Page 250 - Automated Fingerprint Identification Systems (AFIS)

CONTRACTUAL ISSUES REGARDING THE PURCHASE OF AN AFIS 235

System. The government seeks the broadest promise possible, while the vendor
seeks to limit its promise (or at least the fiscal consequences of its promise). In
general, the indemnification clause provides that the vendor will cover the gov-
ernment’s liability or expenses due to claims of personal injury or property
damage arising from the contractual commodities or services or from the fault
or negligence of the vendor. The clause will include specific notification
requirements (such as immediate notification or notification within a certain
time period as a condition of indemnification) and identify the roles of the
parties with respect to the litigation.
In light of the government’s business needs to continue using the intellec-
tual property in the System, additional clauses may be needed in the contract.
An intellectual property indemnification clause protects the government from
claims based on allegations that the software or other System components
infringe a patent, copyright, trade secret, or other property rights. Such alle-
gations often seek to prevent further use by the government. Depending on
the nature of the AFIS application, continued use could be critical. In order to
mitigate this potential risk, the government should seek to contractually obli-
gate the vendor to secure the rights for continued use of the allegedly infring-
ing property or to provide acceptable replacements. In AFIS applications with
significant numbers of interfaces, consideration should also be given to pro-
tecting the government’s investment in the interfaces in the event that the
underlying intellectual property rights are challenged.
Identification of who owns intellectual property employed in the System may
be beneficial in certain circumstances. While not a step undertaken during the
RFP, it may be valuable during the contract negotiations stage. It may identify
possible problematic areas and will provide additional information to use when
developing the listing of materials to be included in an escrow or that must be
addressed outside the escrow (such as third party software that the vendor will
not be able to include in its escrow).

9.7.6.10 Termination Clauses
Statutory requirements, control agency requirements, and advice of legal
counsel will generally determine the contractual bases for terminating the con-
tract between the parties. In an AFIS acquisition, the government may also wish
to incorporate the ability to terminate a specific phase of the project (but not
the entire contract) or the entire project if acceptance testing cannot be met
within a defined period or number of tries.

9.7.6.11 Contractual Means for Keeping Issues in Front of the Vendor
Vendors often create and host user groups for their product lines. There are
benefits on both sides. User groups allow the vendor to obtain customer input