and shall issue such regulations with respect to its operations and procedures as may be necessary to carry out the policies, principles, methods, procedures, and standards prescribed by the Administrator of General Services. Any Government agency may issue such further regulations not inconsistent with the general orders or regulations of the Administrator of General Services as it deems necessary or desirable to carry out the provisions of this chapter.

(d) The Administrator of General Services may, within the limits of funds which may be made available, employ and fix the compensation of necessary personnel in accordance with the provisions of the civilservice laws and sections 661-663, 664-669, 670-672, 673, and 674 of Title 5 and makes expenditures for supplies, facilities, and services necessary for the performance of his functions under this chapter. Without regard to the provisions of the civil-service laws and sections 661-663, 664-669, 670–672, 673, and 674 of Title 5, he may appoint a Deputy Director and may employ certified public accountants, qualified cost accountants, industrial engineers, appraisers, and other experts, and fix their compensation, and contract with certified public accounting firms and qualified firms of engineers in the discharge of the duties imposed upon him and in furtherance of the objectives and policies of this chapter. The Administrator of General Services shall perform the duties imposed upon him through the personnel and facilities of the contracting agencies and other established Government agencies, to the extent that this does not interfere with the function of the Administrator of General Services to insure uniform and efficient administration of the provisions of this chapter.

(e) All orders and regulations prescribed by the Administrator of General Services or any Government agency under this chapter shall be published in the Federal Register. (July 1, 1944, ch. 358, § 4, 58 Stat. 651, amended Ex.Ord.No. 9809, § 8, Dec. 12, 1946, 11 F.R. 14281; 1947 Reorg. Plan No. 1, § 201, eff. July 1, 1947, 12 F. R. 4534, 61 Stat. 951, June 30, 1949, ch. 288, Title I, § 102(b), 63 Stat. 380.)

References in text.-Reference to Deputy Director being appointed by Director of Contract Settlement may be obsolete in view of transfer of functions of Director to the Secretary of the Treasury. See transfer of functions note under this section.

Effective date.-Effective date of chapter, see section 124 (a) of this title. Transfer of functions.-The functions of the Secretary of the Treasury were transferred to the Administrator of General Services by section 102(b) of Act June 30, 1949, cited to text.

Subsec. (a), establishing the Office of Contract Settlement to be headed by the Director of Contract Settlement and providing for the appointment of the Director by the President with the advice and consent of the Senate with compensation of $12,000 per year and a term of two years, was omitted and references in the remainder of this section to "Director" were changed to "Secretary of the Treasury" by Ex. Ord. No. 9809 and 1947 Reorg. Plan No. 1, both cited to text.

Section 201 of said 1947 Reorg. Plan No. 1 provided: "The functions of the Director of Contract Settlement and of the Office of Contract Settlement are transferred to the Secretary of the Treasury and shall be performed by him or, subject to his direction and control, by such officers and agencies of the Department of the Treasury as he may designate. The Contract Settlement Advisory Board created by section 5 of the Contract Settlement Act of 1944 (58 Stat. 649) [section 105 of this title] and the Appeal Board established under section 13(d) of that Act [section 113(d) of this title] are transferred to the Department of the Treasury: Provided, That the functions of the boards shall be performed by them, respectively, under such conditions and limitations as may now or here

after be prescribed by law. The Office of Contract Settlement is abolished." For provisions relating to transfer of records, property, personnel, and funds, see the full text of this Reorg. Plan in note to section 133y-16 of Title 5, Executive Departments and Government Officers and Employees.

This Reorganization Plan made permanent the transfer of functions to the Secretary of the Treasury which had already been made by Ex. Ord. No. 9809, cited to text and set out as a note under section 601 of Appendix to Title 50, War. Effective date of transfer of functions.-Transfer of functions as effective July 1, 1949, see note set out under section 201 of this title.

Cross references.-Additional duties of Director and delegation of authority by him, see sections 121 and 123 of this title.

Separability provisions and short title, see note under section 101 of this title. § 105. Contract Settlement Advisory Board; composition; duties.— There is created a Contract Settlement Advisory Board, with which the Administrator of General Services shall advise and consult. The Board shall be composed of the Administrator of General Services, who shall act as its Chairman, and of the Secretary of the Army, the Secretary of the Navy, the Chairman of the Maritime Commission, the Secretary of State, the chairman of the board of directors of the Reconstruction Finance Corporation, the Secretary of Commerce, and the Attorney General or any alternate or representative designated by any of them. The Administrator of General Services shall request other Government agencies to participate in the deliberations of the Board whenever matters specially affecting them are under consideration. (July 1, 1944, ch. 358, § 5, 58 Stat. 641; Ex.Ord.No. 9630, § 1, Sept. 27, 1945, 10 F.R. 12245; Ex.Ord. No. 9638, Oct. 4, 1945, 10 F.R. 12591; Ex. Ord.No. 9665, § 2, Dec. 27, 1945, 10 F.R. 15365; Ex.Ord.No. 9730, § 1, May 27, 1946, 11 F.R. 5777; Ex.Ord.No. 9809, §§ 1, 8, Dec. 12, 1946, 11 F.R. 14281; Ex. Ord.No. 9841, Apr. 23, 1947, 12 F.R. 2645; 1947 Reorg. Plan No. 1, § 201, eff. July 1, 1947, 12 F.R. 4534, 61 Stat. 951; July 26, 1947, ch. 343, Title II, § 205 (a), 61 Stat. 501.)

Transfer of functions.-All executive and administrative functions of the Maritime Commission were transferred to the Chairman of the Maritime Commission by 1949 Reorg. Plan No. 6, eff. Aug. 19, 1949, 14 F.R. 5228, 63 Stat.. See note set out under section 1111 of Title 46, Shipping.

The Contract Settlement Advisory Board and all its property, records, etc., was transferred to the General Services Administration by Act June 20, 1949, ch. 288, Title I, § 102(b), 63 Stat. 380, but was to retain and perform its functions. See section 212(b) of this title.

The functions of the Secretary of the Treasury were transferred to the Administrator of General Services by section 102(b) of Act June 30, 1949, cited to text.

The Contract Settlement Advisory Board was transferred to the Department of the Treasury by Ex. Ord. No. 9809, § 8, and 1947 Reorg. Plan No. 1, both cited to text. See note to section 104 of this title.

In text of this section, references to "Director" were changed to "Secretary of the Treasury" and phrase "the Secretary of the Treasury" following reference to Secretary of the Navy was omitted by Ex. Ord. No. 9809, § 8, and 1947 Reorg. Plan No. 1, both cited to text. See note to section 104 of this title.

The Administrator of the Foreign Economic Administration was changed to Secretary of State in view of Ex. Ord. No. 9809, cited to text, and set out as a note under 601 of Appendix to Title 50, War and National Defense.

"Secretary of Commerce" was substituted for references to the Chairman of the War Production Board and the chairman and board of directors of the Smaller War Plants Corporation. War Production Board functions were transferred successively to the Civilian Production Administration, to the Office of Temporary Controls and then to the Secretary of Commerce by Ex. Ord. Nos. 9638, 9809, and 9841, cited to text and set out as notes under section 601 of Appendix to Title 50, War and National Defense. Functions of the chairman and

Board of Directors of the Smaller War Plants Corporation were transferred to the Secretary of Commerce by Ex. Ord. No. 9665, cited to text.

Effective date of transfer of functions.-Transfer of functions as effective July 1, 1949, see note set out under section 201 of this title.

Change of name. 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 Act July 26, 1947, cited to text.

Cross references.—Separability provisions and short title, see note under section 101 of this title.

§ 106. Basis for settlement of termination claims-Priority to private contractors.-(a) It is the policy of the Government, and it shall be the responsibility of the contracting agencies and the Administrator of General Services, to provide war contractors with speedy and fair compensation for the termination of any war contract, in accordance with and subject to the provisions of this chapter, giving priority to contractors whose facilities are privately owned or privately operated. Such fair compensation for the termination of subcontracts shall be based on the same principles as compensation for the termination of prime contracts.

(b) Establishment of methods and standards.-Each contracting agency shall establish methods and standards, suitable to the conditions of various war contractors, for determining fair compensation for the termination of war contracts on the basis of actual, standard, average, or estimated costs, or of a percentage of the contract price based on the estimated percentage of completion of work under the terminated contract, or on any other equitable basis, as it deems appropriate. To the extent that such methods and standards require accounting, they shall be adapted, so far as practicable, to the accounting systems used by war contractors, if consistent with recognized commercial accounting practice.

(c) Conclusiveness of settlement.-Any contracting agency may settle all or any part of any termination claim under any war contract by agreement with the war contractor, or by determination of the amount due on the claim or part thereof without such agreement, or by any combination of these methods. Where any such settlement is made by agreement, the settlement shall be final and conclusive, except (1) to the extent otherwise agreed in the settlement; (2) for fraud; (3) upon renegotiation to eliminate excessive profits under section 1191 of Appendix to Title 50, unless exempt or exempted under such section; or (4) by mutual agreement before or after payment. Where any such settlement is made by determination without agreement, it shall likewise be final and conclusive, subject to the same exceptions as if made by agreement, unless the war contractor appeals or brings suit in accordance with section 113 of this title: Provided, That no settlement agreement hereunder involving payment to a war contractor of an amount in excess of $50,000 (or such lesser amount as the Administrator of General Services may from time to time determine) shall become binding upon the Government until the agreement has been reviewed and approved by a settlement review board of three or more members established by the contracting agency in the bureau, division, regional or district office, or other unit of the contracting agency authorized to make such settlement, or in the event of disapproval by the settlement review board, unless approved by the head of such bureau, division, regional or district office, or other unit. Failure of the settlement review

board to act upon any settlement within thirty days after its submission to the board shall operate as approval by the board. The sole function. of settlement review boards shall be to determine the over-all reasonableness of proposed settlement agreements from the point of view of protecting the interests of the Government. In determining, for purposes of this subsection, whether review of any settlement agreement is required because of the amounts involved, no deduction shall be made on account of credits for property chargeable to the Government or for advance or partial payments, but amounts payable under such settlement agreement for completed articles or work at the contract price and for the discharge of the termination claims of subcontractors shall be deducted. (d) Allowable costs.-Except as hereinafter provided, the methods and standards established under subsection (b) of this section for determining fair compensation for termination claims which are not settled by agreement shall be designed to compensate the war contractor fairly for the termination of the war contract, taking into account

(1) the direct and indirect manufacturing, selling and distribution, administrative and other costs and expenses incurred by the war contractor which are reasonably necessary for the performance of the war contract and properly allocable to the terminated portion thereof under recognized commercial accounting practices; and

(2) reasonable costs and expenses of settling termination claims of subcontractors related to the terminated portion of the war contract;

and

(3) reasonable accounting, legal, clerical, and other costs and expenses incident to termination and settlement of the terminated war contract; and

(4) reasonable costs and expenses of removing, preserving, storing and disposing of termination inventories; and

(5) such allowance for profit on the preparations made and work done for the terminated portion of the war contract as is reasonable under the circumstances; and

(6) interest on the termination claim in accordance with subsection (f) of this section; and

(7) the contract price and all amounts otherwise paid or payable under the contract.

The following shall not be included as elements of cost:

(i) Losses on other contracts, or from sales or exchanges of capital assets, fees and other expenses in connection with reorganization or recapitalization, antitrust or Federal income-tax litigation, or prosecution of Federal income-tax claims or other claims against the Government (except as provided in paragraph (3) above); losses on investments; provisions for contingencies; and premiums on life insurance where the contractor is the beneficiary.

(ii) The expense of conversion of the contractor's facilities to uses other than the performance of the contract.

(iii) Expenses due to the negligence or willful failure of the contractor to discontinue with reasonable promptness the incurring of expenses after the effective date of the termination notice.

(iv) Costs incurred in respect to facilities, materials, or services purchased or work done in excess of the reasonable quantitative requirements of the entire contract.

The failure specifically to mention in this subsection any item of cost is not intended to imply that it should be allowed or disallowed. The Secretary of the Treasury may interpret the provisions of this subsection and may provide for the inclusion or exclusion of other costs in accordance with recognized commercial accounting practice.

Where the small size of claims or the nature of production or performance or other factors make it impracticable to apply the principles stated in this subsection (d) to any class of settlements which are subject to this subsection (d), the contracting agencies may establish alternative methods and standards for determining fair compensation for that class of termination claims. The aggregate amount of compensation allowed in accordance with this subsection (excluding amounts allowed under paragraphs (3) and (4) above) shall not exceed the total contract price reduced by the amount of payments otherwise made or to be made under the contract.

(e) Settlement by agreement.-In order to carry out the objectives of this chapter, termination claims shall be settled by agreement to the maximum extent feasible and the methods and standards established under subsection (b) of this section shall be designed to facilitate such settlements. To the extent that he deems it practicable to do so without impeding expeditious settlements, the Administrator of General Services shall require the contracting agencies to take into account the factors enumerated in subsection (d) of this section in establishing methods and standards for determining fair compensation in the settlement of termination claims by agreement.

(f) Interest. Each contracting agency shall allow and pay interest on the amount due and unpaid from time to time on any termination claim under a prime contract at the rate of 22 per centum per annum for the period beginning thirty days after the date fixed for termination and ending with the date of final payment, except that (1) if the prime contractor unreasonably delays the settlement of his claim, interest shall not accrue for the period of such delay, (2) if interest for the period after termination on any advance payment or loan, made or guaranteed by the Government, has been waived for the benefit of the contractor, the amount of the interest so waived allocable to the terminated contract or the terminated part of the contract shall be deducted from the interest otherwise payable hereunder, and (3) if after delivery of findings by a contracting agency, the contractor appeals or sues as provided in section 113 of this title, interest shall not accrue after the thirtieth day following the delivery of the findings on any amount allowed by such findings, unless such amount is increased upon such appeal or suit. In approving, ratifying, authorizing, or making termination settlements with subcontractors, each contracting agency shall allow interest on the termination claim of the subcontractor on the same basis and subject to the same conditions as are applicable to a prime contractor.

(g) Amendment of contracts.-Where any war contract does not provide for or provides against such fair compensation for its termination, the contracting agency, either before or after its termination, shall amend such war contract by agreement with the war contractor, or shall authorize, approve, or ratify an amendment of such war contract by the parties thereto, to provide for such fair compensation. (July 1, 1944, ch. 358, § 6, 58 Stat. 652, amended Ex. Ord. No. 9809, § 8, Dec. 12,