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$ 1601.131–3 Delegations. The Board has power to delegate any of its authority to the Secretary of a Department, who may redelegate to such officers or agencies of the United States as he may designate, with right of redelegation, There is set forth below the organization for renegotiation in the various Departments having renegotiation authority. Delegations by the War Contracts Board to the Secretaries of the various Departments are set forth in 1608.821-1. (RR 131.3]

$ 1601.131-4 Jurisdiction. The Board may, by regulation, or otherwise determine the character of cases to be conducted initially by the Board itself, those to be conducted by its officers or the officers utilized by it, and those to be conducted by the various officers and agencies to which the Board's powers have been delegated. (Subsection (d) (5) of the 1943 act, see $ 1608.801-4.) Renegotiation will initially be conducted by the Departments in all cases, except for instances, if any, in which the Board may determine otherwise. (See $ 1602.200 and following. The powers, duties and discretion of the Board to conduct renegotiation were delegated to the Secretaries of the Departments on February 26, 194 4. (See $ 1608.821-1.) (RR 131.4)

$ 1601.131-5 Review by the Board. The Board may, in its discretion, either upon its own motion or at the request of the contractor or subcontractor, review any determination by order made by any officer or agency to which its powers have been delegated. The Board's determination may be less than, equal to, or greater than the determination reviewed. (Subsection (d) (5) of the 1943 act, see $ 1608.801-4 and also Part 1606, Subpart B). (RR 131.5)

$ 1601.132 War Department organization. (RR 132)

$ 1601.132-1 Organization and functions of War Department Price Adjustment Board. The Renegotiation Division has been established by the Commanding General, Army Service Forces, as a Staff Division under the supervision of the Director of Materiel. The War Department Price Adjustment Board has been organized within the Division. The Chairman and members of the Board are appointed by the Commanding General, Army Services Forces, with the approval of the Under Secretary of War. The

Chairman serves also as Director of the Renegotiation Division. (RR 132.1)

$21601.132-2 Organization and functions of War Department Price Adjust. ment Sections. There has been established a Price Adjustment Section in each of the Technical Services of the Army Service Forces and in the Army Air Forces. The Army Service Forces have Sections in the Technical Services of Chemical Warfare, Engineers, Ordnance, Quartermaster, Signal Corps, Surgeon General, and Transportation. With the exception of the Price Adjustment Section of Chemical Warfare, located in Baltimore, the main Sections of the Technical Services are located in Washington. Headquarters for renegotiation in the Army Air Forces are shared by Washington and Wright Field, Dayton, Ohio. District Price Adjustment Sections have been established by the Technical Services and the Army Air Forces at various procurement centers, and this decentralization allows renegotiation to be conducted close to the location of the company involved. In the office of the War Department Power Procurement Oficer, there has been established an Utilities Price Adjustment Section (RR 132.21

$ 1601.133 Navy Department organtzation. (RR 133)

§ 1601.133–1 Navy Price Adjustment Board. The Secretary of the Navy has established the Navy Price Adjustment Board to conduct renegotiation under the supervision of the Chairman of the Board. The Board has four divisions located in Washington, New York, Chicago and San Francisco, respectively. (RR 133.1]

$ 1601.133-2 Services and Sales Renegotiation Section. In the Office of the General Counsel, Navy Department, there is established a Services and Sales Renegotiation Section which specializes in the renegotiation of sales agents and brokers. This section has its headquarters in Washington and divisional offices in Washington, New York, Chicago and Los Angeles. (RR 133.2)

$ 1601.134 Treasury Department Price Adjustment Board. The Treasury Department has established the Treasury Department Price Adjustment Board in the Procurement Division. The office of the Board is located in Washington. (RR 134]

$ 1601.135 Maritime Commission Price Adjustment Board. The Maritime Commission has established the Price Adjustment Board of the Maritime Commission. The office of the Board is located in Washington. [RR 135]

$ 1601.136 War Shipping Administration Price Adjustment Board. The Administrator of the War Shipping Administration created a Price Adjustment Board within the War Shipping Administration and charged the Board with the responsibility of conducting renegotiations. The office of the Board has been established in New York City, since this location is in close proximity to the great majority of the contractors of the War Shipping Administration, (RR 136]

$ 1601.137 RFC Price Adjustment Board. The boards of directors of Defense Plant Corporation, Metals Reserve Company, Defense Supplies Corporation and Rubber Reserve Company have established the RFC Price Adjustment Board. The office of this Board is located in Washington, D. C. (RR 137]

$ 1601.138 Joint Price Adjustment Board. The Joint Price Adjustment Board has authority, delegated by the Secretaries, to adopt statements of purposes, principles, policies, and interpretations, under the Renegotiation Act of 1942. The Joint Price Adjustment Board has no authority with respect to renegotiation for fiscal years ending after June 30, 1943. (RR 138]

$ 1601.139 Addresses. Addresses of the various Price Adjustment Boards and Sections dealing with renegotiation under the Renegotiation Act of 1943 are set forth in g 1607.791 and following. (RR 139]

to be unreasonable or excessive by the head of the Department or agency of the Government which has ordered such manufacture, use," etc., the head of the Department concerned shall so notify the licensor and licensee. Within a reasonable time thereafter he shall "fix and specify such rates or amounts of royalties, if any, as he shall determine are fair and just, taking into account the conditions of wartime production” and shall authorize the payment thereof by the licensee to the licensor. Under the statute the licensee must not thereafter pay to the licensor or charge to the United States a royalty in excess of that specified in the order, and the licensor's sole and exclusive remedy for royalties in excess thereof is by suit in the Court of Claims or in such district courts as have concurrent jurisdiction,

(b) The statute further provides that: "Nothing herein contained shall be deemed to preclude the applicability of section 403 of Public Law 528, 77th Congress (the Renegotiation Act of 1942), as the same may be heretofore or hereafter amended so far as the same may be applicable." (RR 141]

$ 1601.142 Patent licenses subject to renegotiation. Patent licenses granted to the United States and those granted to Departmental contractors or subcontractors are subject to renegotiation. (See $ $ 1603.334-3 and 1603.388–1.) (RR 142)

$ 1601.143 Allowance of royalties as costs. The allowance of royalties under patent licenses as costs in renegotiation and the effect given to determinations under the Royalty Adjustment Act are discussed in $ 1603.388–1. (RR 143)

PART 1602–PROCEDURE FOR

RENEGOTIATION Subpart A-Assignments for Renegotiation

and Cancellations

Subpart D-Relation of Renegotiation

Act and Royalty Adjustment Act Concerning Patents

$ 1601.140 Scope of subpart. This subpart deals briefly with the Royalty Adjustment Act (Public Law 768, 77th Congress, approved October 31, 1942). (RR 140]

$ 1601.141 Royalty Adjustment Act. (a) Under Public Law 768, 77th Congress, approved October 31, 1942, whenever an invention, patented or unpatented, is manufactured or used for the United States, with license from the owner, and such license provides for the payment of royalties at rates or amounts "believed

Sec. 1602.201 In general. 1602.201-1 Necessity for assignment. 1602.201-2 Effect of assignment. 1602.201-3 Effect of assignments issued on

behalf of the Joint Board. 1602.201-4' Authority in assignment matters, 1602.201-5 Control of assignments. 1602.201-6 Communications. 1602.202 Basis of assignment. 1602.202-1 In general. 1602.202-2 Product classification. 1602.202-3 Brokers and agents. 1602.203 Selection of contractors for as

signment.

NOTE: Part 1602, as originally issued Mar. 24, 1944, appears at 9 F.R. 4140; amendments thereto appear at 9 F.R. 6157, 9108, 12845, 13858.

Sec. 1602.203-1 Contractors previously assigned. 1602.203–2 Contractors not previously as

signed. 1602.203-3 Identification of contractors not

previously assigned. 1602.203-4 Reports as to brokers and agents. 1602.204 Form of assignments. 1602.205 Reassignment of cases. 1602.205–1 When cases reassigned. 1602.205–2 Transfer of information on re

assignments. 1602.206 Cancellation of assignment. 1602.206-1 General. 1602.206–2 Form for submission of request. 1602.20643 When not subject to act; evi

dence required. 1602.206-4 When no excessive profits; evi

dence required. 1602.206-5 Notification. 1602.206–6 Reinstatement.

Subpart B-Preliminary Information

Required of Contractors 1602.220 Scope of subpart. 1602.221 Statutory provision. 1602.222 Filing of manatory financial

statement. 1602.222–1 Sufficiency of contents. 1602.222–2 Time for filing. 1602.222–3 Place for filing. 1602.222-4 Availability of forms. 1602.222-5 Effect of filing mandatory finan

cial statements. 1602.222–6 Filing of mandatory financial

statements by parent and subsidiary corporations on a con

solidated basis. 1602.223 Letter of preliminary inquiry. 1602.223-1 Unassigned contractors. 1602.223-2 Assigned contractors. 1602.223-3 Follow-up. 1602.224 Contractor's information and

work sheet for renegotiation.

Subpart A-Assignments for Renegotia.

tion and Cancellations
$ 1602.201 In general. (RR 201]

$ 1602.201–1 Necessity for assignment. No Department or Service will conduct renegotiation proceedings with any contractor or subcontractor unless and until an assignment for that purpose has been issued on behalf of or is confirmed by the War Contracts Board. This provision is designed to promote orderly procedure through avoidance of duplication of activities as well as by assuring to the extent possible that renegotiation proceedings are conducted by the appropriate Department or Service. Notwithstanding the foregoing, in the absence of specific action by way of disaffirmance by the War Contracts Board, a renegotiation proceeding, conducted by a Department to which a general delegation of authority has been issued by the War Contracts Board, shall not be invalidated by reason of the fact that an ssignment of the particular case had not been duly or properly issued. Assignments issued after the conclusion of a renegotiation proceeding shall be of the same force and effect as if issued at any time prior thereto. (RR 201.1)

§ 1602.201-2 Effect of assignment. The issuance of an assignment shall evidence the authority and duty of the Department or Service to which the assignment is issued to conduct statutory renegotiation with the contractor thereby assigned on an overall basis with respect to the aggregate of the amounts received or accrued during the fiscal year to which the assignments relates; Provided, however, That upon request of the contractor, pursuant to subsection (c) (1) of the 1943 act, the Department or Service to which the assignment is issued may, in its discretion, agree to renegotiate with respect to amounts received or accrued under one or more contracts or subcontracts. (RR 2012]

§ 1602.201-3 Effect of assignments issued on behalf of the Joint Board. All assignments for renegotiation heretofore or hereafter issued in the name of the Joint Price Adjustment Board, through the Assignments and Statistics Branch of the Renegotiation Division, A. S. F., are hereby ratified, approved and confirmed

Subpart C-Preparation for Renegotiation 1602.230 Scope of subpart. 1602.231 Negotiators. 1602.231-1 Disqualification of negotiator.

Subpart D-Conduct of Renegotiation 1602.240 Scope of subpart. 1602.241 Commencement of renegotiation. 1602.242 Dat.. presented by contractor. 1602.243 Process of renegotiation.

Subpart E-Completion of Renegotiation 1602.250 Scope of subpart. 1602.251 Preparation of agreement. 1602.252 Preparation of statement to con

tractor. 1602.253 Administration of agreements. 1602.254 Progress reports. 1602.255 Control of cocuments.

SOURCE: $$ 1602.201 to 1602.255, inclusive, contained in Renegotiation Regulations, Mar. 24, 1944, complete through Revision 14, Dec. 29, 1944, 10 F.R. 968.

with the same force and effect as if they had been originally issued by the War Contracts Board. (RR 201.3)

$ 1602.201-4 Authority in assignment matters. The Assignments and Statistics Branch, Renegotiation Division, A. S. F., has been authorized by the War Contracts Board to act on its behalf in the issuance of assignments, reassignments, and cancellations of assignments. The Assignments and Statistics Branch will discharge its functions subject to such policies as may be established and directions given from time to time by the War Contracts Board but no assignment, reassignment or cancellation of assignment issued by the Assignments and Statistics Branch shall be deemed unauthorized or invalid unless specifically revoked by action of the War Contracts Board. The authority mentioned herein as conferred upon the Assignments and Statistics Branch is deemed to extend not only to the permanent staff of said Branch but also to persons who may from time to time be detailed by any Departmental Board to work with the staff of the Branch. (RR 201.4)

$ 1602.201–5 Control of assignments. A system for the recording and control of assignments will be maintained by the Assignments and Statistics Branch. It will operate with relation to the number of individual contractors assigned, each company whether or not a subsidiary or affiliate of another being represented by a separate assignment and assignment number. Joint ventures will be represented by a single assignment; separate assignments will not be issued for the individual members of a joint venture unless they hold, independently of the joint venture, other contracts subject to renegotiation. Statistical reports of the final results of renegotiation will, however, be based on the number of completed agreements regardless of how many assignments may be represented thereby. As a part of the system established for the recording and control of assignments, the Departments and Services will use the forms appearing in $ $ 1607.705 and 1607.706. (RR 201.5)

$ 1602.201-6 Communications. Communications relating to administrative matters in connection with assignments, reassignments and cancellation of assignments should be addressed to War Contracts Price Adjustment Board, Assignments and Statistics Branch, Room

3D 573, The Pentagon, Washington 25, D. C. (RR 201.6)

$ 1602.202 Basis of assignment. [RR 202]

$ 1602.202–1 In general. Assignments will ordinarily be made to the Department or Service believed to have the predominant interest in the assigned contractor's renegotiable business, but assignments will be made on the basis of industry or product classification in those cases where it is believed that such action will promote efficiency of renegotiation procedure. Assignments may also be determined by the existence of intercompany affiliations or transactions and, in exceptional instances, by considerations of geographic convenience. (RR 201.1]

$ 1602.202-2 Product classification. The War Contracts Board recognizes that in many cases it is advantageous to assign concerns which produce the same or similar products to the same Department or Service. Assignments on the basis of product classification are authorized particularly with respect to concerns producing products as to which one or more of the Departments or Services have the principal overall procurement interest or have acquired specialized experience in renegotiation. Departments and Services should suggest reassignment of contractors when, because of the nature of their products, it appears that efficiency of renegotiation procedure would be promoted thereby. Such reassignments should be suggested notwithstanding the fact that the predominant interest in the particular contractor's business may lie with the Department or Service suggesting the reassignment (see $ 1602.205–1 and form in 1607.703-3). (RR 202.2)

$ 1602.202-3 Brokers and agents. Brokers and agents subject to renegotiation by virtue of subsection (a) (5) (B) of the 1943 act and machine tool dealers will ordinarily be assigned to the Services and Sales Renegotiation Section, Procurement Legal Division, Office of the Under Secretary of the Navy, with the exception of those engaged in the sale of textiles and foodstuffs, who will ordinarily be assigned to the Price Adjustment Section of The Quartermaster General. (RR 202.3]

$ 1602.203 Selection of contractors for assignment, (RR 203]

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Page 2847

$ 1602.203–1 Contractors previously assigned. Generally contractors who were assigned for 1942 fiscal years have been assigned for 1943 fiscal years to the same Department or Service which held the 1942 assignment. Those assignments which were issued prior to the effective date of the 1943 act on behalf of the Joint Board have been confirmed by the War Contracts Board. Such assignments are subject to reassignment on the basis of industry or product classification or because of substantial change in predominant interest. (RR 203.1)

$ 1602.203-2 Contractors not previously assigned. In order that unnecessary assignments may be avoided, initial assignments will not ordinarily be made without the prior receipt and consideration by the Assignments and Statistics Branch on behalf of the War Contracts Board of the information required in the appropriate "Standard Form of Contractor's Report" (see $$ 1602.222 and 1607.701). Exceptions to this rule will be made at the request of any Agency authorized to conduct renegotiation upon an indication of urgency in point of time, lack of necessity for preliminary review, or other considerations deemed appropriate. Unless the required preliminary information is available through mandatory filing or otherwise, it will be obtained by the Assignments and Statistics Branch on behalf of the War Contracts Board by causing to be sent to the contractor a "Letter of Preliminary Inquiry" together with the appropriate "Standard Form of Contractor's Report” (see $ $ 1602.222, 1607.701 and 1607.702-1). In the event that the contractor fails to make satisfactory response within a reasonable time to the "Letter of Preliminary Inquiry," the case may be assigned for renegotiation to the Department or Service believed appropriate. Should the information required by the “Standard Form of Contractor's Report" be received by the War Contracts Board subsequent to the issuance of the assignment, the assignment may be reassigned or cancelled if such action be found by the War Contracts Board to be appropriate; otherwise, the information will be transmitted to the assignee Department or Service. (RR 203.2)

$ 1602.203–3 Identification of contractors not previously assigned. The identification of contractors not previously assigned will be accomplished principally through their filing mandatory financial

statements in conformity with the requirements of the first sentence of subsection (c) (5) (A) of the 1943 act (see § 1602.222). The War Contracts Board may use other sources of information. The Departments and Services may suggest to the War Contracts Board, by means of Form 101 (see $ 1607.703-1), names of contractors to be considered for assignment at a time earlier than that at which the mandatory financial statements may be received. Such suggestions should be limited to cases as to which there is substantial reason to believe that early institution of renegotiation proceedings is advisable or required. (RR 203.3]

$ 1602.203–4 Reports as to brokers and agents. Information coming to the attention of a Department or Service indicating that commissions or other compensation may have been or might be paid or accrued to a broker or agent subject to renegotiation under subsection (a) (5) (B) of the 1943 act or (a) (5) (ii) of the 1942 act will be reported to the Services and Sales Renegotiation Section, Procurement Legal Division, Navy Department, Washington 25, D. C., and to the War Contracts Price Adjustment Board, Assignments and Statistics Branch, Room 3D 573, The Pentagon, Washington 25, D. C. (see § 1602.202-3). (RR 203.4]

§ 1602.204 Form of assignments. Assignments will be issued on Form 102 (shown in § 1607.703—2) or by endorsements on Form 101 (see § 1607.703-1) or by other written notification to the assignee Department or Service. (RR 204)

§ 1602.205 Reassignment of cases. (RR 205]

$ 1602.205–1 When cases reassigned. The War Contracts Board will reassign a case to another Department or Service if it appears that efficiency of renegotiation procedure will be promoted thereby. Such reassignments may be based upon inter-company affiliations or transactions, substantial predominance of interest or the principle of assignment by product classification. Reassignments may be suggested by the Departments, Services, or other Agencies. The use of the form set forth at $ 1607.703-3 is recommended for this purpose, and all requests for reassignment shall contain a statement of the name and address of the office at which the file for the fiscal year under review may be obtained. Re

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