What FAR/DFARS clauses must flow down in contractor NDAs?

Key flow-down requirements include FAR 52.204-21 (Basic Safeguarding), DFARS 252.204-7012 (Safeguarding CUI), DFARS 252.227-7013 (Technical Data Rights), and FAR 52.215-12 (Subcontractor Cost or Pricing Data). The specific clauses depend on contract type and subject matter.

Do government contractors need special NDA provisions for teaming arrangements?

Yes. Teaming agreement NDAs should address exclusive teaming periods, work share allocations, proposal information protection, organizational conflict of interest (OCI) considerations, and provisions for if the team loses or wins the contract.

What audit rights must be included in government contractor NDAs?

FAR requires contractors to provide access to records for government audits. NDAs must include carve-outs allowing disclosure to DCAA, DCMA, contracting officers, and inspector generals. Attempting to restrict these rights can void the NDA.

How long should government contractor NDAs remain in effect?

Duration depends on the information type. Technical data may require 5+ years or indefinite protection. Proposal information typically needs protection through source selection plus 3 years. Some obligations, like export control compliance, have no expiration.

Government Contractor NDA | Prime-Sub & Teaming Agreements

👥 Prime-Subcontractor Relationships

Prime Contractor Concerns

Protecting downward flow of information

Protecting government-furnished information (GFI)
Ensuring subcontractor FAR/DFARS compliance
Controlling technical data and proprietary methods
Preserving bid and proposal confidentiality
Maintaining OCI firewall requirements
Audit trail and records retention

Subcontractor Concerns

Protecting upward flow of information

Protecting proprietary manufacturing processes
Limiting use of technical data to the contract
Preserving competitive position with other primes
Protecting cost and pricing information
Retaining IP rights in independently developed items
Limiting flow-down to applicable clauses only

Key Provisions for Government Contractor NDAs

📄

FAR/DFARS Flow-Down Acknowledgment

Required

Explicitly incorporates applicable FAR and DFARS clauses by reference, ensuring both parties understand their regulatory obligations.

Receiving Party acknowledges that information disclosed hereunder may be subject to the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS), and agrees to comply with all applicable clauses as flowed down from the prime contract, including but not limited to FAR 52.204-21, DFARS 252.204-7012, and DFARS 252.227-7013.

🔍

Government Audit Rights Carve-Out

Required

Preserves the government's statutory and contractual right to audit contractor records without NDA interference.

Notwithstanding any provision herein, this Agreement shall not restrict disclosure to: (i) the Defense Contract Audit Agency (DCAA); (ii) the Defense Contract Management Agency (DCMA); (iii) any Contracting Officer or authorized representative; (iv) any Inspector General; or (v) any other government entity with statutory or contractual audit rights.

🔒

Organizational Conflict of Interest (OCI)

Recommended

Addresses OCI concerns by restricting use of competitively sensitive information and establishing information barriers.

Receiving Party agrees to establish appropriate organizational barriers to prevent Confidential Information from being accessed by personnel who are or may become involved in competitive procurements for similar requirements. Receiving Party shall notify Disclosing Party immediately upon becoming aware of any actual or potential organizational conflict of interest.

📊

Technical Data Rights Reservation

Required

Preserves technical data rights and clarifies that NDA disclosure does not transfer IP ownership or license rights.

Nothing herein shall be construed as granting any license or rights to patents, copyrights, trade secrets, or other intellectual property, except the limited right to review Confidential Information for the Purpose. All technical data rights, including Limited Rights and Restricted Rights as defined in DFARS 252.227-7013, are expressly reserved.

📦

Teaming/Joint Venture Provisions

Situational

For teaming arrangements, addresses exclusivity, work share, and information handling if the team does not win.

If the Parties enter into a teaming arrangement, each Party agrees to: (i) maintain exclusivity for [specify period] regarding the identified opportunity; (ii) protect all work share, pricing, and proposal information; and (iii) return or destroy all Confidential Information within [30] days if the team is not selected or the teaming arrangement terminates.

📜 Common FAR/DFARS Flow-Down Requirements

Clause	Subject	When Required
`FAR 52.204-21`	Basic Safeguarding of Covered Contractor Information	All contracts with federal contract information
`DFARS 252.204-7012`	Safeguarding Covered Defense Information (CUI)	DoD contracts with CUI
`DFARS 252.227-7013`	Rights in Technical Data - Noncommercial Items	Contracts involving technical data
`FAR 52.215-12`	Subcontractor Certified Cost or Pricing Data	Subcontracts exceeding thresholds
`DFARS 252.225-7048`	Export-Controlled Items	Contracts with export-controlled items
`FAR 52.203-13`	Contractor Code of Business Ethics	Contracts over $6M exceeding 120 days

🔍 Government Audit Rights

NDAs cannot restrict the government's statutory right to audit contractor records. Your NDA must include carve-outs for:

DCAA Audits

Cost accounting, labor, indirect rates, and incurred cost submissions

DCMA Reviews

Contract administration, quality assurance, and compliance oversight

Inspector General

Fraud investigations, whistleblower inquiries, and program reviews

GAO Investigations

Congressional oversight and program effectiveness reviews

Contracting Officer

Contract file reviews and performance assessments

Security Reviews

DCSA security compliance and clearance verifications

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⚖️ Consult a Government Contracts Attorney

Government contractor relationships involve complex FAR/DFARS requirements that vary by contract type, dollar value, and subject matter. While this template provides a foundation, you should consult with counsel experienced in federal procurement law before execution. Request a consultation.