by the excess, if any, by which the amount per barrel paid for such crude exceeds the larger of the following:

(1) The basic maximum price therefor plus twenty-five (25) cents, or

(2) The applicant's highest posted purchase price, in effect on or after August 20, 1946, for such crude; except that, for the period August 1 through 19, 1946, only, the amount of this subparagraph shall be the applicant's posted purchase price in effect on the date of purchase;

Provided, however, That such claim shall in no event be greater than an amount equal to the number of barrels of such crude purchased and paid for, multiplied by the applicant's premium rate for such crude. Crude for which an applicant is prohibited from paying the purchase price in whole or in part because of inability on the part of applicant to determine the legal owner or owners, or by reason of other legal prohibitions, shall be deemed to have been paid for when there has been recorded in applicant's books a suspense or other account reflecting a liability on the part of applicant for such purchase price which applicant will ultimately pay to the party or parties legally entitled thereto. [Paragraph (a) amended by Amdt. 4, Aug. 29, 1946, effective Aug. 1, 1946, 11 F.R. 9856]

(b) A claim with respect to crude produced in any designated area and not sold, but refined or consumed by the applicant, shall be in an amount equal to the number of barrels of such crude run by the applicant from the receiving tank, multiplied by the applicant's premium rate for crude produced from such designated area. The number of barrels shall be calculated after such corrections for temperature, basic sediment, water, etc., as are customary in arriving at volumes of crude purchased in the designated area. [Paragraph (b) amended by Amdt. 4, Aug. 29, 1946, effective Aug. 1, 1946, 11 F.R. 9856] [Preceding paragraph (b), in small type, superseded by following paragraph (b) during period covered by this Supplement]

(b) A claim with respect to crude produced in any designated area and not sold, but refined or consumed by the applicant, shall be in an amount equal to the number of barrels of such crude run by the applicant from the receiving tank, multiplied by the applicant's premium rate for crude produced from such designated area; Provided, however, That the applicant's per barrel rate of claim with respect to crude produced by

it in any designated area may not exceed the applicant's per barrel rate of claim with respect to such crude purchased by it. In the event the applicant is not a purchaser of crude produced in any designated area as to which it files a claim under this paragraph, its per barrel rate of claim shall be established by Reconstruction Finance Corporation on special application filed by the applicant. The number of barrels shall be calculated after such corrections for temperature, basic sediment, water, etc., as are customary in arriving at volumes of crude purchased in the designated area. [Paragraph (b) amended by Amdt. 5, Sept. 13, 1946, effective Aug. 1, 1946, 11 F.R. 11012]

(c) Claims with respect to crude produced in any designated area may include only quantities run from receiving tanks on or after the effective date of the inclusion of such designated area in the attached Schedule A. [Paragraph (c) amended by Amdt. 2, Apr. 30, 1946, effective Apr. 1, 1946, 11 F.R. 5124]

NOTE: For Schedule A and amendments thereto, see 10 F.R. 6774, 6779, and 6785, 11 F.R. 2451, 2520, 5745, 9079, 9857, 11773, 13526. Amendment 10 to Schedule A was filed with the Division of the Federal Register on Mar. 8, 1946.

Amendment 11 to Schedule A was filed with the Division of the Federal Register on Mar. 11, 1946.

Amendments 4, 5, 12, and 13 to Schedule A were filed with the Division of the Federal Register on May 24, 1946.

Schedule A and Amendment 1 to Schedule A were filed with the Division of the Federal Register on Aug. 20, 1946.

Amendment 4 to Schedule A (revised Apr. 1, 1946) was filed with the Division of the Federal Register on Sept. 6, 1946.

Amendment 5 to Schedule A was filed with the Division of the Federal Register on Oct. 9, 1946.

Amendment 6 to Schedule A (revised Apr. 1, 1946) was filed with the Division of the Federal Register on Nov. 15, 1946.

PART 7009-FLOUR PRODUCTION PAYMENTS [EXPIRED]

CODIFICATION: Part 7009 expired June 30, 1946. See note to this chapter, supra. PART 7010-LIVESTOCK SLAUGHTER PAYMENTS [EXPIRED]

CODIFICATION: Part 7010 expired Oct. 14, 1946. See note to this chapter, supra.

Part

PART 8004 TERMINATION COST MEMORANDUMS

Sec.

8004.11 Settlement expenses and costs of protection and disposition of property. [Revised]

§ 8004.11 Settlement expenses and costs of protection and disposition of property-(a) Reference to Part 8003 of this chapter. Section 8003.1 provides for the inclusion of settlement expenses and costs of protection and disposition of property as follows:

§ 8003.1 General principles.

(k) Settlement expenses. Reasonable accounting, legal, clerical, and other expenses necessary in connection with the termination and settlement of the contract and subcontracts and purchase orders thereunder, including expenses incurred for the purpose of obtaining payment from the Government only to the extent reasonably necessary for the preparation and presentation of settlement proposals and cost evidence in connection therewith.

(1) Protection and disposition of property. Storage, transportation and other costs incurred for the protection of property acquired or produced for the contract or in connection with the disposition of such property.

(b) Definitions. (1) The costs and expenses covered by § 8003.1 (k) and (1) of this chapter include such items as are incident to effecting terminations, termination settlements, and the protection and disposition of property acquired or produced for the contract and on hand at the date of termination. They do not include: (i) the cost of idle equipment, facilities, and personnel and (ii) accounting, legal, clerical, and other costs and expenses incurred by a prime contractor or a subcontractor in any formal appeal or submission, either within a contracting agency or to the Appeal Board of the Office of Contract Settlement, or in any arbitration, mediation, or suit in court, where such proceeding is instituted by such contractor for the

purpose of obtaining payment in excess of the settlement amount determined to be due by the Government or an intervening higher tier contractor. Nothing herein shall be deemed to preclude recovery by a contractor of the reasonable costs and expenses incurred by it in settling termination claims of subcontractors related to the terminated portion of its war contract, including in appropriate cases the cost of defending itself against the assertion of such claims.

(2) The costs of preservation and protection of termination inventory include the necessary greasing, packing, and any other special treatment accorded termination inventory to insure the maintenance of its condition as well as the cost of special precautions necessary to insure its safety. Such costs should be distinguished from storage of termination inventory, the cost of which may include (i) amounts actually paid or payable to outside parties and (ii) a reasonable allocation of the contractor's own costs.

(c) Interpretations. (1) To the extent practicable, the costs and expenses covered by this section should be segregated and charged directly to particular terminated contracts. However, where direct charging is not practicable, any method of allocating these expenses may be used which produces results consistent with the principles set forth in subparagraph (3) of this paragraph. The method used may be based on estimates in the light of past experience and reasonably anticipated future terminations. In the absence of a more appropriate basis of allocation, expenses not charged directly may be allocated to particular terminated contracts by the application of a properly computed rate to the amount of the contractor's own costs included in the settlement proposals.

(2) Settlement expenses and costs of protection and disposition of property may include a properly allocable portion of the costs, including overhead, of special termination units or departments and regularly established organizational units. In such cases, it is not necessary that the expenses of such units or departments be identified with specific contracts, but the services performed must be directly related to termination activities. Factory and administrative overhead may be included as a settlement expense only to the extent that the elements of such overhead are properly

allocable to such termination units or departments.

(3) Whatever method is used to allocate settlement and property expenses, the cumulative amount included for these expenses in all termination settlements to date should not exceed the cumulative total of such expenses actually incurred, and the total amount included in any single termination settlement proposal should not exceed an amount reasonably necessary to settle the contract in question.

(4) The cost of microfilming or preserving records of a war contractor will ordinarily be classified as general and administrative expense and should not be included as a direct settlement expense in a termination settlement.

(5) Part 8051 of this chapter relates to the clearance of termination inventory from plants of war contractors. § 8051.4 of this chapter provides for reimbursement of the costs thereof as follows:

Contractor's right to store at his own risk. A war contractor may at any time remove from his plant and store on his own premises or elsewhere any of the above materials at his own risk. The war contractor will use reasonable care in the transportation and preservation of material so removed and stored, and will comply with any directions or specifications covering removal, preservation, transportation and storage which may be issued by the contracting agency. The war contractor is entitled to be reimbursed for the reasonable cost of (1) necessary or appropriate transportation, preservation, protection and storage, and (ii) compliance with any directions or specifications in connection therewith issued by the contracting agency. Ordinarily, charges for storage of termination inventory prior to the expiration of the plant clearance period will not be deemed a reasonable settlement expense.

(6) Section 8051.5 of this chapter provides for the removal and storage of termination inventory after the 60-day plant clearance period as follows:

Contractor's right to remove or store at Government expense and risk. If the contracting agency fails to arrange for storage by the war contractor or to remove any termination inventory within 60 days after its receipt of a satisfactory inventory schedule (or within such longer period as the contractor may agree), the contractor may remove and store at the Government's expense and risk, any or all those materials remaining, using reasonable care in the transportation and preservation of materials so removed and stored. The words "at the Government's expense and risk" mean,

among other things, that the contractor is not required to insure such materials.

(7) In accordance with the foregoing references, the contractor may include in its settlement proposal the reasonable and necessary costs of transportation, preservation, and protection of termination inventory, regardless of whether such costs are incurred prior or subsequent to the expiration of the 60-day plant clearance period.

(8) Charges for storage of termination inventory may ordinarily be included only for the time following the 60-day plant clearance period. However, if the 60-day period is unreasonable in a particular case, the cost of storage of termination inventory prior to the expiration of such period may be included. (Secs. 4 (b), 6, 58 Stat. 651, 652; 41 U.S.C., Sup., 104 (b), 106) [Reg. 14, Amdt. 4, Mar. 30, 1946, 11 F.R. 3896]

PART 8085-APPEAL BOARD; RULES OF PRACTICE AND PROCEDURE

Sec. 8085.1 8085.4 8085.6

8085.8 8085.19

Address and business hours. [Re-
vised]

Initiation of appeal. [Amended]
Response; submission by contract-
ing agency of documents in sup-
port of findings or failure to make
findings. [Amended]
Panels. [Amended]

Assignment of cases to panels; reports by panels; review of reports; entry of awards or decisions; date of awards or decisions. [Revised] 8085.21 Claims against contracting agencies not originally parties. [Added] 8085.22 Dismissal of proceedings. [Added]

AUTHORITY: §§ 8085.1 to 8085.22, appearing in this Supplement, issued under secs. 4 (b), 13 (d), 58 Stat. 651, 660; 41 U.S.C., Sup., 104 (b), 113 (d) (3).

SOURCE: $ 8085.1 to 8085.22, appearing in this Supplement, contained in Regulation 15, Amendment 1, Director, Office of Contract Settlement, Mar. 26, 1946, 11 F.R. 3603, except as noted following provisions affected.

§ 8085.1 Address and business hours. The address of the principal office of the Appeal Board is: Federal Reserve Building, Washington 25, D. C. This Office will be open to the public from 9 o'clock a. m. to 5:00 o'clock p. m. from Monday to Friday inclusive in each week except on holidays designated by Federal statute or Executive order.

§ 8085.4 Initiation of appeal.

(b) Documents in support of appeal.

material or written argument, pertinent to the issues, which he may wish to submit. It is expected that appellant will use discretion so as: (i) not to burden the record with irrelevant material, and (ii) to cooperate in furnishing the Board with relevant information respecting the issues to be decided. However, nothing herein shall preclude appellant from introducing evidence before the Board or any panel thereof, including any documentary evidence not submitted with the notice of appeal in compliance with this subparagraph. The affidavits and documentary evidence filed with a notice of appeal are for the preliminary information of the Board only, and such filing does not entitle them to admission in evidence upon the hearing. After the filing of such notice written argument may be filed only in the discretion of the board or panel, as provided in § 8085.14. [Subparagraph (2) amended by Reg. 15, Amdt. 2, Aug. 2, 1946, 11 F.R. 9138]

(d) Transmission by appellant to contracting agency of notice of appeal and documents in support of appeal. Before the time when the notice of appeal and the documents in support of the appeal are filed with the Board at its principal office in Washington, D. C., as provided in paragraphs (a) and (b) of this section, appellant shall send a copy of the notice and one complete set of the supporting documents to the office of the contracting agency which made the findings from which the appeal is taken, or upon which a demand for findings was made, if the appeal is taken because of the failure of the agency to make findings after appellant's written demand therefor. [Paragraph (d) amended]

CODIFICATION: In the first sentence of § 8085.4 (a) (5) the parenthetical phrase "(without signature)" was inserted imme

diately following "a copy of the notice of appeal" and preceding "and one complete set of the documents".

§ 8085.6 Response; submission by contracting agency of documents in support of findings or failure to make findings.

(b) Documents in support of findings or failure to make findings. With the response, the contracting agency shall file copies of any relevant stipulations of fact entered into between appellant and the agency, and copies of any affidavits or documentary evidence which, in its opinion, are pertinent to the issues or explain its findings or failure to make findings; and the agency may file any other material or written argument, pertinent to the issues, which it may wish to submit. The agency shall not duplicate unnecessarily documents submitted by appellant in support of the appeal. It is expected that the agency will use discretion so as: (1) not to burden the record with irrelevant material, and (2) to cooperate in furnishing the board with relevant information respecting the issues to be decided. However, nothing herein shall preclude the agency from introducing evidence before the board or any panel thereof, including any documentary evidence not submitted with the response in compliance with this paragraph. The affidavits and documentary evidence filed with a response are for the preliminary information of the board only, and such filing does not entitle them to admission in evidence upon the hearing. After the filing of such response, written argument may be filed only in the discretion of the board or panel, as provided in § 8085.14. [Paragraph (b) amended by Reg. 15, Amdt. 2, Aug. 2, 1946, 11 F.R. 91381

Panels.

A ma

§ 8085.8 jority of the members of any panel shall constitute a quorum and, if a quorum is present, action of a majority of those present shall constitute action of the panel. Action of a panel, the members of which are all the full-time members of the Board shall constitute action of the Board. [Two sentences added]

§ 8085.19 Assignment of cases to panels; reports by panels; review of reports; entry of awards or decisions; date of awards or decisions-(a) Assignment of cases to panels. Each case shall be assigned in accordance with section 13 (d) (2) of the Contract Settle

ment Act, by the Chairman, to a designated panel for hearing, and, subject to the review provisions of this part, for disposition.

(b) Reports by panels. Each panel shall, as soon as practicable after hearing, prepare a report in the form of its proposed disposition of each case assigned to it and such report shall be submitted to the Chairman of the Board. Such report shall become the award or the decision of the panel only when entered as such award or decision upon direction of the Chairman or upon his omission to direct within 10 days after its submission to him that it be reviewed as hereinafter provided.

(c) Review of reports. In order to insure consistency in the application of the act, panel reports shall upon direction of the Chairman be subject to review by a panel the members of which are all the full-time members of the Board. The panel report shall be given the benefit of every reasonable intendment in its favor so far as questions of fact and the proposed disposition of the case are concerned; and any part-time member of the Board acting as a member of the panel submitting the report shall be entitled to participate in the review, although the votes of the full-time members will be determinative. The reviewing panel may, where advisable, reopen the hearing or take such other action as it deems necessary to a just decision of the case. An award or decision entered upon such review shall constitute the award or decision of the Board.

As

(d) Entry of awards or decisions. soon as the Chairman has directed the entry of the report of a panel as its award or decision or has omitted for 10 days to direct its review as hereinbefore provided, or as soon as the Board has made an award or decision, the award or decision of the panel or Board shall be entered in the Office of the Clerk of the Board as the award or decision of the Board. Upon such entry a certified copy of the award or decision with notice of the date of the entry thereof will be sent by registered mail to each of the parties to the case.

(e) Date of awards or decisions. The date of the award or decision of the Board or panel shall be the date of the entry thereof in the Office of the Clerk of the Board.

§ 8085.21 Claims against contracting agencies not originally parties.

(a)