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1945 Designation to hold hearings, to sign and issue subpenas, and to administer oaths or affirmations. June 29

(July 4

(2 docs.) Temporary approval of certain actions taken by the Office of Price Administration..

July 28
Aug. 24

Sept. 28
Delegation of authority to Farm Security Administration to make loans and grants for flood reliel. July 12
Delegation of authority to Special Assistant to the Secretary ..

July 14 Delegation of authority from Secretary to Chief, Agricultural Adjustment Agency.

July 27 Delegation of authority with respect to land exchanges and adjustments of titles to lands.

Aug. 3 Delegation of authority to Assistant Administrator for Regulatory and Market Service Matters, Production & Marketing Administration ---

Aug. 25 Delegation of authority to designated officers of Federal Farm Mortgage Corporation to advertise sales.....

Sept. 7

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11415, 12075

Transfer of responsibility for administration and supervision of agricultural workers' health associations to Director of Labor..


4 Delegation of authority to perform regulatory functions...

Nov. 7 Delegation of authority to Director, Dairy Branch, Production and Marketing Administration. Nov. 29

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upon his determination that such leases are for the best interests of the United States.

(b) In all other lands, pursuant to the applicable statutory authorizations, the Secretary will issue “protective" leases which shall provide for the development of oil and gas in any such lands only upon the Secretary's determination that such development is required to protect the interests of the United States in the petroleum resources of such lands from drainage by actual or prospective operations on adjacent lands. All “protective" leases shall provide for the commencement of drilling only upon notice from the Secretary that the danger of drainage makes such action necessary.

PART 4-OIL AND GAS LEASES Sec. 4.1 Oil and gas rights to which the regula

tions in this part apply. (Revised] 4.2 Policy as to development. (Revised]

AUTHORITY: $$ 4.1 and 4.2 issued under 39 Stat. 1150; 16 U.S.C. 520. 40 Ops. Att'y Gen. No. 7, Apr. 2, 1941.

SOURCE: $ $ 4.1 and 4.2 contained in Regulations, Acting Secretary of Agriculture, Oct. 15, 1945, 10 F.R. 12895.

§ 4.1 Oil and gas rights to which the regulations in this part apply. The regulations herein promulgated are applicable to oil and gas rights owned by the United States and under the jurisdiction of the Department of Agriculture or any agency thereof. They are not applicable to oil and gas rights in (a) lands reserved from the public domain or acquired by exchange pursuant to the act of March 20, 1922 (42 Stat. 465, 16 U.S.C. 485, 486), as such lands are subject to the mineral laws applicable to the public domain and the authority to execute such laws is vested in the Secretary of the Interior, or (b) to 'ands acquired by any agency under the supervision of the Farm Credit Administration.

§ 4.2 Policy as to development. (a) In national forest lands administered under the act of March 1, 1911 (36 Stat. 961), as amended, the Secretary, pursuant to the authority conferred upon him in the act of March 4, 1917 (39 Stat. 1150, 16 U.S.C. 520), will issue oil and gas leases

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Subpart B-Advance Preparations for Termination

Settlements Sec. 6.10 Value of advance preparations. 6.11 Types of advance preparation. 6.12 Conditions applicable to use of pre

termination settlement agreements. 6.13 Approval required. 6.14 Subcontractor pretermination agree


Subpart L-Interest Sec. 6.41 Interest on termination claims.

Subpart M—Interim Financing 6.42 Interim financing. 6.43 Suspension or modification of penalty

for overstatement in connection with

interim financing. AUTHORITY: $$ 6.1 to 6.43, inclusive, issued under 58 Stat. 649; 50 U.S.C., App., Sup. 101 et seq.

SOURCE: $$ 6.1 to 6.43, inclusive, with exceptions noted in text, contained in Regulations, Secretary of Agriculture and War Food Administrator, June 8, 1945, 10 F.R. 6920.

CROSS REFERENCE: For regulations issued by the Director of Contract Settlement, see Chapter XX of Title 32.

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Subpart A-General Provisions $ 6.1 Definitions. (a) All terms used in this part which are used in the Contract Settlement Act of 1944 have the same meaning as given such terms in such act.

(b) “War contract" is defined in the act, in effect, as a contract "connected with or related to the prosecution of the war”. In view of the large number of transactions of differing type and purpose entered into by the Department 1 under a wide range of program activities which may or may not be related to the war effort, whether or not any such transaction is a war contract shall be determined by the Director of Surplus Property and Reconversion after consultation with the Solicitor.

(c) The “terminating officer” with respect to any particular contract shall be the head of the office, agency, or bureau having jurisdiction over such contract, or the officer designated by the head of such ofice, agency, or bureau.

(d) “Settlement Review Board" in any individual case means the Settlement Review Board designated by the head of the office, agency, or bureau within the Department which had jurisdiction over the terminated contract under which the settlement is being made.

(e) "Director of Surplus Property and Reconversion" means the Director of Surplus Property and Reconversion of

Subpart 1-Approval and Payment of Termination

Claims of Subcontractors 6.31 Settlement of subcontracts without ap

proval. 6.32 Approval authority. 6.33 Review of and policy governing ap

proval. 6.34 Direct settlement and payment of sub

contractors' claims.

Subpart J-Claims Under Defective, Informal, or

Quasi Contracts 6.35 Form of claim and supporting evidence. 6.36 Formalization of obligations and com

mitments. 6.37 Investigation and notice of disposition

of claim. 6.38 Procedure if claim not settled by agree


Subpart K-Removal and Storage of Material 639 Termination inventory. 6.40 Government-owned machinery, tools,

and equipment.

* As used herein the word “Department" means the War Food Administration whenever the action contemplated by this regulation relates to a contract under the jurisdiction of any office or agency comprising the War Food Administration.

678214-46-SUPP. VIII-BK. 1-27

Page 407

the United States Department of Agriculture and the War Food Administration.

$ 6.2 Orders and regulations of the Director of Contract Settlement. The exercise of any authority or discretion and the performance of any duty or function conferred or imposed by this part shall be subject to the orders or regulations issued by the Director of Contract Settlement within the scope of the authority conferred upon him by the act. Such orders or regulations, whenever issued, must be complied with by all officers and employees of the Department whose duties or functions are affected thereby. Anything contained in this part which may be inconsistent with any such order or regulation will be deemed amended so as to remove such inconsistency.

$ 6.3 Assistance to war contractors. Employees of the Department dealing in any capacity with the war contract terminations shall as a part of their official duties advise, aid, and assist war contractors in preparing and presenting termination claims, in obtaining interim financing, and in related matters, Provided, That the employees do not receive therefor benefits or compensation of any kind directly or indirectly from the war contractor.

$ 6.4 Amendments to provide for fair compensation. (a) Contracting officers of the Department may, to the extent deemed feasible, give prime war contractors an opportunity to amend their war contracts to include the “Uniform Termination Article for Fixed-price Supply Contracts" set forth in Office of War Mobilization Directive Order No. 1 ($ 8002.1 of Title 32).

(b) Contracting officers of the Department may embody in any war contract with a prime contractor a special agreement with respect to amount of fair compensation, upon termination in accordance with Regulation 3 of the Office of Contract Settlement ($ 8002.2 (e) of Title 32).

$ 6.5 Scope of review by Settlement Review Boards. The sole function of the Settlement Review Board is to determine the over-all reasonableness of the proposed settlement from the standpoint of protecting the Government's interest.

$ 6.6 Determining amount of claim or settlement. When any action under this

part depends upon the amount of a termination claim or settlement, then, unless specifically provided otherwise, in determining the amount of claim or settlement (a) credits for retention or disposal of termination inventory allocated to the claim and advance or partial payments shall not be deducted from the gross claim or settlement, but (b) amounts payable for completed articles or work at the contract price, for the discharge of termination claim of subcontractors and for interest shall be deducted.

$ 6.7 Notice from war contractors. Any request, demand, or notice required or authorized to be made under this part shall be given or made in writing by registered mail, postage prepaid.

$ 6.8 Supervision. All functions and duties hereby conferred or imposed upon any officer of the Department shall be performed under the general supervision of the Director of Surplus Property and Reconversion.

$ 6.9 Authorizations. The head of each agency, office, or bureau is hereby vested with authority to terminate war contracts; to create settlement review boards, where necessary; to handle defective, informal and quasi contracts; to provide interim financing; to do all acts not otherwise assigned which are required or authorized under these regulations, the regulations of the Director of Contract Settlement, and the act, and, except as otherwise specifically provided, to delegate to subordinates any or all of the powers and duties vested in him. Such head may prescribe such conditions, regulations, and restrictions as he may deem necessary for the Department within his agency of the functions provided for hereunder as are consistent with this part.

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is terminated for the convenience or at the option of the Government, notice of such termination. Such notice shall be given as far in advance of cessation of work under the contract as is feasible and consistent with the national security without permitting unneeded production or performance.

$ 6.16 Election to treat suspension notice as termination notice. Whenever the terminating officer directs a prime contractor to cease or suspend all or a substantial part of work under prime contract, without terminating the contract, then, unless the contract otherwise provides, (a) the Department shall compensate the contractor for reasonable costs and expenses resulting from such cessation or suspension, and (b) if the cessation or suspension extends 30 days or more, the contractor may elect to treat it as a termination by delivering written notice of his election so to do to the terminating officer, at any time before the contractor is directed to resume work under the contract.

$ 6.11 Types of advance preparation. Preparation for termination with any contractor may take the form of:

(a) Advance planning, consisting of:

(1) Discussions with the contractor relating to termination education, organization, procedures and problems; and

(2) Tentative understanding or arrangements, not binding upon the Government or the contractor, covering some or all elements of the termination settlement; or

(b) Pretermination agreements between the Department and the contractor covering the elements of the termination settlement in accordance with Regulation 3 of the Office of Contract Settlement (32 CFR, 1944 Supp., 8002.2(e)).

$ 6.12 Conditions applicable to use of pretermination settlement agreements. Pretermination settlement agreements may be made only when the contractor has had suficient experience in the type of production to which the contract relates to insure reasonable accuracy of the information on which the agreement is based. When an agreement involves a forecast of the factors involved in determining fair compensation, the available data must permit a reasonable forecast consistent with sound commercial standards of such factors, and the agreement will so state.

$ 6.13 Approval required. Whenever any pretermination settlement agreement, in an original contract or supplement to an existing contract, involves major elements of a termination settlement, it must be approved by the Director of Surplus Property and Reconversion before it will be considered a binding agreement upon the Department.

$ 6.14 Subcontractor pretermination agreements. Pretermination agreements in subcontracts will be recognized on substantially the conditions applicable to such agreements in prime contracts stated in g 6.12. Any settlements made in accordance with such agreement are subject to review to the same extent as other subcontract settlements.

Subpart D-Immediate Action After

Termination $ 6.17 Stoppage of work. The prime contractor must discontinue the making of subcontracts and must take all necessary steps to stop work as promptly as possible on and after the effective date of the termination notice, except that the prime contractor may continue any part of the work for his own account, unless the notice expressly provides otherwise. The prime contractor is not entitled to compensation or reimbursement of costs, for work done after he should have stopped work, or for work continued on his own account. The contractor should immediately call to the attention of the terminating officer any special circumstances which make it necessary or desirable to continue some or all of the work for the account of the Government in order to avoid waste of materials or work in process or injury to the plant or other property. The terminating officer is authorized to modify the notice of termination in appropriate cases.

Subpart C—Notice of Termination $ 6.15 Notice of termination. The terminating officer will give each prime contractor, work under whose contract

2 See also Director of War Mobilization and Reconversion regulation entitled “Processing of Uncompleted Items; Retention of Work in Progress by Contractor; Taking over of contracts by Other Agencies or Governments" dated Oct. 24, 1944 (9 FR. 12850).

(b) It is the policy of the Department to settle termination claims by agreement to the maximum extent feasible. Other methods of settlement will be resorted to only when a termination claim cannot be fairly settled by agreement.

$ 6.22 Duty to submit claim promptly. Each war contractor should prepare and submit his own claim as promptly as possible without waiting for the claims of his subcontractors. Likewise, a war contractor should promptly transmit up the contractual chain all his settlements with his subcontractor which require approval by the Department.

$ 6.18 Termination of subcontracts. Except as the termination notice provides otherwise, the prime contractor must take steps to terminate, with or without the consent of the subcontractors, all unperformed or partially performed subcontracts related to the terminated portion of the prime contract, except that he may continue any such subcontracts for his own account unless the notice expressly provides otherwise. Such subcontracts must be terminated as promptly as practical on and after the effective date of the termination notice or if the termination notice so provides, at such later time as the terminating officer may direct. The prime contractor will notify his subcontractors of the termination as far in advance of the effective date as possible. Subcontractors, in turn, should be required to pass along the same requirements to their immediate subcontractors. If any subcontractor continues work after it should have been stopped, neither he nor the prime contractor is entitled to compensation or reimbursement from the Government for such work.

$ 6.19 Termination inventory. The prime contractor and each subcontractor must use reasonable care, and, in addition, take such action as the terminating officer may direct or approve, to protect and preserve property in his possession in which the Government has or may acquire an interest, and to reduce or prevent loss or damage to the Government.

$ 6.20 Notice of suits. The prime contractor should promptly notify the terminating officer in writing of any legal proceedings against the contractor based upon any subcontract or commitment related to the terminated contract, which are pending on the effective date of the termination notice or are brought at any time thereafter. The Director of Surplus Property and Reconversion will decide whether to assume control of any such case and defend against such claim by suitable arrangement with the prime contractor.

Subpart F-Settlement Proposals for

Fixed-Price Contracts 3 $ 6.23 Forms. In order to expedite the preparation and review of settlement proposals, the Director of Contract Settlement has prescribed standard forms for settlement proposals under fixedprice war supply contracts. The forms are for use by prime contractors and their subcontractors. The forms are designed to present the information required both for settlement of the claim and for disposal of termination inventory.

$ 6.24 Deviation from forms. Although minor deviations from the requirements of the forms are permissible, prior approval of the Department or the customer (contractor in the next higher tier) must be obtained for any substantial deviation from the requirements. A contractor receiving such approval may not require his subcontractors to submit their proposals on other than the prescribed standard forms. The terminating officer, with the approval of the Director of Surplus Property and Reconversion, may authorize substantial deviations in the standard form or the use of some other suitable form for presenting the proposal.

Subpart E-Methods of Settlement $ 6.21 Methods of settlement. (a) The act provides that fair compensation to war contractors shall be determined (1) by agreement with the war contractor, (2) by determination without agreement, (3) by any combination of these two methods, and (4) by arbitration.

8 In the event the terminated contract is other than a fixed-price contract, appropriate forms and instructions will be sent to the contractor with the notice of termination.

* See Office of Contract Settlement Forms 1, la, lb, 2a, 2b, 2c, 2d, and 3, and Instructions for Use of Standard Contract Settlement Proposal Forms (dated Oct. 1, 1944) which were prescribed by the Director of Contract Settlement by Regulation 8, dated Oct. 13, 1944 (9 FR. 12541), for use by contractors and subcontractors in settling terminated fixed-price war supply contracts.

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