propounded to the witness by forwarding them to the officer designated to take the deposition and simultaneously forwarding a copy to the other party.

(e) Each deposition shall show the docket number and caption of the proceedings, the place and date of taking, the name of the witness, and the.names of all persons present. The person taking the deposition shall certify on the deposition that the witness was duly sworn by him and that the deposition is a true record of the testimony given by the witness, and shall enclose the original deposition and exhibits in a sealed packed with postage and other transportation prepaid and forward same to the Board.

(f) A deposition taken under the provisions of this section may be offered by either party to the appeal. Depositions I will not be considered as evidence until they have been offered and received as such. All objections made at the time of the taking of the deposition will be passed on at the hearing by the Board which may exclude any part determined to be irrelevant, immaterial, or otherwise not admissible as evidence in the proceedings. The entire deposition must be offered unless otherwise stipulated by the parties or directed by the Board.

The parties may stipulate in writing to any facts that are relevant and material to the issues involved, and to those documents or facts which may be received in evidence without formal proof. § 18-60.115 Prehearing conference.

(a) The Board, upon its own initiative or upon application of one of the parties, may direct the parties or their attorneys to appear before the Board or a member designated by the Chairman at a specified time and place for a conference to consider:

(1) Simplification of the issues;

(2) The possibility of obtaining stipulations as to admissions of fact and introduction of documents which will avoid unnecessary proof;

(3) The limitation of the number of expert witnesses, if a hearing is to be held; and

(4) Such other matters as may aid in the disposition of an appeal.

(b) The results of the conference shall be reduced to writing by the Board or the

member designated by the Chairman and made part of the record.

§ 18-60.116 Settlement.

A dispute may be settled at any time by the contractor filing written notice withdrawing his appeal or by written stipulation between the contractor and the Government counsel approved by the Board settling either the entire dispute or any part thereof. If only part of the dispute is settled, the appeal shall continue as to any issues remaining in dispute.

§ 18-60.117 Filing of papers.

The parties shall file with the Board an original and two copies of all papers, subsequent to the petition and answer. Upon receipt thereof, the Board shall forward a copy to the opposing party.

§ 18-60.118 Hearing.

(a) The contractor may submit the case on the record or request a hearing. The Board shall, at the request of either party within 15 days after the answer is filed, grant a hearing. The parties shall be given at least 15 days' notice of the time and place of hearing.

(b) Hearings will be held at NASA Headquarters, Washington, D.C., unless otherwise ordered by the Board.

(c) Hearings shall be as informal as may be reasonably allowable and appropriate under all the circumstances. Both parties may offer oral and written evidence, subject to the exclusion by the Chairman of any irrelevant, immaterial, or repetitious evidence. The general procedures as to the introduction of evidence and the calling of witnesses shall be in the discretion of the Chairman.

(d) Testimony shall be under oath or affirmation, unless the facts are stipulated or the Chairman shall otherwise order. Attention of witnesses shall be invited to the provisions of 18 U.S.C. 1621 relating to false testimony under oath. If the testimony of a witness is not given under oath the Board shall invite the attention of the witness to the provisions of 18 U.S.C. 287,1001; section 18 of the Contract Settlement Act of 1944 (41 U.S.C. 119), and any other provisions of law imposing penalties for knowingly making false representations in connection with claims against the United States or in any matter within the jurisdiction of any department or agency thereof.

This part establishes standards and procedures for the disposition of requests for extraordinary contractual adjustments by contractors of the National Aeronautics and Space Administration (hereinafter referred to as "NASA" or the "Administration"). It does not extend to advance payments or the socalled "residual powers" under the Act of August 28, 1958 (50 U.S.C. 1431-35) (hereinafter referred to as "the Act") and Executive Order No. 10789, November 14, 1958 (23 F.R. 8897) (hereinafter referred to as "the Executive Order"). § 18-61.101

Authority.

(a) The Act empowers the President to authorize departments and agencies exercising functions in connection with the national defense to enter into contracts or into amendments or modifications of contracts and to make advance

payments, without regard to other provisions of law relating to the making, performance, amendment, or modification of contracts, whenever he deems that such action would facilitate the national defense.

(b) The Executive Order authorizes the Administrator of NASA (hereinafter referred to as "the Administrator"), under regulations prescribed by him, to exercise the authority conferred by the Act.

(c) NASA General Management Instruction No. 2-4-4, September 23, 1959, (14 CFR Part 1209) establishes the Contract Adjustment Board (hereinafter referred to as "the Board") to dispose of requests for extraordinary contractual adjustments by NASA contractors.

§ 18-61.102 General policy.

The authority conferred by the Act shall be utilized primarily as an aid to procurement but shall not be utilized so as to encourage carelessness and laxity on the part of contractors nor be relied upon by NASA where other adequate legal authority exists. The actions authorized under the Act shall be processed as expeditiously as practicable but with the care, restraint, and sound judgment appropriate to the exercise of such extraordinary authority.

§ 18-61.103 Standards for deciding

cases.

(a) General. The mere fact that losses occur under a Government contract is not, by itself, a sufficient basis for the exercise of the authority conferred by the Act. Whether, in a particular case, appropriate action such as amendment without consideration, correction of a mistake or ambiguity in a contract, or formalization of an informal commitment, will facilitate the national defense is a matter of sound judgment to be made on the basis of all of the facts of such case. Although it is obviously impossible to predict or enumerate all types of cases with respect to which action may be appropriate, examples of cases or types of cases where action may be proper are set forth in paragraphs (b), (c), and (d) of this section. Even if all of the factors contained in any of the examples are present, other factors or consideration in a particular case may result in a denial of the request. These examples are not intended to exclude

other cases where the Board determines that the circumstances warrant action.

(b) Amendments without consideration. (1) Where an actual or threatened loss under a Government contract, however caused, will impair the productive ability of a contractor whose continued operation as a source of supply is found to be essential to the national defense, the contract may be adjusted but only to the extent necessary to avoid such impairment to the contractor's productive ability. (See § 18-61.105(b) and (c) for form of request.)

(2) Where a contractor suffers a loss (not merely a diminution of anticipated profits) on a Government contract as a result of Government action, the character of the Government action will generally determine whether any adjustment in the contract will be made and its extent. Where the Government action is directed primarily at the contractor and is taken by the Government in its capacity as the other contracting party, the contract may be adjusted if fairness so requires; thus, where such Government action, although not creating any liability on its part, increases the cost of performance, considerations of fairness may make appropriate some adjustment in the contract. (See § 1861.105 (b) and (d) for form of request.)

(c) Mistakes. A contract may be amended or modified to correct or mitigate the effect of a mistake, including the following examples:

(1) A mistake or ambiguity which consists of the failure to express or express clearly in a written contract the agreement as both parties understood it;

(2) A mistake on the part of the contractor which is so obvious that it was or should have been apparent to the contracting officer; and

(3) A mutual mistake as to a material fact.

Amending contracts to correct mistakes with the least possible delay normally will facilitate the national defense by expediting the procurement program and by giving contractors proper assurance that such mistakes will be corrected expeditiously and fairly. (See § 18-61.105 (b) and (e) for form of request.)

(d) Informal commitments. Informal commitments may be formalized under certain circumstances to permit pay

ment to persons who have taken action without a formal contract; for example, where any person, pursuant to written or oral instructions from an official of NASA and relying in good faith upon the apparent authority of the official to issue such instructions, has arranged to furnish or has furnished property or services to NASA or to a Government contractor or subcontractor without formal contractual coverage for such property or services. Formalization of commitments under such circumstances normally will facilitate the national defense by assuring such persons that they will be treated fairly and paid expeditiously. (See § 18-61.105 (b) and (f) for form of request.)

(a) The Act is not authority for: (1) The use of the cost-plus-a-percentage-of-cost system of contracting;

(2) Any contract in violation of existing law relating to limitation of profit or fees;

(3) The negotiation or purchases of or contracts for property or services required by law to be procured by formal advertising and competitive bidding;

(4) The waiver of any bid, payment, performance or other bond required by law;

(5) The amendment of a contract negotiated under 10 U.S.C. 2304(a) (15) to increase the contract price to an amount higher than the lowest rejected bid of any responsible bidder; or

(6) The formalization of an informal commitment, unless it it found that at the time the commitment was made it was impracticable to use normal procurement procedures.

(b) No contract shall be entered into, amended or modified:

(1) Unless a finding is made that the action will facilitate the national defense;

(2) Unless other legal authority in the Administration is deemed to be lacking or inadequate;

(3) Unless the request therefor has been filed before all obligations have been discharged and final payment made; and

(4) Except within the limits of the amounts appropriated and the statutory contract authorization.

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(a) Filing requests. Any contractor seeking an adjustment under the standards set forth may file a request in duplicate with the cognizant contracting officer or his duly authorized representative. If such filing is impracticable, requests will be deemed to be properly filed if filed with the Board or the Administrator.

(b) Form of requests in general. A request shall normally consist of a statement and exhibits covering all of the contractor's allegations and evidence.

(1) Statements. A statement, dated and signed by the contractor, should consist of the following:

(i) A chronological narrative of the essential facts, showing in detail the chain of events leading up to the request;

(ii) The contractor's conclusions based on such facts, showing in terms of the standards set forth in § 18-61.103 and the limitations set forth in § 18-61.104, why the contractor considers itself entitled to the adjustment requested; and

(iii) The precise adjustment requested, showing how it was formulated or computed and the consequences of granting or denying the request, including whether any proceeds from the request, if granted, will be subject to any assignment or other transfer, and to whom.

(2) Exhibits. Exhibits, cross-referenced to the statement, should consist of the following, if such matters are not fully set forth in the statement:

(i) The best evidence available to the contractor in support of any facts alleged by the contractor, including contemporaneous memoranda, correspondence, affidavits, and any other material tending to establish matters of fact;

(ii) If written contracts are involved, complete copies of or a brief description of the contracts, indicating the dates of execution and amendments thereto, the items being procured, the price or prices, the delivery schedule and revisions thereof, and such other special contractual provisions as may be relevant to the request;

(iii) A history of performance indicating when work under the contracts or commitments was begun, the progress

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made to the present, an exact statement of the contractor's remaining obligations, and the contractor's expectations regarding completion thereof;

(iv) A statement of payments received, payments due, and payments yet to be received or to become due, including advance and progress payments, and amounts withheld by the Government, and information as to other obligations of the Government, if any, which are yet to be performed under the contract;

(v) A statement giving a detailed analysis of the monetary elements of the request, including precisely how the actual or estimated dollar amount of the request was arrived at, the effect of approval or denial on the contractor's profits before Federal income taxes, and whether the costs for which reimbursement is requested have been included as a part of its gross costs in statutory renegotiation proceedings, together with the contractor's renegotiation status for the relevant years;

(vi) If a written contract is involved, a statement of the contractor's understanding of why the subject matter of the request cannot now and could not at the time if arose be disposed of under the terms of the contract itself;

(vii) Relevant financial statements, cost analyses, or other such data, preferably certified by a certified public accountant, including such additional financial data as is necessary to explain fully and to support the monetary elements of the request for adjustment;

(viii) A list of persons (in the employ of the Government, in the employ of the contractor, or otherwise connected with the contract) who have some factual knowledge of the subject matter, including where possible the name, office or title, address and telephone number of each such person;

(ix) A statement and evidence of steps taken to mitigate loss and reduce claims to a minimum; and

(x) Such other statements or evidence as may be requested.

(c) Requests under § 18-61.103 (b) (1). In addition to the matters of fact enumerated in § 18-61.105(b), where a request involves possible amendment without consideration, and "essentiality" is a factor, the contractor may be asked to furnish:

(1) A statement and evidence of the contractor's original breakdown of estimated costs, including contingency allowances and profit;

(2) A statement and evidence of the contractor's present estimate of total costs under the contracts involved if enabled to complete, broken down between costs accrued to date of request, and runout costs, and as between costs for which the contractor has made payment and those for which it is indebted at the time of the request;

(3) A statement and evidence of the contractor's estimate of the final price of the contracts involved giving effect to all escalation, changes, extras and the like, known or contemplated by the contractor;

(4) A statement of any claims known or contemplated by the contractor against the Government involving the contracts in question, other than those stated in response to § 18-61.105 (c) (3);

(5) An estimate of the total profit or loss under the contracts involved if enabled to complete at the final contract price (see § 18-61.105 (c) (3)) broken down between profit or loss to date, and run-out profit or loss;

(6) An estimate of the total profits from other Government business, and all other sources, during the period from the date of the first contract involved to the estimated date of completion of all the contracts involved;

(7) A statement of the amount of any tax refunds and an estimate of those anticipated during or for the period from the date of the first contract involved through the estimated completion date of all the contracts involved;

(8) A statement in detail as to efforts the contractor has made to obtain funds from commercial sources to enable it to complete performance of the contracts involved;

(9) A statement of the minimum amount necessary as an amendment without consideration to enable the contractor to complete performance of the contracts involved, and the detailed basis for that amount;

(10) An estimate of the time required to complete each contract if the request is granted;

(11) A statement of the factors which have caused the loss under the contracts involved;