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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 thé 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 sufficient 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:

(i) 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 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. 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, and 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 enAtgaged to represent the contractor. tention is called to 22 Comp. Gen. 993 to the effect that cost-plus-a-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

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 Office 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) were 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, bearing 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, specifi'cally 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

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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]

General.

§ 811.1132 Purchases — (a) 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. By 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 contracts (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 a 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 procedure set forth in subparagraph (4) of this paragraph. Also, not all developmental contracts are exempt, even when

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