Defense Policy Letter a Wake-Up Call

Devon Hewitt

Last fall, Jacques Gansler, then the undersecretary of defense for acquisition, technology and logistics, issued an extraordinary policy letter regarding the Defense Department's acquisition of rights in intellectual property developed by commercial companies.

The letter stated the Defense Department must "now strive to create an environment" in which commercial industry is more willing to contract with the agency. It cited the Defense Department's need to have access to privately funded research and development in order to keep its technology current, and the fact that any intellectual property created from such private research and development is often the lifeblood of commercial technology companies.

The letter acknowledged that, while the Defense Department intellectual property contract provisions allow acquisition personnel to modify standard language to accommodate contractor concerns regarding their rights in intellectual property, few personnel actually take advantage of that flexibility. Accordingly, the letter called for development of a layman's guide for the acquisition work force to "make the complex field more approachable" for Defense acquisition personnel. On Jan. 8, the Defense Department published its second draft of the proposed layman's guide to intellectual property under the agency's contracts.

The policy letter and the rapid release of a draft acquisition guide on intellectual property again marks the Defense Department as a leader in federal procurement. The agency first demonstrated this leadership when it modified existing but anachronistic standard intellectual property contract clauses to more closely reflect federal laws and standard practice.

The revised regulations were finalized in 1995 and, in fact, do afford contractors and acquisition personnel considerable leeway in negotiating contract provisions that protect both the government's and a contractor's interests in intellectual property.

The impact of these regulations, however, has been diminished because government personnel are not well-versed in the provisions and, therefore, lack the confidence to stray from the standard language when appropriate.

Kudos to the Defense Department for accurately identifying this problem and quickly taking steps to solve it. The draft guide is well-written, comprehensive and unwavering in its commitment to protecting contractor's rights in intellectual property shared with the government.

The Defense Department, however, should not rest on these laurels. Gansler's policy letter suggests that in addition to publishing a layman's guide, the agency also may consider sponsoring training courses on the issue for acquisition personnel.

Training is imperative; while issuing a layman's guide to intellectual property encourages flexibility by acquisition personnel, specific training endorses it. Given the fact that old habits die hard, acquisition personnel need not only to be encouraged to negotiate with contractors, but also to be applauded for doing so.

Face-to-face guidance on creating a new environment for contractors will ensure that the message in the Defense Department's policy letter will actually be heard by those tasked with implementing the agency's new approach.

The Defense Department's strides in implementing a cooperative intellectual property policy for federal contractors again raises the question as to why the federal government hasn't adopted such a policy across the board.

At some point, it was suggested that the Defense Department had unique and specialized concerns (i.e., weapons and defense) that warranted implementation of an intellectual property policy different from that adopted by other federal agencies.

The layman's guide, however, in part reflects the governmentwide initiative of relying on commercial products and technologies in procurements, and taking advantage of the inherent cost efficiencies therein, rather than seeking custom and complex solutions.

This initiative, which was part of former Vice President Gore's National Performance Review, applies equally to civilian and Defense Department agencies. In fact, some of the largest information technology procurements completed recently concern modernization of systems at the Internal Revenue Service and the Federal Aviation Administration. Yet these agencies and their contractors are still operating under the civilian intellectual property clauses that have been in place since the 1980s.

Given the significant increase in IT's importance in both the defense and civilian sectors of the government over the past two decades, the reason for the inconsistency between the defense and civilian intellectual property clauses no longer exists. The Defense Department's most recent policy letter should be a wake-up call for civilian agencies and, hopefully, provoke a similar change in environment that would facilitate civilian agencies contracting for the best the commercial marketplace has to offer.

Devon Hewitt is a partner of government practices at ShawPittman in McLean, Va. She can be reached at [email protected]

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