Federal Government Indemnification of Contractors

May any agency of the federal government enter into an indemnification agreement with a contractor or subcontractor that indemnifies the contractor for any liability or damages arising out of a claim that the work performed by the contractor for the governement infringed a copyright?

I am aware of 28 U.S.C. Sec. 1498, but that seems to merely say that the copyright owner has to sue the government, not that the government can affirmatively indemnify the offending contractor. I am also aware of the various FAR clauses that allow indemnification for "unusually hazardous or nuclear" risks, which doesn't apply here.

If the answer is YES, what authority are you relying on?

Thanks for your help!

Sunflower

While there are GAO decisions holding that agencies do not need any special authority to include indemnification provisions in contracts, I am not aware of a decision that specifically addresses copyright violations. In those decisions, the GAO held that in the absence of a statutory indemnification provision, agencies have to limit the indemnity to funds that are available and cannot providean open ended indemnification.

A quick skim through 52.227-xx clauses (I'm a four corners of the contract kind of person) indicated that the Government would require the contractor to indemnify the Government in the event of copyright infringement. That can be waived, but there was no immediately apparent indication that the vice could ever be versa.

Turning to FAR Part 27, the General Guidance at 27.102( e ) reads, "The Government requires that contractors obtain permission from copyright owners before including copyrighted works, owned by others, in data to be delivered to the Government."

Recommend a close reading of FAR Part 27 and its implementing clauses.

Generally, GAO and courts have ruled that ?open-ended? indemnification provisions in contracts violate 31 U.S.C. ? 1341. See e.g., Union Pacific Railroad Corp. v. United States, 52 Fed. Cl. 730 (2002); United States Park Police Indemnification Agreement, B-242146, 1991 US Comp. Gen. LEXIS 1070, Aug. 16, 1991 (stating that absent specific statutory authority, indemnification provisions which subject the government to indefinite or potentially unlimited liability violate the ADA); Project Stormfury, B-198206, 59 Comp. Gen. 369 (1980). To Howard Metzenbaum, B-174839.2, 63 Comp. Gen. 145 (1984); Assumption by Gov?t of Contractor Liability to Third Persons, B-201072, 62 Comp. Gen. 361 (1983); Reimbursement of the State of New York Under Support Contract, B-202518, Jan. 8, 1982, 82-2 CPD ? 2; cf. E.I. DuPont De Nemours v. United States, 365 F.3d 1367 (2004) (holding that the Contract Settlement Act of 1944 exempted certain contracts with indemnification provisions from operation of the Antideficiency Act).

Generally, GAO and courts have ruled that ?open-ended? indemnification provisions in contracts violate 31 U.S.C. ? 1341. See e.g., Union Pacific Railroad Corp. v. United States, 52 Fed. Cl. 730 (2002); United States Park Police Indemnification Agreement, B-242146, 1991 US Comp. Gen. LEXIS 1070, Aug. 16, 1991 (stating that absent specific statutory authority, indemnification provisions which subject the government to indefinite or potentially unlimited liability violate the ADA); Project Stormfury, B-198206, 59 Comp. Gen. 369 (1980). To Howard Metzenbaum, B-174839.2, 63 Comp. Gen. 145 (1984); Assumption by Gov?t of Contractor Liability to Third Persons, B-201072, 62 Comp. Gen. 361 (1983); Reimbursement of the State of New York Under Support Contract, B-202518, Jan. 8, 1982, 82-2 CPD ? 2; cf. E.I. DuPont De Nemours v. United States, 365 F.3d 1367 (2004) (holding that the Contract Settlement Act of 1944 exempted certain contracts with indemnification provisions from operation of the Antideficiency Act).

Thanks Charles!