Intellectual Property Rights in Government Contracts

One of the many business concerns for a newly formed company or even for an existing company moving to the Maryland/Virginia area due to BRAC is the protection of intellectual property. Intellectual property is often a hidden or under exploited asset. Since 1980, entities doing business with the U.S. government can elect to retain title to the intellectual property that may be created during the performance of a contract with the government. While the government must typically be granted a license to use the intellectual property, the fact that the private entity can retain actual ownership is a powerful incentive to develop and exploit innovations.
In general, trademarks protect consumer expectations while patents, copyrights, and trade secrets protect inventors, authors, and entrepreneurs.

With regard to trademarks, typically, the government does not want to own the trademark, nor does it control the use of a trademark. A trademark is used to identify to the consumer the source of goods or services. In a government contract, appropriate use of a mark prevents faulty goods from being attributed to a legitimate contractor and avoids harm to the government recipient as well as to the reputation of the contractor.

With regard to patents, there are particular, mandatory requirements in the acquisition regulations to secure rights and title in new technology. As many companies struggle to identify, manage, and protect their intellectual property in a variety of technologies, it is important for the contractor to work with the Contracting Officer and their own artisans to identify and protect their intellectual property developed during the performance of the contract, and to ensure the rights and obligations under the contract are secured. If a contractor determines that a new invention is created during the contract, the contractor must disclose the invention within two months after the inventor disclosed the invention internally, and then the contractor must elect whether or not to retain title to the invention. If the contractor elects to retain title, they must file a patent application within one year of the election. Additionally, the contractor must file interim reports periodically during the performance of the contract. The specification of any U.S. patent application under the contract and the resulting patent must include a statement that the government has certain rights in the invention. The contractor must institute internal program to ensure employee compliance with the acquisition rules at the risk of loss of title to the invention.

- Jeffrey Maynard

The Role of SCIFs in BRAC Space Construction: Issues for Building Owners

One of the major challenges facing building owners and developers in response to BRAC is addressing the defense and intelligence agencies’ and contractors’ need for a room, group of rooms, or an entire building for the purpose of discussing, handling, processing and/or storing Sensitive Compartmented Information or SCI. SCI is classified information which is required to be handled within formal access control systems established by the Director of Central Intelligence. The facility created for SCI is called a SCIF, short for SCI Facility. The physical elements of a SCIF are designed in line with the directive of the Director of Central Intelligence to “prevent and detect visual, acoustical, technical, and physical access by unauthorized persons” to ensure that activities and conversation taking place therein are private. The construction requirements vary based on the purpose of the particular SCIF but generally involve attachment of metal shields in the perimeter walls, floors and ceilings of the space, which are constructed with reinforced concrete or steel-linings, so there is no unauthorized access; sound insulation to preclude inadvertent disclosure of conversations; single primary access door installed with automatic door closures; alarm features with short response force capabilities; protected grills or bars over all vents and ducts; and windows covered with opaque drapes so there is no visual evidence of activities taking place in the SCIF and no forced entry from outside thereof. The SCIF must be accredited by the Director of Central Intelligence through a formal certification process. Governmental agencies can share a SCIF using a co-utilization agreement. The construction standards for SCIFs vary depending on whether or not the SCIF is located in the United States and whether SCI is actually being stored in it. Efforts are being made to prepare for the significant demand for SCIFs in buildings being constructed to support the infusion of defense and intelligence agencies and their contractors relocating to the area as a result of BRAC. Community colleges, including Frederick, Harford and Anne Arundel, have begun offering training to persons in the various building trades in SCIF construction. There are numerous building contractors specializing in SCIF construction with some also offering assistance in obtaining accreditation.

Constructing SCIF space in buildings impacts many facets of the lease between the building owner and the government agency/contractor tenant, many of which place additional burdens on the landlord. In addition to the obvious increased upfront construction costs, the tenant of SCIF space will be required to impose limitations on landlord’s standard right of access to inspect and clean the premises, likely requiring that access be available only upon advance notice, at prescribed times, and only when accompanied by tenant representatives. Of even greater concern is how and who handles removal of the SCIF improvements and restoration of the space at the expiration of the term. Building owners should be aware that the presence of SCIF improvements may have an adverse impact on the ability of the landlord to lease in the future to tenants not needing SCIF space. It is, therefore, critical to negotiate for the tenant to remove the SCIF improvements or, in the alternative, include the costs of removal in the rent stream.

These are just a sample of the lease provisions impacted by SCIF space leases. As the demand for SCIF space increases in response to BRAC, building owners and government agency/contractor tenants will likely discover the need to negotiate other lease provisions to address the unique features involved in leases constructed with SCIF space.

- Tami P. Daniel

Bid Protests in the BRAC Era

NCI, Inc., an IT services firm out of Reston, Virginia, recently received an $83.7 million BRAC task order award to support the Defense Information Systems Agency (DISA)’s relocation to Fort Meade, Maryland, a move that by law must be completed before September 15, 2011. The task order NCI won involves critical support of the relocation move of DISA’s Command, Control, Communications, Computers, and Intelligence/Information Technology (or, in government contracting circles, C4I/IT) activities from Arlington, Virginia to Fort Meade. For those of you who are less familiar with DISA, it is a Combat Support Agency whose primary objective is to translate cutting edge information technology into U.S. competitive military advantage.

Needless to say, time is of the essence in BRAC relocation contracts generally and in particular, contracts involving the speedy and seamless relocation of military support programs such as DISA’s C4I/IT. Under its new task order, NCI was to start work immediately upon receipt of the task order award to meet BRAC timeline mandates.

And then one of NCI’s competitors filed a bid protest with the Government Accountability Office (GAO). Everything came to a halt.

A GAO bid protest is essentially an administrative lawsuit that challenges the legality of either (1) a solicitation prior to award of a contract, or (2) the contract award itself. If the protestor files its bid protest within certain time periods set forth in GAO’s bid protest regulations, a bid protest of either type stops the procurement process in its tracks, because the rules require an automatic stay of contract performance pending resolution of the protest (usually a 100 day process at GAO). Section § 3553 of Competition In Contracting Act (CICA) provides that “if the Federal agency awarding the contract receives notice of a protest in accordance with this section . . . the contracting officer shall immediately direct the contractor to cease performance under the contract. . . . .” 31 U.S.C. § 3553(d)(3)(A)(ii). The same automatic stay applies if the contract has yet to be awarded. In that case, the agency may not award a contract until the protest is resolved.

A contracting agency may be able to override the automatic stay during a GAO bid protest only if it makes a “written finding that . . . performance of the contract is in the best interests of the United States; or . . . urgent and compelling circumstances that significantly affect interests of the United States will not permit waiting for a decision of the Comptroller General concerning the protest.” Id. § 3553(3)(C)(i)(I) & (II). If the agency cannot demonstrate that an override of the automatic stay is warranted, everyone must wait until GAO renders a decision.

In the case of the bid protest against NCI’s task order award, the impact of an automatic stay on NCI’s deadline to relocate DISA’s C4I/IT operations became a moot point since the protester (who remains unidentified) withdrew its protest on April 7, 2010. That means NCI will be able to start contract performance immediately, albeit after a nearly seven week delay.

- Heather James

Sustainability Efforts at Aberdeen Proving Grounds

Last month, Whiteford, Taylor & Preston joined the Maryland Green Registry, a list of organizations that have green initiatives with some quantifiable results maintained by the Maryland Department of the Environment. While we’re proud of this accomplishment, we were not the most interesting new registrant for March 2010.

That honor lies with the U.S. Army Garrison, Aberdeen Proving Ground. Check out its registry profile here. There is some significant recycling being undertaken by Aberdeen Proving Ground – 67 tons of tires, 32 tons of antifreeze, an eighth of a ton of mercury. It makes the recycling paper bin next to the copier seem quite pedestrian, of course, and we’re much better off with these materials being recycled than sent to the landfill.

Most of the profile underlines the federal government’s increasing emphasis on sustainability goals up and down the supply chain. Its five LEED Silver-compliant buildings are just a small portion of the what the Army expects to have completed in the near future – indeed, all new Army building construction will comply with the requirements of the LEED Silver level for New Construction. Its energy reduction goals are in line with those mandated by President Obama in Executive Order 13514. That’s why those who do business with APG are making sure their products and services will be in line with the Army’s sustainability goals. The Army’s Sustainability website can be found here.

-- Will Pearce, LEED AP BD+C