FAR 52.227-9 - Refund of Royalties

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Prescribed in 27.202-5(c)
Effective Date:	1 April 1984
Clause or Provision:	Clause
Provision or Clause Number:	52.227-9 - Refund of Royalties
Principle Type And/Or Purpose of Contract:
Required:
Applicable:	Architect-Engineering; Dismantling, Demolition or Removal of Improvements; Fixed Price, Supply; Cost Reimbursement, Supply; Communication Services; Cost Reimbursement, Construction; Fixed Price, Construction; Cost Reimbursement, Service; Fixed Price, Service; Cost Reimbursement, R&D; Fixed Price, R&D; Indefinite Delivery; Transportation
Optional:	Utility Services; Simplified Acquisition Procedures (Excludes Micro-Purchase); Facilities; Leasing of Motor Vehicles; Time & Material/Labor Hour
Subject:	Patents, Licenses, Data Rights, and Royalties
ProcurementType:
Contract Threshold:
Prescription Overview:	Prescription (c) Insert the clause at 52.227-9, Refund of Royalties, in negotiated fixed-price solicitations and contracts when royalties may be paid under the contract. If a fixed-price incentive contract is contemplated, change “price” to “target cost and target profit” wherever it appears in the clause. The clause may be used in cost-reimbursement contracts where agency approval of royalties is necessary to protect the Government’s interests.
Clause Overview:	Clause (a) The contract price includes certain amounts for royalties payable by the Contractor or subcontractors or both, which amounts have been reported to the Contracting Officer. (b) The term “royalties” as used in this clause refers to any costs or charges in the nature of royalties, license fees, patent or license amortization costs, or the like, for the use of or for rights in patents and patent applications in connection with performing this contract or any subcontract hereunder. (c) The Contractor shall furnish to the Contracting Officer, before final payment under this contract, a statement of royalties paid or required to be paid in connection with performing this contract and subcontracts hereunder together with the reasons. (d) The Contractor will be compensated for royalties reported under paragraph (c) of this clause, only to the extent that such royalties were included in the contract price and are determined by the Contracting Officer to be properly chargeable to the Government and allocable to the contract. To the extent that any royalties that are included in the contract price are not in fact paid by the Contractor or are determined by the Contracting Officer not to be properly chargeable to the Government and allocable to the contract, the contract price shall be reduced. Repayment or credit to the Government shall be made as the Contracting Officer directs. (e) If, at any time within 3 years after final payment under this contract, the Contractor for any reason is relieved in whole or in part from the payment of the royalties included in the final contract price as adjusted pursuant to paragraph (d) of this clause, the Contractor shall promptly notify the Contracting Officer of that fact and shall reimburse the Government in a corresponding amount. (f) The substance of this clause, including this paragraph (f), shall be included in any subcontract in which the amount of royalties reported during negotiation of the subcontract exceeds $250.
Important Notes/Requirements:	Applicable to negotiated fixed-price solicitations and contracts when royalties may be paid or in cost-reimbursement contracts where agency approval of royalties is necessary to protect the Government's interests.
Subcontract Threshold:
Incorporated by Reference:	Yes
Uniform Contract Format:	I
Editor:	Marshall

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Personal notes.