5) Small business firm means a small business concern as
defined at section 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 121.901 through 121.911 will be used.
(6) Subject invention means any invention of the Subcontractor
conceived or first actually reduced to practice in the performance
of work under this Agreement.
(b) Allocation of principal rights. The Recipient 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
Recipient 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.
(c) Invention disclosure, election of title, and filing of
patent application by Recipient. (1) The Recipient will disclose
each subject invention to NASA within two months after the inventor
discloses it in writing to Recipient personnel responsible for
patent matters. The 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 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 Recipient 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 Recipient.
(2) The Recipient 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 Recipient 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
Recipient 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 provision
may, at the discretion of the agency, be granted.
(d) Conditions when the Government may obtain title. The
Recipient will convey to NASA, upon written request, title to any
subject invention--
(1) If the Recipient fails to disclose or elect title to the
subject invention within the times specified in paragraph (c) of
this provision, or elects not to retain title; provided, that the
agency may only request title within 60 days after learning of the
failure of the Recipient to disclose or elect within the specified
times.
(2) In those countries in which the Recipient fails to file
patent applications within the times specified in paragraph (c) of
this provision; provided, however, that if the Recipient has filed a
patent application in a country after the times specified in
paragraph (c) of this provision, but prior to its receipt of the
written request of the Federal agency, the Recipient shall continue
to retain title in that country.
(3) In any country in which the Recipient 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 Recipient and protection of the Recip

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A96-6535. Public record. Not legal advice.