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LIBRARY OF CONG ZSS

PROBLEMS OF CONTRACT TERMINATION

HEARINGS

BEFORE A

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SUBCOMMITTEE OF THE
COMMITTEE ON MILITARY AFFAIRS

UNITED STATES SENATE
SEVENTY-EIGHTH CONGRESS

CONGRES
SERIAL DECO

OCT 2 -

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FIRST SESSION

ON

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GOVT. SOURCE
S. 1268
A BILL TO FACILITATE THE TERMINATION OF WAR

CONTRACTS

S. 1280
A BILL TO PROVIDE AUTHORITY TO THE SECRETARY OF
WAR TO USE FUNDS NOW OR HEREAFTER APPROPRI-
ATED FOR ADJUSTMENT OF CONTRACTS, AND FOR OTHER

PURPOSES

AND

S. J. Res. 80
A JOINT RESOLUTION TO PROHIBIT THE USE OF COST-
PLUS-A-FIXED-FEE SYSTEM OF CONTRACTING IN CON-

NECTION WITH WAR CONTRACTS

PART 1

OCTOBER 14 AND 15, 1943

Printed for the use of the Committee on Military Affairs

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COMMITTEE ON MILITARY AFFAIRS

ROBERT R. REYNOLDS, North Carolina, Chairman ELBERT D. THOMAS, Utah

WARREN R. AUSTIN, Vermont EDWIN C, JOHNSON, Colorado

STYLES BRIDGES, New Hampshire LISTER HILL, Alabama

CIIAN GURNEY, South Dakota SHERIDAN DOWNEY, California

RIFUS C. HOLMAN, Oregon ALBERT B. CHANDLER, Kentucky

HENRY CABOT LODGE, JR., Massachusetts HARRY S. TRUMAN, Missouri

CHAPMAN REVERCOMB, West Virginia MON C. WALLGREN, Washington

GEORGE A. WILSON, Iowa
HARLEY M. KILGORE, West Virginia
JAMES E. MURRAY, Montana
JOSEPH C. O'MAHONEY, Wyoming

WESLEY E. MCDONALD, Clerk
WALTER I. SMALLEY, Special Assistant

SUBCOMMITTEE ON CONTRACT TERMINATION

JAMES E. MURRAY, Montana, Chairman HARRY S. TRUMAN, Missouri

CHAPMAN REVERCOMB, West Virginia II

PROBLEMS OF CONTRACT TERMINATION

THURSDAY, OCTOBER 14, 1943

UNITED STATES SENATE,
A SUBCOMMITTEE ON CONTRACT TERMINATION
OF THE COMMITTEE ON MILITARY AFFAIRS,

Washington, D. C. The subcommittee met at 10:15 a. m., pursuant to call, in room 357, Senate Office Building, Senator James E. Murray (chairman of the subcommittee) presiding.

Present: Senators Murray and Revercomb.

Also present: Dr. Robert K. Lamb, staff director; A. G. Silverman, general counsel; and B. M. Gross, chief of hearings and research.

Senator MURRAY. The hearing will come to order.

These hearings are in connection with S. 1268, S. 1280, and S. J. Res. 80, and I will ask that they be inserted in the record at this point.

[S. 1269, 78th Cong., 1st sess.)

A BILL To facilitate the termination of war contracts

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in connection with the termination of any contract, which is connected with or related to the prosecution of the war, entered into with any procurement department or agency of the Government, any such department or agency, without regard to any provision of law relating to the making, performance, amendment, or modification of contracts, may make or participate in making commitments or payments for any one or more of the following purposes :

(a) As or for advance or partial payments to contractors, subcontractors, or suppliers directly or indirectly under such contracts; or

(b) For loans or guaranties of loans to such contractors, subcontractors, or suppliers; or

(c) For the purchase of the rights of such contractors, subcontractors, or suppliers to such amounts certified by them to be due in connection with any such termination and upon such terms as may be prescribed or permitted by rules or regulations as set forth in section 2 of this Act.

SEC. 2. (a) The authority hereby granted shall be exercised by any such department or agency, subject to such rules and regulations and by means of such delegation of authority as the Chairman of the War Production Board, or such other official as the President may designate, may prescribe from time to time.

(b) The Chairman of the War Production Board, or such other official as the President may designate, shall prescribe rules and regulations which, to the maximum extent possible, provide for uniformity among the departments or agencies of the Government, set forth above.

(c) The Chairman of the War Production Board, or such other official as the President may designate, is directed to take such steps as may be necessary to provide for payment to contractors, subcontractors, or suppliers, in accordance with the provisions of this Act, as soon as possible after the termination of a contract.

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