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The undersigned represents that Schedule B attached hereto is a consolidating income account showing separately the renegotiable and nonrenegotiable business of each member of the group in the detail specified in the Standard Form of Contractor's Report.

7. Each of the undersigned who participated in a consolidated renegotiation under the act for a prior fiscal year and whose fiscal year differed from the fiscal year of the related group in that renegotiation represents that it has adopted, under the Internal Revenue Code, a fiscal year in conformity with the fiscal year of the related group.

Attest--

(Secretary)

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SCHEDULE A.-EXCEPTIONS TO COMMON FISCAL YEAB

The fiscal period of each of the following members of the applicant related group differed from the group's fiscal year (as defined in g 1464.3(c)) in the manner listed below:

Fiscal period

8. The undersigned are aware that under section 105(e) (1) of the Renegotiation Act of 1951, criminal penalties may be incurred by any person who knowingly furnishes any statement, information, records or data required under said section 105 (e) (1), containing information which is false or misleading in any material respect.

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9. The person signing this request on behalf of each of the undersigned declares, under the criminal penalties provided in section 105 (e) (1) of the Renegotiation Act of 1951, that such undersigned has authorized him to sign this request on its behalf.

In witness whereof, the undersigned have executed this request as of the day of in their proper persons or by their duly authorized representatives.

19---

Nore.--For each person listed above who became or ceased to be qualified for consolidated renegotiation as a member of the related group during the related group's fiscal year, state the applicable date of qualification or disqualification and indicate what qualified or disqualified such person on that date.

12-10-68

Part 1466 Termination of Renegotiation

Sec.

1466.2 Definition of "termination date ”. 1466.1 Statutory provision.

“Termination date” means June 30, 1971. 1466.2 Definition of "termination date". 1466.3 Definition of "status termination date".

1466.3 Definition of “status termination 1466.4 Renegotiability of amounts received or accrued

date”._"Status termination date” means, with and allowability of costs paid or incurred respect to any agency of the Government, the after "date of termination".

date on which the status of such agency as a 1466.5 Fiscal year proceedings in which amounts re

Department within the meaning of section 103 ceived or accrued and costs paid or incurred

(a) of the act is terminated. after date of termination will be considered. 1466.6 Proration of statutory minimum for fiscal

1466.4 Renegotiability of amounts reyears which include the termination date. ceived or accrued and allowability of costs AUTHORITY : 88 1466.1 to 1466.6 issued under sec. 109,

paid or incurred after "date of termina15 Stat. 22; 50 U.S.C. App. Sup. 1219. Interpret or

tion”.(a) Definition of "date of terminaapply sec. 102, 65 Stat. 8; 50 U.S.C. App. Sup. 1212. tion"..The terms "termination date and

"status termination date" are referred to in this 1466.1 Statutory provision.Section 102 (c) of the act provides as follows:

part collectively as the “date of termination.”

(b) In general. The act applies only to (c) Termination“-(1) In general.-- The provisions

amounts received or accrued which are deterof this title shall apply only with respect to receipts

mined under regulations prescribed by the and accruals, under contracts with the Departments and related subcontracts, which are determined under

Board to be reasonably attributable to performregulations prescribed by the Board to be reasonably

ance before the close of the date of termination. attributable to performance prior to the close of the It is immaterial whether the contracts under termination date. Notwithstanding the method of ac which such amounts are derived are completed counting employed by the contractor or subcontractor

before or after the date of termination. The in keeping his records, receipts or accruals determined to be so attributable, even if received or accrued after

purpose of this section is to state the circumthe termination date, shall be considered as having

stances under which amounts received or acbeen received or accrued not later than the termination crued and costs paid or incurred after the date date. For the purposes of this title, the term "termi of termination from prime contracts or subconnation date” means June 30, 1971.

tracts performed in whole or in part before the (2) Termination of status as Department.When

close of the date of termination will be considthe status of any agency of the Government as a De

ered to be reasonably attributable to performpartment within the meaning of section 103(a) is

ance before the close of the date of termination. terminated, the provisions of this title shall apply only with respect to receipts and accruals, under contracts (c) Amounts received or accrued. (1) Comwith such agency and related subcontracts, which are pleted contract method of accounting. If a determined under regulations prescribed by the Board contractor, pursuant to $ 1459.1 (b) of this subto be reasonably attributable to performance prior to

chapter, employed a completed contract method the close of the status termination date. Notwith

of accounting for the fiscal year of the contracstanding the method of accounting employed by the

tor which included the date of termination, contractor or subcontractor in keeping his records,

there will be considered as attributable to perreceipts or accruals determined to be so attributable, even if received or accrued after the status termina formance on or before the date of termination tion date, shall be considered as having been received

an amount of receipts or accruals which bears or accrued not later than the status termination date.

the same relationship to the total income derived For the purposes of this paragraph, the term "status

from the contract as the amount of work pertermination date” means, with respect to any agency,

formed under the contract on or before the date the date on which the status of such agency as a Department within the meaning of section 103(a) is

of termination bears to the total amount of terminated.

work performed under the contract.

321

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(2) Cash receipts and disbursements method which the act does not apply by virtue of section
of accounting.-If a contractor, pursuant to 102(c) thereof and this part.
$ 1459.1(b) of this subchapter, employed a cash (e) Costs to be paid or incurred. With re-
receipts and disbursements method of account spect to costs which are determined by the
ing for the fiscal year of the contractor which Board to be reasonably allocable to performance
included the date of termination, only those before the close of the date of termination, but
amounts received on or before the date of which have not been paid or incurred prior to
termination will be considered to be attributable the completion of renegotiation for the fiscal
to performance on or before the date of year of the contractor in which the date of
termination.

termination occurs, if it is reasonably antici(3) Other methods of accounting. If a con pated that such costs will thereafter be paid or tractor, pursuant to $ 1459.1(b) of this sub incurred, the following rules will be observed: chapter, employed for the fiscal year of the con (1) If the renegotiation for such fiscal year tractor which included the date of termina is concluded by agreement, such costs will be tion a method of accounting other than one of estimated and the amount thereof which is dethe methods described in subparagraphs (1) termined by the Board to be reasonably alloand (2) of this paragraph, only those amounts cable to performance before the close of the accrued or properly accruable on or before the date of termination will be allowed conditiondate of termination will be considered to be ally, and there will be included in the agreement attributable to performance on or before the an appropriate clause providing for the repaydate of termination.

ment, as additional excessive profits, of any (4) When accounting method does not prop portion of such amount not thereafter actually erly reflect renegotiable receipts.-The Board

paid or incurred by the contractor within two may determine that additional amounts re

years after the date of termination. ceived or accrued by a contractor after the date

(2) If the renegotiation for such fiscal year of termination are attributable to performance

is concluded by order, such estimated costs will on or before the date of termination when, in

not be allowed. However, the risk that the the opinion of the Board, the amounts received or accrued on or before the date of termination

contractor will thereafter be required to pay

such costs will be taken into consideration under are disproportionate to the performance of the contractor on or before such date. For example,

§ 1460.12 of this subchapter. if a manufacturer's representative employs a (f) Limitation on post-termination costs

.. cash receipts and disbursements method of ac Notwithstanding the provisions of paragraphs counting and if his receipts on or before the (d) and (e) of this section, no cost which has date of termination are substantially out of not been paid or incurred within two years after proportion to services performed by him on or the date of termination will be allocated to before the date of termination, amounts received peformance before the close of the date of termi- . after the date of termination which are refer nation. If, at the time of renegotiation, it apable to such services will be determined to be pears that a cost has been or is likely to be paid attributable to performance on or before the or incurred more than two years after the date date of termination.

of termination, consideration will be given (d) Costs paid or incurred.Costs paid or thereto under $ 1460.12 of this subchapter toincurred after the date of termination will be gether with the other risks assumed by the conallowed in renegotiation in accordance with the tractor. The determination of when a cost is provisions of Part 1459 of this subchapter to paid or incurred shall be made in accordance the extent that they are paid or incurred in re with the method of accounting employed by the spect of receipts or accruals to which the act contractor for purposes of renegotiation. The applies. Costs paid or incurred on or before time limitation specified in the first sentence of the date of termination will not be allowed in this subparagraph shall not apply to costs which renegotiation to the extent that they are paid are accounted for by the completed contract or incurred in respect of receipts or accruals to method of accounting.

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Part 1467 Mandatory Exemption of Contracts and Sub-
contracts for Standard Commercial Articles or Services?

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SUBPART A FISCAL YEARS ENDING ON OR 1467.56 Duty to furnish additional information.
BEFORE JUNE 30, 1956

1467.57 Effect of filing Application for Commercial

Exemption.
Removed to Appendix.

1467.58 Grant of exemption.
SUBPART B~-FISCAL YEARS ENDING AFTER

1467.59 Accrual of exemption by failure of Board to JUNE 30, 1956 AND ON OR BEFORE OCTOBER 24,

act. 1968

1467.60 Denial of exemption. Sec.

1467.61 Exemption not applicable to related subcon1467.21 Statutory provision.

tracts. 1467.22 Application of exemption.

AUTHORITY: 88 1467.21 to 1467.37 and 1467.41 to 1467.23 Waiver of exemption.

1467.61 issued under sec. 109, 65 Stat. 22; 50 U.S.C.
1467.24 The term "article".

App. 1219. Interpret or apply sec. 106, 65 Stat. 17, as
1467.25 Exemption of standard commercial articles. amended ; 50 U.S.C. App. 1216.
1467.26 Exemption of "like articles”.

SUBPART B-FISCAL YEARS ENDING AFTER
1467.27 Exemption of standard commercial classes of

JUNE 30, 1956 AND ON OR BEFORE AUGUST 24,
articles.

1968
1487.28 The term "service".
1467.29 Exemption of standard commercial services. 1467.21 Statutory provision. With re-
1467.30 Exemption of like services.

spect to fiscal years ending after June 30, 1956,
1467.31 Application for Commercial Exemption.

section 106(e) of the act (added by Pub, Law
1467.32 Duty to furnish additional information.

870, 84th Cong., approved August 1, 1956) pro-
1467.33 Effect of filing Application for Commercial
Exemption.

vides as follows:
1467.34 Grant of exemption.

(e) Mandatory eremption for standard commercial 1467.35 Accrual of exemption by failure of Board to articles and services. (1) Articles and services. The act.

provisions of this title shall not apply to amounts 1467.36 Denial of exemption.

received or accrued in a fiscal year under any contract 1467.37 Exemption not applicable to related subcon or subcontract for an article or service which (with contracts.

respect to such fiscal year) is

(A) A standard commercial article ; SUBPART CFISCAL YEARS ENDING AFTER

(B) An article which is identical in every material OCTOBER 24, 1968

respect with a standard commercial article; or Sec.

(C) A service which is a standard commercial serv1467.41 Statutory provisions.

ice or is reasonably comparable with a standard com1467.42 Application of exemption.

mercial service. 1467.43 "Below-floor" contractor not to apply for

(2) Classes of articles. The provisions of this title exemption.

shall not apply to amounts received or accrued in a 1467.44 Procedure on self-application.

fiscal year under any contract or subcontract for an 1467.45 Procedure when application is filed.

article which (with respect to such fiscal year) is an 1467.46 Waiver of exemption.

article in a standard commercial class of articles. 1467.47 The term "article".

(3) Applications. Paragraph (1) (B) or (C) and 1467.48 Exemption of standard commercial articles. 1467.49 Report of Self-Exemption.

paragraph (2) shall apply to amounts received or 1467.50 Supplemental Report of Self-Exemption. accrued in a fiscal year under any contract or subcon1467.51 Exemption of standard commercial classes of tract for an article or service only ifm articles.

(A) The contractor or subcontractor at his election 1467.52 The term "service".

files, at such time and in such form and detail as the 1467.53 Exemption of standard commercial services.

Board shall by regulations prescribe, an application 1467.54 Exemption of like services,

containing such information and data as may be rem 1467.55 Application for Commercial Exemption.

quired by the Board under its regulations for the pur

pose of enabling it to make a determination under the 1 See $ 1467.9 for regulations pertaining to standard commercial services.

applicable paragraph, and

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341

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(B) The Board determines that such article or or subcontractor has receipts or accruals in such fiscal
service is, or fails to determine that such article or sery-

year, and
ice is not, an article or service to which such para (ii) At least 35 percent of the aggregate receipts or
graph applies, within the following periods after the accruals in such fiscal year by the contractor or sub-
date of filing such application:

contractor from the performance of such service and
(i) In the case of paragraph (1) (B) or (C), three such standard commercial service are not (without
months;

regard to this subsection) subject to this title; and (ii) In the case of paragraph (2), six months; or

(G) The term "standard commercial class of arti-
(iii) In either case, any longer period stipulated by cles" means, with respect to any fiscal year, two or
mutual agreement.

more articles with respect to which the following con-
(4) Definitions. For the purposes of this subsec ditions are met:
tion

(i) At least one of such articles either is customarily
(A) The term "article” includes any material, part maintained in stock by the contractor or subcontractor
component, assembly, machinery, equipment, or other or is offered for sale in accordance with a price schedule
personal property;

regularly maintained by the contractor or subcontrac(B) The term "standard commercial article" means,

tor, with respect to any fiscal year, an article

(ii) All of such articles are of the same kind and (i) Which either is customarily maintained in stock manufactured of the same or substitute materials by the contractor or subcontractor or is offered for (without necessarily being of identical specifications), sale in accordance with a price schedule regularly

(iii) All of such articles are sold at reasonably maintained by the contractor or subcontractor, and comparable prices, and

(ii) From the sales of which by the contractor or (iv) At least 35 percent of the aggregate receipts or subcontractor at least 35 percent of the receipts or accruals in the fiscal year by the contractor or subaccruals in such fiscal year, or of the aggregate receipts contractor from sales of all of such articles are not or accruals in such fiscal year and the preceding fiscal (without regard to this subsection and subsection (c) year, are not (without regard to this subsection and of this section) subject to this title. subsection (c) of this section) subject to this title;

(5) Waiver of exemption. Any contractor or sub(C) An article is, with respect to any fiscal year, contractor may waive the exemption provided in para“identical in every material respect with a standard graphs (1) and (2) with respect to his receipts or commercial article" only ifm

accruals in any fiscal year from sales of any article or (i) Such article is of the same kind and manufac service by including a statement to such effect in the tured of the same or substitute materials (without

financial statement filed by him for such fiscal year necessarily being of identical specifications) as a stand pursuant to section 105 (e) (1), without necessarily ard commercial article from sales of which the con waiving such exemption with respect to receipts or tractor or subcontractor has receipts or accruals in accruals in such fiscal year from sales of any other such fiscal year.

article or service. A waiver, if made, shall be uncon(ii) Such article is sold at a price which is reason

ditional, and no waiver may be made without the ably comparable with the price of such standard com permission of the Board for any receipts or accruals mercial article, and

with respect to which the contractor or subcontractor (iii) At least 35 percent of the aggregate receipts

has previously filed an application under paragraph or accruals in such fiscal year by the contractor or (3). subcontractor from sales of such article and sales of (6) Nonapplicability during national emergencies.such standard commercial article are not (without Paragraphs (1) and (2) shall not apply to amounts regard to this subsection and subsection (c) of this received or accrued during a national emergency prosection) subject to this title ;

claimed by the President, or declared by the Congress, (D) The term "service” means any processing or after the date of the enactment of the Renegotiation other operation performed by chemical, electrical,

Amendments Act of 1956. physical, or mechanical methods directly on materials owned by another person ;

1467.22 Application of exemption.-(a) (E) The term “standard commercial service” means, Effective date. The exemption provided in with respect to any fiscal year, a service from the

section 106(e) of the act, and the regulations performance of which by the contractor or subcon

contained in this subpart, are applicable only tractor at least 35 percent of the receipts or accruals in such fiscal year are not (without regard to this with respect to fiscal years ending after June subsection) subject to this title;

30, 1956. The exemption applies to amounts re(F) A service is, with respect to any fiscal year,

ceived or accrued in any such fiscal year under "reasonably comparable with a standard commercial service” only if

prime contracts with the Departments and sub(i) Such service is of the same or a similar kind, contracts, without regard to whether such prime performed with the same or similar materials, and has

contracts or subcontracts were made before or the same or a similar result, without necessarily in

during such fiscal year. volving identical operations, as a standard commercial service from the performance of which the contractor (b) Scope. Section 106(e) of the act ex

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