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posed the following procedures shall be followed:

(a) A notice of the proposed determination in writing, signed by the GSA Nondiscrimination Officer, shall be sent to the contractor or subcontractor by certified mail, return receipt requested. The notice shall contain the proposed determination of ineligibility for further Government contracts, supported by instances of violation of the nondiscrimination provisions in sufficient detail as to person, place, and time, to inform the contractor of the justification for the proposed determination.

(b) The contractor has 10 days to request a hearing on the proposed determination. In this request, he may ask for a written statement of further facts in reasonable detail regarding the specific charges.

(c) If, at the end of such 10-day period, no request for a hearing has been received by the GSA Nondiscrimination Officer, it may be assumed that the contractor or subcontractor does not desire to be heard; in which event the case file shall be appropriately annotated of this fact and a summary of the case, including any appropriate recommendations, shall be forwarded to the Executive Vice Chairman.

present his case or defense including such cross-examination and confirmation as may be appropriate in the circumstances.

(3) The hearing officer shall make his findings and recommend conclusions upon the basis of the record and evi. dence presented.

(c) No decision made by the hearing officer with respect to an ineligibility hearing shall be final without prior approval of a panel of the Committee. Therefore, all findings and recommendations in such cases shall be forwarded to the Executive Vice Chairman, who upon approval may enter an order declaring the contractor or subcontractor ineligible for further Government contracts, or extension or other modification of existing contracts until such contractor or subcontractor shall have satisfied the Committee that he has established and will carry out personnel and employment policies in compliance with the provisions of the Order. $ 5–53.708—2 Hearing notice.

Whenever hearings are to be held, reasonable advance notice thereof shall be given by certified mail, return receipt requested, to the contractor or subcontractor complained against. The notice shall include the following:

(a) A convenient time and place of hearing.

(b) A statement of the provisions of the Executive order and regulations pursuant to which the hearing is to be held.

(c) A concise statement of the matters pursuant to which the action forming the basis of the hearing has been taken or is proposed to be taken. $ 5–53.709 Posters and notices. $ 5–53.709-1 General.

The Committee has prescribed a standard nondiscrimination poster and Standard Form 38, Notice to Labor Unions or Other Organizations of Workers, to be used in effecting compliance with the nondiscrimination provisions. Posters and notices are to be acquired, distributed, and used in accordance with this $ 5–53.709. $ 5–53.709–2 Requirements for use.

(a) Except as provided in $ 5–53.709-3, contracting officers shall furnish a sufficient quantity of nondiscrimination posters and notices (Standard Form 38) to prime contractors to satisfy their requirements.

$ 5–53.708 Nondiscrimination hearings. $ 5–53.708–1 General.

(a) A contractor or subcontractor shall be afforded an opportunity for a hearing where, after investigation, ineligibility is proposed. They may also be afforded an opportunity for a hearing in connection with complaints which cannot be resolved by informal means even though no ineligiblity is involved but where an investigation indicates the existence of an apparent violation of the provisions. Such hearings shall be conducted by the GSA Nondiscrimination Officer, or such other person or committee as the Administrator may designate. (Hearings in connection with appeals from decisions of contracting officers are handled by the GSA Board of Contract Appeals. (See Subpart 5-53.6.)

(b) The designated hearing officer shall regulate the course of hearings conducted by GSA. The following general rules shall apply to such hearings:

(1) Hearings shall be informally conducted.

(2) Every party shall have the right to counsel, and a fair opportunity to

(b) The posters and notices shall be the nondiscrimination provisions (see furnished by contracting officers with § 5-12.5003–3): Provided, That such exthe notification of award and, at the emptions specifically include an exempsame time, the contractor shall be ad- tion from the requirements to display vised that:

posters and notices; or (1) He is required to furnish the (c) Any specific contract, subcontract, nondiscrimination posters to his sub- or purchase order where a request for contractors;

such exemption has been approved by (2) The nondiscrimination posters the Executive Vice Chairman. (Requests must be posted in all employment offices, for exemptions shall be forwarded to the on bulletin boards, and other conspicu- GSA Nondiscrimination Officer.) ous places available to employees and

$ 5–53.709–4 Acquisition of posters and applicants for employment;

notices. (3) The nondiscrimination posters must be similarly displayed by subcon

The nondiscrimination posters and tractors;

the notice (Standard Form 38) are avail(4) He is required to complete, sign,

able in all GSA Stores Depots and may and furnish the notice (Standard Form

be ordered by GSA personnel in the 38) to each labor union or organization

usual manner. Stock numbers and deof workers with which he has a collective

scriptions of these items are as follows: bargaining agreement or other contract Stock No.

Description or understanding;

7530–338-5437.--- Nondiscrimination poster, (5) His subcontractors are also re

1242" x 1894". quired to execute and furnish such notice

7530–338-5448---- Nondiscrimination poster,

842" x 12". in the same manner to each labor union

7540-823-7871.--- Standard Form 38-Noor organization of workers with which

tice to Labor Unions or they have a collective bargaining agree

Other Organizations of ment or other contract or understanding;

Workers. (6) The notice (Standard Form 38) must be posted in all employment offices,

§ 5–53.709–5 Inability or unwillingness

to display posters and notices. on bulletin boards, and other conspicuous places available to employees and (a) If during the conduct of a routine applicants for employment and must be compliance review, or by other means, a similarly displayed by his subcontractor; contracting officer (or his authorized

representative) becomes aware of the (7) Additional supplies of the post- inability or unwillingness of a contractor ers and notices will be supplied upon

or subcontractor to display posters or request.

furnish notices in accordance with this

$ 5–53.709 or, where the labor unions or $ 5–53.709-3 Exceptions.

other organizations of workers have reContracting officers need not furnish, fused or otherwise declined to accept and contractors and subcontractors need such notices from a contractor or subnot use, the posters and notices under contractor, a report of such instances the following circumstances:

shall be made by the contracting officer (a) Contracts and purchase orders to the GSA Nondiscrimination officer for exempt from the use of the nondis- transmittal to the Committee. crimination provisions as set forth in (b) The report referred to in (a), ${5-12.5003–1 and 5-12.5003–2;

above, shall contain the pertinent cir(b) Certain types and classes of con- cumstances of the case and the action tracts and purchase orders which have taken in the matter by the contracting been exempt from certain paragraphs of officer or his authorized representative.


Subpart 5-53.8—Renegotiation AUTHORITY NOTE: Additional authority for this Subpart 5-53.8, 65 Stat. 7, as amended; 50 U.S.C., App. 1211-1224.

SOURCE: The provisions of this Subpart 5-53.8 appear at 28 F.R. 7184, July 12, 1963.

§ 5-53.801 General.

(a) The Renegotiation Act of 1951, as amended (50 U.S.C. App. 1211-1224), provides for recovery by the Government of contractors' excessive profits under certain contracts. GSA contracts are subject to renegotiation under the terms of the Renegotiation Act of 1951 unless exempted by the statute or by authorization of the Renegotiation Board.

(b) The Renegotiation Board, in its Regulations under the Renegotiation Act of 1951 (32 CFR Ch. XIV), prescribes definitions, sets forth mandatory and permissive exemptions, implements the statute with substantive rules, and provides procedures in connection with contracts subject to renegotiation, $ 5–53.802 Contract clause.

(a) Contracts which are determined to be subject to the Renegotiation Act of 1951 shall contain the following clause:

RENEGOTIATION The contract is subject to the Renegotiation Act of 1951, as amended, and shall be deemed to contain the provisions required by section 104 thereof. The extent of renegotiation will be determined in accordance with regulations under the Act. The Contractor agrees to include this Renegotiation clause (including this sentence) in each subcontract made to perform any part of the work or to furnish any materials required for this contract.

(b) When this clause is to be included in preprinted supplemental provisions, the clause set forth in paragraph (a), of this section, may be preceded by a preamble setting forth the basic exemptions applicable to the contracting programs for which the supplemental provisions form is generally used; for example:

The following Renegotiation clause shall apply unless the contract calls for delivery to a GSA supply depot or a Government agency not included in the Renegotiation Act of 1951.

$ 5–53.803 Exemptions by statute.

The Renegotiation Act of 1951 exempts the following:

(a) Any contract with any Territory, possession, or State, or any agency or political subdivision thereof, or with any foreign government or any agency thereof. (See Renegotiation Board Regulations 32 CFR 1453.1.)

(b) Any contract or subcontract for an agricultural commodity in its raw or natural state, or if the commodity is not customarily sold or has not an established market in its raw or natural state, in the first form or state, beyond the raw or natural state, in which it is customarily sold or in which it has an established market. The term "agricultural commodity” includes but is not limited to (see 32 CFR 1453.2) :

(1) Commodities resulting from the cultivation of the soil, such as grains of all kinds, fruits, nuts, vegetables, hay, straw, cotton, tobacco, sugarcane, and sugar beets.

(2) Natural resins, saps, and gums of trees.

(3) Animals, such as cattle, hogs, poultry, and sheep, fish and other marine life, and the produce of live animals, such as wool, eggs, milk, and cream,

(c) Any contract or subcontract for the product of a mine, oil, or gas well, or other mineral or natural deposit, or timber, which has not been processed, refined, or treated beyond the first form or state suitable for industrial use. (See 32 CFR 1453.2(b).)

(d) Any contract or subcontract with a common carrier for transportation, or with a public utility for gas, electric energy, water, communications, or transportation, when made in either case at rates not in excess of published rates or charges filed with, fixed, approved, or regulated by a public regulatory body, State, Federal, or local, or at rates not in excess of unregulated rates of such a public utility which are substantially as favorable to users and consumers as are regulated rates. In the case of the furnishing or sale of transportation by common carrier by water, this paragraph shall apply only to such furnishing or sale which is subject to the jurisdiction of the Interstate Commerce Com

mission under Part III of the Interstate Commerce Act or subject to the jurisdiction of the Federal Maritime Board under the Intercoastal Shipping Act, 1933, and to such furnishing or sale in any case in which the Renegotiation Board finds that the regulatory aspects of rates for such furnishing or sale, or the type and nature of the contract for such furnishing or sale, are such as to indicate, in the opinion of the Renegotiation Board, that excessive profits are improbable. (See 32 CFR 1453.3.)

(e) Any contract or subcontract with an organization exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1954, but only if the income from such contract or subcontract is not includible under section 512 of such Code in computing the unrelated business taxable income of such organization. (See 32 CFR 1453.4.)

(f) Any contract which the Renegotiation Board determines does not have a direct and immediate connection with the national defense. In designating those classes and types of contracts which shall be exempt and in exempting any individual contract under this paragraph, the Board considered as not having a direct or immediate connection with national defense any contract for the furnishing of materials or services to be used by the United States, a Department or agency thereof, in the manufacture and sale of synthetic rubbers to a private person or to private persons which are to be used for nondefense purposes. (See 32 CFR 1453.5.)

(g) Any subcontract directly or indirectly under a contract or subcontract already exempt in accordance with paragraph (b), (c), (d), (f), or (h) of this $ 5–53.803. (See 32 CFR 1453.6.)

(h) Any contract, awarded as a result of competitive bidding, for the construction of any building, structure, improvement, or facility other than a contract for the construction of housing financed with a mortgage or mortgages insured under the provisions of Title VIII of the National Housing Act, as now or hereafter amended. (See 32 CFR 1453.7.)

(i) Any contract subcontract which the Renegotiation Board exempts, as provided in 5–53.805.

(j) Contracts and subcontracts for standard commercial articles and standard commercial services (and "like" articles and services) exempt from renegotiation in accordance with section 106(e) of the Renegotiation Act of 1951. The exemption on standard commercial articles only is self-executing; the other require application to the Renegotiation Board. § 5–53.804 National defense considera.

tions. § 5–53.804-1 Determinations by the

Renegotiation Board. Subject to § 1453.5(C) of the Renegotiation Board's Regulations, the Renegotiation Board has determined that the following contracts do not have direct and immediate connection with the national defense and, therefore, are exempt from renegotiation:

(a) All contracts of the Public Buildings Service and the National Archives and Records Service.

(b) All stores stock contracts for delivery to GSA supply depots.

(c) All Federal Supply Schedule contracts and consolidated direct delivery contracts with respect to deliveries made to Government agencies other than the Department of Defense (including the military departments), Atomic Energy Commission, and National Aeronautics and Space Administration.

(d) Contracts for maintenance and repair of buildings and structures.

(e) Contracts to the extent they obligate funds of, or are reimbursed by, another Department named in section 103 of the Renegotiation Act of 1951 as exercising functions having a direct and immediate connection with the national defense, if the contracts would be exempt if made by such other Department. Contractors should be informed that funds of other Departments are being used. (See 32 CFR 1453.5(b) (2).) The Departments named in section 103 are 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 Seryices Administration, the National Aeronautics and Space Administration, and the Atomic Energy Commission. (See 32 CFR 1451.14(b).)

33-622 0-65-7

(f) Contracts to the extent they obligate funds of another agency of the Government, other than a Department named in or designated in section 103 of the Renegotiation Act of 1951, or to the extent that GSA is to be reimbursed by such other Government agency or other person. Contractors should be informed that funds of other Departments are being used. Those contracts obligating funds for military assistance in connection with foreign aid programs are not exempt from renegotiation under this paragraph. (See 32 CFR 1453.5(b) (3) (ii).)

(g) Contracts for the purchase of materials for authorized resale except contracts for the purchase of materials to be issued or sold under the monetary clothing allowance system of the armed services. (See 32 CFR 1453.5(b) (4).)

(h) Contracts for the removal of waste materials. (See 32 CFR 1453.5 (b) (5).)

(i) Contracts for laundry, cleaning, and pressing services. (See 32 CFR 1453.5 (b) (6).) $ 5–53.804–2 Determinations by GSA.

(a) Notwithstanding the determination set forth in $ 5–53.804-1, Individual contracts will be subject to renegotiation when the Head of the appropriate Service or Staff Office, or any of his designees, determines that such individual contract does have a direct and immediate connection with the national defense. This determination shall be set forth in the contract as follows:

For the purpose of the Renegotiation Act of 1951, as amended, it has been determined that this contract has a direct and immediate connection with the national defense. (See 32 CFR 1453.5(c).)

(b) In considering whether a specific contract does have a direct and immediate connection with the national defense, the Renegotiation Board requested that such determination be made in any case in which:

(1) The language of the appropriation act making funds available, enabling legislation, or the legislative history, is such that it is evident that the project was presented to, and approved by, the Congress because of its importance to the national defense.

(2) Award of the contract cannot be made without a certification, determingtion, or comparable prior action that the procurement is essential or necessary in the interests of the national defense. Such certification, determination, or comparable prior action would normally be made by the General Services Administration, but could be made by any agency of the Government which is competent to act in such manner.

(3) The contract is to be made under a War Powers Act

such as Public Law 85-804 (50 U.S.C. 1431-1435).

(4) Loans or advances are to be made to the contractor under the Defense Production Act of 1950 in order to facilltate performance of the contract.

(5) For other reasons, it is believed that the contract has a dir an mediate connection with the national defense. $ 5–53.804–3 Individual prime con

tracts. Individual prime contracts may be determined not to have a direct and immediate connection with the national defense by the Renegotiation Board on application of the prime contractor through GSA.


§ 5–53.805 Exemptions by the Renego

tiation Board. $ 5–53.805-1 Exempted classes of con

tracts. In the exercise of its discretion as authorized by the Renegotiation Act of 1951, the Renegotiation Board has exempted the following classes of contracts from renegotiation:

(a) All prime contracts and subcontracts wholly performed outside the United States by any person who is not engaged in a trade or business in the United States and is (1) an individual who is not a national of the United States; (2) a partnership or joint venture in which individuals who are not nationals of the United States or corporations which are not domestic corporations are entitled to more than 50 percent of the profits; or (3) a corporation (other than a domestic corporation) more than 50 percent of the voting stock of which is owned directly or indirectly by persons described in subparagraphs (1) and (2) of this paragraph. (See 32 CFR 1455.2 (c), (C-1).)

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