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may have been paid to a broker or selling agent subject to statutory renegotiation will be reported to the Assignment and Statistics Branch, Renegotiation Division, Headquarters, Army Service Forces.

(c) The chief of each technical service shall designate an officer primarily charged with the duty of coordinating the activities of such service with those of the other technical services, in matters relating to contingent fees and excessive sales expenses of contractors. The name of the officer so designated shall be furnished to the Director, Purchases Division, Headquarters, Army Service Forces, by memorandum, giving the full name, title, position, mailing address, and telephone extension number of such representative.

Subpart D—Price and Rationing

Regulations CROSS REFERENCE: For tabulation of price and rationing regulations of the Office of Price Administration, see Appendix—Tabulation of Documents in Chapter XI of Title 32.

$ 811.1130 General-(a) Scope of this subpart. This subpart deals primarily with certain problems arising from or associated with the relation of the maximum price and rationing regulations issued by the Office of Price Administration (hereinafter sometimes referred to as OPA) to War Department purchases and sales. It discusses separately (1) price regulations in general, (2) problems primarily associated with purchases, (3) information pertinent to sales, and (4) matters relating to rationing. (For a further discussion as to OPA matters primarily relating to War Department sales, see $ 821.111 et seq.) The discussion is introductory and is not intended to be complete Complete details and the text of OPA regulations and orders may be found in the FEDERAL REGISTER, or may be procured from any OPA office. Should these sources fail, inquiries should be sent through the chief of the technical service concerned to the OPA Branch, Purchases Division, Headquarters, Army Service Forces, Washington 25, D. C.

(b) Function of OPA Branch. (1) Because of penalties imposed by the Emergency Price Control Act of 1942, as amended, upon contractors who violate price ceilings, contractors must proceed with caution in the acceptance of contracts. To expedite procurement and

sales, it is important that War Department personnel be familiar with the problems involved and able, whenever possible, to be of assistance or guidance to contractors. It is an important function of the OPA Branch to undertake the solution of specific problems.

(2) Whenever contact or negotiation is necessary between one of the services and the Office of Price Administration on any price regulation or rationing problem which involves a general policy or might affect more than one of the services, the negotiations will be conducted through the Chief, OPA Branch, Purchases Division. (Proc. Reg. 11, C 40, Aug. 31, 1944,9 F.R. 10956]

$ 811.1131 OPA price regulations in general-(a) General (1) The Ofice of Price Administration, pursuant to the Emergency Price Control Act of 1942, as amended, and appropriate' delegations of authority, establishes ceiling prices for certain sales of commodities and services. These ceilings are established either by (i) Price Schedules; (ii) Maximum Price Regulations; (iii) Temporary Maximum Price Regulations; (iv) the General Maximum Price Regulation; or (v). other directives. Certain exemptions from price control have been granted and methods for obtaining relief provided, as discussed more fully hereafter.

(2) Definition of commodity: By statutory definition, the term commodity, as to which a ceiling price may be established, includes, with certain exceptions set forth in the statute, commodities, articles, products, materials and services.

(b) Specific Price Regulations (Price Schedules and Maximum Price Regulations). The distinction between price schedules and maximum price regulations is historical only. Both are price regulations, essentially similar in nature, and are hereafter referred to without distinction as specific price regulations. They establish ceiling prices for the commodities or services specified therein.

(c) The General Maximum Price Regulation (GMPR). The General Maximum Price Regulation (hereafter referred to as GMPR) places a price ceiling on practically all commodities and services sold or rendered by manufacturers, wholesalers and retailers, if not covered by specific price regulations (see $$ 811.1131 (e), 811.1132 (f) for exemptions). In general, ceiling prices on items covered by this regulation are


based on the highest prices charged in March, 1942. Other formulae are used in the event the March 1942 method is inapplicable. Specific price regulations, as to the specific articles or services covered therein, take precedence over the GMPR, whether issued prior or subsequent to the GMPR.

(d) The service regulation: MPR 165. As above noted (paragraph (c)) all services (along with commodities) brought under control of the OPA by the GMPR. Effective August 19, 1942, Maximum Price Regulation 165 brought under specific control a long list of services, leaving those not specifically listed still covered by the GMPR, subject to exemptions (see $ 811.1132 (f)).

(e) Exemptions (1) General. OPA has granted exemption of certain purchases and sales from price control. In some cases, specific commodities and services have been exempted from all price control. In other cases, though in general the commodities and services are subject to price ceilings, some purchases and sales thereof, depending on the identity of the buyer or seller, or on other special considerations, have been exempted.

(2) How exemptions are effected. (i) In the case of commodities and services covered by the GMPR, exemptions are granted respectively by OPA Revised Supplementary Regulation No. 1 and OPA Supplementary Regulation No. 11.

(ii) In the case of commodities or services covered by specific price regulations, exemptions are granted by the terms of the regulation itself, either (a) by specific terms or (b) by incorporating in the regulation by reference terms of other directives.

(iii) In addition to the foregoing methods, exemptions may be granted in specific cases or otherwise by the terms of various OPA orders.

(iv) When determining whether or not an exemption exists, the language apparently granting the exemption must be carefully examined, beari in mind particularly that although certain transactions may be exempt from price control by the GMPR, they still may be subject to control by specific price regulations unless such regulations, or orders issued supplementary thereto, specifically exempt them.

(3) Particular exemptions of interest. Reference is made to certain exemptions

of primary interest in connection with purchases (see $ 811.1132 (b) to (f)) and sales (see § 811.1134 (b)).

(f) Procedure for obtaining relief-(1) General. The OPA has provided methods for obtaining relief with respect to price control, in proper cases, by way of elevation of ceiling prices, exemption, or otherwise.

(2) Obtaining higher maximum price. (i) OPA Procedural Regulation No. 6, effective July 3, 1942, as amended ($ $ 1300.401-1300.414 of Title 32), sets forth the procedure to be followed (except where other OPA regulations specifically otherwise provide) to obtain higher maximum prices for commodities or services under Government contracts or subcontracts. In substance, the regulation provides that (a) any seller who has entered into or proposes to enter into a Government contract, or a subcontract thereunder, who believes that his maximum price or prices impedes or threatens to impede the production, manufacture or distribution of a commodity or the supply of a service which is essential to the war program and which is or will be the subject of such contract or subcontract, may apply for adjustment of his maximum price or prices; (b) any government agency may appear as an interested party in the case of any such application; (c) upon the filing of an application for adjustment, or within five days prior thereto and until final disposition of the application, contracts may be entered into or proposals and bids submitted at the higher price or prices requested in the application, and deliveries may be made under such contracts, except that the seller may not receive and the buyer may not pay the amount by which the price exceeds the maximum price unless and until an order granting a higher price has been issued; (d) the seller shall include in any sale, contract to sell, or offer to sell at the price requested in the application the following: The maximum price for the commodity or service in question; a statement that the quoted price is subject to the approval of the Office of Price Administration; and a statement that an appropriate application has been filed, or will be filed within five days with the Office of Price Administration, and (e) applications involving War Department contracts exceeding $5,000,000 in value must be filed with the OPA in Washington, D. C. (Other applications, (with a few exceptions) may be filed either with the appropriate regional office of the OPA or with the OPA in Washington, D. C.)

(ii) Special procedure to obtain higher maximum prices is provided by amendments to MPR 136, (Machines and Parts and Machinery Services), effective April 12, 1943 and June 25, 1943, respectively, to which reference is made for complete details. This procedure is available to any person who has entered into a “war contract", defined as a contract for the sale of machine or part purchased for the ultimate use of the armed forces of the United States or for lend-lease purposes, or for use in the production or manufacture of any such commodity. Provision is also made for adjustments of the maximum prices of machinery services,

(3) Certain specific cases. For methods of obtaining relief in certain cases primarily relating to purchases (see § 811.1132 (c) to (e)).

(g) Dissemination of information by chiefs of technical services. Whenever the Office of Price Administration makes an industry-wide revision of ceiling prices on any item purchased by the War Department, or other revision in ceiling prices affecting products purchased by the War Department, the chief of the technical service involved will notify all contracting officers. [Proc. Reg. 11, C 40, Aug. 31, 1944, 9 F.R. 10957]

$ 811.1132 Purchases (a) General. This section deals with OPA matters primarily relating to purchases. (For a discussion as to sales see § 821.111 et seq.; $ 811.1134 (a) to (c). Interested personnel should, in addition, be familiar with the preceding paragraphs of this section.

(b) Exemptions of purchases by virtue of War Department-OPA Agreement, September 1942. Among the exemptions from price control heretofore granted by the OPA by methods indicated in § 811.1131 (e) are transactions involving certain so-called military items. agreement between the OPA and the War Department, military items exempt in September 1942 will remain exempt. However, under this agreement, OPA has reserved the right to resume control over exempt items if it develops that the War Department is unable to control prices effectively through its own procurement policies.

(c) Exemptions of secret contracts and subcontracts-(1) Exemption. OPA Supplementary Order No. 42, which applies to all specific price regulations and

to the GMPR, exempts from price control sales and deliveries of any commodity or service made under a contract or subcontract properly certified as secret to the OPA (see subparagraph (3) of this paragraph for proper certification).

(2) Period of exemption. The exemption applies only for such period as is necessary for the preservation of secrecy. The purchasing agency certifying the contract as secret must notify the contractor or subcontractor and the OPA whenever the contract or subcontract ceases to be secret. Upon receipt of such notification by the contractor or subcontractor, the exemption will end. (See subparagraph (3) of this paragraph for proper notification.)

(3) Procedure. The certification mentioned in subparagraph (1) of this paragraph, made by a representative of the purchasing agency, shall set forth the date of the secret contract or subcontract and its number or other designation. It shall not name the commodity or service covered thereby or the name or address of the contractor. The notice mentioned in subparagraph (2) of this paragraph shall identify the contract and state that it is no longer secret. Both the certificate and the notice shall be sent to: The Security Officer, Office Services Division, Office of Price Administration, Federal Office Building No. 1, Washington 25, D. C.

(d) Exemption of developmental con, tracts (1) Definition of developmental. A contract or subcontract is deemed by the terms of OPA Revised Supplementary Regulation No. 1, to be “developmental” if the manufacturer or supplier thereunder requires a period of time for the accumulation of sufficient production experience to permit him to make a fair estimate of his manufacturing costs, or if the purchaser thereunder requires period of time to select a product, or both.

(2) Exemption. OPA Revised Supplementary Regulation No. 1 (insofar as ceiling established by the GMPR are concerned) and many specific price regulations grant exemptions from price control in connection with developmental contracts and subcontracts properly certified as being “developmental”. The exemptions are not automatic, but are conditioned on complying with the pro, cedure set forth in subparagraph (4) of this paragraph. Also, not all developmental contracts are exempt, even when



such procedure is followed, so in each case the pertinent OPA regulations should be consulted.

(3) Period of exemption. Any exemption of a developmental contract or subcontract applies only so long as the period necessary for development continues. The OPA reserves the right, after consultation with the certifying Government agency, to determine when the developmental period shall expire (for services, MPR 165 fixes a maximum time limit of 90 days).

(4) Procedure. (i) To obtain exemption of a developmental contract or subcontract, where exemption is provided for (see subparagraph (2) of this paragraph) it is necessary that the contract or sub-contract be certified by the War Department as being developmental and that the contractor or subcontractor file a report within ten days after entering into the contract or subcontract. The certificate, with blank spaces filled in appropriately may be in the following form:

In accordance with the provisions of Maximum Price Regulation No.

Section (or the General Maximum Price Regulation) the following contract is hereby certified as developmental: Contract No. Date of Contract

Name and address of supplier.

Commodity covered The report, to be filed by the contractor or subcontractor must describe the product or service, the terms of the contract or subcontract (including pricing provisions) and the production plans of which the contract or subcontraet is a part, and must estimate the duration of the developmental work. Both the certificate and the contractor's report should be sent (the certificate in duplicate) to the Office of Price Administration, Washington 25, D. C. Attention: War Goods Price Coordinator.

(e) Exemption of emergency purchase-(1) Exemption. OPA Revised Supplementary Regulation No. 1 (insofar as ceilings established by the GMPR are concerned) and many specific price regulations grant exemptions from price control of "emergency purchases" made by the War Department. The exemptions are not automatic, but are conditioned on complying with the procedure set forth in subparagraph (3) of this paragraph. Also, not all emergency

purchases are exempt, even when such procedure is followed, so in each case, the pertinent OPA regulations should be consulted.

(2) Definition. To satisfy the definition of "emergency” for purposes of the exemption (i) the subject matter of the purchase must be needed at once, and (ii) at least a portion of the purchase must be capable of immediate delivery (or performance in the case of services) either from stock or after a short period of production. In any case, the emergency exemption is applicable only to the quantity immediately deliverable. The exemption will not apply to contracts or agreements for future delivery.

(3) Procedure. To obtain exemption of an emergency purchase, where exemption is provided for (see subpar. (1) of this paragraph), the purchasing officer must certify that it was imperative to secure the commodity or service immediately and that it was impossible to secure, or unfair to require, immediate delivery or performance at the maximum price which would otherwise be applicable. The certificate must set forth, in addition, (i) the name and address of the seller, (ii) the date of purchase, (iii) the date of delivery, (iv) a description of the commodity or service purchased, (v) the quantity purchased, (vi) the price, and (vii) a brief statement of the facts giving rise to the emergency situation which necessitated the purchase at a price higher than the applicable maximum price. The certificate must be filed with the OPA in Washington within five days (ten days in the case of services) after the purchase is made. It should be sent in duplicate to: Office of Price Administration, Washington 25, D. C., Attention: War Goods Price Coordinator. (No report is required in the case of services unless the total price thereof exceeds $500.00, and a similar exemption is extended in some specific price regulations to emergency purchases.)

(f) Other exemptions of primary interest in connection with purchases (1) General. Attention is called in this paragraph to certain exemptions from price control by the GMPR (but not necessarily from control by specific price regulations: see § 811.1131 (e) (2) (iv)) not specified in preceding sections, of primary interest in connection with purchases.

(2) Commodities. The following exemptions as to commodities are established by OPA Revised Supplementary Regulation No. 1, which provides in part that the GMPR shall not apply to sales or deliveries of the following commod. ities or in the following transactions:

(i) Aviation gasoline and components, synthetic rubber and components, toluene manufactured from petroleum and agricultural components used in the manufacture of furfural, under the conditions and to the extent stated in the regulation.

(ii) Sales and deliveries to the United States or its agencies of the following commodities:

(a) Aircraft, ammunition, armored trains, artillery, balloon barrage equipment, bombs, bomb sights, caissons, fire control equipment, gas masks, grenades, gun sights, military bridges, mines, mortars, projectiles, pyrotechnics, small arms, ships and boats, and torpedoes;

(6) Amphibians, armed vehicles, automobiles, tanks, trailers and trucks, when sold for military purposes;

(c) Component parts and subassemblies of any product excepted under (a) and (b), regardless of the person to whom sold or delivered, including all metallic and non-metallic component parts, adjuncts and accessories which have been machined or fabricated but not including raw or unfinished materials or any other materials which are in such form as to permit their use in the manufacture of products other than those excepted under (a) and (b);

(d) Military propellants and explosives;

(e) The following Army field and emergency rations and commodities: completed rations; C; D; K; Five-inOne; Mountain; Bail Cut; Combat; Jungle; Life Raft; Cornea Beef Hash (51/2 lb. can); Meat and Vegetable Hash (6 lb. 12 oz. can); Chili Con Carne, and Ten-in-One.

(iii) Dehydrated vegetables sold to the Armed Forces of the United States.

(iv) The list of exemptions in this paragraph is not complete. Interested personnel are referred to the text of OPA Revised Supplementary Regulation No. 1.

(3) Services. The exemptions mentioned in subparagraph (1) of this paragraph are established, as to services, by OPA Supplementary Regulation No. 11 (which also has been incorporated by ref

erence into the so-called Service Regulation MPR 165; see $ 811.1131 (d)). It provides, in part, that the GMPR shall not apply to compensation for the following services:

(i) The lubrication, painting, rental, storage, washing, operation, repair, conversion, modification, maintenance or other services of aircraft, including maintenance of or repairs to engines, parts, accessories, instruments and other equipment used in connection with aircraft.

(ii) The list of exemptions in subparagraph (3) of this paragraph is not com

lete. Interested per anel are referred to the texts of OPA Supplementary Regulation No. 11 and Maximum Price Regulation No. 165.

(g) Responsibility of contracting officers as to purchases. (1) Contracting officers, in executing contracts covering procurement of commodities or purchases unless otherwise specifically directed, are not required to verify the prices charged by any vendor or contractor against the maximum prices fixed in accordance with the Emergency Price Control Act of 1942, and in the absence of actual knowledge of violation of price limitations, they may assume that prices charged do not exceed maximum prices. Likewise, in connection with cost-plus-&fixed-fee contracts, contracting officers in approving items for reimbursement are not responsible for determining whether the costs of materials, supplies, tools, equipment or machinery exceed the maximum prices thus fixed. In the interests of economical purchasing, however, contracting officers are expected to exert reasonable effort to be familiar with the OPA regulations that apply to the commodities and services which they buy.

(2) Where a contracting officer is definitely informed that the price or proposed price of a commodity or service is in excess of the OPA maximum, he should proceed as follows:

(i) Try to negotiate a reduction in the price to conform to th: OPA standard;

(ii) If such a reduction proves impossible, endeavor to have the contractor file an application for an adjustment of the established maximum price with OPA under $$ 1300.401–1300.414 of Title 32 (see $ 811.1131 (f));

(iii) If necessary, and if immediate deliveries can be made, make emergency purchases for immediate delivery in ex

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