(a) Form. No printed form is prescribed for the filing of an application for exemption under section 106(e) (3) of the act. However, the information and data prescribed in paragraph (b) of this section will be known as the "Application for Commercial Exemption". This application shall be furnished in writing, shall be entitled "Application for Commercial Exemption”, and shall consist of numbered paragraphs corresponding with the numbers in paragraph (c) of this section. Attention is called to the fact that the submission of this application is subject to the penalty provisions of section 105 (e) (1) of the act.

(b) Use. Except as provided in § 1467.22 (e) (1), the Application for Commercial Exemption shall be filed by every contractor who claims exemption under section 106 (e) of the act for any articles or services, except standard commercial articles (see § 1467.22 (b)). separate application must be filed by every contractor claiming the exemption; affiliated or related contractors may not file consolidated applications.

A

(c) Contents. The Application for Commercial Exemption shall contain the information and data prescribed in the following instructions:

(1) Description of articles or services. Set forth a description of the articles or services claimed to be exempt, including representative catalogs or brochures, if available. State clearly whether exemption is being claimed for (i) like articles-i. e., articles which are identical in every material respect with a standard commercial article or articles; (ii) articles in a standard commercial class or classes of articles; (iii) standard commercial services; or (iv) like servicesi. e., services which are reasonably comparable with a standard commercial service or services. If it is desired in a single application to claim exemption for any like articles, standard commercial services, or like services, as well as for articles in one or more standard commercial classes of articles, a statement in substantially the following form must be included: "The contractor hereby consents and agrees that the 6-month period prescribed in section 106 (e) (3) (B) (ii) of the act shall apply with respect to all of the articles (or: all of the articles and services) for which exemption is claimed in this application."

(2) Like articles. With respect to each like article described separately in subparagraph (1) of this paragraph, set forth a description of the standard commercial article with which such like article is claimed to be identical in every material respect; set forth information sufficient to establish that both of such articles are of the same kind, are manufactured of the same or substitute materials, and are sold at reasonably comparable prices; and set forth a schedule of sales showing the following with respect to the fiscal year under review:

Sales in the above schedule are to be determined by any of the sales segregation methods acceptable, for purposes of renegotiation, in accordance with Part 1456 of this subchapter. If the new durable productive equipment exemption is applicable (see Part 1454 of this subchapter), the sales listed above should be stated before application of such exemption.

(4) Standard commercial services. With respect to each standard commercial service described in subparagraph (1) of this paragraph, state the total amount of sales of such service in the fiscal year under review, and the amount and percent of the nonrenegotiable portion of such sales. Sales for this purpose are to be determined by any

of the sales segregation methods acceptable, for purposes of renegotiation, in accordance with Part 1456 of this subchapter.

(5) Like services. With respect to any like service described in subparagraph (1) of this paragraph, describe the standard commercial service with which such like service is claimed to be reasonably comparable; set forth information sufficient to establish that both of such services are of the same or a similar kind, are performed with the same or similar materials, and have the same or a similar result; and set forth a schedule of sales showing the following with respect to the fiscal year underTM review:

Sales in the above schedule are to be determined by any of the sales segregation methods acceptable, for purposes of renegotiation, in accordance with Part 1456 of this subchapter.

(d) Time for filing. Except as set forth in § 1467.22 (e) (1), every contractor who claims that the exemption provided in paragraph (1) (B) or (C) or paragraph (2) of section 106 (e) of the act is applicable to any of its receipts or accruals in a fiscal year, under prime > contracts with the Departments or sub

contracts, shall file an Application for Commercial Exemption as soon as practicable after the close of such fiscal year, but in no event later than the date upon which the contractor is required to file the Standard Form of Contractor's Report with respect to such fiscal year. If the Application for Commercial Exemption is filed on or before the date upon which the contractor is required to file the Standard Form of Contractor's Report with respect to such fiscal year, the contractor shall not be required to file

the Standard Form of Contractor's Report until the date prescribed in § 1470.3 (d) of this subchapter for the filing thereof or until the thirtieth day after the Board sends to the contractor written notice of the action of the Board on the claim for exemption, whichever occurs later. If, as a result of such action of the Board, the renegotiable receipts or accruals of the contractor and all related contractors in such fiscal year aggregate less than the minimum amount for renegotiation prescribed in section 105 (f) (1) of the act, the contractor shall not be required to file the Standard Form of Contractor's Report but shall be entitled, if it elects so to do, to file the Statement of Non-Applicability with respect to such fiscal year.

[21 F.R. 8812, Nov. 14, 1956, as amended at 25 F.R. 4801, June 1, 1960; 28 F.R. 9673, Sept. 4, 1963]

§ 1467.32 Duty to furnish additional information.

The filing of an Application for Commercial Exemption in accordance with the provisions of this section will not relieve any prime contractor or subcontractor of the duty to furnish any other information, records or data which are determined by the Board to be necesary to carry out its responsibilities under section 106 (e) of the act.

§ 1467.33 Effect of filing Application for Commercial Exemption.

(a) In general. When the Application for Commercial Exemption is filed, it will be considered that the contractor has filed the information and data prescribed in paragraph (3) of section 106(e) of the act, and the applicable 3-month or 6-month period prescribed in said paragraph will thereupon begin to run, except as provided in the succeeding paragraphs of this section.

(b) When application is defective. If, within sixty (60) days after the filing of an Application for Commercial Exemption, the Board sends to the contractor a written notice that such application is in the opinion of the Board incomplete or otherwise defective in any material respect, and that exception has been taken thereto in such respect, the filing of such application will not be considered to be the filing of the information and data prescribed in paragraph (3) of section 106 (e) of the act, sufficient to start the running of the applicable 3-month or 6month period prescribed in said paragraph, and such period will not begin to

run until such defect has been corrected by the filing of the information or data specified in the notice of the Board. If the contractor fails to correct the defect within a reasonable time after such notice, the Board may deny the application of the contractor for exemption.

(c) When additional information is required. If, within sixty (60) days after the filing of an Application for Commercial Exemption, the Board sends to the contractor a written request to furnish specific additional information or data to support the claim for exemption, the filing of such application will not be considered to be a filing of information and data sufficient to start the running of the applicable 3-month or 6-month period prescribed in section 106 (e) (3) of the act, and such period will not begin to run until a complete and satisfactory filing of the additional information or data so requested has been made. Any such additional information or data, when filed, will be deemed a part of the Application for Commercial Exemption. If such additional filling is complete and satisfactory, the Board as soon as possible thereafter will send to the contractor a written notice that the additional information and data is complete and satisfactory and that the applicable 3-month or 6-month period began to run on the date of such additional filing. If the contractor fails to furnish the additional information or data within a reasonable time after the request therefor, the Board may deny the application of the contractor for the exemption.

(d) When material mis-statement occurs. If the Application for Commercial Exemption filed by any contractor contains a mis-statement of a material fact, or the applicable 3-month 6-month period prescribed in section 106 (e) (3) of the act will not begin to run until such mis-statement has been corrected, with or without any notice or request from the Board, and notwithstanding that the Board previously may have notified the contractor that such application had been accepted as complete and satisfactory.

§ 1467.34 Grant of exemption.

If, within the applicable 3-month or 6-month period prescribed in section 106 (e) (3) of the act, computed in accordance with the provisions of § 1467.33, or within any longer period stipulated by mutual agreement, the Board deter

mines that any article or service for which exemption has been claimed by the contractor in the Application for Commercial Exemption is an article or service to which the exemption applies, the Board will give written notice of such determination to the contractor and will advise the contractor that its sales of such article or service in the fiscal year under review are exempt under section 106 (e) of the act. Except as provided in § 1467.33 (d), such exemption shall be fixed and final.

§ 1467.35 Accrual of exemption by failure of Board to act.

If, within the applicable 3-month or 6-month period prescribed in section 106 (e) (3) of the act, computed in accordance with the provisions of § 1467.33 or within any longer period stipulated by mutual agreement, the Board fails to determine that any article or service for which exemption has been claimed by the contractor in the Application for Commercial Exemption is not an article or service to which the exemption applies, the sales of such article or service in the fiscal year under review shall be exempt under section 106(e) of the act and, except as provided in § 1467.33 (d), such exemption shall be fixed and final.

§ 1467.36 Denial of exemption.

If within the applicable 3-month or 6-month period prescribed in section 106(e) (3) of the act, computed in accordance with the provisions of § 1467.33, or within any longer period stipulated by mutual agreement, the Board determines that any article or service for which exemption has been claimed by the contractor in the Application for Commercial Exemption is not an article or service to which the exemption applies, the Board will give written notice of such determination to the contractor and will advise the contractor that its sales of such article or service in the fiscal year under review are not exempt under section 106 (e) of the act.

tion 106(a) (7) of the act, which exempts subcontracts under certain exempt prime contracts or subcontracts, does not apply to subcontracts under prime contracts or subcontracts exempted under section 106(e) of the act (see § 1453.6 of this subchapter).

Subpart C-Fiscal Years Ending After October 24, 1968

SOURCE: The provisions of this Subpart C appear at 33 F.R. 16339, Nov. 7, 1968, unless otherwise noted.

§ 1467.41 Statutory provision.

The regulations in this subpart apply only with respect to amounts received or accrued in fiscal years ending after October 24, 1968. Such regulations implement the provisions of section 106(e) of the act as amended by Public Law 90-634.

§ 1467.42 Application of exemption.

(a) Effective date. The exemption provided in section 106(e) of the act (as amended by Public Law 90-634), and the regulations contained in this subpart, are applicable only with respect to fiscal years ending after October 24, 1968. References in this subpart to section 106(e) of the act mean said section as so amended. The exemption applies to amounts received or accrued in any such fiscal year under prime contracts with the Departments and subcontracts, without regard to whether such prime contracts or subcontracts were made before or during such fiscal year.

(b) Scope. Section 106(e) of the act exempts amounts received or accrued under any contract or subcontract for any of the following:

(1) A standard commercial article; (2) An article in a standard commercial class of articles;

(3) A standard commercial service; (4) A service which is reasonably comparable with a standard commercial service (hereinafter in this subpart referred to as a "like service").

The exemption of Item 1 may be applied by a contractor himself, without application to the Board. With respect to Items 2, 3, and 4, a contractor must file an application with the Board in order to obtain exemption. A contractor shall not be entitled to claim exemption of receipts or accruals for any standard commercial services or like services, to which the 3-month period prescribed in section 106(e) (3) (B) (i) of the act is applicable,

and in the same application to claim exemption of receipts or accruals for articles in one or more standard commercial classes of articles, to which the 6-month period prescribed in section 106(e) (3) (B) (ii) is applicable, unless the contractor consents and agrees that such 6-month period shall apply with respect to all the articles and services for which exemption is claimed in such application. In the absence of such consent and agreement, the contractor shall be required to file a separate application for exemption of those items to which the 3month period applies, and a separate application for exemption of those items to which the 6-month period applies.

(c) Effect. (1) When a contractor files an application for exemption of amounts received or accrued in a fiscal year from the sale of a standard commercial service or a like service, such receipts or accruals are exempt for such fiscal year if within 3 months thereafter, or any longer agreed period, the Board grants, or fails to deny, such application.

(2) When a contractor files an application for exemption of amounts received or accrued in a fiscal year from sales of an article in a standard commercial class of articles, such receipts or accruals are exempt if within 6 months thereafter, or any longer agreed period, the Board grants, or fails to deny, such application.

(d) Definition. Section 106(e) (4) refers, in subparagraphs (B) (ii) and (F) (iii), to the sale of an article "for civilian industrial or commercial use" (see §§ 1467.48(c) and 1467.51(f)), and in subparagraphs (D) (i) and (E) (ii) to the performance of a service "for civilian industrial or commercial purposes" (see §§ 1467.53(c) and 1467.54 (d)). Such transactions are referred to in the cited provisions of this subpart as a "commercial sale" or "commercial sales," and such terms mean a sale or sales not subject to renegotiation.

§ 1467.43 "Below-floor" contractor not to apply for exemption.

If the amounts received or accrued under prime contracts with the Departments and subcontracts during the fiscal year by the contractor and all related contractors, including receipts or accruals for which exemption may be obtained only by application to the Board under section 106(e)(3) of the act, aggregate less than the minimum amount for renegotiation prescribed in section 105 (f) (1), the contractor shall not file the

Application for Commercial Exemption described in § 1467.55. An Application for Commercial Exemption filed under such circumstances will be returned to the contractor without action by the Board thereon.

§ 1467.44 Procedure on self-application.

(a) Every contractor who, but for his self-application of the exemption provided in paragraph (1)(A) of section 106 (e) of the act, would be required to file a Standard Form of Contractor's Report for a fiscal year pursuant to § 1470.3(a) of this subchapter, shall file a Report of Self-Exemption as provided in § 1467.49 (a). The preceding sentence shall not apply to any contractor who files a Statement of Non-Applicability for a fiscal year pursuant to § 1470.3(b) of this subchapter.

(b) Any contractor who has filed a financial statement (Standard Form of Contractor's Report or Statement of Nonapplicability) or a Report of SelfExemption shall file a Supplemental Report of Self-Exemption for such fiscal year as provided in § 1467.50 if the Board so requests.

(c) Neither the filing of a Report of Self-Exemption nor the filing of a Supplemental Report of Self-Exemption shall constitute the filing of a financial statement pursuant to section 105 (e) (1) of the act and will not commence the running of the 1-year period of limitations prescribed in section 105(c). § 1467.45 Procedure when application

is filed.

(a) Every contractor who claims that the exemption provided in paragraph (1) (B) or paragraph (2) of section 106 (e) of the act is applicable to any of his receipts or accruals for a fiscal year shall file an Application for Commercial Exemption as provided in § 1467.55.

(b) When a contractor files an application, pursuant to section 106(e) (3) of the act, for exemption of some of his receipts or accruals for a fiscal year, the applicability of the exemption to such receipts or accruals will be determined by the Board before the Board takes action with respect to any other receipts or accruals of the contractor in such fiscal year.

(c) If, therefore, in addition to receipts or accruals for which a contractor has filed an Application for Commercial Exemption, the contractor in the same fiscal year has other renegotiable receipts