Sec.

1471.1 When assignment is made.

1471.2 How assignment is made.

1471.3

Reserved.

1471.4 Reassignment to Board.

AUTHORITY: Sections 1471.1 to 1471.4 issued under section 109, Pub. Law 9, 82d Cong. Interpret or apply section 107, Pub. Law 9, 82d Cong.

1471.1 When assignment is made.-After receipt of a Standard Form of Contractor's Report from a contractor, the Board will assign the case to a Regional Board for renegotiation if it determines that further proceedings in the matter are warranted. No assignment will be made when the Board can readily decide on the basis of the information contained in the Standard Form of Contractor's Report that the contractor has not realized excessive profits for the fiscal year and that no purpose would be served by making an assignment to a Regional Board. If the Board decides not to make an assignment, the Board will notify the contractor to this effect. See § 1498.6 (c) of this subchapter.

1471.2 How assignment is made.-(a) An assignment may be made to a Regional Board on some basis other than geographical in an appropriate case when it is believed that such assignment will promote efficiency in the renegotiation procedure. Similarly, the Board will reassign a case from one Regional Board to another if it appears that efficiency of renegotiation procedure will be promoted thereby.

(b) At the time of assignment, every case will be designated by the Board as either a Class A case or a Class B case. Generally, a Class A case will be one in which the contractor reports on the Standard Form of Contractor's Report that it has derived from subject contracts profits of more than $800,000 and a Class B case will be one in which the contractor reports on the Standard Form of Contractor's Report that it has derived from subject contracts profits of $800,000 or less. If the fiscal year of the contractor is a frac

tional part of 12 months, the $800,000 amount will be reduced to the same fractional part thereof for the purposes of this paragraph.

(c) The Regional Board to which the case is assigned will notify the contractor of the assignment and will also advise the contractor whether the case is a Class A case or a Class B

case.

(d) Except in cases governed by paragraph (e) of this section, with respect to contractors whose receipts or accruals are wholly or predominantly under subcontracts described in section 103(g) (3) of the act, a Class A case will generally be one in which the contractor reports on the Standard Form of Contractor's Report that its aggregate of such receipts or accruals is $100,000 or more and a Class B case will be one in which the contractor reports on the Standard Form of Contractor's Report that its aggregate of such receipts or accruals is less than $100,000. If the fiscal year of the contractor is a fractional part of 12 months, the $100,000 amount will be reduced to the same fractional part thereof for the purposes of this paragraph.

(e) Notwithstanding the foregoing, to facilitate concurrent renegotiation of members of affiliated or related groups when not consolidated (see § 1464.10 of this subchapter), renegotiable members of any such group will generally all be designated at the time of assignment as Class A or Class B cases according to the proper designation of the member having the largest amount of profits from subject contracts for the fiscal year under review.

(f) Any case designated as a Class A or a Class B case may be redesignated at any time if the Board considers such redesignation desirable in the public interest. Any case initially designated as a Class A or a Class B case according to the amounts reported on the Standard Form of Contractor's Report may, but will not necessarily, be redesignated if further information developed after assignment

Sec. 1472.1 1472.2

1472.3 1472.4

Statutory provision.

Renegotiation Procedure.

Conduct of renegotiation by Regional Board.
Conduct of renegotiation by Board.

1472.5 Notice of Points for Presentation.
1472.6 Filing of information and requests by con-
tractor.

AUTHORITY: Sections 1472.1 to 1472.5 issued under section 109, Pub. Law 9, 82d Cong. Interpret or apply section 105, Pub. Law 9, 82d Cong.

1472.1 Statutory provision.-Section 105 (a) of the act provides in part as follows:

Renegotiation proceedings shall be commenced by the mailing of notice to that effect, in such form as may be prescribed by regulation, by registered mail or by certified mail to the contractor or subcontractor. The Board shall endeavor to make an agreement with the contractor or subcontractor with respect to the elimination of excessive profits received or accrued, and with respect to such other matters relating thereto as the Board deems advisable. Any such agreement, if made, may, with the consent of the contractor or subcontractor, also include provisions with respect to the elimination of excessive profits likely to be received or accrued. If the Board does not make an agreement with respect to the elimination of excessive profits received or accrued, it shall issue and enter an order determining the amount, if any, of such excessive profits, and forthwith give notice thereof by registered mail or by certified mail to the contractor or subcontractor. In the absence of the filing of a petition with the Court of Claims under the provisions of and within the time limit prescribed in section 108, such order shall be final and conclusive and shall not be subject to review or redetermination by any court or other agency. ** [Matter in italics added by Pub. Law 86-507, 86th Cong., approved June 11, 1960.]

1472.2 Renegotiation procedure.-(a) In general. Subject to the provisions of paragraph (c) of this section, renegotiation will be conducted in the manner outlined in this part.

(b) Commencement of renegotiation. Renegotiation proceedings will be commenced by mailing a notice to that effect by registered mail to the contractor. Ordinarily, renegotia

tion proceedings will not be commenced until after the contractor has filed a Standard Form of Contractor's Report (see § 1470.3 (a) of this subchapter) and the case has been assigned to a Regional Board for renegotiation (see § 1471.1 of this subchapter).

(c) Procedure in special circumstances. If a contractor fails or refuses to file a Standard Form of Contractor's Report, or other necessary information, records or data requested by the Board or a Regional Board, or if the interests of the Government otherwise so require, any of the steps outlined in this part may be omitted (except the mailing of statutory notices), or may be combined, accelerated, or otherwise modified in such manner as may be considered necessary or appropriate to protect the interests of the Government in the particular circumstances. See § 1475.2.

1472.3 Conduct of renegotiation by Regional Board.—(a) Submission of additional information; preliminary meetings. After a case has been assigned to a Regional Board for renegotiation, the Regional Board personnel assigned to the case will examine the Standard Form of Contractor's Report and other information submitted by the contractor and will determine what additional information is needed. When necessary, a preliminary meeting or meetings will be held with the contractor to discuss the information and data to be submitted by the contractor and the manner in which it is to be submitted. The contractor shall also be entitled in any case to submit, and in cases deemed appropriate will be invited at an appropriate stage in the proceed ́ings to submit, a statement setting forth such further information, data, and representations as it may desire to have taken into consideration under the factors prescribed in section 103 (e) of the act, and explained in Parts 1460 and 1490 of this chapter. A reasonable opportunity will be provided for the submission of any information, data or representations that

the contractor may be requested or invited to submit.

(b) Disputed issues. Before completing the reports described in paragraphs (e), (f), (g), and (i) of this section, the Regional Board personnel assigned to the case will endeavor to resolve with the contractor any issues or disputed matters of fact, law, or accounting. Upon its request, the contractor will be afforded a reasonable opportunity to present to such Regional Board personnel, both orally and in writing, any statements or arguments which the contractor desires to submit in support of its position on any such issues or

matters.

(c) Plant inspection. In cases deemed appropriate or, in any event, in any case in which there exists a possibility of excessive profits, Regional Board personnel will, whenever practicable, with the consent of the contractor, visit and inspect the appropriate plant or site of the contractor, unless a visit of reasonably recent date was made to such plant or site in connection with the renegotiation of the contractor for an earlier fiscal year. Generally, a plant visit, if undertaken, will be made before the completion of the Renegotiation Report pursuant to paragraph (i) of this

section.

(d) Regional Board member as renegotiator. A Regional Board member who serves as the assigned renegotiator in a case will not be eligible thereafter to serve as a member of a panel of the Regional Board constituted pursuant to paragraph (1) of this section or to vote as a member of the Regional Board in the final disposition of the case.

(e) Accounting Report. Except as provided in paragraph (g) of this section, after all relevant financial, accounting and related information has been obtained, the Regional Board accountant assigned to a case will prepare an Accounting Report which will include pertinent financial schedules and accounting data. A copy of the Accounting Report will be furnished to the contractor by the Director, Division of Accounting, after his approval thereof and after such furnishing is authorized by the Chairman of the Regional Board. The letter transmitting the Accounting Report will request the contractor to state, within a fixed time, its concurrence in or its objections

to the Statement of Income (Schedule A) included in such report, and will invite its comments upon any other matters set forth therein. A copy of any modification thereafter made of the Accounting Report will be furnished to the contractor by the Director, Division of Accounting, after his approval thereof and after such furnishing is authorized by the Chairman of the Regional Board. The contractor will be requested to state its concurrence in or its objections to such modification.

(f) Clearance Recommendation by renegotiator. Except as provided in paragraph (g) of this section, if the renegotiator assigned to a case, after considering the Accounting Report, all information and data submitted by the contractor, and all relevant procurement, performance and other information that shall have been obtained, concludes that the contractor did not realize excessive profits in the fiscal year under review, he will prepare a Clearance Recommendation which will include an analysis of the case under the statutory factors. A Clearance Recommendation will not be furnished to the contractor.

(g) Clearance Notice Report. Notwithstanding the provisions of paragraph (e) or (f) of this section, and in lieu of preparing an Accounting Report and a Clearance Recommendation as provided therein, the renegotiator and accountant assigned to a case will prepare a Clearance Notice Report (i.e., a short form recommendation of clearance) in any case in which they consider such a report appropriate. A Clearance Notice Report will not be furnished to the contractor.

(h) Clearance finding by Regional Board. A Clearance Recommendation or a Clearance Notice Report will, upon its approval by the Director, Division of Renegotiating, be submitted by him to the Regional Board for consideration. If the Regional Board approves the Clearance Recommendation or the Clearance Notice Report and finds that the contractor did not realize any excessive profits, the clearance procedure set forth in Part 1473 of this chapter will be followed. If the Regional Board declines to approve a Clearance Recommendation, an Accounting Report and a Renegotiation Report will be prepared, which will be subject to the provisions of paragraphs (e) and (i) of this section.