§ 1421.122 Definition of terms.

(a) The terms "the 1948 act," or "the act," mean the Renegotiation Act of 1948.

(b) The term "Secretary" means the Secretary of Defense.

(c) The terms "renegotiate” and “renegotiation" include a determination by agreement or order under the Renegotiation Act of 1948.

(d) The term "excessive profits" means the portion of the profits derived from subject contracts or subcontracts which is determined, in accordance with subsection (b) of the act, to be excessive.

(e) The term "profits derived from subject contracts or subcontracts" means the excess of the amounts received or accrued under subject contracts or subcontracts over the costs paid or incurred with respect thereto.

(f) The term "subject contracts and subcontracts" means contracts in excess of $1,000 entered into under the authority of the Supplemental National Defense Appropriation Act, 1948, obligating funds appropriated by that act, obligating funds consolidated by that act with funds appropriated therein, or entered into through contract authorizations granted in that act, and all subcontracts in excess of $1,000 under such contracts. In addition it includes any contract or subcontract in excess of $1,000 made subject to the Renegotiation Act of 1948 pursuant to the provisions of section 401 of the Second Deficiency Appropriation Act, 1948, by section 622 of the National Military Establishment Appropriation Act, 1950, or by section 618 of the General Appropriation Act, 1951.

(g) The term "subcontract", as used in the act, means any purchase order or agreement in excess of $1,000 to perform all or any part of the work, or to make or furnish any article, required for the performance of any other subject contract or subcontract.

(h) The term "article" means any material, part, assembly, machinery, equipment, or other personal property.

(i) 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 books.

(j) The term "contract" is generally used to include a subcontract, except where the distinction between them is clear from the context.

(k) The term "contractor" is generally used to include both a contractor and a subcontractor, except where the distinction between them is clear from the context.

(1) The term "mandatory statement" means the contractor's report discussed in §§ 1422.222 to 1422.222-7 of this subchapter.

(m) The terms "renegotiable business" and "renegotiable sales" mean the business of a contractor or subcontractor under subject contracts or subcontracts which are not exempt.

(n) The term "fiscal year" means the taxable year of the contractor or a subcontractor under Chapter 1 of the Internal Revenue Code.

(0) The term "Secretary of a Department" means the Secretary of the Department of the Army, the Secretary of the Department of the Navy, or the Secretary of the Department of the Air Force.

(p) The term "Policy and Review Board" or "Board" means the Military Renegotiation Policy and Review Board.

(q) The term "Renegotiation Board” means the Armed Services Renegotiation Board.

(r) The term "Renegotiation Division" means the Army, Navy, or Air Force Division of the Renegotiation Board.

(s) The terms "these regulations" or "the regulations" means the Military Renegotiation Regulations promulgated under the act.

(t) For the purposes of section 401 of the Second Deficiency Appropriation Act, 1948, "aircraft" means any craft (including without limitation thereto, airplanes, balloons, dirigibles, helicopters and gliders) of a type capable of being flown by a human pilot carried by such craft.

(u) For the purpose of section 401 of the Second Deficiency Appropriation Act, "aircraft part" means any item which, at the time of the entering into the contract for its purchase, is intended by the procuring activity to be installed or physically incorporated in aircraft, whether in the original construction of aircraft, or in the repair, maintenance, or modification thereof. It includes, without limitation thereto, ordnance, navigational, electronic, and experimental equipment. It does not include multi-purpose items purchased for stock unless at the time of entering into such contract it is known by the procuring

activity that all or substantially all of the quantity purchased is intended for ultimate installation or physical incorporation in aircraft.

(v) For the purpose of section 622 of the National Military Establishment Appropriation Act, 1950 and section 618 of the General Appropriation Act, 1951, the term "negotiated contracts" means (1) all contracts entered into by or on behalf of the Department of Defense (including the Department of the Army, Department of the Navy, and Department of the Air Force) pursuant to authority of one or more of the exceptions set forth in section 2 (c) of the Armed Services Procurement Act of 1947, Public Law 413, 80th Congress and all contracts for construction work entered into pursuant to authority contained in section 2 (e) of said act, and (2) all contracts entered into by or on behalf of the Department of Defense (including the Department of the Army, Department of the Navy and Department of the Air Force) without formal advertising pursuant to other statutory authorization either dispensing with or not. requiring formal advertising.

(w) For the purpose of section 622 of the National Military Establishment Appropriation Act, 1950 and section 618 of the General Appropriation Act, 1951, the term "procurement" means the purchasing, renting, leasing, or otherwise obtaining or acquiring any property, thing, or service, or any combination thereof.

(x) The term "Board" means the Renegotiation Board created by section 107 (a) of the Renegotiation Act of 1951 (Pub. Law 9, 82d Cong.).

(y) 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 (see 17 F. R. 1401).

[13 F. R. 8641, Dec. 29, 1948, as amended by Amdt. 5, 15 F. R. 168, Jan. 12, 1950; Amdt. 10, 15 F. R. 6987, Oct. 19, 1950; 17 F. R. 1384, Feb. 13, 1952] Subpart C-Organization and Func

tion of the Renegotiation Board SOURCE: The provisions of this Subpart C appear at 17 F.R. 7218, Aug. 8, 1952; 17 F.R. 8362, Sept. 17, 1952, unless otherwise noted. § 1421.130 Statutory authority.

§ 1421.130-1 Renegotiation Act of 1948.

The authority and discretion to administer the Renegotiation Act of 1948

are conferred upon the Secretary of Defense with power of delegation (subsections (f) and (g); see § 1428.801 of this subchapter).

§ 1421.130-2 Renegotiation Act of 1951.

Section 107(f) of the Renegotiation Act of 1951 provides in part that, notwithstanding any other provisions of law, the Secretary of Defense is authorized to delegate, in whole or in part, to The Renegotiation Board created by that act, the powers, functions and duties conferred upon him by any other renegotiation law.

§ 1421.131

Delegation by the Secretary of Defense to The Renegotiation Board.

On January 18, 1952, effective January 20, 1952, the Secretary of Defense delegated to The Renegotiation Board all of the powers, functions and duties conferred upon him by the Renegotiation Act of 1948, as amended or supplemented (see § 1428.825 of this subchapter).

§ 1421.132 Redelegation by The Renegotiation Board to the Secretary of Defense.

On January 20, 1952, The Renegotiation Board redelegated to the Secretary of Defense the power, function and duty of eliminating excessive profits under subsection (b) of the Renegotiation Act of 1948, as amended or supplemented, with power of redelegation (see § 1428.826 of this subchapter). § 1421.133 Redelegation by the Secretary of Defense to the Secretaries of the Army, Navy and Air Force. On January 20, 1952, the Secretary of Defense redelegated to each of the Secretaries of the Army, the Navy and the Air Force, respectively, the power, function and duty of eliminating excessive profits under subsection (b) of the Renegotiation Act of 1948, as amended or supplemented with power of redelegation (see § 1428.827 of this subchapter). Subpart D-Relation of Renegotiation Act and Royalty Adjustment Act Concerning Patents

SOURCE: The provisions of this Subpart D appear at 13 F.R. 8641, Dec. 29, 1948, unless otherwise noted.

§ 1421.141 Royalty Adjustment Act.

(a) Under Public Law 768, 77th Congress, approved October 31, 1942, whenever an invention, patented or unpat

ented, is manufactured or used for the United States, with license from the owner, and such license provides for the payment of royalties at rates or amounts "believed to be unreasonable or excessive by the head of the Department or agency of the Government which has ordered such manufacture, use," etc., the head of the Department concerned shall notify the licensor and licensee. Within a reasonable time thereafter, he shall "fix and specify such rates or amounts of royalties, if any, as he shall determine are fair and just," and shall authorize the payment thereof by the licensee to the licensor. Under the statute, the licensee must not thereafter pay to the licensor or charge to the United States a royalty in excess of that specified in the order, and the licensor's sole and exclusive remedy for royalties in excess thereof is by suit in the Court of Claims or in such district courts as have concurrent jurisdiction.

(b) The Royalty Adjustment Act is in effect during the continuance of the war and for six months thereafter. It does not preclude the applicability of the Renegotiation Act of 1948. § 1421.142

Patent licenses subject to renegotiation.

Patent licensing agreements otherwise constituting subject contracts or subcontracts, are subject to renegotiation. (See § 1423.334-4 and § 1421.388-1 of this chapter.)

[13 F. R. 8641, Dec. 29, 1948, as amended by Amdt. 5, 15 F. R. 168, Jan. 12, 1950] § 1421.143

costs.

Allowance of royalties as

The allowance of royalties as costs in renegotiation and the effect given to determinations under the Royalty Adjustment Act are discussed in § 1423.388-1 of this chapter.

PART 1422-PROCEDURE FOR RENEGOTIATION

Subpart A-[Reserved]

Subpart B-Preliminary Information Required of

1422.271

1422.272

by Regional

1422.272-1 1422.272-2

Class A cases.

Class B cases.

1422.222-3 Time for filing.

1422.273

1422.222-4 Place for filing.

1422.222-5 Availability of forms.

1422.274

Determination by the Armed

Services Renegotiation Board. Determination by Board.

1422.292 Furnishing of other statements. 1422.293 Requests for statements. Subpart J-Control of Renegotiation Records and Information Contained Therein

Subpart A-[Reserved]

Subpart B-Preliminary Information Required of Contractors

AUTHORITY: The provisions of this Subpart B issued under sec. 3, 62 Stat. 259; 50 U.S.C. App., 1193.

SOURCE: The provisions of this Subpart B appear at 13 F.R. 8644, Dec. 29, 1948, unless otherwise noted.

§ 1422.221 Statutory provision.

Subsection (c) of section 3 of the Renegotiation Act of 1948 provides as follows:

For the purpose of administering this section the Secretary of Defense shall have the right to audit the books and records of any contractor or subcontractor subject to this section. In the interest of economy and the avoidance of duplication of inspection and audit, the services of the Bureau of Internal Revenue shall, upon request of the Secretary of Defense and with the approval of the Secretary of the Treasury, be made available to the extent determined by the Secretary of the Treasury for the purpose of making examinations and audits under this section.

Subsection (f) of section 3 of the Renegotiation Act of 1948 provides, in part, as follows:

The Secretary of Defense shall promulgate and publish in the FEDERAL REGISTER regulations interpreting and applying this section and prescribing standards and procedures for determining and eliminating excessive profits hereunder using so far as he deems practicable the principles and procedures of the Renegotiation Act of February 25, 1944, as amended, having regard for the different economic conditions existing on or after the effective date of this Act from those prevailing during the period 1942 to 1945 *

Subsection (h) of section 3 of the Renegotiation Act of 1948 provides as follows:

Any person who willfully fails or refuses to furnish any information, records, or data required of him under this section, or who

knowingly furnishes any such information, records or data containing information which is false or misleading in any material respect, shall upon conviction thereof, be punished by a fine of not more than $10,000 or imprisonment for not more than two years, or both.

§ 1422.222 Filing of mandatory state

ment.

§ 1422.222-1 In general.

In accordance with the statutory authority quoted in § 1422.221:

(a) The "Standard Form of Contractor's Report" as set forth in § 1427.702 of this subchapter is hereby prescribed as the form of mandatory statement generally required to be filed by contractors and subcontractors.

(b) No special form is prescribed for construction contractors, architects and engineers. Such contractors should adapt this "Standard Form of Contractor's Report" to the particular needs of the case.

§ 1422.222-2 Sufficiency of contents.

Except as stated in this part, the forms of "Standard Form of Contractor's Report" are required to be prepared in accordance with the instructions which relate to them and which appear in § 1427.702-1 of this subchapter. The reports are required to contain all applicable information and exhibits specified by the forms and the instructions. However, if any of the information called for by the appropriate "Standard Form of Contractor's Report" for a fiscal year has been furnished previously by the contractor, the contractor may complete the "Standard Form of Contractor's Report" by incorporating by reference the information so furnished and making a specific statement of the time and place of such filing.

[13 F. R. 8644, Dec. 29, 1948, as amended by Amdt. 10, 15 F. R. 6987, Oct. 16, 1950] § 1422.222-3 Time for filing.

The mandatory statements hereby prescribed shall be filed on or before the last day of the fifth month following the close of the contractor's fiscal year whether or not any specific request for filing has been made.

§ 1422.222-4 Place for filing.

The mandatory statements hereby prescribed shall be filed in duplicate with The Renegotiation Board, Washington 25, D.C.

[13 F. R. 8644, Dec. 29, 1948, as amended at 17 F. R. 1384, Feb. 13, 1952]

The filing of a mandatory statement in accordance with the provisions of §§ 1422.222 to 1422.222-7 will not relieve any contractor or subcontractor of the duty to furnish such other information, records or data which are determined by the renegotiating agency to be necessary to carry out its responsibilities under the act.

§ 1422.222-7 Filing of mandatory statements on a consolidated basis.

Parent and subsidiary corporations which constitute an "affiliated group" as defined in subsection (d) of section 141 of the Internal Revenue Code may satisfy the requirements for filing of mandatory statements under the Renegotiation Act of 1948 by filing a "Standard Form of Contractor's Report" on a consolidated basis. When such a consolidated "Standard Form of Contractor's Report" is filed there shall also be filed a "Standard Form of Contractor's Report" for each subsidiary corporation (except as noted below) but any such subsidiary corporation report may be completed by writing thereon a statement that a consolidated report has been filed by the parent company. Where any such subsidiary corporation has not received or accrued during the applicable period any amount whatever under subject contracts and subcontracts no separate report need be filed by it. The filing of a consolidated "Standard Form of Contractor's Report" does not necessarily commit the members of the group to renegotiation on a consolidated basis nor does the acceptance of such a filing commit the Government to this course. Commonly owned enterprises not constituting an "affiliated group" and, therefore, not entitled to file a consolidated "Standard Form of Contractor's Report" may nevertheless be renegotiated upon a consolidated basis if mutually agreeable (see § 1423.309 of this subchapter).

50-078-71- --2

§ 1422.223-2

Assigned contractors.

The Renegotiation Division may send to contractors who have been assigned to them for renegotiation the "Letter of Preliminary Inquiry" (set forth in § 1427.701 of this subchapter) and the appropriate "Standard Form of Contractor's Report." In such cases, the filing of the "Standard Form of Contractor's Report" will constitute compliance with the requirements of mandatory filing under §§ 1422.222 to 1422.222-7 if filed within the time prescribed, and, with respect to assigned cases, will enable a determination to be made as to whether further renegotiation proceedings will be necessary. If it is decided that no further action is necessary the contractor will be so advised. § 1422.224 Contractor's information and work sheet for renegotiation. The Board may send to a contractor or subcontractor a form designed to assist him in preparing information when it is contemplated that formal renegotiation proceedings will be carried to conclusion (see § 1422.242). The form prepared for the use of supply contractors is the "Contractor's Information and Work Sheet for Renegotiation" (see § 1427.704 of this subchapter).

Subpart C-Assignment of Contractors for Renegotiation

AUTHORITY: The provisions of this Subpart C issued under sec. 109, 65 Stat. 22; 50 U.S.C. App. 1219.

SOURCE: The provisions of this Subpart C appear at 17 F.R. 1384, Feb. 13, 1952, unless otherwise noted.