Cubic Defense Applications, Inc.
Docket: ASBCA 58519
Decision date: 2018-05-08

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of--
Cubic Defense Applications, Inc. 
Under Contract No. N00039-03-C-0024 
APPEARANCES FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 58519 
Paul F. Khoury, Esq. 
Tracye Winfrey Howard, Esq. 
Wiley Rein LLP 
Washington, DC 
Craig D. Jensen, Esq. 
Navy Chief Trial Attorney 
David Koman, Esq. 
Ellen M. Evans, Esq. 
Senior Trial Attorneys 
OPINION BY ADMINISTRATIVE JUDGE HARTMAN 
ON APPELLANT'S MOTION FOR SUMMARY JUDGMENT 
Appellant moves for summary judgment on the ground that the government 
"expressly and unambiguously released the claim that is the subject of this Appeal" 
when it entered into a "global settlement" with appellant amicably resolving ASBCA 
Nos. 56097 and 56288, both of which concerned Contract No. N00039-03-C-0024. 
The government opposes appellant's summary judgment motion on the grounds: its 
challenge to appellant's data rights assertions here is not barred by the language of the 
parties' earlier settlement agreement; the right to challenge data rights assertions by a 
contractor is a statutory "right" provided to the Secretary of Defense that cannot be 
waived by a contracting officer (CO); and there are genuine issues of material fact 
precluding grant of appellant's motion. 
STATEMENT OF FACTS FOR PURPOSES OF THE MOTION 
During 2003, the Department of the Navy, Space and Naval Warfare Systems 
Command (SPAW AR) awarded Contract No. N00039-03-C-0024 ( contract), in the amount 
of $31,818,433.00 for the design, development, testing, production, integration, 
deployment, documentation, engineering technical services and logistical support of a 
system meeting the requirements of the AN/USQ-167 Communications Data Link System 
(CDLS) to Cubic Defense Applications, Inc. (Cubic). CDLS "is a wideband data link for 
the transmission of signal and imagery intelligence data" between a ship and an airborne 
military aircraft such as the Global Hawk, U-2, F-18, or P-3. The contract incorporated by 
reference various clauses from the Department of Defense Federal Acquisition Regulation 

Supplement (DFARS), including: DFARS 252.227-7013, RIGHTS INTECHNICALDATA­
NONCOMMERCIAL ITEMS (Nov 1995); DF ARS 252.227-7014, RIGHTS IN NONCOMMERCIAL 
COMPUTER SOFTWARE AND NONCOMMERCIAL COMPUTER SOFTWARE DOCUMENTS 
(JUN 1995); DFARS 252.227-7015, TECHNICAL DATA-COMMERCIAL ITEMS (Nov 1995); 
DFARS 252.227-7019, VALIDATION OF ASSERTED RESTRICTIONS-COMPUTER SOFTWARE 
(JUN 1995); and DF ARS 252.227-7037, VALIDATION OF RESTRICTIVE MARKINGS 
ON TECHNICAL DATA (SEP 1999). (R4, tab 2 at 78,112,241,242) 
As part of its 30 September 2002 "proposal" to perform the contract, Cubic submitted 
to SPA WAR the following table pursuant to DFARS 252.227-7017, IDENTIFICATION AND 
ASSERTION OF USE, RELEASE, OR DISCLOSURE RESTRICTIONS (JUN 1995): 
Technical Data or Name of Person Computer Software to be Basis for Asserted Rights Asserting Furnished With Assertion** Category*** Restrictions**** Restrictions* 
CDRL Item A004, Cubic Defense Systems, Technical Report- Mixed Funding Limited 
Studies/Services Inc. 
CDRL Item A006, Cubic Defense Systems, Technical Report- Mixed Funding Limited 
Studies/Services Inc. 
CDRL Item A007, Cubic Defense Systems, Technical Report- Mixed Funding Limited 
Studies/Services Inc. 
CDRL Item AOOZ, Cubic Defense Systems, Logistics Management Mixed Funding Limited 
Information Inc. 
CDRL Item AOI7, Cubic Defense Systems, Baseline Description Mixed Funding Limited Inc. Document 
CDRL Item AOIG, Cubic Defense Systems, Product Drawings and Mixed Funding Limited Inc. Associated Lists 
CDRL Item AOIL, Mixed Funding Limited Cubic Defense Systems, 
Software Maintenance Plan Inc. 
CDRL Item AOIM, Cubic Defense Systems, Software Requirements Mixed Funding Limited 
Specification Inc. 
CDRL Item AOIN, Cubic Defense Systems, System/Subsystem Design Mixed Funding Limited 
Description Inc. 
CDRL Item AOIP, Cubic Defense Systems, Software Design Mixed Funding Limited 
Description Inc. 
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CDRL Item AOIQ, Cubic Defense Systems, Software Interface Design Mixed Funding Limited Inc. Description 
CDRL Item AOIR, Cubic Defense Systems, Software Version Mixed Funding Limited Inc. Description 
CDRL Item AOIS, Cubic Defense Systems, Interface Control Mixed Funding Limited Inc. Document 
CDRL Item AOIT, Cubic Defense Systems, Interface Design Mixed Funding Limited Inc. Description 
CDRL Item AOIU Mixed Funding Limited Cubic Defense Systems, 
Inc. 
CDRL Item A009, 
Test Plan Computer Mixed Funding Limited Cubic Defense Systems, 
Software Product End Inc. 
Items 
* For technical data (other than computer software 
documentation) pertaining to items, components, or processes 
developed at private expense, identify both the deliverable 
technical data and each such item, component, or process. For 
computer software or computer software documentation identify 
the software or documentation. 
** Generally, development at private expense, either exclusively 
or partially, is the only basis for asserting restrictions. For 
technical data, other than computer software documentation, 
development refers to development of the item, component, or 
process to which the data pertain. The Government's rights in 
computer software documentation generally may not be 
restricted. For computer software, development refers to the 
software. Indicate whether development was accomplished 
exclusively or partially at private expense. If development was 
not accomplished at private expense, or for computer software 
documentation, enter the specific basis for asserting restrictions. 
*** Enter asserted rights category (e.g., government purpose 
license rights from a prior contract, rights in SBIR data 
generated under another contract, limited, restricted, or 
government purpose rights under this or a prior contract, or 
specially negotiated licenses). 
**** Corporation, individual, or other person, as appropriate. 
(R4, tab I at 74-76) 
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In July 2007, after submitting to the CO a Request for Equitable Adjustment and 
Certified Claim in the amount of $6,511,103 contending that Cubic incurred increased costs 
and schedule delays as a result of constructive changes arising from specification defects, 
and SP AW AR' s failure to approve test plans and procedures and expansion of testing 
requirements, Cubic appealed the "deemed" denial of its claim to this Board, which was 
docketed as ASBCA No. 56097. During December of 2007, SP AW AR' s CO issued a final 
decision asserting a $4,115,001 claim against Cubic for contract relief SP AW AR provided 
to Cubic resulting in decreased costs. Cubic again filed an appeal with this Board, and its 
second appeal was docketed as ASBCA No. 56288. (R4, tabs 6, 11 at 630-31) 
On 24 November 2008, Cubic and SPAW AR officials executed a Stipulation of 
Settlement and Agreement (Settlement Agreement) amicably resolving ASBCA 
Nos. 56097 and 56288, which provided in part: 
WHEREAS, the parties have negotiated and given full 
consideration to all matters relating to a compromise and 
settlement of all matters contained in ASBCA Nos. 56097 
and 56288, as well as all matters and/or claims and 
potential matters and/or claims (known or unknown) arising 
out of, incidental to, or relating to the Contract; 
WHEREAS, in the interest of resolving all matters 
relating to ASBCA Nos. 56097 and 56288, as well as all 
matters and/or claims and potential matters and/or 
claims (known or unknown) arising under or in regard 
to the Contract, and under the sound policy of law 
favoring the settlement of disputes, the parties 
understand and agree that the parties' agreements 
herein constitute and represent full consideration for 
and satisfaction of any and all matters and/or claims 
brought under ASBCA Nos. 56097 and 56288, as well as 
all matters and/or claims or potential matters and/or 
claims (known or unknown) arising under or in regard 
to the Contract. 
NOW, THEREFORE, in consideration of the mutual 
promises and agreements of the parties hereto, each to the 
other, and other valuable consideration, the parties, 
intending to be legally bound, hereby agree as follows: 
1. Cubic consents to the dismissal with prejudice of 
ASBCA No. 56097 .... 
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2. The Government consents to the dismissal with 
prejudice of ASBCA No. 56288 .... 
3. . .. [T]he Government will pay Cubic a single, lump-sum 
amount of $3,900,000 for complete and final resolution of 
ASBCA Nos. 56097 and 56288 .... 
4. The parties agree to renegotiate and execute a bi-lateral 
modification to Contract Line Item Number (hereinafter 
"CLIN") 0012, pursuant to which Cubic shall: (a) upgrade 
seven (7) Installation Test Fixtures (hereinafter "ITFs"), to 
be provided by the Government to Cubic as 
Government-Furnished Property ... for a not-to-exceed price 
of$913,749 .... 
5. Cubic will resolve, at no cost to the Government, all 
issues identified by the Government in SP AW AR Letter 
08-154 dated 7 August 2008, including hardware, software, 
and firmware retrofits to all CDL systems delivered under 
the Contract.... Provided that Cubic meets its commitment 
under this Paragraph 5, the Government will not withhold 
final payment under the Contract because of this issue 
beyond 30 March 2010. 
6. Upon Cubic's completion of the work identified in 
Paragraph 5 above, the Government will remove any 
conditional acceptance concerning the first two CDL 
Systems delivered by Cubic under the Contract. ... 
7. The Government acknowledges that all data items on 
the Contract Data Requirements List (hereinafter 
"CORL") previously submitted by Cubic are approved 
and that Cubic has no obligation to submit any further 
data items with the exception of: (a) Test Reports under 
CDRL AOOJ for any remaining hardware deliverables; and 
(b) a Test Report documenting the hardware, software, and 
firmware retrofits described in Paragraph 5, above. 
10. Cubic shall deliver the two INCO kits referenced above 
in Paragraph 4 to the Gove1nment by no later than seven (7) 
months from execution of the bi-lateral Contract 
Modification for CLIN 0012 .... 
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11. In anticipation of Contract close-out, the Government 
acknowledges that Cubic has fully satisfied all 
requirements set forth in Contract Clause B-1 ("Payment of 
Fixed Fee Based on Staff Hours") and Contract Clause B-2 
("Fee Adjustment Formula") .... 
12. The Government, to the extent permitted by law, 
releases and saves harmless Cubic, its parent company, 
subsidiaries, affiliates, agents, servants, employees, 
officials, subcontractors, suppliers, successors, and assigns, 
shareholders, and sureties from ASBCA No. 56288 and 
any further claim, liability, obligation, appeal, action or 
demand, known or unknown, or any other avenue of 
relief in connection with, arising out of, incidental to, or 
relating to the Contract as of the date this Agreement is 
executed. Notwithstanding anything to the contrary, 
this release does not extend to any claims related to the 
Contract that may arise in the future. 
13. Cubic warrants and represents that no other action by 
Cubic with respect to the Contract is pending or will be 
filed in any court, administrative body, or legislative body 
based on any action or inaction by the Government as of 
the date this Agreement is executed .... 
14. Upon execution of this Agreement, Cubic releases 
and saves harmless the Government, including its 
officials, officers, enlisted personnel, employees, and 
agents from these appeals and from any further claim, 
liability, obligation, appeal, action or demand of Cubic, its 
subsidiaries, affiliates, agents, servants, employees, 
officials, subcontractors, suppliers, successors, and assigns, 
shareholders, and sureties from ASBCA No. 56097 and 
any further claim, liability obligation, appeal, action or 
demand, known or unknown, or any other avenue of 
relief in connection with, arising out of, incidental to, or 
relating to the Contract (including, but not limited to 
claims or appeals for or in regard to alleged delay, 
disruption, impact, direct costs and/or cumulative 
disruption or impact) as of the date this Agreement is 
executed. Notwithstanding anything to the contrary, 
this release does not extend to any claims related to the 
Contract that may arise in the future. 
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15. This Agreement is for the sole purpose of settling all 
claims and appeals arising out of, incidental to, or relating 
to the Contract, and this Agreement shall not be cited or 
otherwise referred to by either Cubic or the Government in 
any proceedings, whether judicial or administrative in 
nature, except as is necessary to effect the terms of this 
Agreement. 
16. This Agreement contains the entire agreement and 
understanding between the parties concerning the subject 
matter herein (including, but not limited to, ASBCA 
Nos. 56097 and 56288) and supersedes and replaces all 
prior claims, settlement negotiations, and agreements 
written or oral concerning the subject matter. 
(R4, tab 11) (Emphasis added) 
In July of 2009, the parties executed Modification No. P00035 to their contract 
altering CLIN 0012 and providing for "settlement of the Contractor's certified claim 
against the Government submitted 8 May 2007" and subsequent appeal before the 
ASBCA docketed as ASBCA No. 56097, and ''the Government's claim against the 
Contractor" docketed as ASBCA No. 56288 (R4, tab 12 at 641). Modification 
No. P00035 stated that Cubic will promptly file its submission to dismiss ASBCA 
No. 56097 with prejudice upon execution of the modification and that the government will 
promptly file its submission to dismiss ASBCA No. 56288 upon execution of the 
modification (id. at 642). The modification contained release language similar to that set 
forth in the parties' Settlement Agreement. Paragraph 12 of the modification provided: 
The Government, to the extent permitted by law, releases 
and saves harmless Cubic ... from ASBCA No. 56288 and 
any further claim, liability, obligation, appeal, action or 
demand, known or unknown, or any other avenue of relief 
in connection with, arising out of, incidental to, or relating 
to the Contract. Notwithstanding anything to the 
contrary, this release does not extend to any claims 
related to the Contract that may arise in the future. 
[Emphasis added] 
(Id. at 644) Paragraph 14 of the modification provided: 
Upon execution of this modification, Cubic releases and 
saves harmless the Government.. .from ASBCA 
No. 56097 and any further claim, liability obligation, 
appeal, action or demand, known or unknown, or any other 
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avenue of relief in connection with, arising out of, 
incidental to, or relating to the Contract (including, but not 
limited to claims or appeals for or in regard to alleged 
delay, disruption, impact, direct costs and/or cumulative 
disruption or impact). Notwithstanding anything to the 
contrary, this release does not extend to any claims 
related to the Contract that may arise in the future. 
[Emphasis added] 
(Id.) The ASBCA received motions to dismiss the appeals with prejudice from the 
parties in September 2009 and the appeals were dismissed. 
During November of 2011, Cubic submitted to SP AW AR a proposal for three 
additional CDL Systems, 15 modified KI-1 lA subsystems, an Engineering Change 
Proposal, 11 engineering change kits for Aircraft Carrier-Tactical Support Center 
Integration, and engineering services (see R4, tabs 14-15, 22). In a table submitted 
pursuant to DF ARS 252.227-7017, Cubic asserted that the government's right to use, 
release, or disclose specific technical data or computer software was restricted to 
"Limited" rights on the basis that development of the data and/or software had been 
"Internal R&D Funding" (R4, tab 14). Cubic stated that it was "asserting its rights 
established in the baseline (initial) COLS Contract (Contract #N00039-03-C-0024) for 
legacy COLS items" ( id. at 654 ). About three weeks later, a SP AW AR contract specialist 
advised the SP AW AR CO and Cubic by email that he did not agree with Cubic' s assertion 
of data rights. He stated: 
CORL deliverables under the last contract have been 
developed with funding provided by the Government and 
not with "internal R&D funding." Data rights should be 
"unlimited" since these items have been developed with 
Government funding. If this is refuted, then the 
Government requires supporting documentation that can 
substantiate that internal funding was used. 
(R4, tab 15 at 660, 662) During the next six months, the parties engaged in various 
communications regarding Cubic's assertion of data rights (e.g., R4, tabs 16-19) and, 
on 17 July 2012, met to discuss Cubic's limited rights assertion based on funding 
sources (R4, tab 20 at 697). By letter and email dated 20 July 2012, Cubic provided 
SP AW AR information it believed justified its limited rights assertion for Part 
No. 285875 (programmable loads module) (id. at 697-712, tab 21). 
On 2 August 2012, SPA WAR awarded Contract No. N00039-12-C-0084 to 
Cubic for three CDL Systems, 15 modified KI-1 lA subsystems, an Engineering 
Change Proposal, 11 engineering change kits for Aircraft Carrier-Tactical Support 
Center Integration, and engineering services (KI-1 lA Subsystem Contract) (R4, 
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tab 22). On the same date, a SP AW AR CO sent a letter to Cubic regarding the initial 
Contract No. N00039-03-C-0024, stating: 
The Government is challenging the validity of the Cubic 
Restricted Rights assertions, because Cubic cites mixed 
funding behind the development of...CDRL's, yet claims 
Limited Rights in the CDRL's. 
As required by []252.227-7037, Validation of Restrictive 
Markings On Technical Data, of the DFARS, which is 
incorporated by reference into [the Contract], the [CO] 
requires that Cubic provide the written records it is relying 
on as justification behind its ... assertions. These records 
must be in sufficient detail to enable the [CO] to determine 
the validity of the Limited Rights assertions. 
Please also be advised that if Cubic fails to respond to this 
letter ... with the required documentation, the [CO] shall 
issue a final decision, in accordance with paragraph (f) of 
this clause and the Disputes clause of [the Contract] 
pertaining to the validity of the asserted restrictions. 
(R4, tab 23 at 838) 
By letter dated 6 September 2012, Cubic submitted a response to the CO's letter 
stating it was providing "information supporting Cubic's claim of limited and restricted 
rights" in Contract No. N00039-12-C-0084, the second COLS contract (R4, tab 24 at 916). 
In a letter dated 25 September 2012, the CO advised Cubic that its letter was 
"non-responsive" because the government's letter addressed "Cubic's data rights 
assertions in the 2003 COLS contract" and Cubic must "justify the data rights assertions 
made" with respect to the initial contract "before the allocation of data rights (if any) in 
the follow-on ... contract" (R4, tab 25 at 956). The CO added that, "[b ]ecause Cubic did 
not appear to understand what the Government wanted," the government ''will add an 
additional 14 days time to the 60 day period that is currently in effect, to allow Cubic to 
provide an3dequate response" by close of business on 16 October 2012 (id. at 957). 
By letter dated 16 October 2012, Cubic advised SP AW AR: 
In its September 6, 2012 letter, Cubic indicated that 
it would deliver [3 items] subject to restriction and that it 
would deliver all other technical data and computer 
software required under the KI-1 lA Subsystem Contract 
subject to Government Purpose Rights .... 
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After further review of the KI-1 lA Subsystem SOW 
and CDRLs, however, Cubic has determined that the 
technical data that are required to be delivered under those 
CDRLs relate specifically to the KI-1 lA Subsystem being 
developed under the KI-1 lA Subsystem Contract. 
Consequently, with the one exception noted below, the 
Government is entitled to unlimited rights in that technical 
data. 
The sole exception to the above is the KI-16 
COMSEC Module. As explained and demonstrated ... at 
Cubic' s facility on July 17, 2012, Cubic partially developed 
the KI-16 using internal IRAD funding. Cubic therefore is 
willing to provide SP AW AR with Government Purpose 
Rights in the technical data associated with that item. 
(R4, tab 26 at 962-63) Cubic added in a footnote to its letter that it understood the 
CO's "challenge to Cubic's data rights assertions" to "relate to the assertions made by 
Cubic in connection with its proposal for the KI-I IA Subsystem Contract" and not to 
"any of the restrictive markings on technical data delivered under Cubic's Contract 
No. N00039-03-C-0024" (id. at 962). 
In a letter dated 13 November 2012, SPAWAR's CO notified Cubic that its 
16 October letter was "non-responsive to the Government data rights challenge" and, 
after reviewing the correspondence between the parties, "the Government does not see 
how Cubic can possibly take an understanding ... that the Government has been talking 
about vetting the data rights assertions to the 2012 (N00039-12-C-0084) COLS 
contract" when it "has been attempting to vet the data rights assertions from ... the 2003 
(N00039-03-C-0024) contract" (R4, tab 27 at 966). The CO added she "can only 
conclude th[at] Cubic's non-understanding is intentional, and ... Cubic either cannot or 
will not provide the required documentation behind the assertions" with respect to the 
2003 contract (id. at 966-67). The CO advised that, "[i]n view of the above, the 
Government will incorporate the [2012 data] assertions into the N00039:.12.:.C-0084 
[follow-on] contract" but requires "Cubic provide the written records it is relying on as 
justification" for its rights assertions regarding the initial contract (id. at 967). The CO 
added, if Cubic failed to provide the required records by close of business on 
20 November 2012, she would issue a final decision addressing the validity of the 
initial contract asserted restrictions (id.). 
On 20 November 2012, Cubic notified the CO that "SPAWAR's challenge to 
Cubic's restrictive markings on any technical data delivered prior to November 24, 
2008, is barred and moot" because SP AW AR provided Cubic with a general release in 
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settling ASBCA Nos. 56097 and 56288, and Cubic "has no obligation to produce - and 
will not be producing- any written records to justify" restrictive markings (R4, tab 28 
at 974-75). About two months later, SPA WAR's CO issued a "final decision" 
notifying Cubic that, because it had "not provided the documentation behind the data 
rights assertions" with respect to the initial contract "as required by regulation," it "is 
not entitled to make the ... assertions and the Government is entitled to Unlimited Rights 
in the technical data and computer software" listed (R4, tab 29 at 989-90). Less than 
two weeks later, Cubic timely filed an appeal of the CO's decision with this Board. 
STATUTORY AND REGULATORY FRAMEWORK 
The first provision specifying treatment by the government of contractor rights 
in technical data appeared in the 1955 version of the Armed Services Procurement 
Regulation (ASPR). Prior to that time, military regulations addressed only contractor 
data subject to a patent or copyright. Bell Helicopter Textron, ASBCA No. 21192, 
85-3 BCA 118,415 at 92,388; Donna C. Maizel, Trade Secrets and Technical Data 
Rights in Gov 't Contracts, 114 Mil. L. Rev. 225, 235 (1986); Robert M. Hinrichs, 
Proprietary Data and Trade Secrets under Department of Defense Contracts, 36 Mil. 
L. Rev. 61, 71 (1967); Arthur R. Whale, Government Rights to Technical Information 
Received Under Contract, 25 Geo. Wash. L. Rev. 289,295 (1957). 
ASPR 9-112 (4 Jan. 1955), a mandatory clause for all Department of Defense 
(DoD) research and development (R&D) contracts, gave the United States "the right to 
reproduce, use, and disclose for Governmental purposes" all of the "reports, drawings, 
blueprints, data, and technical information specified to be delivered by the Contractor 
to the Government under th[ e] contract" with no regard to whether the data originated 
before or after the contract award. The DoD construed this grant of right as including 
the right to use such data for competitive procurement. B-152684, 44 Comp. Gen. 451 
(5 Feb. 1965); Ralph C. Nash, Jr. & Leonard Rawicz, Intellectual Property in 
Government Contracts, 457 (6th ed. 2008); Greg S. Sharp, A Layman's Guide to 
Intellectual Property In Defense Contracts, 33 Pub. Cont. L.J. 99, 103 (2003); Maizel, 
Trade Secrets, 114 Mil. L. Rev. at 235; Hinrichs, Proprietary Data, 36 Mil. L. Rev. 
at 71; Ray M. Harris, Trade Secrets as they Affect the Government, 18 Bus. Law 613, 
619 (1963); Whale, Government Rights, 25 Geo. Wash. L. Rev. at 296. 
After the defense industry objected to the loss of rights in data, DoD rewrote the 
ASPR to give contractors protection for data they delivered under supply contracts, while 
maintaining unlimited rights in data delivered under R&D contracts. Pursuant to the 1957 
regulations, information was classified as "proprietary data, design data, or operational 
data." Design and operational data continued to be subject to delivery to and use by DoD 
under supply contracts, but "proprietary" data was protected. It was not to be requested in 
advertised supply contracts for standard commercial items and was to be obtained in 
negotiated supply contracts only if a clear need was established and the data was specified 
in the contract's schedule. A clause for data delivered under such contracts provided DoD 
11 
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was to obtain rights in proprietary data sufficient to permit the data's required use, which 
was "limited rights" if only needed for a limited purpose. This clause was to be used with 
another providing: data so limited was to be identified in the schedule as being subject to 
limitation; a legend was to be placed on such data identifying the portion or pages to which 
the legend applied; and DoD possessed the right "at any time to modify, remove, obliterate 
or ignore any marking not authorized by the terms of the contract," subject to contractor 
right of appeal under the disputes clause. The 1957 ASPR additionally set forth a new 
policy of obtaining and utilizing a contractor's "engineering drawings" to allow 
procurement by formal advertisement. DoD's specification for drawing preparation 
(Military Specification MIL-D-70327, "Drawings, Engineering and Associated Lists"), 
however, required drawings to be so complete that they often revealed trade secrets utilized 
in the manufacture of an item. Industry and Members of Congress contended the 1957 
revision was "offensive to the American way of business" because the originator of a design 
enjoyed no competitive advantage in bidding to perform subsequent solicitations no matter 
how much money or private resources it had expended in developing that item, and the 
revised ASPR lasted only a year. ASPR 9-201, 9-202.2, 9-203.1, 9-203.2 (9 Apr. 1957) 
reprinted at 22 Fed. Reg. 6335, 6336 (8 Aug. 1957); B-138638, 38 Comp. Gen. 667 (6 Apr. 
1959); Nash & Rawicz, Intellectual Property at 458-60; Maizel, Trade Secrets, 114 Mil. L. 
Rev. at 235; Hinrichs, Proprietary Data, 36 Mil. L. Rev. at 71-72; William Munves, 
Proprietary Data in Defense Procurement, 1962 Mil. L. Rev. 155, 169-72, 174; see 
Hearings on Proprietary Rights & Data before Subcommittee No. 2 of the House Select 
Committee on Small Business, 86th Cong. 2d Sess. 2, 18-20, 32-33 (1960). 
During 1958, to provide greater protection of contractor proprietary data, DoD 
altered the ASPR to provide that, in any "supply" contract not having experimental or 
research work as one of its principal purposes, proprietary data need not be furnished 
absent identification in the contract's delivery schedule. ASPR 9.202-l(b) (15 Oct. 
1958), reprinted in 23 Fed. Reg. 10432 (30 Dec. 1958); ASPR 9.203-2, reprinted in 
23 Fed. Reg. 10434 (30 Dec. 1958). This allowed a DoD contractor to remove its 
proprietary data from drawings, unless otherwise specifically required by the delivery 
schedule. In sum, DoD received a second set of drawings from the contractor with 
trade secrets expunged. Nash & Rawicz, Intellectual Property at 460; Maizel, Trade 
Secrets, 114 Mil. L. Rev. at 240; Hinrichs, Proprietary Data, 36 Mil. L. Rev. at 72. 
Neither DoD nor contractors, however, were happy with the 1958 ASPR revision. 
DoD contended under the regulation it received data that was so incomplete as to be not 
useable. The expunged drawings sometimes were referred to as "swiss cheese drawings." 
Defense contractors were highly critical ofDoD's interpretation of ASPR's definition of 
proprietary data as excluding any component or end product that could be ascertained by 
the practice of "reverse engineering." They asserted the 1958 ASPR harmed their 
competitive positions by requiring them to disclose information and, if DoD really needed 
that data, it should pay for it. Hearings on Proprietary Rights & Data before 
Subcommittee No. 2, 86th Cong. 2d Sess. 27, 30, 34, 38-44, 52, 69, 109, 121-42, 175; 
Sharp, A Layman's Guide, 33 Pub. Cont. L.J. at 103 (the ASPR at times forced DoD to 
12 

repurchase from original source); Maizel, Trade Secrets, 114 Mil. L. Rev. at 240; 
Hinrichs, Proprietary Data, 36 Mil. L. Rev. at 72-73; Munves, Proprietary Data, 1962 
Mil. L. Rev. at 156, 166-67, 178-79. 
In 1964, as a result of increasing contractor dissatisfaction, DoD abandoned the 
concept of contractor "proprietary data" and broadened a contractor's right to protect 
data. DoD altered the ASPR to define a contractor's rights in terms of "technical data" 
(ASPR 9.201(a) (14 May 1964), reprinted at 30 Fed. Reg. 6969 (25 May 1965)), with 
data that was developed at private expense by a contractor being furnished to DoD on a 
"limited rights basis" (ASPR 9.202-l(b), reprinted at 30 Fed. Reg. 6969 (25 May 1965)) 
and other data being furnished DoD on an "unlimited rights basis" (ASPR 9.201(c), 
reprinted at 30 Fed. Reg. 6969 (25 May 1965)). The government could no longer claim a 
right to use all data under R&D contracts. The contractor's right to assert "limited rights" 
in data was not determined by the type of contract at issue but by whether the item at 
issue was "developed at private expense." The delivery of"swiss cheese" drawings by a 
contractor was foreclosed because the contractor could assert limited rights protection in 
data it developed. The contractor had to deliver a complete technical data package to the 
government containing a notice that only "limited rights" in data were being conveyed 
(known as a limited rights or restrictive legend) if data set forth was developed at 
contractor expense. If a technical data package was not so marked, the government 
received unlimited rights in that data. If the data furnished was marked with a legend that 
was not permitted by terms of the contract, the government could assert only "limited 
rights" in that data pending inquiry by it to the contractor. If the contractor failed to 
respond to the inquiry or show the legend set forth was authorized, government personnel 
could "obliterate such legend." Contractors deemed this an improvement over prior 
practice allowing the government to modify, remove, obliterate or ignore a marking on 
technical data "without notice" to a contractor. In sum, under the 1964 revised 
regulations, whether or not technical data was "developed at private expense" was 
determinative ofDoD's right to use the data. The regulatory emphasis was on tracing 
whose resources had paid for development of the items, components, or processes offered 
for sale. ASPR 9.202-2(b) (14 May 1964), reprinted at 30 Fed. Reg. 6969 (25 May 
1965); ASPR 9.202-3(c)(2) (14 May 1964), reprinted at 30 Fed. Reg. 6970 (25 May 
1965); ASPR 9.203 (14 May 1964), reprinted at 30 Fed. Reg. 6970-71 (25 May 1965); 
Maizel, Trade Secrets, 114 Mil. L. Rev. at 245; John B. Framakides, Technical Data in 
Government Contracts, 8 Wm. & Mary L. Rev. 573, 578-79 (1967); Theodore M. 
Kostos, Unauthorized Use of Technical Data in Government Contracts: Remedies of the 
Data Owner, 6 B.C. L. Rev. 753, 754-55 (1965); Hinrichs, Proprietary Data, 36 Mil. L. 
Rev. at 74-76, 78, 80; see American Eng'g Co., B-156959 (Comp. Gen. 6 Dec. 1965) 
(government disregarded markings without notice to contractor under 1960 subcontract). 
The ASPR, however, did not set forth a definition of the term "developed at 
private expense." In 1964, 1969, and from 1973 until 1974, the ASPR subcommittee on 
technical data rights attempted unsuccessfully to define the term. DoD maintained that, 
where there was a mix of government and private funds, an item could not be said to have 
13 

been "developed at private expense." Also, where the government paid for an 
"improvement" to a privately developed item, it was to receive unlimited rights in the 
"improvement" and limited rights in the basic item if that item could be "segregated." 
The definition of the term, along with the issue of whether the government should be 
contesting limited rights assertions to avoid continued sole source procurement, were 
presented to the General Accounting Office (GAO) in various bid protest actions. GAO 
essentially adopted the term's definition advocated by DoD. Megapulse, Inc., B-194986, 
80-1 CPD ,-r 42 (Comp. Gen. 5 Jan. 1980). 1 
The 1964 modified regulations remained in force largely unchanged for 
20 years. See Nash and Rawicz, Intellectual Property in Government Contracts at 429; 
see also Continental Electronics Mfg. Co., ASBCA No. 18704, 76-1 BCA ,-i 11,654. In 
1984, however, public outrage over inflated and excessive prices being charged the 
government for sole-source, spare-parts procurements, H.R. Rep. No. 690, 98th Cong., 
2d Sess. 10-12; 39 Fed. Cont. Rep. (BNA) No. 25, at 1183 (Jun. 20, 1983), caused 
Congress to examine the issue of data rights in government contracts. It determined 
that an inability of agencies to retrieve technical data the government was authorized to 
use and furnish to bidders on prospective contracts was impeding the existence of 
competition for government contracts. H.R. Rep. No. 690 at 14-15; Maize!, Trade 
Secrets, 114 Mil. L. Rev. at 270. Due to the many spare part horror stories that 
appeared in the press and the seeming inability ofDoD to draft regulations necessary to 
address all relevant issues, Congress enacted three statutes intended to increase 
competition for award of government contracts and set forth data rights policies: the 
Competition in Contracting Act of 1984 (CICA), Pub. L. No. 98-369 (18 July 1984), 
98 Stat. 1175; the Defense Procurement Reform Act of 1984, Pub. L. No. 98-525, Title 
XII (19 Oct.), 98 Stat. 2492, 2588-2611; and the Small Business and Federal 
Procurement Competition Enhancement Act of 1984, Pub. L. No. 98-577 (30 Oct. 
1984), 98 Stat. 3066. William C. Anderson, Comparative Analysis of Intellectual 
Property Issues Relating to the Acquisition of Commercial and Noncommercial Items 
by the Federal Government, 33 Pub. Cont. L.J. 47 (Fall 2003); Diane M. Sidebottom, 
Intellectual Property in Federal Government Contracts: The Past, The Present, and 
1 During 1985, the definition of the term was before us for resolution and we 
essentially ruled the same as GAO, i.e., that "private expense" means "totally" 
at private expense. We held additionally the term "developed" meant 
practicability, workability, and functionability (which we deemed to be 
essentially synonymous for this purpose) must be demonstrated, i.e., the item or 
component must be analyzed and/or tested sufficiently to demonstrate to 
reasonable persons skilled in the applicable art that there is a high probability 
the item or component will work as intended. Bell Helicopter, 85-3 BCA 
,-i 18,415 at 92,389-94, 92,424; Maize!, Trade Secrets, 114 Mil. L. Rev. at 245, 
251-54, 256; Hinrichs, Proprietary Data, 36 Mil. L. Rev. at 76; see, e.g., 
B-190798, B-191007, 78-1CPDi1431 (Comp. Gen. 13 Jun. 1978); B-174866, 
52 Comp. Gen. 312 ( 4 Dec. 1972). 
14 
I 

One Possible Future, 33 Pub. Cont. L.J. 70-71; Maizel, Trade Secrets, 114 Mil. L. Rev. 
at 270. 
For civilian agencies, Congress required the development of regulations 
affording the government "unlimited rights" in all data developed exclusively with 
federal funds if such data is specified for delivery and needed to ensure competitive 
acquisition of substantial quantities of supplies or services in the future. Small 
Business and Federal Procurement Competition Enhancement Act of 1984, Pub. L. 
No. 98-577, § 301(b)(l), 98 Stat. 3074 (codified at 41 U.S.C. § 418a(b)(l)(A), (B) 
(1984), later recodified at 41 U.S.C. § 2302 (2011)). With respect to DoD, Congress 
provided more detailed guidance, specifying that (in prescribing regulations regarding 
the legitimate interest of the United States and a contractor in technical or other data 
under the FAR) the following factors, among others, shall be considered: "Whether 
technical data was developed- (A) exclusively with Federal funds; (B) exclusively at 
private expense; or (c) in part with Federal funds and in part at private expense"; and 
"the interest of the United States in increasing competition and lowering costs by 
developing and locating alternative sources of supply and manufacture." Defense 
Procurement Reform Act of 1984, Pub. L. No. 98-525, Title XII (19 Oct.), Part B, 
98 Stat. 2492, 2595-96 (codified at 10 U.S.C. § 2320(a)). 
Congress stated that regulations issued shall require that, whenever practicable, 
a contract for supplies or services: (1) define the respective rights of the United States 
and the contractor or subcontractor (at any tier) regarding any technical data to be 
delivered; (2) specify the technical data, if any, to be delivered and schedule for such 
delivery; (3) establish or reference procedures for determining acceptability of 
technical data to be delivered; ( 4) establish separate contract line items for the technical 
data, if any, to be delivered; (5) to the maximum extent practicable, identify in advance 
of delivery technical data which is to be delivered with restrictions on the right of the 
United States to use such data; ( 6) require the contractor to revise any technical data 
delivered to reflect engineering design changes made during contract performance and 
affecting the form, fit, and function of the contract items specified; (7) require the 
contractor to furnish written assurance at time of delivery that the technical data is 
complete and accurate and satisfies contract data requirements; (8) establish remedies 
to be available to the United States when data required to be delivered is found to be 
incomplete or inadequate; and (9) authorize the head of the agency to withhold 
payments under the contract during any period if the contractor does not meet the 
requirements of the contract pertaining to the delivery of technical data. Defense 
Procurement Reform Act of 1984, Pub. L. No. 98-525, 98 Stat. 2596; Small Business 
and Federal Procurement Competition Enhancement Act of 1984, Pub. L. No. 98-577, 
98 Stat. 3075. Congress added that: 
(a) A contract for supplies or services ... which 
provides for the delivery of technical data shall provide 
that-
15 

(1) A contractor or subcontractor at any tier 
shall be prepared to furnish to the [CO] a written 
justification for any restriction asserted by the 
contractor or subcontractor on the right of the United 
States to use such technical data; and 
(2) The [CO] may review the validity of any 
restriction asserted by the contractor or 
subcontractor under the contract on the right of the 
United States to use technical data fumished ... under 
the contract if the [CO] determines that reasonable 
grounds exist to question the current validity of the 
asserted restriction and that the continued adherence 
to the asserted restriction by the United States would 
make it impracticable to procure the item 
competitively at a later time. 
Defense Procurement Reform Act of 1984, 98 Stat. 2597; Small Business and Federal 
Procurement Competition Enhancement Act of 1984, 98 Stat. 3071 (codified at 
41 U.S.C. § 253d, recodified at 41 U.S.C. § 4703). Congress specified that, if after 
review a CO determines a challenge to an asserted restriction is warranted, the CO 
shall provide a written notice to the contractor or subcontractor asserting the restriction 
stating grounds for challenging the restriction and requiring submission of a response 
within 60 days justifying validity of the asserted restriction. Defense Procurement 
Reform Act of 1984, 98 Stat. 2598; Small Business and Federal Procurement . 
Competition Enhancement Act of 1984, 98 Stat. 3071. After failure to receive a 
response or review of the response received, the CO is to issue a decision pertaining to 
the validity of the asserted restriction. Defense Procurement Reform Act of 1984, 98 
Stat. 2597 (codified at 10 U.S.C. § 232l(e) later redesignated 10 U.S.C. § 2321(g)); 
Small Business and Federal Procurement Competition Enhancement Act of 1984, 98 
Stat. 3072. Congress specified, if a response is submitted to a CO by either a 
contractor or subcontractor, it shall be considered a "claim" within the meaning of the 
Contract Disputes Act (CDA). Defense Procurement Reform Act of 1984, 98 Stat. 
2598 (codified at 10 U.S.C. § 232l(f) later redesignated § 232l(h)); Small Business 
and Federal Procurement Competition Enhancement Act of 1984, 98 Stat. 3072. 
Finally, Congress directed that, upon final disposition, if the CO's challenge to the 
restriction on the right of the United States to use the data is sustained, the restriction 
on the right shall be cancelled and, if the assertion is found not to have been 
substantially justified, the contractor or subcontractor, as appropriate, shall be liable to 
the United States for payment of the cost to the United States of reviewing the asserted 
restriction. Defense Procurement Reform Act of 1984, 98 Stat. 2598; Small Business 
and Federal Procurement Competition Enhancement Act of 1984, 98 Stat. 3072. 
16 
I 

Congress mandated that the changes it made in technical data rights treatment 
apply to solicitations issued one year after date of enactment (19 October 1984) and on 
10 September 1985 the Defense Acquisition Regulatory (DAR) Council issued a set of 
proposed rules to implement those changes. 50 Fed. Reg. 36,887 (1985); Defense 
Procurement Reform Act of 1984, 98 Stat. 2599 (§ 2323(c)(2)). The proposed rules 
constituted a complete rewrite ofDFARS Subpart 227.4 to accommodate language set 
forth in Pub. L. Nos. 98-525 and 98-577. Section 227.471 of the proposed rules 
defined "developed at public expense" as data "brought to a point of practical 
application," i.e., ''which had been constructed, practiced, or used, and tested so as to 
clearly demonstrate that it performs the objective for which it was developed," and was 
accomplished without direct government payment at a time when no government 
contract required performance of the development effort and the effort was not part of 
performing a government contract. Comments upon the proposed rules were to be 
submitted by 9 October 1985. 50 Fed. Reg. 36,887 (1985). 
On 24 October 1985, the DAR Council decided not to implement the proposed 
rules after the consensus of a meeting with representatives of industry, congressional 
staffs, the press and the government was that the comment period was "too short." The 
DAR Council extended the public comment period to January 1986 and issued a 
temporary interim revision incorporating minimal statutory requirements until a final 
version of the rules could be implemented. No definition for "developed at private 
expense" was set forth in the interim rules. The interim rules, however, addressed the 
statutory challenge provision. They stated, after a CO determines that a challenge to a 
restrictive marking is warranted, the CO shall send a written challenge notice to the 
contractor or subcontractor; any written response from the contractor or subcontractor 
shall be considered a claim within the meaning of the CDA that must be certified 
regardless of dollar amount; the CO shall issue a final decision stating whether the 
restrictive marking(s) challenged are valid or not valid; and the government will 
continue to be bound by the restrictive marking for a period of 90 days from issuance 
of the final decision or longer if the contractor submits to the CO a notice of intent to 
file suit. 50 Fed. Reg. 43,158 (24 October 1985) (DFARS 227.413-l(c)); 50 Fed. 
Reg. 41,180 (9 October 1985). 
During October 1986, the House of Representatives and Senate agreed to 
specifically require DoD to publish regulations defining the terms "developed" and 
"at private expense." They stated: 
Efforts to define the terms have been ongoing since 1962 
without resolution. Because of the lack of definitions in the 
Federal Acquisition Regulations and the Defense 
Supplement to those regulations, the military departments 
have differed in their approach on the issue. The conferees 
agreed that a uniform approach throughout the [DoD] was 
desirable and necessary .... 
17 

The conferees believe that previously proposed [DoD] 
regulations published for public comment September 10, 
1985, defined the term "developed" in an excessively, 
stringent manner by requiring an "actual reduction to 
practice" - a term of art used to establish an inventor's 
priority rights under the patent laws. The conferees agree 
that, for purposes of determining whether an item or 
process has been developed at private expense, an item 
should generally be considered "developed" if the item or 
process exists and reasonable persons skilled in the 
applicable art would conclude that a high probability exists 
that the item or process will work as intended. The 
conferees determined, however, that because circumstances 
may exist in which such a standard may be inappropriate, 
crafting of more exact parameters would be better 
accomplished through the regulatory process. 
In addition, the conferees agree that as a matter of general 
policy "at private expense" development was accomplished 
without direct government payment. Payments by the 
government to reimburse a contractor for its indirect costs 
would not be considered in determining whether the 
government had funded the development of an item. Thus, 
reimbursement for Independent Research and Development 
expenses and other indirect costs ... , although such 
payments are in indirect support of a development effort, 
are treated for purposes of this Act as contractor funds. 
H.R. Rep. No. 99-1001, at 510-11 (1986 Conf. Rep.). With respect to validation of 
proprietary data restrictions, Congress amended section 2321 of title 10 (Validation of 
Proprietary Data Restrictions) to provide: 
(b)(l) The Secretary of Defense shall ensure that 
there is a thorough review of the appropriateness of any 
restriction on the right of the United States to release or 
disclose technical data delivered under a contract to persons 
outside the Government, or to permit the use of such 
technical data by such persons. Such review shall be 
conducted before the end of the three-year period beginning 
on the date on which the final payment is made on a 
contract under which technical data is required to be 
delivered, or the date on which the technical data is 
delivered under such contract, whichever is later. 
18 

DoD Authorization Act, 1987, Pub. L. No. 99-661, 100 Stat. 3816, 3951 (contained in 
identical form in Joint Resolution making appropriations for FY 1987 and other 
purposes, Pub. L. No. 99-500, 100 Stat. 1783-171 ). Congress added that, 
notwithstanding the three-year limitation, ''the United States may challenge a 
restriction on the release, disclosure, or use of technical data delivered under a contract 
at any time if such technical data-(i) is publicly available; (ii) has been furnished to 
the United States without restriction; or (iii) has been otherwise made available without 
restriction." 100 Stat. 3952. 
Beginning in 1987, after considerable discussion and debate regarding DoD 
technical data policy, DoD published a series of draft and interim regulations to reform 
its technical data policies and procedures. E.g., 52 Fed. Reg. 12390 (16 Apr. 1987); 
52 Fed. Reg. 2082 (16 Jan. 1987). For the first time, DoD added a new category or 
type of license (Government Purpose License Rights) to the two existing categories or 
types ("limited" rights if developed exclusively at private expense and "unlimited" 
rights if developed with federal funds) in an attempt to address the legitimate rights of 
DoD and contractors in technical data where there was "mixed funding" of 
development. If a contractor's contribution to an item or process developed in part 
with federal funds and in part at private expense was significant (more than 50%), DoD 
generally was to receive Government Purpose License Rights, rather than unlimited 
rights as provided under existing policy. 52 Fed. Reg. 2082 (DFARS 227.472-5, 
Standard Rights in Technical Data; 252.227-7013(b )(2), RIGHTS IN TECHNICAL DATA). 
During December 1987, in enacting the National Defense Authorization Act for FY s 
1988 and 1989, § 808, 101 Stat. 1019, 1128-29, Congress provided further guidance to 
DoD regarding the definition of developed exclusively at private expense, mandating 
that, in defining such terms, the Secretary shall specify the manner in which indirect 
costs shall be treated and shall specify that amounts spent for independent research and 
development and for bid and proposal costs shall not be considered to be federal funds 
for purposes of the definitions. 
On 1 April 1988, the DAR Council again issued interim rules for Subpart 227.4 
and Part 252 of the DF ARS. The new interim rules, among other things, implemented 
section 808 of the National Defense Authorization Act for FYs 1988 and 1989 and 
direction from the Deputy Assistant Secretary of Defense (Procurement) that DFARS 
Subpart 227.4 be simplified and streamlined. 53 Fed. Reg. 10780. 
On 28 October 1988, after evaluating public comments received, the DAR 
Council issued another interim rule replacing in its entirety the interim ruled published 
on 1 April 1988. 53 Fed. Reg. 43698 (28 Oct. 1988). Among the changes made to the 
rule was that "notification and listing procedures" were revised to simplify and clarify 
the process for establishing rights in data. This coverage was altered to "clarify that the 
listing process does not accelerate the validation process and is not a final 
19 

determination of rights." DFARS 227.473-1, Procedures for Establishing Rights in 
Technical Data, of the new interim rule provided in part: 
(2) Preaward Notification. 
(i) The offeror is required to identify, in its proposal, 
items, components, processes or computer 
software which it intends to use and which would 
result in delivery of technical data to the 
Government with other than unlimited rights .... 
(3) Contract award. 
(i) The contractor's notification will serve as the 
basis for the list to be included in the contract 
identifying all technical data with restrictions on 
the Government's right of use or disclosure that is 
required by paragraph (k) of the clause at 
252.227-7013. 
(iii) The purpose of the list is to facilitate the 
review of contractor assertions required by 
10 U.S.C. [§] 2321 and to provide a basis for 
Government acquisition planning. It is not a 
final determination of rights and does not alter 
the rights of the parties under 10 U.S.C. 
[§§] 2320 or 2321. 
(6) Supporting information. The [CO] should rely on 
the representation provided with the contractor's 
notification. Detailed supporting information, 
either preaward or postaward, should normally not 
be requested unless there are reasonable grounds to 
question the validity of the assertion. While the 
contractor or subcontractor is obligated to provide 
sufficient information to fully justify the assertions, the 
[CO] should only obtain enough information to 
determine if the assertion is reasonable and to evaluate 
20 

its likely impact on the Government. [Emphasis 
Added] 
With respect to validation of restrictive markings on technical data, DFARS 227.473-4 
of the new interim rule provided: 
The clause at 252.227-7037 sets forth rights and procedures 
pertaining to the validation of restrictive markings asserted 
by contractors and subcontractors on deliverable technical 
data and shall be included in all solicitations and contracts 
which require the delivery of technical data. The 
Government should review the validity of any asserted 
restriction on technical data deliverable under a contract. 
This review should be accomplished before acceptance of 
the technical data but no later than three years after final 
payment or three years after delivery of the technical 
data to the Government, whichever is later. The [CO] 
may challenge restrictive markings if there are reasonable 
grounds to question their validity but only if the three-year 
period has not expired. However, the Government may 
challenge a restrictive marking at any time if the technical 
data (1) is publicly available; (2) has been furnished to the 
United States without restriction; or (3) has been otherwise 
made available without restriction. Only the [CO's] final 
decision resolving a formal challenge constitutes 
"validation" as addressed in 10 U.S.C. [§] 2321. A 
decision by the Government not to challenge a 
restrictive marking or asserted restriction does not 
constitute "validation." 
Id. (Emphasis added) The RIGHTS IN TECHNICAL DATA AND COMPUTER SOFTWARE 
clause, DFARS 252.227-7013, in the new interim regulation provided in part: 
(k) Identification of restrictions on Government rights. 
Technical data and computer software shall not be tendered 
to the Government with other than unlimited rights, unless 
the technical data or computer software are identified in a 
list made part of this contract. This list is intended to 
facilitate review and acceptance of the technical data and 
computer software by the Government and does not 
change, waive, or otherwise modify the rights or 
obligations of the parties under the clause at DFARS 
252.227-7037. As a minimum, this list must-
21 

( 1) Identify the items, components, processes, or 
computer software to which the restrictions on 
the Government apply; 
(2) Identify or describe the technical data or 
computer software subject to other than 
unlimited rights; and 
(3) Identify or describe, as appropriate, the category 
or categories of Government rights ... on the use 
of disclosure of the technical data or computer 
software. 
The VALIDATION OF RESTRICTIVE MARKINGS ON TECHNICAL DA TA clause, 
DFARS 252.227-7037, in the new interim regulation provided in part: 
(b) Justification. The Contractor or subcontractor at 
any tier is responsible for maintaining records 
sufficient to justify the validity of its markings that 
impose restrictions on the Government and others to 
use, duplicate, or disclose technical data delivered or 
required to be delivered under the contract or 
subcontract, and shall be prepared to furnish to the 
[CO] a written justification for such restrictive 
markings in response to a challenge under paragraph 
(d) below. 
( d) Challenge. 
(1) Notwithstanding any provision of this contract 
concerning inspection and acceptance, if the [CO] 
determines that a challenge to the restrictive 
marking is warranted the [CO] shall send a 
written challenge notice to the Contractor or 
subcontractor asserting the restrictive markings .... 
(3) The Contractor's or subcontractor's written 
response shall be considered a claim within the 
meaning of the Contract Disputes Act of 1978 
(41 U.S.C. [§§] 601 et seq.) and shall be 
22 

certified ... regardless of dollar amount. 
[Emphasis added] 
In December 1991, Congress enacted DoD Authorization Act, FY 1992 and 
1993, § 807, 105 Stat. 1290, 1421-23, requiring the Secretary of Defense to form a 
government-industry advisory committee to develop recommended regulations to 
supersede the interim regulations implementing requirements of 10 U.S.C. § 2320, 
Rights in Technical Data. After holding meetings between July 1992 and December 
1993, the advisory committee mandated by Congress concluded existing regulations 
were a disincentive to companies that create new technology with their own funding to 
furnish such technology to DoD. The Committee developed revised regulations that it 
believed established a balance between data developers' and data users' interests, and 
would encourage both creativity and firms to offer newly developed technology to 
DoD since it deemed protection of privately developed data crucial for developers, 
especially those with limited product lines. 59 Fed. Reg. 31584 (20 June 1994). 
On 20 June 1994, the DAR Council published for public comment regulations 
adopting the recommendations of the Government-Industry Technical Data Advisory 
Committee established pursuant to the National Defense Authorization Act for FY s 
1992 and 1993. The proposed regulations identified any government rights in 
technical data or computer software as specific nonexclusive, license rights a 
contractor has granted the government. 59 Fed. Reg. 31585, 31587. They defined 
standard license rights in proposed clauses set forth at DF ARS 252.227-7013, RIGHTS 
IN TECHNICAL DATA-NONCOMMERCIAL ITEMS, and 252.227-7014, RIGHTS IN 
NONCOMMERCIAL COMPUTER SOFTWARE AND NONCOMMERCIAL COMPUTER SOFTWARE 
DOCUMENTATION. 59 Fed. Reg. at 31605-07, 31608-11. The rules stated that a 
contractor retains all rights not granted to DoD. 59 Fed. Reg. 31587 (DF ARS 
227.4034(a)). They added a new Subpart 227.5, Rights in Computer Software and 
Computer Software Documentation. 59 Fed. Reg. at 31597-604. The proposed rules set 
forth a standard Government Purpose Right applicable in all mixed funding situations 
allowing DoD to use such data for "governmental purposes" (including competition but 
not commercial use), with the government acquiring "Unlimited Rights" in that data only 
five years following award of the development contract or subcontract or a period 
negotiated by the parties. 59 Fed. Reg. at 31588. Existing regulations required that 
indirect costs of development be considered "government funded" if development was 
required for performance of a government contract (53 Fed. Reg. 43698, DF ARS 
227.471, Definitions (Oct 1988) ("developed exclusively at private expense")), but the 
1994 proposed rules specified development accomplished with costs charged to indirect 
cost pools be considered development accomplished at "private expense." 59 Fed. Reg. 
at 31608. The proposed rules also added a new clause (DFARS 252.227-7015, 
TECHNICAL DAT A-COMMERCIAL ITEMS) that generally required DoD to acquire 
technical data pertaining to "commercial" items or processes only customarily provided 
to the public. 59 Fed. Reg. at 31586 (DFARS 227.402-1), at 31611-12. The proposed 
rules (DFARS 227.403-13) did not make any significant alterations to DoD's right to 
23 

review, verify, challenge and validate asserted restrictions on technical data use set forth 
in existing regulations. Compare 59 Fed. Reg. 31592-93, 31617-18, 31620, with 53 Fed. 
Reg. 43698 (Oct. 1988) (DFARS 227.473-1, Procedures for Establishing Rights in 
Technical Data; and 227.473-4, Validation of Restrictive Markings on Technical Data). 
In October 1994, Congress passed the Federal Acquisition Streamlining Act of 
1994 (FASA), Pub. L. No. 103-355, 108 Stat. 3243, to revise and streamline Federal 
government acquisition laws. Among other things, FASA modified 10 U.S.C. 
§ 2320(b) to provide a presumption of development at private expense for commercial 
items, and added a new subsection (f) to 10 U.S.C. § 2321 specifying that, under 
"commercial item" contracts, a CO must presume private expense development 
whether or not the contractor submits a justification in response to a challenge notice. 
The subsection also provided that challenges under contracts for "commercial items" 
can be sustained only if information furnished by DoD demonstrates that the item was 
not developed exclusively at private expense. 
During June 1995, the DAR Council amended the DFARS to prescribe final 
technical data regulations (previously published in June 1994 for comment as interim 
rules) with changes made in the rules necessitated by F ASA and based on comments 
received. 60 Fed. Reg. 33464 (28 June 1995). The final rule revised the 1988 interim 
guidance on rights in technical data, and added new guidance on rights in computer 
software and software documentation intended to replicate commercial practice. The 
rule deleted DFARS Subpart 227.4, Rights in Data and Copyright, and replaced that 
subpart with Subpart 227.71, Rights in Technical Data. 60 Fed. Reg. 33469-70. The 
new rule made several major changes from the 1988 rule, including separate treatment 
for commercial and noncommercial technical data, a requirement to grant government 
purpose rights (GPR) (previously known as "government purpose license rights" or 
GPLR) in all mixed funding situations, and direction to determine funding at the 
lowest segregable level of an item, component, or process. Compare DF ARS 
252.227-7013(a)(l 1), (12), (b)(2) (1988), with DFARS 252.227-70I3(a)(7)(i), (11), 
252.227-70I4(a)(7)(i), 252.227-7015 (1995). 
Because DoD has unique needs for technical data created by its missions, it is 
exempt from the standard FAR rules regarding technical data and follows only rules set 
forth in the DFARS. FAR 27.400; DFARS 227.400. DFARS Subparts 227.71 (Rights 
in Technical Data), and 227.72 (Rights in Computer Software and Computer Software 
Documentation) set forth a unique process for acquisition of intellectual property (IP) 
license rights in technical data or computer software developed and/or delivered under 
a contract. In general, a contractor (developer of IP) retains title to its developed IP 
and DoD receives from the contractor a nonexclusive license to use, reproduce, 
modify, release, perform, display, or disclose the technical data or software. 
The DF ARS essentially set forth three different levels of DoD license rights in 
noncommercial technical data based on source of funding for data development: 
24 

limited; unlimited; and government purpose rights. If the data pertain to an item or 
process developed exclusively with government funding, DoD receives unlimited rights 
and may use, modify, reproduce, perform, display, release or disclose the data to 
anyone and for any purpose. DFARS 252.227-7013(a)(I5). If the data pertain to an 
item or process developed exclusively with private funding, DoD receives limited rights 
and may not share the information with anyone outside DoD unless that disclosure is 
temporary and made merely to satisfy one ofDoD's limited internal needs, such as 
reviewing competitive contract proposals or performing an emergency overhaul. 
DFARS 252.227-7013(a)(13); 10 U.S.C. § 2320(a)(2)(D)(i). If the data pertain to an 
item or process developed with both government and private funding, DoD receives 
GPR for five-years or other negotiable period and may use, modify, reproduce, perform, 
display, release, or disclose the data within the government without restriction and 
release or disclose that data to any person or entity outside DoD only for government 
purposes. DFARS 252.227-7013(a)(l 1); 252.227-7013(a)(12)(i), (ii). After expiration 
of five years or the period negotiated, the GPR in technical data reverts to unlimited 
rights. DFARS 252.227-7013(b)(2)(i), (ii). While technical data can be provided with 
limited rights, the computer software and software documentation clause does not 
contain this choice but instead includes a "restricted rights" license that is substantially 
similar to that set forth in the FAR data rights clause. DFARS 252.227-7014(a)(14). 
The technical data rights system created by statute and regulation gives DoD 
unlimited rights in noncommercial technical data delivered under DoD contracts unless 
a contractor takes various affirmative actions to limit such rights both before and after 
contract award. DFARS 227.7I03-5(a)(7); 252.227-7013(b)(l)(vii). A contractor 
providing non-public information to DoD must act to protect the non-public nature of 
that information or accept loss of any right to have it protected. See, e.g., Campbell 
Plastics Eng'g & Mfg. v. Brownlee, 389 F.3d 1243, 1247-48 (Fed. Cir. 2004); Bell 
Helicopter Textron, 85-3 BCA ,r 18,415 at 92,430-32. 
Pursuant to 10 U.S.C. § 2320(b)(5), DFARS 227.7103-3(b) and 227.7203-3(b) 
of the final rule mandate inclusion of DF ARS 252.227-7017 in all solicitations for 
noncommercial items requiring offerors to identify in their offers technical data, 
computer software, and software documentation for which restrictions upon use, 
release, or disclosure ( other than copyright) would be asserted and to attach a list of 
those assertions to their offers. DFARS 252.227-7017(d) specifies the attached list 
state, among other things, the technical data or computer software to be furnished with 
restrictions, basis for the offeror' s assertion of restriction ( e.g., development of item in 
whole or in part at private expense), and the asserted rights category ( e.g., limited or 
government purpose rights). DFARS 227.7103-4(b) and 227.7203-4(b), License 
Rights, explain (for technical data pertaining to items, components, or processes, and 
for computer software or computer software documentation, respectively) that the 
scope of the license acquired by DoD is generally determined by the source of funds 
used for development and that determination of source of development funds should be 
made "at any practical subitem or subcomponent level or for any segregable portion of 
25 

a process" for technical data and the "lowest practicable segregable portion" of 
software or documentation. 
When acquiring and specifying technical data, software, and software 
documentation, DoD utilizes a Contracts Data Requirements List (CDRL), DD 
Form 1423, to satisfy in part statutory and regulatory mandates to establish to the 
extent practicable technical data and software to be delivered under a contract. 
DFARS 215.470(b). Prior to award ofa contract, a contractor lists on a CDRL all 
the noncommercial technical data and computer software that the contract names as 
unlimited rights deliverables that the contractor intends to deliver with less than 
unlimited rights. DFARS 252.227-7013(e)(2), (3); 252.227-7014(e)(2), (3). The 
contractor must disclose its asserted rights category for each such data item and the 
basis for its assertions. DFARS 252.227-7017(b), (d). DoD may use the list during 
source selection to evaluate the impact of contractor identified restrictions on DoD 
evaluation factors. DFARS 227.7103-10(a)(5); 227.7203-lO(a)(S); Office of the Under 
Secretary of Defense for Acquisition, Technology, and Logistics, Intellectual Property: 
Navigating Through Commercial Waters, 2-5 (2001). Facts and theories behind the 
contractor assertions are handled when needed in other processes and by other clauses. 
DFARS 227.7103-10(a)(2); 227.7103-13; 227.7203-10(a)(2); 227.7203-13. Prior, 
future, or contemporaneous rights asserted under other contracts do not provide a 
certain basis for determining DoD's rights under the current contract. A prior list 
assertion (unless formally challenged and resolved) is merely a contractor's position 
based upon then existing facts and/or assumptions. DFARS 227.7013-13(a); 
227.7103-13(c)(8) (only a CO's final decision or actions of the ASBCA or court of 
competent jurisdiction sustaining validity of asserted restriction constitutes validation); 
227.7203-13(e)(2) (same). CDRL assertions simply represent the unilateral claim of 
the contractor regarding allocation of rights for noncommercial technical data or 
software. See DFARS 227.7103-10(a)(4); 227.7203-10(a)(4); 227.7103-13(a); 
227.7203-13(a); 252.227-7013(e)(4); 252.227-7014(e)(4). They are not immediately 
binding upon DoD, which can challenge those assertions even after final payment under 
the contract. DFARS 227.7103-10(a)(4); 227.7103-13(a), (c)(l); 227.7203-10(a)(4); 
227.7203-13(a), (d)(2); 252.227-7013(e)(4); 252.227-7014(e)(4); Under Secretary of 
Defense, Intellectual Property at 2-5 thru 2-6. 
A properly asserted pre-award assertion list made in good faith by a contractor 
must be attached to the contract at award. See DFARS 252.227-7013(e)(2); 
252.227-7014(e)(2); 252.227-7017(1). A contractor is allowed to update that attachment 
only if there is new information or an inadvertent omission in drafting the list that would 
not have materially affected the source selection. The factual determination as to whether 
either of the two conditions exist is for the CO to make and any update of the attachment 
can only be made by CO contract modification. DFARS 252.227-7013(e)(3), (4); 
252.227-7014(e)(3), (4). A contractor who fails to make a proper pre-award assertion 
and who later cannot satisfy one of the two tests for updating the pre-award assertions is 
26 

required to deliver all such noncommercial data and software with unlimited rights. See 
DFARS 227.7103-5(a)(7); 252.227-7013(b)(l)(vii), (e)(2), (3); 252.227-7014(e)(2), (3). 
After award of a contract, a contractor must mark noncommercial technical data 
or software it delivers with an authorized marking in an authorized manner showing that 
the data or software is submitted in confidence to actually receive protection for its data 
or software. Failure to so mark the data results in delivery of the data with unlimited 
rights. See DFARS 227.7103-lO(c)(l); 227.7203-lO(c)(l); 252.227-7013(!)(2)-(4); 
accord Xerxe Group, Inc. v. United States, 278 F.3d 1357, 1360 (Fed. Cir. 2002); 
General Atronics Corp., ASBCA No. 49196, 02-1BCA131,798 at 157,067; Bell 
Helicopter, 85-3 BCA 118,415 at 92,409, 92,432-33; Wayne H Coloney Co., B-211789, 
83-2 CPD 1242 (Comp. Gen. 23 Aug. 1983). If a contractor shows it inadvertently 
delivered unmarked data to DoD and agrees to relieve DoD of liability pertaining to the 
unmarked data, it can ask the CO for permission to subsequently mark the data at its 
own expense if that request is made within six months of submission. DF ARS 
227. 7103-10( C )(2); 227. 7203-10( C )(2). 
Markings must be placed "on the transmittal document.. .and ... each page of the 
printed material containing data for which restrictions are asserted." DF ARS 
227.7103-lO(b); 252.227-7013(f)(l); 252.227-7014(f)(l). A contractor may apply a 
restrictive legend ONLY to those portions of the data/software/page covered by an 
authorized assertion. DFARS 252.227-7013(t)(l). When such markings are not so 
limited to only the restricted portions of a page, the markings are "nonconforming." 
Under Secretary of Defense, Intellectual Property at 2-10 ( alteration of prescribed 
content or format of marking results in marking being "nonconforming"). 
The DF ARS provide the specific text for markings that may be placed on 
noncommercial technical data and software, and may specify the location where the 
marking must appear. DFARS 252.227-7013(t)(l), (2)-(4); 252.227-7014(!)(2), (3)-(4). 
Any alteration of the prescribed content or format of a marking results in the marking 
being "nonconforming." Under Secretary of Defense, Intellectual Property at 2-10. 
There are three contractually recognized categories of legends-"justified," 
"unjustified," and "nonconforming." A justified legend is in a prescribed format 
authorized for use on the deliverable. See DFARS 227.7103-12(a)(l); 227.7203-12(a)(l). 
An "unjustified" legend is an unauthorized marking that does not depict accurately 
restrictions applicable. DFARS 227.7103-12(b)(2). A "nonconforming" legend is (a) an 
authorized marking that differs in form or substance from the contract marking 
requirements or (b) any marking which is not authorized by DFARS 252.227-7013 or 
252.227-7014. DFARS 227.7103-12(a)(l); 227.7203-12(a)(l). 
A contractor is prohibited from placing a restrictive marking or legend on any 
deliverable noncommercial technical data and computer software unless the contract 
contains an attachment acknowledging the restrictive assertion covering such 
27 

data/software. See DF ARS 252.227-7013( e )(2); 252.227-7014( e )(2) (last sentence). 
A legend which is in a contract-specified format but which is not authorized for use 
due to failure to assert prior to delivery is a "nonconforming" legend. See DF ARS 
252.227-7013(e)(2); 252.227-7014(e)(2); 227.7103-12(a)(l); 227.7203-12(a)(l). In 
sum, when a contractor violates the procedural agreements of the parties' contract 
(such as making a proper assertion, using a proper legend format, or limiting 
application of the proper format to only that portion of the data covered by a proper 
assertion), that legend with regard to that data is "nonconforming." 
Correction of nonconforming markings on technical data and computer 
software, respectively, are not subject to DFARS 252.227-7037, VALIDATION OF 
RESTRICTIVE MARKINGS ON TECHNICAL DATA; and 252.227-7019, VALIDATION OF 
ASSERTED RESTRICTIONS - COMPUTER SOFTWARE. Rather, nonconforming legends 
may be ordered removed or corrected by simple CO notification and a 60-day period to 
correct or comply. If a contractor fails to abide by the CO's order, it loses the right to 
assert any restriction on DoD's use and further disclosure of the data or software. 
DFARS 252.227-7013(h)(2); 252.227-7014(h)(2); 227.7103-ll(a)(l), 12(a)(l), (2); 
Under Secretary of Defense, Intellectual Property at 4-19. 
An unjustified marking is one that does not accurately characterize the 
restrictions that apply to a particular deliverable. For example, if a limited rights 
legend is placed on data for which DoD is entitled to receive GPR, that legend is 
unjustified (even if it conforms to the format and content for limited rights legends). 
DFARS 227.7103-12(b)(l); 227.7203-12(b)(l); Under Secretary ofDefense, 
Intellectual Property at 4-18, 4-19. A CO has the right to review and challenge the 
validity of an unjustified marking. DFARS 227.7103-12(b)(2); 227.7203-12(b)(2); 
252.227-7013(h); 252.227-7019(e)(l); 252.227-7037(e). Procedures for reviewing and 
challenging unjustified legends are set forth in DF ARS 252.227-7019 for computer 
software and in DF ARS 252.227-7037 for technical data, both of which are based on 
10 u.s.c. § 2321. 
To discourage contractors from simply marking all their designs and drawings 
with proprietary markings, Congress placed restrictions upon the right of contractors to 
mark data and codified the means of challenging marked data. Under 10 U.S.C. 
§ 2321, Congress has specified a CO may review the validity of any restriction a 
contractor asserts on DoD use if the CO determines that reasonable grounds exist to 
question the current validity of the asserted restriction and continued adherence to the 
asserted restriction would make it impracticable to procure the item to which the 
technical data pertain. Congress further expressly specified a CO may initiate a 
challenge to a contractor asserted use restriction within three years (now six years, 
National Defense Authorization Act for FY 2012, Pub. L. No. 112-81, § 815(b)(l)(A), 
125 Stat. 1492-93), of the date on which final payment is made upon the contract under 
which the technical data was required to be delivered or the date on which the technical 
data was actually delivered, whichever is later. 10 U.S.C. § 2321(d)(2)(B). A 
28 

challenge to an asserted use or release restriction may also be made after the end of 
period set forth by Congress if the technical data involved: is publicly available; has 
been furnished to the United States without restriction; or has otherwise been made 
available without restriction. 10 U.S.C. § 232I(d)(2)(A)(i)-(iii). 
Congress has mandated that a contractor or subcontractor at any tier under a contract 
for the delivery of noncommercial data be prepared to furnish to a CO ''written justification" 
for the restriction it asserts on the right ofDoD to use such data. 10 U.S.C. § 232I(b). Any 
contract that entails delivery of technical data must include the Validation of Restrictive 
Marking on Technical Data Clause (DFARS 252.227-7037). DFARS 227.7102-3(c); 
227.7I03-6(e)(4); 227.7104-6(e)(4); 227.7203-6(f). That clause requires a contractor to 
setup and maintain a system of records that are "sufficient to justify the validity of its 
restrictive markings." DFARS 252.227-7037(c); 227.7103-1 l(b); see IO U.S.C. § 2321(b). 
While IO U.S.C. § 2321 provides for validation with respect to only technical data, DoD has 
issued a clause, DF ARS 252.227-7019 providing a similar process for computer software, 
which also requires a contractor to setup and maintain a system of records that are "sufficient 
to justify the validity of any markings that assert restrictions on the Government's rights to 
use, modify, reproduce, perform, display, release or disclose." DFARS 252.227-7019(b). 
If a CO believes there are reasonable grounds to question the validity of an 
asserted restriction, the CO is to send a written notice to the contractor that includes the 
CO's basis for questioning the assertion and notification that the contractor is to respond 
within 60 days. 10 U.S.C. § 232I(d)(3); DFARS 252.227-7037(e)(l); 252.227-7019(e). 
The contractor receiving such a notice is to possess the required records to prove what 
was "exclusively funded at private expense," and has a contractual obligation to have 
such proof on file and available. DF ARS 252.227-7013(g); 252.227-7014(g); see 
DF ARS 252.227-7013(g)(2); 252.227-7014(g)(2); 252.227-7017(f); 252.227-7019(f)(iii); 
252.227-7037(b), (e)(3). If the contractor requires more than 60 days to respond, it may 
submit a written request for an extension of time detailing its need for more time. The 
CO shall grant extra time as appropriate. 10 U.S.C. § 232I(e). 
The contractor's response to the CO's challenge is considered a "claim" under the 
CDA, which must be certified by the contractor for a technical data validation. 
DFARS 252.227-7037(e)(3); 10 U.S.C. § 2321(h).2 When the contractor submits a 
2 We acknowledge that in Alenia North America, Inc., ASBCA No. 57935, 13 BCA 
, 35,296, an appeal where neither the letter contract nor "definitized" contract 
contained any DF ARS or FAR data rights clauses, and the parties never adhered to 
the "validation" procedures expressly set forth in 10 U.S.C. § 2321 and DFARS 
252.227-7037, we deemed a CO's final decision asserting the government 
possessed unlimited rights in technical manuals delivered by a contractor and 
directing the removal of the contractor's restrictive legend-stating that manual 
"must not be used for any purpose other than that for which it is supplied," 
"reproduced without written authorization," or "disclosed to unauthorized 
29 

response to the CO, the CO has 60 days to decide whether the justification submitted is 
valid. 10 U.S.C. § 232l(g)(2). If the CO determines the contractor failed to justify the 
asserted restriction, the CO is to issue a final decision sustaining the challenge and 
cancelling the restriction. 10 U.S.C. § 232l(i)(l)(A); DF ARS 252.227-7019(f)(6)(i); 
252.227-7037(g)(2)(ii). If the contractor fails to submit a response to the challenge 
regarding the asserted restriction, the CO also is to issue a final decision pertaining to the 
validity of the asserted restriction. 10 U.S.C. § 232l(g)(l); DFARS 252.227-70I3(g)(2); 
252.227-7019(f)(5). For 90 days after the issuance of a final decision, however, DoD must 
continue to abide by the contractor-asserted restriction to allow the contractor to commence 
an action before either this Board or provide notice of intent to file an action in the United 
States Court of Federal Claims pursuant to the CDA. DFARS 252.227-7019(g)(I)(i); 
252.227-7037(g)(2)(ii). 
By tying the validation to a final decision by a CO, Congress made the matter a 
"contract dispute," rather than an independent cause of action in federal district court. 
If the contractor wants to dispute the CO's challenge regarding technical data rights, it 
cannot assert the matter was "unrelated" to a contract action, as the contractor did in 
Megapulse, Inc. v. Lewis, 672 F.2d 959 (D.C. Cir. 1982). Rather, it must appeal the 
CO's final decision in accordance with the CDA. 41 U.S.C. § 7104. 
In sum, pursuant to statutory procedures providing due process to a contractor, 
Congress has statutorily authorized a CO to cancel restrictions on DoD's right to use 
noncommercial technical data or software if, in response to a "challenge" by a CO, a 
contractor does not submit justification for those restrictions ( claim by the contractor), 
the CO issues a final decision concluding the asserted restrictions are not valid, and any 
suit pursuant to the CDA with respect to the CO's final decision results in a court or 
board decision favorable to DoD. 10 U.S.C. § 232l(i)(A). 
DECISION 
Cubic moves for summary judgment in this appeal contending that SP AW AR 
"expressly and unambiguously released the claim that is the subject of this Appeal" 
when it entered into a "global settlement" amicably resolving ASBCA Nos. 56097 and 
56288, both of which concerned Contract No. N00039-03-C-0024 (app. mot. at 1). 
Cubic asserts that: "[SPAWAR's] claim is that Cubic's Limited Rights assertions in 
persons"-to be a "government" claim. In so concluding to resolve a question of 
jurisdiction, we essentially relied on a line of precedent that this Board has 
jurisdiction to decide the respective rights of parties under a contract even though 
no monetary relief is sought. E.g., Gen. Elec. Automated Sys. Div., ASBCA 
No. 36214, 89-1 BCA 121,195 at 106,959 (citing Systron Donner, Inertial Div., 
ASBCA No. 31148, 87-3 BCA 120,066). We, therefore, do not consider Alenia 
to have addressed the nature of a claim under the validation procedures at issue 
here under 10 U.S.C. § 2321 and DFARS 252.227-7037 or relevant to this appeal. 
30 

certain technical data ... delivered under the 2003 ... [CDLS] Contract...are invalid 
because Cubic cited 'mixed funding' as the basis of its assertions"; SP AW AR "knew 
or reasonably should have known of the basis of that claim ... prior to the parties' 
execution of a Settlement Agreement related to the CDLS Contract in November 
2008"; and SP AW AR' s claim thus "accrued prior to the execution of the Settlement 
Agreement." According to Cubic, the settlement agreement "included plain and 
unambiguous mutual releases of all claims related to the CDLS contract" stating that 
"all matters and/or claims and potential matters and/or claims (whether known or 
unknown) arising out of, or incidental to, or relating to the [CDLS] Contract" were 
released and SPAWAR's validation "claim, asserted years after the parties executed the 
Settlement Agreement, .. .is barred by the release." (App. reply at 1-2) 
SP AW AR responds that Cubic "cites and relies on select parts of the release of 
claims to assert that the language bars 'all claims,'" but fails to recognize "other parts 
of the Settlement Agreement" which state that the "release does not extend to any 
claims related to the Contract that may arise in the future." According to SP AW AR, 
the "claim [at issue in this appeal] arose after ... the Settlement Agreement, and is 
therefore not barred by the release language in the Agreement which specifically 
reserved rights of parties to pursue claims related to the CDLS Contract that arise in the 
future." (Gov't opp'n at 8-9) 
In arguing that the claim which is the subject of this appeal is barred because the 
claim ( among others) was released, Cubic repeatedly contends the claim before us is a 
"SP AW AR" claim. It asserts that ''the only question before the Board is the legal issue 
of whether the Government's data rights claim arose before the parties executed the[ir] 
Settlement Agreement" (e.g., app. reply at 5-6). The basic premise underlying Cubic's 
assertion, however, is incorrect. The claim before us is not a SP AW AR claim, but a 
claim by Cubic. 
After years of complaints that data furnished by contractors to the government 
with restrictions on use and disclosure was being made available by the government to 
others in contravention of the use and disclosure restrictions without an adequate legal 
remedy available to a contractor, Congress established by statute a specific procedure to 
resolve disputes regarding restrictions on use and disclosure of data that a contractor 
imposes on data furnished to the government. DoD subsequently incorporated those 
statutory provisions into its regulations and mandatory clauses for its contracts. As 
discussed above, during 1984, Congress specified as a matter of law a DoD contract 
providing for delivery of technical data shall provide: the contractor or subcontractor at 
any tier is to be prepared to furnish the CO a written justification for any restriction 
asserted by the contractor or subcontractor on the right of the government to use such 
data; and the CO may review the validity of any restriction asserted under the contract 
on the right of the government to use such data if the CO "determines that reasonable 
grounds exist to question the current validity of the asserted restriction" and that 
"continued adherence to the asserted restriction by the United States would make it 
31 

impracticable to procure the item competitively at a later time." Congress stated that, if 
after review the CO determines a challenge to an asserted restriction is warranted, the 
CO shall provide a written notice to the contractor or subcontractor challenging the 
restriction asserted and requiring submission of a response within 60 days justifying 
validity of the asserted restriction. The contractor's response to the CO's challenge 
regarding technical data validation is deemed a "claim" under the CDA, DF ARS 
252.227-7037(e)(iv)(3); 10 U.S.C. § 232l(h), which the contractor must certify, 
DFARS 252.227-7037(e)(iv)(3), and the CO shall issue a final decision upon that claim, 
DFARS 252.227-7037(g)(l), (2), which can be appealed to the U.S. Court of Federal 
Claims or this Board in accordance with the CDA, DFARS 252.227-7037(g)(2)(iv). 
Defense Procurement Reform Act of 1984, Pub. L. No. 98-525, 98 Stat. 2598. 
Likewise, if a contractor fails to submit a response in support of its challenged use 
restrictions, as occurred in this appeal, in order to preclude a contractor from being able 
to prevent the resolution of a challenge to the validity of use restrictions, Congress also 
expressly specified the CO shall issue a final decision on the validity of the challenged 
use restrictions, which can then be appealed to the Court of Federal Claims or this 
Board in accordance with the CDA. Id. 
In requiring a contractor or subcontractor to furnish "written justification" for a 
restriction asserted on use of noncommercial data or software furnished pursuant to a 
contract and specifying the contractor's written submittal will be treated as a "claim" 
under the CDA, Congress clearly placed the burden of proof for validating a use or 
release restriction on a contractor or subcontractor and established that the ''validation" 
of such restrictions under contracts subject to 10 U.S.C. § 2321 containing a DoD 
''validation" clause, as here, constitutes a "claim" by a contractor under the CDA. 
Accordingly, the issue in this appeal is not whether a "claim" by SP AW AR is barred 
by the release executed by the parties. Rather, the issue is whether Cubic's "claim" 
contending the restrictions it has asserted are valid and subsequent appeal by Cubic of 
the CO's final decision to the contrary is barred by the release executed by the parties 
over three years earlier. 
"A release is a contract whereby a party abandons a claim or relinquishes a right 
that could be asserted against another." E.g., Colorado River Materials, Inc. dlbla 
NAC Construction, ASBCA No. 57751, 13 BCA ,r 35,233 at 172,991. The scope of a 
release, therefore, is a question of contract interpretation. Id. As with any question of 
contract interpretation, the first step is to examine the language used by the parties. 
Beil BC! Co. v. United States, 570 F.3d 1337, 1341 (Fed. Cir. 2009); Dureiko v. United 
States, 209 F .3d 1345, 1356 (Fed. Cir. 2000); Tri-0, Inc. v. United States, 28 Fed. Cl. 
463, 470-71 (1993). 
Two paragraphs of the parties' Settlement Agreement contain very broad 
language. As found above, the second whereas clause of the Agreement states: 
32 

[I]n the interest of resolving all matters relating to ASBCA 
Nos. 56097 and 56288, as well as all matters and/or claims 
and potential matters and/or claims (known or unknown) 
arising under or in regard to the Contract, and under the 
sound policy of law favoring the settlement of disputes, the 
parties understand and agree that the parties' agreements 
herein constitute and represent full consideration for and 
satisfaction of any and all matters and/or claims brought 
under ASBCA Nos. 56097 and 56288, as well as all 
matters and/or claims or potential matters and/or 
claims (known or unknown) arising under or in regard 
to the Contract. [Emphasis added] 
Similarly, as found above, paragraph 15 of the Settlement Agreement states: 
This Agreement is for the sole purpose of settling all 
claims and appeals arising out of, incidental to, or 
relating to the Contract, and this Agreement shall not be 
cited or otherwise referred to by either Cubic or the 
Government in any proceedings, whether judicial or 
administrative in nature, except as is necessary to effect the 
terms of this Agreement. [Emphasis added] 
Based on the language of the Agreement, Cubic asserts that the parties' 
"Settlement Agreement released 'all matters and/or claims and potential matters and/or 
claims (whether known or unknown) arising out of, or incidental to, or relating to the 
[CDLS] Contract"' (app. reply at 2). According to Cubic, it and SPAW AR executed a 
"global settlement agreement" in November 2008 to settle "all matters contained in 
ASBCA Nos. 56097 and 56288, as well as all matters and/or claims and potential 
matters and/or claims (whether known or unknown) arising out of, or incidental to, or 
relating to the [CDLS] Contract" (app. reply at 3, emphasis deleted). Cubic adds that 
the Agreement states that the parties intended the Agreement "to resolve all matters 
that were in any way related to or connected with the CDLS Contract" (app. mot. at 5; 
accord app. reply at 6 n.7 ("plain language of the Settlement Agreement makes clear 
that the parties intended the Agreement to resolve not only the matters in ASBCA 
Nos. 56097 and 56288, but 'all claims and potential claims resulting from or relating to 
the Contract"'). In sum, Cubic contends ( at least initially in its briefs) that SP AW AR 
"executed a valid general release, and there is no reason for this Board to entertain the 
notion that [SPAW AR] harbored an unspoken, undocumented exception to that broad 
release" (app. mot. at 6). 
As SP AW AR notes in its opposition to Cubic' s summary judgment motion, 
however, it is undisputed that both of the express releases set forth in the Settlement 
Agreement for the parties (paragraphs 12 and 14) include the following language: 
33 

"Notwithstanding anything to the contrary, this release does not extend to any 
claims related to the Contract that may arise in the future" ( emphasis added). 
SP AW AR contends in its opposition to Cubic' s summary judgment motion that this 
language demonstrates the Settlement Agreement does not release "all claims" arising 
under or associated with the CDLS contract. (Gov't opp'n at 8-9) 
Cubic is correct that general language similar to that set forth above indicates an 
intent to make an ending of every matter arising under or by virtue of the contract. 
E.g., Augustine Med. Inc. v. Progressive Dynamics, Inc., 194 F.3d 1367, 1371-72 
(Fed. Cir. 1999). "[A] general release precludes a party to the contractual armistice 
from renewing or initiating further combat." HL. C. & Assocs. Constr. Co. v. United 
States, 367 F.2d 586, 590 (Ct. Cl. 1966) (quoting United States v. William Cramp 
& Sons Co., 206 U.S. 118 (1907)). 
The very release that Cubic relies upon as releasing "all claims and potential 
claims resulting from or relating to the Contract," however, also expressly states that, 
"[n]otwithstanding anything to the contrary, this release does not extend to any claims 
related to the Contract that may arise in the future." That language clearly qualifies the 
extent of the release. If the release of claims was intended to be unqualified, there 
would be no need for any such language of qualification. E.g., Metric Constructors, 
Inc. v. United States, 314 F.3d 578, 582 (Fed. Cir. 2002). It provides, in conjunction 
with the other release language, that Cubic and SP AW AR are both released by the 
other from all matters and/or claims or potential matters and/or claims (known or 
unknown) arising under or in regard to the contract, EXCEPT "any claims related to 
the Contract that may arise in the future." Bilateral contract Modification No. P00035 
memorializing the parties' 2008 Settlement Agreement contained the same language 
set forth in the Settlement Agreement concerning CDLS contract claims arising in the 
future. As found above, paragraphs 12 and 14 of Modification No. P00035 state: 
"Notwithstanding anything to the contrary, this release does not extend to any claims 
related to the Contract that may arise in the future." The 2008 settlement agreement 
and subsequent bilateral contract modification, therefore, do not effect an ironclad or 
complete release of the parties from any and all claims relating to or arising under their 
CDLS contract, as Cubic suggests, but instead a "partial" release of claims. 
Pursuant to its plain terms, the parties' release (set forth both in the Settlement 
Agreement and bilateral contract modification) does "not extend" to contract claims 
arising "in the future." We are not free to ignore the express language utilized by the 
parties in their Settlement Agreement (and repeated in the contract modification). It is 
well established that, in construing the Settlement Agreement, the agreement must be 
considered as a whole and interpreted in a way that harmonizes and gives meaning to 
all its words and provisions. Julius Goldman's Egg City v. United States, 697 F.2d 
1051, 1057 (Fed. Cir. 1983); Thanet Corp. v. United States, 591 F.2d 629,635 (Ct. 
CL 1979). An interpretation giving a reasonable meaning to all parts of an agreement 
is preferred to one leaving a portion of the agreement useless, inexplicable, inoperative, 
34 

void, insignificant, meaningless, or superfluous, or achieves a weird and whimsical 
result. Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991) (citing 
Arizona v. United States, 575 F.2d 855, 863 (Ct. Cl. 1978)). Ifwe do not ignore the 
parties' language that "this release does not extend to any claims related to the Contract 
that may arise in the future," but construe that language as excepting from the parties' 
release CDLS contract claims that "arise in the future," we give a reasonable meaning 
to all parts of the parties' agreement in accordance with the principles of contract 
construction. See id. 
It is the burden of the parties entering into a settlement agreement to expressly 
reserve in the agreement any rights that they wish to maintain beyond the date of the 
settlement agreement. If the parties intend to leave things open and unsettled, their intent 
to do so must be made manifest. Augustine Med, 194 F.3d at 1372. We believe the 
parties' language in their Settlement Agreement makes manifest their intent to create only 
a "partial" release of Contract claims, and to expressly reserve in the Settlement 
Agreement that the release of claims does not apply to "[COLS] contract claims" that 
"arise in the future," i.e., their wish to maintain beyond the date of their Settlement 
Agreement their ability to pursue CDLS contract claims that "arise in the future." 
Compare id., with Tri-0, 28 Fed. Cl. at 470-71 (there is nothing in language of release to 
support a holding the parties contemplated a discharge of any subsequent claims); 
Advanced Eng'g & Planning Corp., ASBCA Nos. 53366, 54044, 03-1 BCA ,r 32,157 
(releases incorporated as part of bilateral modification not "general" releases). 
Cubic contends further in its summary judgment briefs that, even if the parties' 
release of claims is not a general release, the claim at issue in this appeal is barred by 
the Settlement Agreement release because it arose prior to the parties' execution of 
their Settlement Agreement, rather than after execution. Cubic states that SP AW AR 
knew or should have known it had a basis "to challenge Cubic' s assertion of Limited 
Rights in CDLS technical data" when Cubic submitted its CDLS assertions table in 
2002 asserting Limited Rights in data due to development of data with mixed funding. 
(App. mot. at 7, 8; app. reply at 7, 9) According to Cubic, because the stated basis of 
the rights asserted in its CDLS assertions table "is inconsistent-on its face-with the 
standard allocation of rights established by DFARS 252.227-7103," the "government 
possessed all the information necessary to assert its claim" when Cubic submitted the 
CDLS assertions table in 2002 (app. reply at 8). 
Cubic, however, once again founds its arguments upon a false premise. This 
appeal is not to resolve a "government" claim. As discussed above, the claim that is 
before us is not a SPA WAR claim. Instead, pursuant to statute, 10 U.S.C. § 2321, 
regulations and contract clauses, DFARS 252.227-7037, this appeal constitutes a 
''validation" claim by Cubic pursuant to a process statutorily created by Congress and 
detailed in regulations and contract clauses by DoD to allow a contractor to validate its 
CDRL assertions of restrictions on government use and release of technical data and 
software. 
35 

For several decades, contractors furnishing technical data and software to the 
government complained that the government could remove restrictive use markings 
they placed upon their technical data and software without due process of law or any 
effective legal remedy available to a contractor to prevent such government action. 
E.g., Nash & Rawicz, Intellectual Property in Government Contracts at 468; Int'! 
Eng'g Co. v. Richardson, 367 F. Supp. 640, 652-54 (D.D.C. 1973); Int'! Eng'g Co., 
Div. of A-T-0, Inc. v. Richardson, 361 F. Supp. 818, 823-25 (D.D.C. 1973) (existing 
procedure "seriously lacking in adequate standards" for striking a restrictive legend, 
furnishing adequate notice of specific objections by a CO, and allowing contractor 
opportunity to present evidence and to cross-examine adverse witness), rev'd on other 
grounds, 512 F.2d 573 (D.C. Cir. 1975), cert. denied, 423 U.S. 1048 (1976). As the 
D.C. Circuit Court of Appeals explained in Aktiebolaget Bo/ors v. United States, 
194 F.2d 145 (D.C. Cir. 1951): 
The owner of an unpatented trade secret has a 
property right in it as long as he does not disclose it. His 
right to the exclusive use of it depends upon the 
continuance of secrecy. Any person who obtains the secret 
from him by ... unlawful means violates his property right 
and commits a tort .... 
... [O]ne who has lawfully acquired a trade secret 
may use it in any manner without liability unless he 
acquires it subject to a contractual limitation or restriction 
as to its use. In that event a licensee who uses the secret for 
purposes beyond the scope of the license granted by the 
owner is liable for breach of contract, but he commits no 
tort, because the only right of the owner which he thereby 
invades is one created by the agreement of disclosure. The 
owner could not maintain a suit against him for damages 
arising from unlicensed use without pleading and proving 
the contract. This being true, the gist of the owner's action 
is the breach of the licensing agreement. 
Established precedent for nearly a third of a century, therefore, held that the only remedy 
available to a contractor contending the government was disclosing or had disclosed 
technical data furnished the government with restrictions upon disclosure and use was a suit 
for breach of contract, i.e., receipt of money damages. Int'! Eng'g, 512 F.2d 573, cert. 
denied, 423 U.S. 1048 (1976); Williams Int'! Corp. v. United States, 7 Cl. Ct. 726, 730-31 
(1985); Baldwin-Lima Hamilton Corp. 50 Comp. Gen. 271 (13 Oct. 1970) (Federal Tort 
Claims Act exempts claims arising out of interference with contract rights; if licensee's use 
exceeds that permitted by license, licensor's remedy lies in contract); Farmakides, Technical 
Data in Government Contracts, 8 Wm. & Mary L. Rev. at 575. Many contractors did not 
36 

consider money damages for contract breach to be an adequate legal remedy because they 
desired to preclude the public release of their trade secret or technical data by the 
government to avoid significant future economic harm to their business. The U.S. courts of 
appeals however held availability of a legal remedy under the Tucker Act, 28 U.S.C. 
§ 1491, for contract breach precluded contractors from maintaining an action against the 
government in district court under the Administrative Procedure Act (APA), 5 U.S.C. 
§§ 701-706, or another legal provision. Int'! Eng'g, 512 F.2d at 577-80; Aktiebolaget, 194 
F.2d at 148-50. In 1982, relying upon a recent Supreme Court decision holding a party 
seeking to bar an agency's disclosure of information it had supplied that agency has no 
cause of action in a district court under the Freedom of Information Act (FOIA), 5 U.S.C. 
§ 552; Chrysler Corp. v. Brown, 441 U.S. 281,294 (1979), or the Trade Secrets Act, 
18 U.S.C. § 1905, Chrysler, 441 U.S. at 316-17, but may seek review of the agency's action 
in district court and potentially obtain an injunction against that action pursuant to the AP A, 
Chrysler, 441 U.S. at 317, the D.C. Circuit held for the first time in Megapulse, 672 F.2d 
959, that a contractor could maintain an action pursuant to the APA and Trade Secrets Act 
for an injunction against an agency barring release of the contractor's data because 
monetary relief based on breach of contract was not an adequate remedy under the facts of 
the appeal. While recognizing an action against the United States "which is at its essence a 
contract claim" lies within the Tucker Act and "a district court has no power to grant 
injunctive relief in such a case," 672 F.2d at 967, the D.C. Circuit further determined that 
the action before it by a government contractor did not present a "disguised contract action" 
cognizable only elsewhere. Id. at 968. 
Less than two years after the D.C. Circuit's decision in Megapulse, Congress enacted 
legislation which expressly provided contractors furnishing technical data to government 
agencies with a statutory and regulatory process providing them with due process prior to a 
CO removing one of their legends restricting use of data furnished. 10 U.S.C. § 2321; 
41 U.S.C. § 253d; Anderson, Comparative Analysis of Intellectual Property Issues, 33 Pub. 
Cont. L.J. at 47. By statute, Congress specified that contracts for supplies or services identify 
in advance of delivery to the maximum extent practicable technical data which is to be 
delivered with restrictions on the right of the United States to use such data. 10 U.S.C. 
§ 2320(b)(5). To satisfy this statutory mandate (and related regulatory requirements), a 
contractor lists on a CDRL all noncommercial technical data and computer software that the 
contract names as unlimited rights deliverables that the contractor intends to deliver with less 
than unlimited rights, specifically disclosing the asserted rights category for each data item 
and the basis for its assertions. DFARS 252.227-7013(e)(2), (3); 252.227-7014(e)(2), (3); 
252.227-701 ?(b), (d). Pursuant to the statutory and regulatory framework, the CDRL 
becomes part of the parties' contract (DFARS 227.7103-10(a)(3); 227.7203-10(a)(3); 
252.227-7013(e)(2); 252.227-7014(e)(2); 252.227-7017(±)), the contractor must mark 
noncommercial technical data or software it delivers with an authorized marking in accord 
with its CDRL assertions (DFARS 227.7103-lO(b)(l), 227.7203-lO(b)(l)), and the contractor 
must maintain records sufficient to justify the validity of its CDRL assertions and markings 
that impose restrictions on the government's right to use, duplicate or disclose technical data 
delivered or required to be delivered. 10 U.S.C. § 232l(b); DFARS 252.227-7037(c). 
37 

Assertions set forth on a CDRL are not binding on the government. They are simply the 
unilateral claim of a contractor regarding allocation of rights for noncommercial technical 
data or software. See DFARS 227.7103-10(a)(4); 227.7203-10(a)(4); 227.7103-B(a); 
227.7203-B(a); 252.227-7013(e)(4); 252.227-7014(e)(4). They are not binding on DoD, 
which is free to issue a challenge to the assertions even after it has made final contract 
payment. 10 U.S.C. § 2321(c)(2)(A), (d); DFARS 227.7103-10(a)(4); 227.7103-B(a), (d)(4), 
(8) ( only a CO' s final decision or actions of the ASBCA or court of competent jurisdiction 
sustaining validity of asserted restriction constitutes validation); 227.7203-10(a)(4); 
227.7203-6(±); 227.7203-B(a), (d)(2), (e)(2); 252.227-7013(e)(4); 252.227-7014(e)(4); 
Under Secretary of Defense, Intellectual Property at 2-5 thru 2-6. 
Pursuant to the administrative process preceding a validation challenge, a CO may 
request a contractor or subcontractor informally explain the basis for its asserted 
restrictions, as occurred between the parties here. If the CO is not satisfied with the 
explanation received, as occurred here, the CO may request additional information be 
supplied, as also occurred here and appears to have resulted in the parties' July 2012 
meeting at Cubic's facility. If the CO then makes a determination that (1) reasonable 
grounds exist to question the contractor's rights assertion and (2) continued adherence to 
the asserted restriction could make it impracticable to competitively procure the item, the 
CO may issue to the contractor a written "challenge" regarding the rights assertion. 
10 U.S.C. § 232l(b)(2)(A); DFARS 227.7103-B(c)(l), (d)(2), (4); 252.227-7037(d)(l), 
(2), (e); 252.227-7019(d)(l), (2), (3); Nash & Rawicz, Intellectual Property in 
Government Contracts at 469. 
Only if this standard is met is the CO free to issue a written statement challenging 
the contractor's assertion setting forth the CO's specific grounds for questioning the use 
assertion(s) and seeking within 60 days production by the contractor to the CO of records 
sufficient to justify the validity of its restrictive marking(s). 10 U.S.C. § 2321(b), (d)(3); 
DFARS 227.7103-1 l(b), (d)(4); 252.2277037(c), (e)(l); 252.227-7019(b). A contractor's 
production of records seeking to justify the validity of the restrictive marking(s) is, by law, 
considered to be a "contractor" claim under the CDA. DFARS 252.227-7037(e)(iv)(3); 
10 U.S.C. § 2321(b), (h). The CO will then issue a final decision on the contractor's 
claim. 10 U.S.C. § 2321(g)(2); DFARS 252.227-7037(g). 
Where a contractor, as here, fails to respond to a challenge, i.e., does not produce 
written justification to the CO for its asserted use restriction(s), Congress directs "the [CO] 
shall issue a [final] decision pertaining to the validity of the asserted restriction," despite 
the contractor's lack of response. 10 U.S.C. § 2321(g)(l); DFARS 252.227-7019(t)(5); 
252.227-7037(±); Nash & Rawicz, Intellectual Property in Government Contracts at 1376. 
Thus, a contractor cannot prevent determination of the validity of its asserted use 
restriction(s) by failing to follow or adhere to the procedures set forth by Congress and 
DoD for such a determination. 
38 

The issuance of a final CO decision upon the validity of the asserted use 
restriction(s) allows a contractor to immediately obtain review of the CO final decision by 
this Board or the U.S. Court of Federal Claims. DFARS 252.227-7019(g)((i), (ii); 
252.227-7037(g)(2)(iii), (iv); see 10 U.S.C. § 2321 (h). Some scholars have described the 
resulting proceedings before this Board and the Court of Federal Claims as an "injunctive 
type proceeding." Nash & Rawicz, Intellectual Property in Government Contracts at 1374. 
In accordance with statute, the contractor has the burden of proof on appeal 
(10 U.S.C. § 232l(b); DFARS 252.227-7019(b), (t)(iii); 252.227-7037(b)(2)(ii), (c), (e)(ii), 
(g)(i)), the standard of review is de novo (41 U.S.C. § 7104(b)(4)), and any determination 
by the board or court that is adverse to the contractor can be appealed to the U.S. Court of 
Appeals for the Federal Circuit. Until any appeal is concluded, DoD must leave restrictive 
markings intact and act in accordance with the restriction. If upon final disposition, the 
CO's challenge to the contractor's use or release restriction is not sustained, "the United 
States shall continue to be bound by the restriction." 10 U.S.C. § 2321(i)(2)(A); Sharp, 
Layman's Guide to Intellectual Property, 33 Pub. Cont. L.J. at 109; Nash & Rawicz, 
Intellectual Property in Government Contracts at 469- 70; Chester D. Taylor & David W. 
Burgett, Government Rights in Data and Software, 88-3 Briefing Papers 22 (Feb. 1988). 
As noted above, some scholars have described the resulting proceedings before 
us as an "injunctive type proceeding." Nash & Rawicz, Intellectual Property in 
Government Contracts at 1374. At this juncture, we need not characterize the nature of 
the proceedings Congress created before us, but note that our ultimate determination in 
such appeals - determination of the validity of a contractor's asserted use or release 
restriction(s)- will provide Cubic with (1) the due process sought by contractors before 
a government agency removes, obliterates or ignores a restrictive rights legend on data 
furnished it pursuant to a contract and (2) an adequate legal remedy, i.e., preclusion of 
an agency's removal, obliteration or disregard of a contractor's asserted use or release 
restriction ifwe determine the restriction to be justified. 10 U.S.C. § 232l(i)(2)(A) 
(government shall continue to be bound by restriction); DF ARS 252.227-7019 (h)(2)(i) 
(same); 252.227-7037(h)(2)(i) (same); Nash & Rawicz, Intellectual Property in 
Government Contracts at 583 (counterpart FAR clause attempts to answer due process 
issues raised in Int'! Eng'g Co., 367 F. Supp. at 653-54). 
In sum, Congress and DoD have created a very specific, detailed process for 
validating a contractor's use or release restrictions. This process discourages COs from 
pursuing the validation of the restrictions prior to contract award and essentially 
encourages CO's to accept such restrictions during performance of a contract because a 
CO is not to issue a validation challenge until the CO can make two specific 
determinations, one of which concerns future re-procurement of the items procured. 
The process created by DoD and Congress encourages a CO to make informal inquiries 
of contractors if the CO has questions concerning a contractor's justification of a use or 
release restriction in an attempt to resolve such issues informally and inexpensively, 
and only allows a CO to issue a "written challenge" commencing a formal "validation" 
39 

of a use or release restriction after a CO can determine (1) reasonable grounds exist to 
question the contractor's rights assertion and (2) continued adherence to the asserted 
restriction could make it impracticable to competitively procure the item. If and when 
the CO is able to make these determinations, the CO can issue a written validation 
challenge to a contractor seeking production by the contractor within 60 days of 
records sufficient to justify the validity of its restrictive marking(s). By statute, 
Congress has specified that the contractor's response to the CO's challenge producing 
records intended to justify the validity of its restrictive marking(s) is to be treated as a 
"contractor" claim under the CDA and a CO is to issue a final decision on the validity 
of the restrictive marking(s). Where, as here, if the contractor fails to produce records 
to justify the validity of its restrictive marking( s ), Congress has further specified that 
the CO is to proceed to issue a final decision that the marking(s) are not valid, thereby 
allowing a contractor to obtain review of the validity of the marking(s) de novo by 
either this Board or the Court of Federal Claims. 
In asking us to hold that the action regarding validation of use or release 
restrictions before us arose in 2002 when Cubic submitted its table of restrictive marking 
(CDRL) assertions to SPA WAR and that table was appended to the parties' contract, 
Cubic essentially asks us to ignore the very specific, detailed statutory and regulatory 
framework set forth by Congress and DoD for the resolution of validation of use or 
release restrictions. As set forth above, Congress has determined that a contractor's 
response to a CO' s challenge justifying the validity of its restrictive marking( s) is to be 
treated as a contractor "claim" under the CDA. A contractor cannot submit to a CO a 
response deemed by Congress as a "claim" or fail to submit a response to the CO until a 
CO issues a written validation challenge to the contractor with respect to the restrictive 
markings, and the CO cannot issue such a challenge to a contractor until the CO is able to 
determine (1) reasonable grounds exist to question the contractor's rights assertion(s) and 
(2) the government's continued adherence to the contractor's asserted restriction(s) may 
make it impracticable for the government to competitively procure the item. 
We recognize, as Cubic asserts, that FAR defines "accrual" of a contract claim as 
"the date when all events, that fix the alleged liability of either the Government or the 
contractor and permit assertion of the claim, were known or should have been known." 
FAR 33.201. As the Court of Appeals explained in Kellogg Brown & Root Servs., Inc. v. 
Murphy, 823 F.3d 622, 626 (Fed. Cir. 2016), however, our "[p]recedent elaborates that 
whether and when a CDA claim accrued is determined in accordance with the FAR, the 
conditions of the contract, and the facts of the particular case." Fixing the date of accrual 
of a claim requires first that there is a "claim." Binding precedent illustrates that a claim 
does not arise for purpose of running a limitations period "if a claim cannot be filed 
because mandatory pre-claim procedures have not been completed." Id. (citing Crown 
Coat Front Co. v. United States, 386 U.S. 503, 510-12 (1967)) (pre-CDA case finding that 
the contractor's claim "first accrued ... upon the completion of the administrative 
proceedings contemplated and required by the provisions of the contract"); Bay Area 
Laundry & Dry Cleaning Pension Trust Fund v. Ferber Corp. of Calif., Inc., 522 
40 
r 

U.S. 192, 200-02 ( 1997) (rejecting as "inconsistent with basic limitations principles" the 
position that a claim can arise and the limitations period commence when the claimant's 
suit would be premature because required pre-suit procedures had not taken place). In this 
appeal, mandatory pre-claim procedures, i.e., CO issuance of a written validation 
challenge to Cubic' s asserted use and release restrictions and expiration of a period of at 
least 60 days for Cubic either to submit a response justifying its asserted use and release 
restrictions with documentation it was required by statute, regulation, and contract to have 
maintained to do so or Cubic to fail to submit such a response) did not occur until 2012, 
four years after the parties' execution of their 2008 release. Accordingly, the claim before 
us regarding validation of Cubic's use and release restrictions did not arise until after 
execution of the parties' release and comes within the expressly stated qualification or 
exception to that release for claims arising in the future. 
Cubic suggests that ifwe determine the validation claim arose after the parties' 
Settlement Agreement we are ignoring the CDA, which governs claim accrual (app. reply 
at 9-10). The CDA, however, does not define claim or claim accrual. See Rejlectone, 
Inc. v. Dalton, 60 F.3d 1572, 1575 (Fed. Cir. 1995) (en bane). Those terms are defined in 
the FAR (FAR 33.201, 52.233-1), which does not apply to DoD with respect to data 
rights issues. 10 U.S.C. § 2320(a)(l), (b)(3), (7). We note that the DFARS provisions, 
which are applicable to DoD with respect to data rights, set forth the administrative and 
contractual scheme regarding validation of contractor asserted restrictions created by 
Congress and DoD. According to Cubic, SPAW AR fails to cite any legal authority to 
support a conclusion by us here that a "specific statute" such as 10 U.S.C. § 2321 trumps 
the CDA, which Cubic states "confers the Board's jurisdiction" (app. reply at 9). We 
note it is a well-established principle of statutory interpretation that, a statute of specific 
intention takes precedence over a general statute, particularly if the specific statute was 
later enacted. Brown v. GSA, 425 U.S. 820, 834 (1976) (a precisely drawn statute 
pre-empts more general remedies). We do not, however, construe 10 U.S.C. § 2321 as 
"trumping" the CDA. With respect to validation of contractor restrictions, we believe our 
statutory interpretation reads both statutes together without conflict. See, e.g., Kellogg 
Brown & Root, 823 F.3d at 626. Cubic's asserted interpretation of the statutes, on the 
other hand, clearly conflicts with Congressional intent in enacting 10 U.S.C. § 2321. 
Congress expressly authorized a CO to issue a ''validation challenge" to a contractor 
within "six years" after the final contract payment. 10 U.S.C. § 232I(d)(2) (2011). This 
authorization clearly is inconsistent with Cubic's suggestion that validation claims accrue 
or arise when a contractor's CDRL or data list becomes a part of the contract awarded 
since many if not most validation challenges would thereby be barred by the CDA's 
six-year statute of limitations long before the Congressionally-authorized period for 
bringing such challenges expired. See, e.g., 41 U.S.C. § 7I03(a)(4)(A); Carl Vacketta & 
Oliver Holmes, Government Rights in Technical Data, Briefing Papers, 84-12 Fed. Pubs. 
7 (Dec. 1984) (not uncommon for government to contest contractor's classification of 
data five to ten years after original contract is complete). 
41 

We note that, with respect to government contracts, it is not unheard of to have 
claims arise after a contract has ended. See IO U.S.C. § 2321(d)(2)(B) (validation 
challenge may now occur within six years after final contract payment); Kellogg Brown & 
Root, 823 F.3d at 629 (claim for subcontractor's costs accrued on a date after all 
subcontractor activity ended); American Western Corp. v. United States, 730 F.2d 1486, 
1488 (Fed. Cir. 1984) (price reduction allowed after full performance of contract where 
contract set forth formula for determining amount of adjustment); Bar Ray Products, Inc. 
v. United States, 162 Ct. Cl. 836, 837-38 (1963) (latent defect not discoverable by 
ordinary diligence asserted after contract completion); World Wide Tankers, Inc., ASBCA 
No. 20903, 77-1 BCA ,r 12,302 (limitations do not begin to run until disputes procedures 
afforded by contract are exhausted); Baifield Industries, Div. of A-T-0, Inc., ASBCA 
No. 19025, 75-1 BCA ,r 11,245 at 53,526 (defective cost or pricing data determined 
pursuant to contract audit clause within three years after final payment). 
While Cubic further suggests that a CO's written validation challenge, by itself, is 
a government "claim" (app. mot. at 6-8), pursuant to statute, regulation, and contract, it 
is simply an administrative proceeding by a CO attempting to obtain from a contractor 
written documentation justifying the contractor's assertion of restrictions on use or 
release that a contractor is required to maintain by contract (DFARS 252.227-7037(c), 
(e); 252.227-7019(b)), regulation (DFARS 227.7103-I3(b)) and statute (10 U.S.C. 
§ 2321(b)). After receipt of the documentation a contractor submits, a CO may agree 
with the contractor's assertion of restrictions on use or release by the agency and dispose 
of the validation challenge in the contractor's favor. DFARS 252.227-7019(f)(iv)(4); 
252.227-7037(g)(l). We note the purpose of a validation challenge is not to examine 
whether a contractor "properly" completed its data rights assertion table appended to the 
contract, as Cubic appears to suggest (app. mot. at 7, 8; app. reply at 7, 9), but to 
determine if a proper "restriction" was asserted by Cubic with respect to specific data. 
The issue is whether Cubic was entitled to assert "limited rights" in the specific data, not 
whether Cubic erred in listing "mixed funding" upon its data rights assertion table with 
respect to items it asserted were subject to the "limited rights" restriction. It is 
conceivable Cubic may have erred in listing "mixed funding" on its assertions table 
because earlier regulations considered certain costs charged to indirect cost pools as 
government funding, thereby constituting "mixed funding," not realizing that Congress 
directed that such funding is now to be considered as funding at "private expense," as 
discussed above, and therefore be entitled to assert "limited rights" with respect to the 
data at issue. See Nash & Rawicz, Intellectual Property in Government Contracts at 
511; H.R. Rep. No. 99-1001 at 510-11 (1986 Conf. Rep.) 59 Fed. Reg. 31585, 31608; 
National Defense Authorization Act for FYs 1988 and 1989, § 808, 101 Stat. 1019, 
1128-29 (amounts spent for independent research and development and bid and proposal 
costs shall not be considered to be government funding for purposes of definition of 
developed at private expense). 
Because we conclude based on the plain language of the parties' 2008 release that 
claims arising in the future were expressly exempted from that release and the claim of 
42 

Cubic regarding validation of its use or release restrictions before us arose after 
execution of the parties' release, we need not address SP AW AR' s assertions that the 
right to challenge data rights assertions by a contractor is a statutory "right" given to the 
Secretary of Defense that cannot be waived by a CO. We therefore express no views on 
either SPAW AR's contention or Cubic's counterargument that it follows from a CO 
being empowered by the Secretary of Defense to implement a validation challenge that 
the CO is also empowered to release or waive the DoD Secretary's right to make such 
challenges. See generally Exec. Business Media v. DoD, 3 F.3d 759 (4th Cir. 1983) 
(Attorney General's plenary power did not include license to agree to settlement that 
violates civil laws governing agency); FN Manufacturing, Inc. v. United States, 42 Fed. 
Cl. 87, 93 (1998) (while CO may settle contract claims, CO may not "give away" data 
rights which are not at stake if, in doing so, it subverts goals of CICA); D&R Machine 
Co., ASBCA No. 50730, 98-1BCA129,462 at 146,236 (parties cannot by agreement 
override plain dictates of Congress); Earth Property Services, Inc., B-237742, 90-1 
Comp. Gen. 1273 (the existence of a settlement agreement does not permit agency to act 
in ways not otherwise permitted by applicable statutes and regulations). 
The standards set forth in FED. R. CIV. P. 56 guide us in resolving the motion for 
summary judgment in this appeal, which relies on the Rule 4 file. Dongbuk R& U 
Engineering Co., ASBCA No. 58300, 13 BCA 135,389 at 173,637; J. W. Creech, Inc., 
ASBCA Nos. 45317, 45454, 94-1BCA126,459 at 131,661; Board Rule 7(c)(2). We 
will grant a summary judgment motion only if pleadings, depositions, interrogatory 
answers, and admissions on file, together with any affidavits or other evidence, show 
that there is no genuine issue as to any material fact, and the moving party is entitled to 
judgment as a matter of law. Cubic, the party seeking summary judgment, has the 
burden of demonstrating both of those elements. Celotex Corp. v. Catrett, 477 U.S. 317, 
323 (1986); Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed. 
Cir. 1987); Comptech Corp., ASBCA No. 55526, 08-2 BCA 133,982 at 168,082. 
SP AW AR, who is the nonmoving party, is entitled to have all reasonable inferences 
drawn in its favor. Celotex, 477 U.S. at 322-24; Elekta Instrument S.A. v. 0. U.R. 
Scientific Int'!, Inc., 214 F.3d 1302, 1306 (Fed. Cir. 2000). 
Based upon ( 1) our interpretation of the language of the parties' settlement 
agreement and release, and (2) the contractual, regulatory and statutory provisions 
creating and governing procedures for validation of the restrictions asserted by Cubic 
on use or release, we conclude that the parties' agreement expressly exempted claims 
arising in the future and that the claim before us concerning validation of restrictions 
asserted by Cubic on use and release arose after execution of the parties agreement and 
release. Accordingly, Cubic is not entitled to judgment as a matter of law. 
43 

CONCLUSION 
For reasons stated above, we deny Cubic's motion for summary judgment. 
Dated: 8 May 2018 
I concur 
RICHARD SHACKLEFORD 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
TERRENCE S. HARTMAN 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I concur 
OWEN C. WILSON 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA No. 5 8519, Appeal of Cubic 
Defense Applications, Inc., rendered in conformance with the Board's Charter. 
Dated: 
44 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals 
I i