Contract library: filed DoD agreements

What kind of agreement it is

Is it a FAR contract, and which rules come with it?

Other transactions and technology investment agreements are not procurement contracts, so the FAR and DFARS apply only where the agreement says so. The Joby agreement says this expressly and is also a SBIR Phase III award. The Perpetua agreement rests on 10 U.S.C. 4001 and Title III of the Defense Production Act.

For subscribers: 3 extracts side by side from Joby OT, Perpetua TIA, and what to check.

Termination and stop work

Can the government end it, and on what terms?

The government can end these agreements when it decides it is in its interest, on notice (60 days in the Joby agreement) and with a negotiated settlement for work done. Stop-work orders run for 90 days. The DoD offtake is different: it has events of default with long cure periods, and either side can terminate only after the default has run for 60 or 90 days.

For subscribers: 8 extracts side by side from Joby OT, Perpetua TIA, Elk Creek DIBC, MP offtake, and what to check.

Obligated funds and appropriations

Is the money actually there, and what if Congress does not provide it?

In the prototype and consortium agreements the government's liability is limited to the funds obligated so far. The Perpetua award caps spending before definitization at 75% of the not-to-exceed amount. The MP price floor says appropriated funds were not yet available, so DoD commits to seek them, certifies funding at the start of each fiscal year and states it may incur obligations in advance of appropriations.

For subscribers: 6 extracts side by side from Joby OT, Perpetua TIA, Elk Creek DIBC, MP price floor, and what to check.

How payment works

How and when is the company paid?

Cost-reimbursed awards pay against requests for reimbursement, with a final 1% held back until the final report is accepted. Consortium project awards pay fixed-price milestones or actual costs. The MP offtake pays the expected production cost each quarter plus a quarterly payment equal to a quarter of a threshold EBITDA amount of US$140m a year, adjusted for inflation at 2%.

For subscribers: 6 extracts side by side from Perpetua TIA, Elk Creek DIBC, MP offtake, and what to check.

Offtake, price floors and pricing promises

What does the government commit to buy, at what price, and what does it ask in return?

DoD agrees to buy all the magnets the new plant offers for ten years from commercial operation, and separately guarantees a ten-year price floor of US$110 per kilogram of NdPr. A DPA Title III award runs the other way: the company promises not to charge the government more than its other customers, and to pass on yield gains for five years.

For subscribers: 6 extracts side by side from MP offtake, MP price floor, Perpetua TIA, and what to check.

Property bought with government money

Who owns the equipment, and can it be charged to a lender?

Under the Perpetua award, title to property bought with federal funds vests in the government for the life of the agreement, and the company may not encumber it without approval. Even property the company buys with its own money and counts as cost share gives the government a financial interest.

For subscribers: 3 extracts side by side from Perpetua TIA, and what to check.

IP, data and march-in

What rights does the government take in the company's inventions and data?

The company keeps title to its inventions, but the government takes a paid-up licence on termination, approves assignments of US patent rights and holds march-in rights. Under the consortium agreement, a terminated project still gives the government its agreed data rights in completed or partly completed milestones.

For subscribers: 4 extracts side by side from Perpetua TIA, Elk Creek DIBC, and what to check.

Foreign transfers and foreign ownership

What happens if technology or ownership goes abroad?

Transfers of technology to foreign firms need 60 days' notice and government consent, and no transfer can happen until the government decides. An unapproved transfer means refunding the government's development funding and a government licence. Any change in foreign ownership, control or influence must be notified at once, and ownership notices sent to the SEC, FTC or DOJ go to the agreements officer at the same time.

For subscribers: 6 extracts side by side from Joby OT, Perpetua TIA, and what to check.

See the Deal clearance navigator: NSI Act, CFIUS, EU screening and FCC

Follow-on production

Can a prototype lead straight to a production award?

Both prototype agreements rely on 10 U.S.C. 4022, which allows a follow-on production contract or other transaction without a new competition once the prototype is successfully completed. Each agreement defines what successful completion means, and it can come before the whole project ends.

For subscribers: 3 extracts side by side from Joby OT, Elk Creek DIBC, and what to check.

Assignment, change of control and security

Can the agreement move with a sale, or be used as security for a loan?

The Joby agreement can pass on a merger, change of control, sale of substantially all assets or internal reorganisation. The consortium agreement needs consent to assign but expressly keeps the right to assign payments under the Assignment of Claims Act. The MP offtake needs DoD consent to assign, except to MP affiliates or as security for the plant's construction financing.

For subscribers: 4 extracts side by side from Joby OT, Elk Creek DIBC, MP offtake, and what to check.

Disputes, damages caps and governing law

Who decides a dispute, and how much can be claimed?

The Joby agreement sends disputes to a joint decision of the head of the contracting activity and the company's chief executive, and caps damages at the government funding disbursed. The Perpetua award goes to the agreements officer and then an appeal authority whose decision is final. The MP price floor is governed by US federal law, with Delaware law filling gaps.

For subscribers: 5 extracts side by side from Joby OT, Perpetua TIA, MP price floor, and what to check.