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(3) The second and third "Whereas" clauses of $ 813.1329 should be used without substantial change. It is advisable to recite (as in the third "Whereas" clause) that licensor has requested the Secretary of War to forebear from giving notice under the Act, in order that there will be consideration for the licensor's promise.
(4) The fourth “Whereas" clause of $ 813.1329 should be omitted.
(5) In $ 813.1329, Art. 3 the appropriate articles would be those specified in subparagraphs (1) or (2) of paragraph (h).
(6) The provisions of $ 813.1329, Articles 5 and 7 should be omitted.
(7) Provision should be made at the foot of the contract for execution by licensor alone.
(j) Action required when royalties have been voluntarily adjusted. When royalties chargeable to the War Department have been voluntarily adjusted with the participation of any delegate, he or the chief of the technical service concerned shall promptly report the adjustment to the Director. Such report is required whether or not the United States is party to any contract in connection therewith, and whether or not the Director's approval is required for such contract. The report shall include:
(1) A memorandum of facts (in triplicate), containing so far as practicable and appropriate the information listed in $ 811.1112 (aa) and, in addition, a statement of:
(i) The nature extent of the adjustment.
(ii) Estimated benefits to the Government.
(iii) Methods proposed for supervision or control of the Government's interest.
(iv) Future action contemplated.
(2) Sufficient copies of the agreement for distribution by the Director to interested agencies (a total number equal to the number of licensors and licensees, plus three).
(3) Three copies of the withdrawal of notice (if a notice had previously been given) and three copies (one duly executed by the licensor) of the consent and release specified in subparagraph (3) of $ 811.1112 (i).
(4) If the adjustment is embodied in a contract executed on behalf of the Goyernment and requiring approval of the
Director, the contract shall be transmitted in form ready for signature by the Director accompanied by the recommendations of the delegate or technical service having the matter in hand.
(k) Copies to the Chief, Patents Division, Ofice of The Judge Advocate General. In the case only of an adjustment which is embodied in a contract executed on behalf of the Government and requiring approval of the Director, a copy of each document required in that case by paragraph (j) to be transmitted to the Director, shall be forwarded to the Chief, Patents Division, Office of The Judge Advocate General, concurrently with the transmittal of the originals thereof to the Director.
(1) Numbering and distribution. (1) It is unnecessary to number royalty adjustment agreements, notwithstanding the provisions of $ 803.309,
(2) The executed original of every royalty adjustment agreement (whether or not executed by the Government) will be forwarded to the Chief, Audit Division, Room 506, General Accounting Office, Washington 25, D. C., under the following conditions:
(i) If such agreement provides that the Government is to make or receive the payment of an amount determinable at the time of the execution of the contract (such as, for example, refund of royalties already accrued or received), the agreement will be forwarded immediately.
(ii) If such agreement provides that the Government is to make or receive the payment of money upon the happening of or in an amount which is contingent upon a future event (such as, for example, refund of royalties to accrue or to be received), the agreement will be forwarded immediately or upon the happening of any event which requires the payment or receipt of moneys under the agreement.
(3) If such an agreement contains any provision granting to the Government an interest (such as an assignment or license) in or under patents or applications for patents, the agreement is required by Executive Order No. 9424, February 18, 1944, to be recorded in the United States Patent Office. Such recording will be carried out in the manner provided in paragraph 4 of AR 25-10. An agreement providing for a waiver of royalties under existing private licenses, (c) Numbering and distribution. (See $ 811.1113 (1).) [Proc. Reg. 11, C 39, Aug. 4, 1944, 9 F.R. 9594, and C 40, Aug. 31, 1944, 9 F.R. 10956)
Subpart C-Litigation and Related
even for a limited time, is subject to the foregoing.
(4) If a royalty adjustment agreement contains provisions such as to require both that it be forwarded to the General Accounting Office (subparagraph (2) above) and that it be recorded in the Patent Office (subparagraph (3) above), and the War Department has in its possession no more than one executed original thereof, such original shall first be transmitted for recording in the Patent Office (in compliance with paragraph 4 of AR 25-10) with a request that it be returned, and upon return thereof said original shall then be forwarded to the General Accounting Office. Hereafter the representative of the War Department shall, if possible, secure an executed original and an executed duplicate original of all documents required to be forwarded under subparagraph (2) and recorded under subparagraph (3) above, and the executed duplicate original shall be used for complying with paragraph 4 of AR 25–10. [Proc. Reg. 11, C 39, Aug. 4, 1944, 9 F.R, 9592, and C40, Aug. 31, 1944, 9 F.R. 10955)
$ 811.1114 Agreements in settlement and compromise after an order is made and before suit against the United States has been instituted. (See $ 811.1112 (g).)
(a) Approval required. Every agreement in settlement and compromise of a claim against the United States accruing in consequence of the making of an order under the Act is subject to the approval of the Director,
(b) Submission for approval. (1) The contract in an appropriate number of copies each executed by all necessary parties and by a delegate on behalf of the United States, shall be transmitted to the Director ready for execution by him, accompanied by a report containing:
(i) A full statement of all relevant facts and circumstances, and
(ii) The recommendations of the chief or deputy chief of the originating technical service that the contract be approved.
(2) One copy of the proposed agreement and of the report accompanying the same shall be forwarded to the Chief, Patents Division, Office of The Judge Advocate General, concurrently with the transmittal of the originals thereof to the Director.
$ 811.1120 Procedure for handling litigation involving cost-plus-a-fixed-fee contractors-(a) General. It is of the utmost importance that The Judge Advocate General be promptly notified of the institution of all suits in which the interests of the United States are involved including all suits against costplus-a-fixed-fee contractors and subcontractors. This will make it possible to take steps to remove suits instituted in state courts to the federal courts and to take all other steps necessary to protect the interests of the Government. Likewise it is essential that the information furnished be full and complete and not fragmentary.
(b) Procedure. The following procedure is prescribed with respect to litigation involving cost-plus-a-fixed-fee contractors and subcontractors:
(1) Such contractors should be advised immediately upon receipt of process in any action filed against them to furnish a copy of all papers to the contracting officer or appropriate War Department representative. This will be in addition to any similar requirement of any outstanding insurance policy.
(2) Teletype, radio, or telegraphic notification of such suit should be sent immediately to The Judge Advocate General, Washington, D. C., by the War Department representative in charge of the project or activity out of which the suit arises, giving all pertinent facts concerning the suit. In the usual case, these facts will include the court in which the suit has been filed, the names of parties to the suit, the date of service of process, a statement of the alleged cause of action, the amount sued for, the date on which answer to the suit must be filed, a statement of the principal defense to the suit which the defendant may raise, and a statement as to whether the amount sued for is fully covered by insurance and if so, whether or not the insurance carrier will accept full responsibility for the defense of the suit.
(3) Copies in triplicate of all suit papers and a statement of available facts will be forwarded immediately to The Judge Advocate General, Washington, D. C. If a board of inquiry is convened to investigate, or acts on the case, copies of all reports of the board's proceedings and findings will be included in the papers transmitted. Since The Judge Advocate General, has the duty of maintaining all War Department legal liaison with the Department of Justice and other Government departments, the chief of the technical service concerned, upon request of The Judge Advocate General, will immediately transmit to his office any information in his possession that may be requested. Requests for Government representation will not be made to the Department of Justice by War Depa nt field representatives but will be made directly to The Judge Advocate General. Violations of this well-established War Department policy have caused confusion and prevented proper co-ordination in the handling of litigation with the Department of Justice.
(4) The agreement for representation to be signed by the cost-plus-a-fixed-fee contractor or other defendant, three copies of which will be forwarded to The Judge Advocate General, Washington, D. C.. will read as follows:
The undersigned hereby requests the Attorney General of the United States to designate counsel to defend on behalf of the undersigned the action entitled
It is further understood that by assuming the defense of said action, the obligations of the United States under United States Contract No.
are not altered or increased; it is further agreed that such representation will not be construed as a waiver or estoppel of any rights which any interested party may have under said contract.
(c) Procedure to determine legal position to be taken in suits based upon the Fair Labor Standards Act of 1938. (1) In order that any differences of opinion between the War or Navy Departments and the Department of Labor as to the legal position which should be taken by the Government in suits against costplus-a-fixed-fee contractors based upon the Fair Labor Standards Act may be resolved, the War Department, the Navy Department, the Department of Labor and the Department of Justice have entered into the following agreement as to the administrative procedures to be followed to determine the position to be taken by the Government in such suits:
MEMORANDUM OF AGREEMENT ON UNIFORM
ADMINISTRATIVE PROCEDURES 1. Purposes: The procedures herein outlined are provided in order to:
(a) Secure in the disposition of litigated claims settled and uniform application of the Fair Labor Standards Act to the types of work performed by cost-plus-a-fixed-fee contractors.
(b) Obtain either an effective and economical defense by the Department of Justice against claims under the Fair Labor Standards Act, or the quick payment of such claims, depending upon whether such claims are determined pursuant to these procedures to be valid or invalid; and
(c) Establish a method for handling claims which is fair and equitable in protection of the claimant, the United States, and the cost-plus-a-fixed-fee contractor.
2. Definitions: For purposes of this agreement, the term
(a) "Contracting Agency" means the War Department, or the Navy Department, as the case may be.
(b) "Cost-Plus-a-Fixed-Fee Contractor" means a contractor who has entered into a contract with a contracting agency, acting in its own behalf, or in behalf of the United States, pursuant to which the contracting agency, or the United States, is obligated to pay the labor costs of the work performed under the contract.
(c) "Claim" means a suit based upon the Fair Labor Standards Act for additional payments for work performed for a cost-plus-afixed-fee contractor; and the term "claimant" means a person by whom or on whose behalf such suit is instituted.
3. Prompt Investigation, Determination, and Payment of a Valid Claim: Claims will be immediately investigated by the contracting agency. If in the judgment of the contracting agency the claim should be paid, the United States Attorney will be promptly notified and he will effect settlement of the claim and disposition of the suit. If such is not the judgment of the contracting agency, the claim, together with the contracting agency's recommendation and report of the investigation, will be referred to the appropriate regional office of the Wage and Hour Division for such further and prompt investigation as may be necessary, and for determination. Contemporary or joint investigations will be held by both agencies when found feasible.
4. Review of Determination of the Regional Office of the Wage and Hour Division: Within ten days after notice of the determination of the regional office of the Wage and Hour Division, the contracting agency may, if dissatisfied with, and unwilling to settle on the basis of the determination of the regional office of the Wage and Hour Division, appeal to the Wage and Hour Administrator for his final determination of the claim. If part or the whole of the claim is found valid by the Administrator, the United States Attorney will effect settlement of the claim and dispo
sition of the suit accordingly, except that if the contracting agency should conclude that the determination of the Administrator is in its view so clearly unsound as to render assent thereto improper, such agency may elect not to be bound by such determination and to proceed as provided in Paragraph 5.
5. Participation of the Department of Justice in Discussions: At the instance of either contracting agency or of the Administrator, the Department of Justice will, if the case appears sufficiently important and the legal issues sufficiently doubtful, join in any discussion among the parties preceding the determination of the Administrator, and will informally accord to the parties the benefits of its views on the legal issues. It is understood that the Department of Justice is not intended to act as an appellate tribunal and that requests for its participation in discussions will be limited to the few important and doubtful cases. Each case in which a contracting agency has elected, pursuant to Paragraph 4, not to be bound by a determination of the Administrator shall be made the subject of discussion with the Department of Justice. Whenever any such case is the subject of discussion with the Department of Justice that Department may determine the Government's litigation position, If the Department of Justice makes such determination the action of all parties hereto with respect to the disposition of the particular case shall be in accord with the determination of the issues so made. In the event the Department of Justice declines in such cases to make such determination of the issues, the Department may decide not to provide further legal representation in any litigation of such case, in which event the costplus-a-fixed-fee contractor shall be represented by private counsel and neither the Administrator nor the contracting agency nor any of their representatives shall appear or participate in the litigation.
6. Suits on Claims Against Cost-Plus-aFixed-Fee Contractors To Be Handled by the Department of Justice: The Department of Justice will have its United States Attorneys appear for cost-plus-a-fixed-fee contractors in all suits on claims filed against them, and will seek extensions of time suficient to permit the foregoing procedures to operate. Subject to the Attorney General's usual discretion to avoid untenable positions in court, the conduct of such litigation will be in conformity with the administrative determinations made pursuant to such procedures.
7. Duration: The procedures provided in this agreement are recognized as experimental in nature, and any signatory hereto shall be free to withdraw from this agreement. In the absence of such withdrawal, the procedures shall endure until the purposes set forth in Paragraph 1 are accomplished.
(2) The Under Secretary of War by memorandum dated December 15, 1943, to the Commanding Generals of the
Army Air Forces and the Army Service Forces, with reference to the above agreement, directed that:
To carry out the purposes of the agreement the procedure set forth below will be followed:
(1) The Judge Advocate General will be notified, as provided in AR 410-5 and other applicable regulations, promptly upon receipt of notice that suit based upon the Fair Labor Standards Act has been filed against a War Department cost-plus-a-fixed-fee contractor. He will request the Attorney General to direct the United States District Attorney to appear in the suit on behalf of the contractor and to obtain the extension of time contemplated by Paragraph 5 of the agreement.
(ii) The Judge Advocate General will determine the position of the War Department in respect of such suits, to the same extent as in other cases referred to him under AR 410–5, and will further determine which cases should be appealed by the War Department to the Wage and Hour Administrator or the Attorney General, pursuant to the provisions of the attached agreement. He will also represent the War Department in all such appeals.
(3) In conformity with the above agreement and directive, upon notification of the institution of a suit based upon the Fair Labor Standards Act against a cost-plus-a-fixed-fee contractor as provided in paragraph (b) of this section, the Judge Advocate General will request the ttorney General to direct the United States District Attorney to appear in the suit on behalf of the contractor and to obtain the extension of time contemplated by paragraph 5 of the agreement. The technical service promptly will make or cause to be made such investigation as may be necessary to ascertain the precise nature of the work performed by the complaining employee during the period for which he seeks additional compensation, promptly will report such information and such other information as the Judge Advocate General may request to the Judge Advocate General with the technical service's recommendation as to the position to be taken by the War Department in respect of the suit. Such investigation as to the nature of the employee's employment during the period may be made in collaboration with an investigator of the Wage and Hour Divi
sion of the Department of Labor in any case in which the technical service deems this appropriate.
(4) The Judge Advocate General will determine which claims in litigation shall be referred to the Department of Labor for the further investigation and for determination as permitted by paragraphs 3 and 4 of the agreement and which claims shall be referred by the War Department to the Department of Justice as permitted by paragraph 5 of the agreement, and will represent the War Department in connection therewith.
(5) In those cases in which the Department of Justice determines the legal position to be taken by the Government and decides that the claim should be litigated, it will conduct the litigation in accordance with the course of action determined upon as provided in the agreement. Should the Department of Justice refuse to determine the legal position to be taken by the Government and should the Judge Advocate General decide that the claim should be litigated, he will so advise the technical service in order that private counsel may be engaged to represent the contractor. Attention is called to 22 Comp. Gen. 993 to the effect that cost-plus-&-fixed-fee contractors in proper cases may be reimbursed the reasonable and necessary costs, including attorneys' fees, incurred in the defense of such suits. (See also the Comptroller General's opinion to the Secretary of War of December 15, 1943 (B-38642) affirming such position).
(6) The Judge Advocate General will advise the technical services as to claims which it has been determined should be compromised rather than litigated. Attention is called to the Comptroller General's opinion to the Secretary of War of December 15, 1943 (B-38642) to the effect that the War Department properly may, upon proper administrative determination as therein indicated that the settlement in each instance was fully warranted as being in the best interest of the Government, reimburse contractors for payments to employees in settlement of claims for overtime asserted in section 7 of the Fair Labor Standards Act, in amounts less than the total amounts which would be required to be paid in the event adverse judgments were obtained, even if the consummation of the settlement necessitated adjustment of disputed questions as to the amounts of
overtime involved as well as questions pertaining to the application of the act.
$ 811.1121 Reports of criminal conduct in connection with War Department contracts. (a) There has been set up in the Criminal Division of the Department of Justice a special unit whose duty it is to take appropriate action as expeditiously as possible in all cases in which criminal conduct is shown to exist in connection with contracts entered into by the Government with business concerns in connection with the war program.
(b) The Under Secretary of War desires that a report be made to his office of any instances of criminal conduct in connection with War Department contracts. A report of such an instance should contain a full statement of the facts indicating criminal conduct. Such reports to the Under Secretary of War should be transmitted through channels to the Director, Purchases Division, Headquarters, Army Service Forces, for submission to the Office of the Under Secretary.
$ 811.1122 Joint action with Navy with respect to contingent fees. (a) The Director, Purchases Division, Headquarters, Army Service Forces, has been designated to coordinate with the appropriate representatives of the Navy on problems involving the subject of contingent fees and excessive compensation of sales representatives for obtaining Government prime contracts and subcontracts thereunder.
(b) The Director, Renegotiation Division, Headquarters, Army Service Forces, will be in charge of relations with the Navy in the matter of renegotiation of brokers and commission and selling agents under section 403 of the Sixth Supplemental National Defense Appropriation Act, 1942 as amended. Such brokers and agents, so far as subject to statutory renegotiation (See Public Law 149, 78th Congress) are assigned for that purpose to the Service and Sales Renegotiation Section, Procurement Legal Division, Office of the Under Secretary of the Navy with the exception of those engaged in the sale of textiles and foodstuffs which are assigned to the Price Adjustment Section of the Quartermaster General (See Joint Renegotiation Manual, pars. 133, 202.2, 203.4, 336). Information coming to the attention of War Department personnel indicating that commissions or other compensation