PART XX, TITLE 50

CHAPTER 16.-NATIONAL INDUSTRIAL RESERVES NATIONAL INDUSTRIAL RESERVE ACT OF 1948

Section 451. Congressional declaration of purpose and policy. In enacting this chapter, it is the intent of Congress to provide a comprehensive and continuous program for the future safety and for the defense of the United States by providing adequate measures whereby an essential nucleus of Government-owned industrial plants and a national reserve of machine tools and industrial manufacturing equipment may be assured for immediate use to supply the needs of the armed forces in time of national emergency for in anticipation thereof; it is further the intent of the Congress that such Government-owned plants and such reserve shall not exceed in number or kind the minimum requirements for immediate use in time of national emergency, and that any such items which shall become surplus to such requirements shall be disposed of as expeditiously as possible. July 2. 1948, c. 811, § 2, 62 Stat. 1225.

(a) The term "national industrial reserve", as used in this chapter, means that excess industrial property which has been or may hereafter be sold, leased, or otherwise disposed of by the United States, subject to a national security clause, and that excess industrial property of the United States which not having been sold, leased, or otherwise disposed of, subject to a national security clause, shall be transferred to the Administrator of General Services under section 454 of this title.

(b) The term "excess industrial property," as used in this chapter, means any machine tool, any industrial manufacturing equipment and any industrial plant (including structures on land owned by or leased to the United States, substantially equipped with machinery, tools, and equipment) which is capable of economic operation as a separate and independent industrial unit and which is not an integral part of an installation of a private contractor, which machine tools, industrial manufacturing equipment, and industrial plants are under the control of any executive department or independent establishment in the executive branch of the Government, including any wholly owned Government corporation and which are not required for its immediate needs and responsibilities as determined by the head thereof.

(c) The term "national security clause", as used in this chapter, means those terms, conditions, restrictions, and reservations, heretofore formulated or as may be formulated under section

453 (2) of this title for insertion in instruments of sale or lease of property, determined in accordance with section 453 (1) of this title to be a part of the national industrial reserve, which will guarantee the availability of such property for the purposes of national defense at any time when availability thereof for such purposes is deemed necessary by the Secretary of Defense. July 2, 1948, c. 811, § 3, 62 Stat. 1225; June 30, 1949, c. 288, Title I, § 103, 63 Stat. 380.

Section 453. Powers and duties of Secretary of Defense.

To effectuate the policy set forth in section 451 of this title the Secretary of Defense is authorized and directed to—

(1) determine which excess industrial properties should become a part of the national industrial reserve under the provisions of this chapter;

(2) formulate a national security clause, as defined in section 452(c) of this title and vary or modify the same from time to time in such manner as best to attain the objectives of this chapter, having due regard to securing advantageous terms to the Government in the disposal of excess industrial property;

(3) consent to the relinquishment or waiver of all or any part of any national security clause in specific cases when necessary to permit the disposition of particular excess industrial property when it is determined that the retention of the productive capacity of any such excess industrial property is no longer essential to the national security or that the retention of a lesser interest than that originally required will adequately fulfill the purposes of this chapter: Provided, That nothing in this subsection shall require the modification or waiver of any part of any such national security clause when such clause is deemed necessary by the Secretary of Defense to effectuate the purposes of this chapter; and

(4) designate what excess industrial property shall be disposed of subject to the provisions of the national security clause. July 2, 1948, c. 811, § 4, 62 Stat. 1226.

Section 454. Plant disposal; modification of national security clauses; transfer to Administrator of General Services; machine tools.

(a) In the event that any agency charged with the disposal of excess industrial property, after making every practicable effort so to do, is unable to dispose of any excess industrial plant because of the national security clause it shall notify the Secretary of Defense, indicating such modifications in the national security clause, if any, which in its judgment would make possible disposal of the plant. The Secretary of Defense shall consider and agree to any and all such proposed modifications as in his judgment

would be consistent with the purposes of this chapter. If, however, such clause is not modified or the requirements thereof waived pursuant to section 453 (c) of this title, or if modified, such plant cannot then be disposed of under such modified clause, the Secretary of Defense shall direct that such plant be transferred to the Administrator of General Services, and such transfer shall be without reimbursement or transfer of funds.

(b) Notwithstanding any other provisions of law, any agency charged with the disposal of excess machine tools and industrial manufacturing equipment shall transfer custody of such machine tools and equipment as may be designated by the Secretary of Defense pursuant to section 453 of this title to the Administrator of General Services, without reimbursement, for storage and maintenance. July 2, 1948, c. 811, § 5, 62 Stat. 1226; June 30, 1949, c. 288, Title I, § 103, 63 Stat. 380.

Section 455. Acceptance of plants by Administrator of General Services; disposition; conditions of lease.

Subject to provisions of section 456 of this title, the Administrator of General Services is authorized and directed to accept the transfer to it of such excess industrial property as is directed to be transferred to it under section 453 of this title and, as and when directed or authorized by the Secretary of Defense pursuant to section 456 of this title, to utilize, maintain, protect, repair, restore, renovate, lease, or dispose of such property. Notwithstanding section 303(b) of Title 40, any lease may provide for the renovation, maintenance, protection, repair, and restoration by the lessee, of the property leased, or of the entire unit or installation when a substantial part thereof is leased, as part or all of the consideration for the lease of such property. July 2, 1948, c. 811, § 6, 62 Stat. 1226; June 30, 1949, c. 288, Title I, § 103, 63 Stat. 380.

Section 456. Powers of Secretary of Defense respecting property in national industrial reserve.

The Secretary of Defense, with respect to property in the national industrial reserve, is authorized when he deems such action to be in the interest of national security

(1) to establish general policies for the care, maintenance, utilization, recording, and security of such property transferred to the Administrator of General Services pursuant to section 454 of this title; and

(2) to direct the transfer without reimbursement by the Administrator of General Services of any of such property to other Government agencies with the consent of such agencies; and

(3) to direct the leasing by the Administrator of General Services of any of such property to designated lessees; and

(4) to authorize the disposition by the Administrator of General Services of any of such property by sale or otherwise when in the opinion of the Secretary of Defense such property may be disposed of subject to or free of the national security clause provided for in section 454 of this title; and

(5) to authorize and regulate the lending of any such property by the Administrator of General Services to any nonprofit educational institution or training school when (a) the Secretary shall determine that the program proposed by such institution or school for the use of such property will contribute materially to national defense, and (b) such institution or school shall by agreement make such provision as the Secretary shall deem satisfactory for the proper maintenance of such property and for its return to the Administrator of General Services without expense to the Government. July 2, 1948, c. 811, § 7, 62 Stat. 1227; June 30, 1949, c. 288, Title I, § 103, 63 Stat. 380.

Section 457. Transportation, maintenance, disposition, etc., by Administrator of General Services of transferred property.

As and when directed or authorized by the Secretary of Defense pursuant to the provisions of section 456 of this title, the Administrator of General Services shall after the date upon which transfer is directed pursuant to section 454 of this title provide for the transportation, handling, care, storage, protection, maintenance, utilization, repair, restoration, renovation, leasing, and disposition of excess industrial property. July 2, 1948, c. 811, § 8, 62 Stat. 1227; June 30, 1949, c. 288, Title I, § 103, 63 Stat. 380.

Section 458. Limitation on acquisition of property.

Nothing contained in this chapter shall be construed as authorizing the acquisition of any property for the national industrial reserve except from excess or surplus Government-owned property. July 2, 1948, c. 811, § 9, 62 Stat. 1227.

CHAPTER 29.-NATIONAL DEFENSE CONTRACTS

Section 1431. Authorization; official approval.

The President may authorize any department or agency of the Government which exercises functions in connection with the national defense, acting in accordance with regulations prescribed by the President for the protection of the Government, to enter into contracts or into amendments or modifications of contracts

heretofore or hereafter made and to make advance payments theron, without regard to other provisions of law relating to the making, performance, amendment, or modification of contracts, whenever he deems that such action would facilitate the national defense. The authority conferred by this section shall not be utilized to obligate the United States in an amount in excess of $50,000 without approval by an official at or above the level of an Assistant Secretary or his Deputy, or an assistant head or his deputy, of such department or agency, or by a Contract Adjustment Board established therein. Pub. L. 85-804, § 1, Aug. 28, 1958, 72 Stat. 972.

Section 1432. Restrictions.

Nothing in this chapter shall be construed to constitute authorization hereunder for

(a) the use of the cost-plus-a-percentage-of-cost system of contracting;

(b) any contract in violation of existing law relating to limitation of profits;

(c) the negotiation of purchases of or contracts for property or services required by law to be procured by formal advertising and competitive bidding;

(d) the waiver of any bid, payment, performance, or other bond required by law;

(e) the amendment of a contract negotiated under section 2304 (a) (15) of Title 10 or under section 252 (c) (13) of Title 41 to increase the contract price to an amount higher than the lowest rejected bid of any responsible bidder; or

(f) the formalization of an informal commitment, unless it is found that at the time the commitment was made it was impracticable to use normal procurement procedures. Pub. L. 85-804, § 2, Aug. 28, 1958, 72 Stat. 972.

Section 1433. Public record; examination of records by Comptroller General.

(a) All actions under the authority of this chapter shall be made a matter of public record under regulations prescribed by the President and when deemed by him not to be detrimental to the national security.

(b) All contracts entered into, amended, or modified pursuant to authority contained in this chapter shall include a clause to the effect that the Comptroller General of the United States or any of his duly authorized representatives shall, until the expiration of three years after final payment, have access to and the right to examine any directly pertinent books, documents, papers, and records of the contractor or any of his subcontractors engaged in