(d) Rules and regulations; blind-made products, priority

(1) The Committee may make rules and regulations regarding (A) specifications for commodities and services on the procurement list, (B) the time of their delivery, and (C) such other matters as may be necessary to carry out the purposes of sections 46 to 48c of this title. (2) The Committee shall prescribe regulations providing that

(A) in the purchase by the Government of commodities produced and offered for sale by qualified nonprofit agencies for the blind or such agencies for other severely handicapped, priority shall be accorded to commodities produced and offered for sale by qualified nonprofit agencies for the blind, and

(B) in the purchase by the Government of services offered by nonprofit agencies for the blind or such agencies for other severely handicapped, priority shall, until the end of the calendar year ending December 31, 1976, be accorded to services offered for sale by qualified nonprofit agencies for the blind. (e) Problems and production methods; study and evaluation

The Committee shall make a continuing study and evaluation of its activities under sections 46 to 48c of this title for the purpose of assuring effective and efficient administration of sections 46 to 48c of this title. The Committee may study (on its own or in cooperation with other public or nonprofit private agencies) (1) problems related to the employment of the blind and of other severely handicapped individuals, and (2) the development and adaptation of production methods which would enable a greater utilization of the blind and other severely handicapped individuals.

(June 25, 1938, ch. 697, § 2, 52 Stat. 1196; June 23, 1971, Pub. L. 92-28, § 1, 85 Stat. 79.)

AMENDMENTS

1971-Pub. L. 92-28, in substituting subsecs. (a) to (e) for former paragraph, among other changes: extended the provisions to cover commodities and services of agencies for the blind and other severely handicapped, previously limited to brooms and mops and other suitable commodities manufactured by agencies for the blind; added provisions incorporated in subsecs. (a) and (e); incorporated in subsec. (b) provisions for determination of fair market price and price revisions; incorporated in subsec. (c) provisions for designation of a central nonprofit agency, providing for distribution by direct allocation, subcontract, or any other means; incorporated existing provisions in subsec. (d)(1), adding par. (2) thereof; and deleted provision that no change in prices shall become effective prior to expiration of fifteen days from date on which such change is made by the Committee.

EFFECTIVE DATE OF 1971 AMENDMENT Amendment by Pub. L. 92-28 effective Aug. 1, 1971, see section 2 of Pub. L. 92-28, set out as a note under section 46 of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 48a of this title. § 48. Procurement requirements for the Government; nonapplication to prison-made products

If any entity of the Government intends to procure any commodity or service on the pro

curement list, that entity shall, in accordance with rules and regulations of the Committee, procure such commodity or service, at the price established by the Committee, from a qualified nonprofit agency for the blind or such an agency for other severely handicapped if the commodity or service is available within the period required by that Government entity; except that this section shall not apply with respect to the procurement of any commodity which is available for procurement from an industry established under chapter 307 of title 18, and which, under section 4124 of such title 18, is required to be procured from such industry. (June 25, 1938, ch. 697, § 3, 52 Stat. 1196; June 23, 1971, Pub. L. 92-28, § 1, 85 Stat. 80.)

AMENDMENTS

1971-Pub. L. 92-28 extended provisions to cover any commodity or service on the procurement list for former provision for brooms and mops and other suitable commodities, excepted the section from application to prison-made products, and deleted provision for nonapplicability of sections 46 to 58 of this title to cases where brooms and mops were available for procurement from and Federal department or agency and procurement therefrom was required under provisions of any law in effect on June 25, 1938, or to cases where brooms and mops were procured outside continental United States.

EFFECTIVE DATE OF 1971 AMENDMENT

Amendment by Pub. L. 92-28 effective Aug. 1, 1971, see section 2 of Pub. L. 92-28, set out as a note under section 46 of this title.

§ 48a. Audit

The Comptroller General of the United States, or any of his duly authorized representatives, shall have access, for the purpose of audit and examination, to any books, documents, papers, and other records of the Committee and of each agency designated by the Committee under section 47(c) of this title. This section shall also apply to any qualified nonprofit agency for the blind and any such agency for other severely handicapped which have sold commodities or services under sections 46 to 48c of this title but only with respect to the books, documents, papers, and other records of such agency which relate to its activities in a fiscal year in which a sale was made under sections 46 to 48c of this title.

(June 25, 1938, ch. 697, § 4, as added June 23, 1971, Pub. L. 92-28, § 1, 85 Stat. 81.)

EFFECTIVE DATE

Section effective Aug. 1, 1971, see section 2 of Pub. L. 92-28, set out as an Effective Date of 1971 Amendment note under section 46 of this title.

8 48b. Definitions

For purposes of sections 46 to 48c of this title

(1) The term "blind" refers to an individual or class of individuals whose central visual acuity does not exceed 20/200 in the better eye with correcting lenses or whose visual acuity, if better than 20/200, is accompanied by a limit to the field of vision in the better eye to such a

degree that its widest diameter subtends an angle of no greater than 20 degrees.

(2) The terms "other severely handicapped" and "severely handicapped individuals" mean an individual or class of individuals under a physical or mental disability, other than blindness, which (according to criteria established by the Committee after consultation with appropriate entities of the Government and taking into account the views of non-Government entities representing the handicapped) constitutes a substantial handicap to employment and is of such a nature as to prevent the individual under such disability from currently engaging in normal competitive employment.

(3) The term “qualified nonprofit agency for the blind" means an agency

(A) organized under the laws of the United States or of any State, operated in the interest of blind individuals, and the net income of which does not inure in whole or in part to the benefit of any shareholder or other individual;

(B) which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and

(C) which in the production of commodities and in the provision of services (whether or not the commodities or services are procured under sections 46 to 48c of this title) during the fiscal year employs blind individuals for not less than 75 per centum of the man-hours of direct labor required for the production or provision of the commodities or services.

(4) The term “qualified nonprofit agency for other severely handicapped" means an agency

(A) organized under the laws of the United States or of any State, operated in the interest of severely handicapped individuals who are not blind, and the net income of which does not inure in whole or in part to the benefit of any shareholder or other individual;

(B) which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and

(C) which in the production of commodities and in the provision of services (whether or not the commodities or services are procured under sections 46 to 48c of this title) during the fiscal year employs blind or other severely handicapped individuals for not less than 75 per centum of the man-hours of direct labor required for the production or provision of the commodities or services.

(5) The term “direct labor" includes all work required for preparation, processing, and packing of a commodity, or work directly relating to the performance of a service, but not supervision, administration, inspection, or shipping.

(6) The term "fiscal year" means the twelvemonth period beginning on October 1 of each year.

(7) The terms "Government" and "entity of the Government” include any entity of the legislative branch or the judicial branch, any executive agency or military department (as such agency and department are respectively defined by sections 102 and 105 of title 5), the United States Postal Service, and any nonappropriated

fund instrumentality under the jurisdiction of the Armed Forces.

(8) The term "State" includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Trust Territory of the Pacific Islands. (June 25, 1938, ch. 697, § 5, as added June 23, 1971, Pub. L. 92–28, § 1, 85 Stat. 81, and amended July 25, 1974, Pub. L. 93–358, § 1(3), 88 Stat. 393; Apr. 21, 1976, Pub. L. 94-273, § 3(22), 90 Stat. 377.)

AMENDMENTS

1976-Pub. L. 94-273 substituted "October" for "July" in par. (6).

1974-Pub. L. 93-358 added as par. (5) a new definition of the term "direct labor", struck out former par. (6) which had defined the term “direct labor” without reference to work directly relating to the performance of a service, and redesignated former pars. (7), (8), and (9) as (6), (7), and (8), respectively.

EFFECTIVE DATE

Section effective Aug. 1, 1971, see section 2 of Pub. L. 92-28, set out as an Effective Date of 1971 Amendment note under section 46 of this title.

§ 48c. Authorization of appropriations

There are authorized to be appropriated to the Committee to carry out sections 46 to 48c of this title $240,000 for the fiscal year ending June 30, 1974, and such sums as may be necessary for the succeeding fiscal years. (June 25, 1938, ch. 697, § 6, as added June 23, 1971, Pub. L. 92-28, § 1, 85 Stat. 82, and amended July 30, 1973, Pub. L. 93-76, 87 Stat. 176; July 25, 1974, Pub. L. 93–358, § 1(4), 88 Stat. 393.)

AMENDMENTS

1974-Pub. L. 93-358 substituted “$240,000 for the fiscal year ending June 30, 1974, and such sums as may be necessary for the succeeding fiscal years" for $200,000 each for the fiscal year ending June 30, 1972, and the next succeeding fiscal year, and $240,000 for the fiscal year ending June 30, 1974".

1973-Pub. L. 93-76 increased the authorization of appropriation to $240,000 for the fiscal year ending June 30, 1974.

EFFECTIVE DATE

Section effective Aug. 1, 1971, see section 2 of Pub. L. 92-28, set out as an Effective Date of 1971 Amendment note under section 46 of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 46, 47, 48a, 48b of this title.

§ 49. Defense employment; honorable discharge from land and naval forces as equivalent to birth certificate

No defense contractor shall deny employment, on account of failure to produce a birth certificate, to any person who submits, in lieu of a birth certificate, an honorable discharge certificate or certificate issued in lieu thereof from the Army, Air Force, Navy, Marine Corps, or Coast Guard of the United States, unless such honorable discharge certificate shows on

its face that such person may have been an alien at the time of its issuance.

(June 22, 1942, ch. 432, § 1, 56 Stat. 375.)

CHANGE OF NAME

Air Force was inserted under the authority of section 207(a), (f) of act July 26, 1947, ch. 343, title II, 61 Stat. 502, 503. The Department of War was designated the Department of the Army and the title of the Secretary of War was changed to Secretary of the Army by section 205(a) of such act July 26, 1947. Sections 205@a) and 207(a), (f) of act July 26, 1947 were repealed by section 53 of act Aug. 10, 1956, ch. 1041, 70A Stat. 641. Section 1 of act Auc. 10, 1956, enacted "Title 10, Armed Forces", which in sections 3010 to 3013 and 8010 to 8013 continued the Departments of the Army and Air Force under the administrative supervision of a Secretary of the Army and a Secretary of the Air Force, respectively.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 50 of this title.

§ 50. "Defense contractor" defined

As used in sections 49 and 50 of this title the term "defense contractor" means an employer engaged in

(1) the production, maintenance, or storage of arms, armament, ammunition, implements of war, munitions, machinery, tools, clothing, food, fuel, or any articles or supplies, or parts or ingredients of any articles or supplies; or

(2) the construction, reconstruction, repair, or installation of a building, plant, structure, or facility;

under a contract with the United States or under any contract which the President, the Secretary of the Army, the Secretary of the Air Force, the Secretary of the Navy, or the Secretary of Transportation certifies to such employer to be necessary to the national defense. (June 22, 1942, ch. 432, § 2, 56 Stat. 376; Aug. 6, 1981, Pub. L. 97-31, § 12(16), 95 Stat. 154.)

AMENDMENTS

1981-Pub. L. 97-31 substituted reference to Secretary of Transportation for reference to United States Maritime Commission.

CHANGE OF NAME

The Secretary of the Air Force was inserted under the authority of section 207(a), (f) of act July 26, 1947, ch. 343, title II, 61 Stat. 501. The Department of War was designated the Department of the Army and the title of the Secretary of War was changed to Secretary of the Army by section 205(a) of such act July 26, 1947. Sections 205(a) and 207(a), (f) of act July 26, 1947 were repealed by section 53 of act Aug. 10, 1956, ch. 1041, 70A Stat. 641. Section 1 of act Aug. 10, 1956, enacted "Title 10, Armed Forces", which in sections 3010 to 3013 and 8010 to 8013 continued the Departments of the Army and Air Force under the administrative supervision of a Secretary of the Army and a Secretary of the Air Force, respectively.

§ 51. Fees or kick-backs by subcontractors on negotiated contracts; recovery by United States; conclusive presumptions; withholding of payments The payment of any fee, commission, or compensation of any kind or the granting of any gift or gratuity of any kind, either directly or indirectly, by or on behalf of a subcontractor, as defined in section 52 of this title, (1) to any

officer, partner, employee, or agent of a prime contractor holding a negotiated contract entered into by any department, agency, or establishment of the United States for the furnishing of supplies, materials, equipment or services of any kind whatsoever; or to any such prime contractor or (2) to any officer, partner, employee, or agent of a higher tier subcontractor holding a subcontract under the prime contract, or to any such subcontractor either as an inducement for the award of a subcontract or order from the prime contractor or any subcontractor, or as an acknowledgment of a subcontract or order previously awarded, is prohibited. The amount of any such fee, commission, or compensation or the cost or expense of any such gratuity or gift, whether heretofore or hereafter paid or incurred by the subcontractor, shall not be charged, either directly or indirectly, as a part of the contract price charged by the subcontractor to the prime contractor or higher tier subcontractor. The amount of any such fee, cost, or expense shall be recoverable on behalf of the United States from the subcontractor or the recipient thereof by setoff of moneys otherwise going to the subcontractor either directly by the United States, or by a prime contractor under any contract or by an action in an appropriate court of the United States. Upon a showing that a subcontractor paid fees, commissions, or compensation or granted gifts or gratuities to an officer, partner, employee, or agent of a prime contractor or of another higher tier subcontractor, in connection with the award of a subcontract or order thereunder, it shall be conclusively presumed that the cost of such expense was included in the price of the subcontract or order and ultimately borne by the United States. Upon the direction of the contracting department or agency or of the General Accounting Office, the prime contractor shall withhold from sums otherwise due a subcontractor any amount reported to have been found to have been paid by a subcontractor as a fee, commission, or compensation or as a gift or gratuity to an officer, partner, employee, or agent of the prime contractor or another higher tier subcontractor. (Mar. 8, 1946, ch. 80, § 1, 60 Stat. 37; Sept. 2, 1960, Pub. L. 86-695, 74 Stat. 740.)

AMENDMENTS

1960-Pub. L. 86-695 inserted "negotiated" preceding "contract" and deleted “, on a cost-plus-a-fixed-fee or other cost reimbursable basis" following "whatsoever" in clause (1), and substituted "setoff" for "set-off" and "contract" for "cost-plus-a-fixed-fee or cost reimbursable contract," preceding "or by an action".

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 52 of this title. § 52. Definitions

For the purpose of sections 51 to 54 of this title, the term “subcontractor” is defined as any person, including a corporation, partnership, or business association of any kind, who holds an agreement or purchase order to perform all or any part of the work or to make or to furnish any article or service required for the perform

ance of a negotiated contract or of a subcontract entered into thereunder; the term "person" shall include any subcontractor, corporation, association, trust, joint-stock company, partnership, or individual; and the term "negotiated contract" means made without formal advertising.

(Mar. 8, 1946, ch. 80, § 2, 60 Stat. 38; Sept. 2, 1960, Pub. L. 86-695, 74 Stat. 740.)

AMENDMENTS

1960-Pub. L. 86-695 substituted "negotiated contract" for "cost-plus-a-fixed-fee or cost reimbursable contract" in the definition of “subcontractor" and defined the term "negotiated contract".

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 51 of this title.

8 53. Power of General Accounting Office as to fees and kick-backs

For the purpose of ascertaining whether such fees, commissions, compensation, gifts, or gratuities have been paid or granted by a subcontractor, the General Accounting Office shall have the power to inspect the plants and to audit the books and records of any prime contractor or subcontractor engaged in the performance of a negotiated contract.

(Mar. 8, 1946, ch. 80, § 3, 60 Stat. 38; Sept. 2, 1960, Pub. L. 86-695, 74 Stat. 741.)

AMENDMENTS

1960-Pub. L. 86-695 substituted "negotiated contract" for "cost-plus-a-fixed-fee or cost reimbursable contract".

(d) Personnel; supplies, facilities, and services.

(e) Publication in Federal Register. Contract Settlement Advisory Board; composition; duties.

Basis for settlement of termination claims. (a) Priority to private contractors.

(b) Establishment of methods and standards.

(c) Conclusiveness of settlement.

(d) Allowable costs.

(e) Settlement by agreement.

(f) Interest.

(g) Amendment of contracts.

Settlement of subcontractors' claims.

(a) Conclusiveness of settlement.

(b) Supervision of payments to war con

tractors.

(c) Group settlements.

(d) Direct settlement by contracting

agency.

(e) Amount of settlement.

(f) Equitable payments.

Interim financing.

(a) Prime contractors.

(b) Method of financing; amounts pay

able.

(c) Evidence to support financing.

(d) Penalty for overstatement of claims. (e) Advance payments as part of termi

nation settlement.

(f) Liquidation of loans, etc., prior to final settlement.

(g) Settlement of claims; validation of prior financing.

Advance or partial payments to subcontractors; excessive payments, interest, liability of war contractor.

Guarantee of loans, advances, etc.

(a) By contract.

(b) By assignment.

(c) Federal Reserve bank as fiscal agent. (d) Application of other laws.

Termination of contracts.

(a) Advance notice; prime contracts.

(b) Cessation of work without termina

tion.

(c) Authority of Administrator of General Services; classes of contracts. Removal and storage of materials. (a) Termination inventory.

(b) Statement on material of inventory.
(c) Removal and storage by Government

agency.

(d) Removal and storage by war contractor.

(e) Acquisition by Government agency of inventory material; liability. (f) Postponement or delay of termination settlement.

(g) Government-owned machinery. (h) Limitation on Government acquisi

tion of inventories.

(1) Removal and storage by war contractor at own risk.

Court of Claims.

(a) Repealed.

(b) Rules and regulations. (c) Compliance.

(a) Appointment of auditors.

(b) Procedure.

(c) Jurisdiction.

§ 101. Declaration of policy

The Congress declares that the objectives of this chapter are

(a) to facilitate maximum war production during the war, and to expedite reconversion from war production to civilian production as war conditions permit;

(b) to assure to prime contractors and subcontractors, small and large, speedy and equitable final settlement of claims under terminated war contracts, and adequate interim financing until such final settlement;

(c) to assure uniformity among Government agencies in basic policies and administration with respect to such termination settlements and interim financing;

(d) to facilitate the efficient use of materials, manpower, and facilities for war and civilian purposes by providing prime contractors and subcontractors with notice of termination of their war contracts as far in advance of the cessation of work thereunder as is feasible and consistent with the national security;

(e) to assure the expeditious removal from the plants of prime contractors and subcontractors of termination inventory not to be retained or sold by the contractor;

(f) to use all practicable methods compatible with the foregoing objectives to prevent improper payments and to detect and prosecute fraud.

(July 1, 1944, ch. 358, § 1, 58 Stat. 649.)

SHORT TITLE

Section 27 of act July 1, 1944, provided that: “This Act [enacting this chapter] may be cited as the 'Contract Settlement Act of 1944'."

SEPARABILITY OF PROVISIONS

Section 26 of act July 1, 1944, provided: "If any provision of this Act [enacting this chapter], or the application of such provision to any person or circumstance, is held invalid, the remainder of this Act or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby."

CROSS REFERENCES

Disposal of surplus property, see sections 484 and 511 to 514 of Title 40, Public Buildings, Property, and Works.

Settlement of claims for losses on certain war contracts, see note set out under section 106 of this title. § 102. Surveillance by Congress

(a) To assist the Congress in appraising the administration of this chapter and in developing such amendments or related legislation as may further be necessary to accomplish the objectives of this chapter, the appropriate committees of the Senate and the House of Representatives shall study each report submitted to the Congress under this chapter and shall otherwise maintain continuous surveillance of the operations of the Government agencies under this chapter.

(b) Repealed. Oct. 31, 1951, ch. 654, § 1(110), 65 Stat. 705.

(July 1, 1944, ch. 358, § 2, 58 Stat. 649; Oct. 31, 1951, ch. 654, § 1(110), 65 Stat. 705.)

AMENDMENTS

1951-Subsec. (b). Act Oct. 31, 1949, repealed subsec. (b), which related to reports to Congress.

CROSS REFERENCES

Reports to Congress by Administrator of General Services, in connection with procurement, contracts, property management, etc., see section 492 of Title 40, Public Buildings, Property, and Works.

8 103. Definitions

As used in this chapter

(a) The term "prime contract" means any contract, agreement, or purchase order heretofore or hereafter entered into by a contracting agency and connected with or related to the prosecution of the war; and the term "prime contractor" means any holder of one or more prime contracts.

(b) The term "subcontract" means any contract, agreement, or purchase order heretofore or hereafter entered into to perform any work, or to make or furnish any material to the