domestic economy may not be available to them for export.

(e) Cooperative organizations shall be permitted to participate in fixed price sales of consumer goods at the same time and under the same conditions as other commercial enterprises. In determining the level of trade at which a particular cooperative organization will buy, consideration should be given solely to its functions as a wholesaler or retailer and not the features of cooperative ownership.

(f) Industrial users, i. e., manufacturing or commercial enterprises of a class which normally purchases property for its own use and not for resale shall be permitted to participate in fixed price sales at the retail level, or at the wholesale level (at the minimum quantity specified in § 8322.8) if such class customarily buys from manufacturers at the same price as wholesalers, Provided, That in either case the property so purchased is not resold in its present form except after incorporation into an end product. Orders of commercial and industrial purchasers shall be filled in accordance with § 8322.10 after retailers and wholesalers who serve small retailers.

(g) Purchasing agents (including resident buyers, commission men, brokers, and other agents) who perform the purchasing function for the principals they represent, shall be permitted to participate in disposals of surplus property. Sales made through these agents shall be made only in the name of the principal they represent and in fixed price sales at the level of distribution of the principal. Such agents shall be required to present a written authorization from the principal for each purchase.

(h) All purchasers who may participate in fixed price sales shall also be eligible to acquire property offered by any other method.

(1) Ultimate consumers (persons who buy for their own personal use) are not ordinarily expected to purchase surplus property directly from the disposal agency except when such property is offered in suitable lots or units under circumstances which will not complicate the work of disposal, or where sales to ultimate consumers, for example through rural farm auctions, would be more effective than offerings by other methods. Sales to ultimate consumers or to any other purchasers who are not normal

trade channels may be made in any quantity and by any method of sale after it has been clearly established that the property will not move through normal channels.

§ 8322.12 Exclusive sales to one purchaser. It is contrary to general policy to sell any item of surplus property exclusively to one purchaser (including the original vendor or manufacturer). Exceptions may be taken to this rule only when:

(a) It is necessary in order to protect public health or public safety, or

(b) The exclusive purchaser can perform certain functions necessary to make the property salable, such as repairing, rehabilitating, sorting, grading, or testing more economically and effectively than the disposal agency or others.

§ 8322.13 Competitive bidding. (a) Whenever the competitive bid method of sale is employed, an upset price shall be established representing the tentative estimate of the disposal agency as to what may be the fair value of the property. The amount of the upset price shall not be disclosed in the offering nor in any other way to any person not in the employ of the disposal agency. If all or some bids received are lower than such upset price, the disposal agency may reject the bids below the upset price, or with the approval of a reviewing authority, may accept them. The unsold balance may be reoffered with the same or a lower upset price.

(b) No certificate or other finding shall be required that the property offered for sale by competitive bidding is scrap or salvage. No scrap warranty shall be required of the purchaser except in cases where the disposal agency finds that the property is dangerous to public health or safety.

(c) Whenever property which has not previously been offered for sale to priority claimants at fixed prices is offered for sale by competitive bidding, a reserve of such property shall be established to meet the anticipated requirements of priority claimants. The competitive bid offering shall be made simultaneously to priority claimants and to non-priority purchasers, and the lowest acceptable bid by such non-priority purchasers shall be regarded as fair value for priority claimants. Any property so reserved which remains after filling the legitimate

8323.4

8323.5

8323.6

8323.7

Allocation.

Interdepartmental Advisory Committee on Surplus Electronic Property Disposal.

Establishing minimum prices.

Determination to be commercially unsalable.

Disposals for educational and public-health purposes.

8323.8 8323.9 Disposal as salvage or scrap. 8323.10 Rendering components and parts unfit for intended use.

Disposal of special purpose electronic property.

8323.11 Regulations by agencies to be reported to the Administrator.

8323.12 Records and reports.

SOURCE: §§ 8323.1 to 8323.12, inclusive, contained in Regulation 23, Administrator, Dec. 16, 1946, effective Dec. 19, 1946, 11 F.R. 14490.

§ 8323.1 Definitions—(a) Terms defined in act. Terms not defined in paragraph (b) of this section which are defined in the Surplus Property Act of 1944 shall in this part have the meaning given to them in the act.

"Electronic

(b) Other terms. (1) property" means mobile and stationary personal property peculiar to the science of electronics including wired or wireless communications. It includes, but is not limited to, radio-broadcast receiving and transmitting equipment, other than when installed in or attached to an aircraft, as complete units or the respective components and parts thereof; telephone and telegraph equipment, as complete units or the respective components or parts thereof; electronic detection devices; electronic tubes; electronic equipment such as condensers, resistors, indicators, mounting components, and converters. It also includes those instruments and devices for testing radio and radar equipment, as well as such wire and cable as is used in communications systems.

(2) "Commercially unsalable property" as used herein is distinguished from property of no commercial value as used in Part 8319 of this chapter and

means property which has no reasonable prospect of sale at or above a minimum price established by the disposal agency, or where such minimum price has not been established, no reasonable prospect of sale except as salvage or scrap.

(3) "Salvage" means property that is in such a worn, damaged, deteriorated, or incomplete condition, or is of such a specialized nature that it has no reasonable prospect of sale as a unit, or is not usable as a unit without major repairs, or alteration. Salvage has some value in excess of its basic material content because it may contain serviceable components or may have value to a purchaser who may make major repairs or alterations. Salvage includes used containers and cable reels.

(4) "Scrap" means property that has no reasonable prospect of sale except for its basic material content.

(5) "Instrumentality" as used herein refers to any instrumentality of a State, territory, or possession of the United States, the District of Columbia, or any political subdivision thereof, as well as such States and subdivisions themselves.

(6) "Nonprofit institution" means any nonprofit scientific, literary, educational, public-health, public-welfare, charitable, or eleemosynary institution, organization, or association, or any nonprofit hospital or similar institution, organization, or association, which has been held exempt from taxation under section 101 (6) of the Internal Revenue Code, or any nonprofit volunteer fire company or cooperative hospital or similar institution which has been held exempt from taxation under section 101 (8) of the Internal Revenue Code.

(7) "Educational institution or instrumentality" means any school, school system, library, college, university, or other similar institution, organization, or association, which is organized for the primary purpose of carrying on instruction or research in the public interest, and which is a nonprofit institution or an instrumentality.

(8) "Public-health institution or instrumentality" means any hospital, board, agency, institution, organization, or association, which is organized for the primary purpose of carrying on medical, public-health, or sanitational services in the public interest, or research to extend the knowledge in these fields, and which is a nonprofit institution or an instrumentality.

(9) "Special purpose electronic property" means those types which have been primarily designed for, and which are generally useful only for, military purposes or which are not readily adaptable or which cannot be economically converted so as to be adaptable for general use by individuals or industry in a peacetime economy.

(10) "General purpose electronic property" means those types which are so designed, or which may economically be converted to such design, so as to be usable or adaptable for use by individuals or industry in a peacetime economy.

§ 8323.2 Scope. This part applies to the disposal of surplus electronic property located in the continental United States, its territories and possessions.

§ 8323.3 Allocation. Surplus electronic property shall be disposed of so as to satisfy the needs of priority claimants as provided for in Part 8302 of this chapter and of nonprofit institutions as provided for in Part 8314 of this chapter. Thereafter the Administrator or his designee may allocate electronic property in short supply to non-priority purchasers. Allocations will be made in such a manner as will effectuate the objectives of the act.

§ 8323.4 Interdepartmental Advisory Committee on Surplus Electronic Property Disposal. Pursuant to arrangements made with other interested Government agencies, there is established an Interdepartmental Advisory Committee on Surplus Electronic Property Disposal which shall function as an advisory comImittee to the Administrator and shall consist of representatives of the Federal Communications Commission, the War Department, the Navy Department, the Department of Interior, the War Assets Administration, and a representative of the Administrator, who shall serve as Chairman of the Committee. It shall be the duty of such Committee to furnish advice and make recommendations to the Administrator with respect to the policies and procedures to be applied in the disposal of surplus electronics and the allocation of electronic property upon which advice may be requested by the Administrator.

§ 8323.5 Establishing minimum prices. The disposal agency is authorized to establish minimum prices for items of electronic property and to treat as commer

cially unsalable any such property which after a reasonable test of the market it concludes cannot be sold within a reasonable period of time at prices equal to or greater than such minimum prices.

§ 8323.6 Determination to be commercially unsalable. In order to obtain the greatest return to the Government and at the same time to obviate all unnecessary expense of care, handling, shipping, reconditioning, and maintenance of such property, the disposal agency shall make prompt determination as to those items of electronic property which are commercially unsalable and should therefore be promptly disposed of as salvage or scrap. Such a determination by the disposal agency may be made by any of the following methods:

(a) By a full and adequate offering of reasonable quantities for sale;

(b) By a finding of the War Department or the Navy Department, based upon the requirements of national defense, that an item of electronic property should not be approved for general use;

(c) By a finding of the disposal agency that there is an oversupply which exceeds any known or foreseeable demand;

(d) By the findings of qualified consultants;

(e) By direct findings of the disposal agency that the cost of care and handling is believed to exceed foreseeable returns.

§ 8323.7 Disposals for educational and public-health purposes. (a) Where the disposal agency determines that any item of surplus electronic property is commercially unsalable, disposal may be made to educational or public-health institutions or instrumentalities as provided in this section. The disposal agency shall compile a list of such items and shall ascertain fixed prices which will reflect the benefit which has accrued or may accrue to the United States from the use of such property by educational or public-health institutions or instrumentalities. Such lists shall be submitted to the Administrator, and if approved, will be published by order hereunder. The disposal agency is authorized to dispose of such property to educational or public-health institutions or instrumentalities at the prices so approved: Provided, however, That no such disposals at the prices so approved may be allowed to any such institutions

which are not exempt from taxation under section 101 (6) of the Internal Revenue Code.

(b) The disposal agency shall establish procedures pursuant to which educational or public-health institutions or instrumentalities may make written application for surplus electronic property available for disposal to such institutions or instrumentalities. Such procedures shall include (1) a certification that the applicant is an educational or public-health institution or instrumentality as defined in § 8323.1 and is exempt from taxation under section 101 (6) of the Internal Revenue Code (2) a certification of the purposes for which the property is to be acquired, and (3) an agreement that the property will not be resold to others within one (1) year of the date of purchase without the consent in writing of the disposal agency.

§ 8323.8 Disposal of special purpose electronic property. (a) Aside from a relatively small demand for special purpose electronic property to serve specialized industrial, educational, and private uses, there is no significant market for electronic property of this class.

(b) Special purpose electronic property which has been determined to be commercially unsalable by the disposal agency may be disposed of by such disposal agency as salvage or scrap as provided in § 8323.9 or otherwise, but if disposed of other than as salvage or scrap by the disposal agency, then in such event the property shall be disposed of at fixed prices.

§ 8323.9 Disposal as salvage or scrap. (a) Surplus electronic property including components and parts which, pursuant to the provisions of § 8323.6 are determined by the disposal agency to be commercially unsalable, may be disposed of as salvage or scrap by such disposal agency.

(b) When items determined by the disposal agency to be scrap are in the possession of the owning agencies, they should be promptly disposed of by such owning agencies pursuant to the provisions of Part 8309 of this chapter.

(c) In each case where disposal of electronic property, including components and parts is made as scrap by the disposal agency, then in such event a scrap warranty as prescribed in Part 8309 of this chapter may be required from the purchaser thereof.

§ 8323.10 Rendering components and parts unfit for intended use (a) The Administrator has determined that, in the case of components and parts such property may become commercially unsalable as the volume of surplus declarations increase and that in order not to incur excessive costs of care and handling and to insure orderly disposal and prevent speculative resale, certain components and parts determined to be commercially unsalable by reason of oversupply should be rendered unfit for intended use before disposal as salvage or scrap.

(b) Where the disposal agency finds such action to be required with respect to components and parts in its possession, it shall render such property unfit for intended use prior to sale as salvage or scrap.

(c) In those cases where the disposal agency finds such action to be required with respect to components and parts in the possession of an owning agency, it shall direct the owning agency not to dispose of such property as salvage or scrap in accordance with the provisions of § 8323.9 (b), but instead to declare such components and parts to the end that all such property may be rendered unfit for intended use by the disposal agency.

§ 8323.11 Regulations by agencies to be reported to the Administrator. Owning and disposal agencies shall file with the Administrator copies of all regulations, orders, and instructions of general applicability which it has issued or may hereafter issue in furtherance of the provisions, or any of them, of this part.

§ 8323.12 Records and reports. Each owning and disposal agency shall prepare and maintain such records as will show full compliance with the provisions of this part and with the applicable provisions of the Surplus Property Act of 1944, relating to the disposal of surplus electronic property.

PART 8401-ORGANIZATION OF THE WASHINGTON OFFICE OF WAR ASSETS ADMINISTRATION

AUTHORITY: §§ 8401.1 to 8401.15, inclusive, issued under Pub. Law 404, 79th Cong., 60 Stat. 237; 5 U.S.C., Sup., 1001 et seq.

SOURCE: §§ 8401.1 to 8401.15, inclusive, contained in Operations Notice 1, Administrator, Aug. 28, 1946, effective Sept. 11, 1946, 11 FR. 177A-750.

§ 8401.1 Scope. The War Assets Administrator performs a dual function in the disposal of surplus property through the War Assets Administration. One of these functions is to determine policy for all disposal agencies designated pursuant to the Surplus Property Act of 1944, as amended; and the other is to perform the functions of a designated disposal agency. This part deals solely with the organization and functions of the Washington Office of the War Assets Administration as an agency designated for the disposal of surplus property located within the continental limits of the United States of America, its territories and possessions.

88401.2 Office of the Administrator. The Administrator exercises general supervision and direction over the care and handling and disposition of surplus property and the transfer of surplus property between Government agencies in accordance with the provisions of the Surplus Property Act of 1944, as amended, and pursuant to Executive Order No. 9689 dated February 1, 1946 (Title 3, supra).

§ 8401.3 Office of Field Operations— (a) Organization and functions. The Office of Field Operations continuously reviews, analyzes, investigates, and evaluates the activities and accomplishments of the various field offices through personal contact with the operating staffs and recommends and institutes corrective action both in the Washington and field offices whenever such action is deemed necessary in order to more effectively achieve the objectives of the War Assets Administration.

(1) Compliance Enforcement Division. The Compliance Enforcement Division

assures that all activities of the War Assets Administration are carried out with integrity and in compliance with the provisions of the Surplus Property Act and the regulations and directives issued thereunder.

(2) Survey Division. The Survey Division maintains personal liaison with field activities; advises and consults with Zone Administrator and Regional Directors regarding their operating problems; investigates operations of field installations and institutes remedial action to correct faulty conditions.

(b) Authority. The authority to perform such functions is assigned to the Deputy Administrator for Field Operations, who is further authorized to redelegate to subordinate officials such part of that authority as he deems necessary.

§ 8401.4 Legislative and Liaison Division. The Legislative and Liaison Division acts as a clearing agency for the two way flow of information between the War Assets Administration, the legislative branch of the Government, and the Executive Office of the President, except with respect to budgetary and appropriation data, which are functions of the Budget Division. Authority to perform such functions is assigned to the Deputy Administrator for Legislative and Liaison Activities, who is further authorized to redelegate to subordinate officials such part of that authority as he deems necessary.

§ 8401.5 Office of Plans and Policies(a) Organization and functions. The Office of Plans and Policies coordinates and directs all activities of the War Assets Administration as required in the review, coordination, initiation, and recommendation of basic policies, broad programs, and the organization and methods necessary to secure prompt and orderly disposal of surplus property in conformity with the economic and general welfare objective of the Surplus Property Act and analyzes operating results with respect thereto.

(1) Disposal Policy Division. The Disposal Policy Division initiates and reviews disposal policies and methods and changes thereto so as to achieve the disposal aims of the War Assets Administration with maximum speed and effective

ness.

(2) Public Interest Division. The Public Interest Division represents the in