Sec. 1451.1

SCOPE OF REGULATION 8

Arrangement of regulations.

1451.2 Cross references.

1451.33 "Internal Revenue Code."

AUTHORITY: Sections 1451.1 to 1451.32 issued under section 109, Pub. Law 9, 82d Cong.

SCOPE OF REGULATIONS

1451.1 Arrangement of regulations.-For purposes of the Code of Federal Regulations, the Renegotiation Board Regulations under the Renegotiation Act of 1951 have been assigned to Title 32, Chapter XIV, Subchapter B, comprising Parts 1450 to 1499, inclusive. The regulations in this subchapter are divided into parts, each one of which deals with a separate aspect of renegotiation; and each part is further subdivided into sections. The numbering of individual parts and sections is keyed to the numbering system of the Code of Federal Regulations. The numbering is not necessarily consecutive and is designed to permit subsequent insertion of additional parts and sections.

The first four digits of the number indicate the part number. The digit or digits following the decimal point indicate the number of the section within the part.

1451.2 Cross references.-Unless specifically stated otherwise, cross references in the regulations in this subchapter indicate parts or sections of the regulations in this subchapter.

1451.3 Citations.-The regulations in this subchapter shall be referred to as the Renegotiation Board Regulations, and any section may be cited as RBR followed by the section number. Thus, this section may be cited as RBR

1451.3.

1451.4 Applicability of regulations.-The applicability of the regulations in this subchapter shall be co-extensive with the applicability of Title I of the Renegotiation Act of 1951, and the regulations in this subchapter shall apply to all proceedings conducted under Title I of the act.

1451.5 Amendments and additions.-When amendments or additions to the regulations in this subchapter are adopted by the Board, such amendments or additions will become effective at once unless otherwise specified. The adoption of such amendments or additions will not affect the validity of any action theretofore taken in accordance with prior regulations.

DEFINITIONS

1451.11 "The 1951 act" and "the act."The terms "the 1951 act" and "the act" mean the Renegotiation Act of 1951, as amended or supplemented.

1451.12 "The 1948 act."-The term "the 1948 act" means the Renegotiation Act of 1948, as amended or supplemented.

1451.13 "Board."-The term "Board" means The Renegotiation Board created by section 107 (a) of the act.

1451.14 "Department".— (a) Definition applicable through December 31, 1956 removed to Appendix.

(b) After December 31, 1956, the term "Department" means the Department of Defense, the Department of the Army, the Department of the Navy, the Department of the Air Force,

the Maritime Administration, the Federal Maritime Board, the General Services Administration, the Atomic Energy Commission, and any other agency of the Government exercising functions having a direct and immediate connection with the national defense which is designated by the President during a national emergency proclaimed by the President, or declared by the Congress, after August 1, 1956; but any such designation shall cease to be in effect on the last day of the month during which such national emergency is terminated.

(c) The term "Department" also includes the National Aeronautics and Space Administration, with respect to contracts entered into by such Administration and to contracts transferred to such Administration from a Department under section 301 or section 302 of the National Aeronautics and Space Act of 1958, and to related subcontracts.

(d) The term "Department" also includes the Federal Aviation Agency, with respect to contracts entered into by such agency, and related subcontracts, to the extent of the amounts received or accrued by a contractor or subcontractor after June 30, 1964.

1451.15 "Secretary".-(a) Definition applicable through December 31, 1956 removed to Appendix.

(b) After December 31, 1956, the term "Secretary" means the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, the Secretary of Commerce (with respect to the Maritime Administration), the Federal Maritime Board, the Administrator of General Services, the Atomic Energy Commission, and the head of any other agency of the Government which the President shall designate as a Department pursuant to section 103 (a) of the act.

(c) The term "Secretary" also includes the Administrator of the National Aeronautics and Space Administration, with respect to contracts entered into by such Administration and to contracts transferred to such Administration from a Department under section 301 or section 302 of the National Aeronautics and Space Act of 1958, and to related subcontracts.

(d) The term "Secretary" also includes the Administrator of the Federal Aviation Agency, with respect to contracts entered into by such Agency, and related subcontracts, to the extent of the amounts received or accrued by a contractor or subcontractor after June 30, 1964.

1451.16 "Excessive profits."-The term "excessive profits" means the portion of the profits derived from contracts with the Departments and subcontracts which is determined in accordance with Title I of the act to be excessive.

1451.17 "Profits derived from contracts with the Departments and subcontracts."— The term "profits derived from contracts with the Departments and subcontracts" means the excess of the amount received or accrued under such contracts and subcontracts over the costs paid or incurred with respect thereto and determined to be allocable thereto.

1451.18 "Subcontract."-The term "subcontract" means:

(a) Any purchase order or agreement (including purchase orders or agreements antedating the related prime contract or higher tier subcontract) to perform all or any part of the work, or to make or furnish any materials, required for the performance of any other contract or subcontract, but such term does not include any purchase order or agreement to furnish office supplies;

(b) Any contract or arrangement covering the right to use any patented or secret method, formula, or device for the performance of a contract or subcontract; and

(c) Any contract or arrangement (other than a contract or arrangement between two contracting parties, one of whom is found by the Board to be a bona fide executive officer, partner, or full-time employee of the other contracting party) under which:

(1) Any amount payable is contingent upon the procurement of a contract or contracts with a Department or of a subcontract or subcontracts; or

(2) Any amount payable is determined with reference to the amount of a contract or contracts with a Department or of a subcontract or subcontracts; or

(3) Any part of the services performed or to be performed consists of the soliciting, attempting to procure, or procuring a contract or contracts with a Department or a subcontract or subcontracts.

1451.19 "Fiscal year."-The term "fiscal year" means the taxable year of the contractor or subcontractor under chapter 1 of the Internal Revenue Code, except that where any readjustment of interests occurs in a partnership as de

fined in section 761 (a) of such code, the fiscal year of the partnership or partnerships involved in such readjustment shall be determined in accordance with the provisions of section 1457.7 of this subchapter.

1451.20 "Received or accrued” and “paid or incurred."-The terms "received or accrued" and "paid or incurred" shall be construed according to the method of accounting employed by the contractor or subcontractor in keeping his records, but if no such method of accounting has been employed, or if the method so employed does not, in the opinion of the Board, or, upon redetermination, in the opinion of the Court of Claims, properly reflect his receipts or accruals or payments or obligations, such receipts or accruals or such payments or obligations shall be determined in accordance with such method as in the opinion of the Board, or, upon redetermination, in the opinion of the Court of Claims, does properly reflect such receipts or accruals or such payments or obligations.

1451.21 “Person. "The term person" includes an individual, firm, corporation, association, partnership, and any organized group of persons whether or not incorporated.

1451.22 “Materials. The term mate rials" include raw materials, articles, commodities, parts, assemblies, products, machinery, equipment, supplies, components, technical data, processes, and other personal property.

1451.23 "Agency of the Government."— The term "agency of the Government" means any part of the executive branch of the Government or any independent establishment of the Government or part thereof, including any department (whether or not a Department as defined in section 1451.14), any corporation wholly or partly owned by the United States which is an instrumentality of the United States, or any board, bureau, division, service, office, officer, employee, authority, administration, or other establishment of the Government which is not a part of the legislative or judicial branches.

1451.24 "Subject prime contracts and subcontracts" and "renegotiable prime contracts and subcontracts."-The terms "sub

ject prime contracts and subcontracts" and "renegotiable prime contracts and subcontracts" mean contracts and subcontracts to which the provisions of the act are applicable.

1451.25 "Subject contracts."-The term "subject contracts" includes subject subcontracts, except when the context clearly indicates otherwise.

1451.26 "Contract."-The term "contract" includes subcontract, except when the context clearly indicates otherwise.

1451.27 Contractor. "The term contractor" includes subcontractor, except when the context clearly indicates otherwise.

1451.28 "Renegotiable business” and “renegotiable sales."-The terms "renegotiable business" and "renegotiable sales" mean the aggregate business of a contractor or subcontractor under subject prime contracts and subcontracts which are not exempt. The term "non-renegotiable business" means any business of a contractor or subcontractor other than renegotiable business.

1451.29 "Procurement."-The term "procurement" means the purchasing, renting, leasing or otherwise obtaining or acquiring of any property, thing or service, or any combination thereof.

1451.30 "Renegotiation clause."-The term "renegotiation clause" means any provision in a prime contract or subcontract which states or incorporates by reference the substance of section 104 of the act.

1451.31 "Related contractors." The term "related contractors" means all persons under control of or controlling or under common control with the contractor.

1451.32 "Regional Board."-The term "Regional Board" means a regional board created by the Board by Section 1 of the "Delegation of Authority to Regional Boards under the Renegotiation Acts of 1948 and 1951," dated February 8, 1952, as amended (see page vii of this manual).

1451.33 "Internal Revenue Code."-The term "Internal Revenue Code," when used with reference to a specific section of the Internal Revenue Code of 1939, means such section or the corresponding section of the Internal Revenue Code of 1954, whichever is applicable. See Internal Revenue Code of

1954, section 7852 (b). Sections 1110, 1111, 1113, 1114, 1115 (a), 1116 1117(a) 1118, 1120, and 1121 of the Internal Revenue Code of 1939, relating to Tax Court Procedure (see section 108 of the act), are superseded by sections 7451, 7453, 7455, 7456, 7457 (a), 7458, 7459 (a), 7460, 7461, and 7462 of the Internal Revenue Code of 1954 for all fiscal

years. In all other respects, the provisions of the Internal Revenue Code of 1954 corresponding with the provisions of the Internal Revenue Code of 1939 cited in the act or in this subchapter apply only to fiscal years beginning on or after January 1, 1954, and ending after August 16, 1954.

Sec.

1452.1 General coverage of the act.

1452.2 Application of the act to prime contracts. 1452.3 Application of the act to subcontracts.

1452.4 Subcontracts to perform work or furnish materials.

1452.5 Real property.

1452.6

1452.7

1452.8

Patent licenses.

Brokers and manufacturers' agents.
Effect of renegotiation clause.

AUTHORITY: Sections 1452.1 to 1452.8 issued under sec. 109, Pub. Law 9, 82d Cong. Interpret or apply sections 102 to 104, Pub. Law 9, 82d Cong.

1452.1 General coverage of the act.-(a) Coverage through December 31, 1956-Removed to Appendix.

(b) Coverage after December 31, 1956(1) Statutory provisions.—(i) Section 102 (a) of the act, as amended by Pub. Law 870, 84th Cong., approved August 1, 1956, effective December 31, 1956, provides as follows:

In general. The provisions of this title shall be applicable (1) to all contracts with the Departments specifically named in section 103 (a), and related subcontracts, to the extent of the amounts received or accrued by a contractor or subcontractor on or after the first day of January 1951, whether such contracts or subcontracts were made on, before, or after such first day, and (2) to all contracts with the Departments designated by the President under section 103 (a), and related subcontracts, to the extent of the amounts received or accrued by the contractor or subcontractor on or after the first day of the first month beginning after the date of such designation whether such contracts or subcontracts were made on, before, or after such first day.

(ii) Section 103 (a) of the act, as amended, provides as follows:

Department. The term "Department" means the Department of Defense, the Department of the Army, the Department of the Navy, the Department of the Air Force, the Maritime Administration, the Federal Maritime Board, the General Services Administration, the National Aeronautics and Space Administration, the Federal Aviation Agency, and the Atomic Energy Commission. Such term also includes any other agency of the Government exercising functions having a direct

and immediate connection with the national defense which is designated by the President during a national emergency proclaimed by the President, or declared by the Congress, after the date of the enactment of the Renegotiation Amendments Act of 1956; but such designation shall cease to be in effect on the last day of the month during which such national emergency is terminated.

(iii) Section 102 (c) of the act, as amended provides as follows:

(c) Termination—(1) In general.-The provisions of this title shall apply only with respect to receipts and accruals, under contracts with the Departments and related subcontracts which are determined under regulations prescribed by the Board to be reasonably attributable to performance prior to the close of the termination date. Notwithstanding the method of accounting employed by the contractor or subcontractor in keeping his records, receipts or accruals determined to be so attributable, even if received or accrued after the termination date, shall be considered as having been received or accrued not later than the termination date. For the purposes of this title, the term "termination date" means June 30, 1973.

(2) Termination of status as Department.-When the status of any agency of the Government as a Department within the meaning of section 103 (a) is terminated, the provisions of this title shall apply only with respect to receipts and accruals, under contracts with such agency and related subcontracts, which are determined under regulations prescribed by the Board to be reasonably attributable to performance prior to the close of the status termination date. Notwithstanding the method of accounting employed by the contractor or subcontractor in keeping his records, receipts or accruals determined to be so attributable, even if received or accrued after the status termination date, shall be considered as having been received or accrued not later than the status termination date. For the purposes of this paragraph, the terms "status termination date" means, with respect to any agency, the date on which the status of such agency as a Department within the meaning of section 103 (a) is terminated.

1452.2 Application of the act to prime contracts. Except as exempted pursuant to section 106 of the act (see Parts 1453, 1454,