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FAR and DFARS › FAR Part 52: Solicitation Provisions and Contract Clauses › Subpart 52.2

FAR 52.227-9 Refund of Royalties.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This clause governs how royalties included in the contract price are handled. The contractor must report royalties paid or owed before final payment, and the Government only pays for royalties that were priced in and are properly chargeable and allocable to the contract. If royalties are not actually paid or are not properly chargeable, the contract price is reduced and the contractor must repay or credit the Government.

Applies to: Contractors and subcontractors whose contracts include royalties in the contract price

What it requires

  • Furnish the Contracting Officer a statement of royalties paid or required to be paid in connection with performing the contract and subcontracts, with reasons, before final payment
  • Promptly notify the Contracting Officer and reimburse the Government in a corresponding amount if, within 3 years after final payment, the Contractor is relieved in whole or in part from paying royalties included in the final contract price
  • Include the substance of this clause, including paragraph (f), in any subcontract in which the amount of royalties reported during negotiation of the subcontract exceeds $250

Key terms: royalties · Contracting Officer · final payment · subcontract · contract price

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

As prescribed in 27.202-5(c), insert the following clause:

Refund of Royalties (APR 1984)

(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) above, 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) above, 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.

(End of clause)

Sections it refers to

  • 27.202-5 Solicitation provisions and contract clause.

Sections that refer to it

  • 27.202-4 Refund of royalties.
  • 27.202-5 Solicitation provisions and contract clause.

← 52.227-8 [Reserved] · 52.227-10 Filing of Patent Applications—Classified Subject Matter. →

Rule changes for FAR Part 52

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 52.227-9 Refund of Royalties · SpendQuery