The Fear Series: The “David v. Goliath” Fight

Last week I asked what keeps small DoD/DoW contractors up at 2:00 AM.  

A small defense contractor lands a subcontract with a large prime. They've developed proprietary software at their own expense. The prime wants unlimited rights and wants access to modules that aren't even part of the contract scope. They were ready to hand it all over.

Not because they had to. Because they assumed the prime could demand it. Here's what I want them to know.

The prime does not automatically own what you build.

When a subcontractor develops technology using its own funds, independent of any contract requirement, it retains ownership. The prime gets a license to use it, not an ownership assignment.

DFARS 252.227-7013 and -7014 require primes to flow down data rights protections to subcontractors. That's your legal basis. But DFARS sets the floor, the subcontract controls the ceiling. Primes routinely layer in IP assignment clauses, background IP definitions, or proprietary data terms that erode the very protections DFARS was designed to preserve. If you sign without pushing back, the flowdown on paper means nothing in practice.

The flowdown under DFARS 252.227-7013(l) and 252.227-7014(l) ensures the sub has standing to assert the same categories of rights (Limited, Restricted, GPR) that a prime would. But the sub has to actually do three things: (1) negotiate the subcontract to ensure the DFARS clauses are flowed down without commercial overlays that gut them, (2) assert restrictions via -7017/-7019 before delivery, and (3) mark deliverables with the correct legends under -7013(f) and -7014(f). Miss any of those steps and the DFARS framework is just words on a page.

Don't let the ask outrun the requirement.

The prime asks for your full software suite. The contract calls for one module. You deliver everything to be cooperative and now you've expanded the IP license far beyond what the performance requirements demand.

Scope-match your deliverables to the actual SOW. Cross-reference every CDRL and line item against what the prime is asking to receive. If the ask exceeds the scope, that's a negotiation not a compliance obligation.

Precision protects you.

Your assertion table is your claim of ownership, made in advance, on the record. Tie it to specific line items and funding sources. Vague assertions get challenged. Sloppy markings get stripped.

Document what you developed independently before the subcontract starts not after the dispute begins.

The biggest threat to your IP isn't the prime. It's your own silence.

DFARS gives you the ammunition. The subcontract is where you win or lose the fight. The only way to know where you stand is to look at the funding source, read the flowdown, review the scope, and make a real assessment. Not a fear-based one.