Board. Any such material will, in every case, be carefully excluded from any documents to which access is granted in accordance with this part.

1480.4 Access to renegotiation records.(a) The public.-Upon request to the Secretary of The Renegotiation Board, Washington 25, D. C., any person may inspect during usual business hours, at the office of the Secretary, a copy of the transcript of any official Board actions granting exemptions of contracts from renegotiation under the act, except in cases where such Board action is of a nature required to be held confidential for good cause. purpose of this paragraph (a) is to make available for public inspection Board actions on applications for exemptions, when such actions are not issued as regulations and are not required to be held confidential for good cause.

The

(b) Departmental procurement personnel.Any Department named in or designated pursuant to section 103 (a) of the act may be afforded access to documents in the custody of the Board when such Department determines that such assistance is necessary to further its procurement activities. Credentials duly issued to employees of any such Department for such purpose will be honored accordingly.

(c) Departments performing renegotiation functions.-Any Department named in or designated pursuant to section 103 (a) of the act and any Department named in a prior Renegotiation Act will be afforded access to documents in the custody of the Board when any such agency determines that such access is necessary to the performance of duties imposed on it by the several acts under which such documents were obtained. Credentials duly issued to employees of any such agency for such purpose will be honored accordingly.

(d) Persons properly and directly concerned in renegotiation.-Persons properly and directly concerned in any renegotiation proceeding, or their duly authorized representatives, may apply in writing to the Secretary of The Renegotiation Board for access to records of such proceeding. Access will be granted at times and places which are convenient in the light of the physical location of the records to which access is sought. Access will not be furnished under this paragraph (d) to memoranda

and reports prepared by Government employees for use within the Government or to any other material which, in the opinion of the Board, should be held confidential for good cause. A person will not be deemed properly and directly concerned in any renegotiation record unless it relates to renegotiation of the contracts of such person, or of a partnership or joint venture in which he was a partner or joint venturer during the period renegotiated, or unless the person has such other pecuniary interest in the result of a renegotiation proceeding that, in the opinion of the Board, he would be caused unreasonable hardship by being denied access to records relating thereto.

1480.5 Affording access to documents pursuant to subpoena or other judicial process. Subpoenas duces tecum, or other judicial process constituting a demand for access to or the production of documents in the custody of the Board, are properly to be served upon the Chairman of the Board. No person, notwithstanding that he may have physical possession of such documents, is authorized to afford access thereto or to produce the same pursuant to subpoena duces tecum or other judicial process except upon authorization or direction from the Chairman of the Board. Whenever a subpoena or other process demanding the production of documents which are in the custody of the Board, whether issued by a Federal court, State court, or administrative tribunal, is served upon any person, other than said Chairman, having possession of such documents, such person will appear in such court or tribunal and respectfully decline to present such documents, basing his refusal upon this regulation and pointing out that the Board's regulation makes provision for the serving of subpoenas upon its Chairman.

1480.6 Disclosure of information acquired in the performance of duties in connection with renegotiation.-Disclosure of facts, knowledge of which was acquired in the course of official duty in connection with any renegotiation proceeding conducted by or under the authority of the Board, the Military Renegotiation Policy and Review Board or the War Contracts Price Adjustment Board is to be made only to such persons or bodies and subject to

the same restrictions as are provided in this part with respect to access to documents in the custody of the Board.

1480.7 Control of physical possession of documents. Any person transferred or separated from duty or employment in connection with renegotiation, or transferred or separated from duty or employment in any other connection in which possession of documents in the custody of the Board is authorized, shall, upon such transfer or separation, deliver all such documents in his possession into the possession of a responsible official.

1480.8 Opinions and orders.-Except as authorized in section 1480.4 (a), opinions and orders will not be published or made available to the public under section 3 (b) of the Administrative Procedure Act, inasmuch as they are regarded as confidential for good cause shown,

by reason of the confidential data furnished by contractors and relating to their business, and included therein. For the purposes of this paragraph, the term "opinion" includes a statement furnished pursuant to Part 1477 of this subchapter and the term "order" includes an agreement to eliminate excessive profits, as well as a unilateral determination. Opinions and orders are not cited as precedents in any renegotiation proceedings.

1480.9 Copies of documents.-A person or Department entitled to access to documents under this part will, upon request, be given copies of such documents, provided that such person or Department reimburses the Board for any expenses incurred in connection with the preparation of such copies which the Board considers should properly be borne by such person or Department.

Bec.

1490.1

Introduction.

de

1490.1 Introduction. - Subcontracts scribed in section 103 (g) (3) of the act are substantially different from other contracts and subcontracts subject to the act, both in the nature of the services rendered thereunder and their relation to the defense effort. Because of these basic differences, the application of the act to such subcontracts gives rise to correspondingly different problems and considerations. The regulations in this part apply solely to subcontracts described in section 103 (g)(3) of the act. As used in this part, except when the context clearly indicates otherwise, the term "contractor" means any person holding one or more subcontracts described in section 103 (g) (3) of the act.

1490.2 Statutory provisions.-(a) Coverage.-Section 103 (g) (3) of the act provides in part as follows:

The term "subcontract" means

(1)

(2)

(3) Any contract or arrangement (other than a contract or arrangement between two contracting parties, one of whom is found by the Board to be a bona fide executive officer, partner, or full-time employee of the other contracting party) under which—

(A) Any amount payable is contingent upon the procurement of a contract or contracts with a Department or of a subcontract or subcontracts; or

(B) Any amount payable is determined with reference to the amount of a contract or contracts with Department or of a subcontract or subcontracts; or

(C) Any part of the services performed or to be performed consists of the soliciting, attempting to procure, or procuring a contract or contracts with a Department or a subcontract or subcontracts.

(b) Minimum amount subject to renegotia tion.-Section 105 (f) (2) of the act provides as follows:

If the aggregate of the amounts received or accrued during a fiscal year (and on or after the applicable effective date specified in section 102 (a) by a subcontractor, and all persons under control of or controlling or under common control with the subcontractor, under subcontracts described in section 103 (g) (3) is not more than $25,000, the receipts or accruals from such subcontracts shall not, for such fiscal year, be renegotiated under this title. If the aggregate of such amounts received or accrued during the fiscal year under such subcontracts is more than $25,000, no determination of excessive profits to be eliminated for such year with respect to such subcontracts shall be in an amount greater than the amount by which such aggregate exceeds $25,000.

(c) Computation of aggregate receipts or accruals.-Under Section 105 (f) (3) of the act, in computing its aggregate receipts or accruals for any fiscal year ending after June 30, 1956, a broker, agent or other person holding a subcontract described in section 103 (g) (3) of the act must include all commissions or other compensation from its parent or other related principal which are referable to renegotiable prime contracts or subcontracts. See § 1458.2 (b) of this subchapter.

1490.3 Limited exemption of subcontracts for architectural, design or engineering services.-Certain subcontracts described in section 103 (g) (3) of the act have been exempted by the Board under certain circumstances. Such exemption is limited to subcontracts "for architectural, design or engineering services, no part of which services is or was related to the effecting or procuring of a contract with a Department or a subcontract, if the aggregate renegotiable business of the subcontractor holding such subcontracts and all per

sons under control of or controlling or under common control with such subcontractor during a fiscal year of 12 months is not more than $250,000, in the case of a fiscal year ending before June 30, 1953, or $500,000, in the case of a fiscal year ending on or after June 30, 1953, or $1,000,000, in the case of a fiscal year ending after June 30, 1956, or, during a fiscal year which is a fractional part of 12 months, is not more than the same fractional part of $250,000, $500,000, or $1,000,000, as the case may be" (see § 1455.3 (b) (6) of this subchapter).

1490.4 Application of the act.-Subcontracts described in section 103 (g) (3) of the act are subject to renegotiation under the act to the extent of amounts received or accrued on or after the date applicable to the prime contract to which the subcontract relates (see § 1452.2 of this subchapter).

1490.5 Filing of financial statement.— The regulations pertaining to this subject are set forth in § 1470.3 of this subchapter. It will be noted therefrom that no special form is prescribed for persons holding subcontracts described in section 103 (g) (3) of the act. Every such person, if required by the first sentence of section 105 (e) (1) of the act to file a financial statement with the Board for a fiscal year, shall adapt the Standard Form of Contractor's Report to his particular needs. Any such person who elects to file a financial statement with the Board for a fiscal year pursuant to the second sentence of section 105 (e) (1) of the act may file the Statement of Non-Applicability.

1490.6 Determination of renegotiable business under section 103 (g) (3) of the act. (a) Receipts and accruals which are derived from any contract or arrangement described in section 103 (g) (3) of the act are renegotiable only to the extent that they are contingent upon the procurement of a renegotiable prime contract or subcontract, or are determined with reference to the amount of a renegotiable prime contract or subcontract, or are received or accrued for soliciting, attempting to procure, or procuring a renegotiable prime contract or subcontract.

Example. X Company, only part of whose sales are subject to renegotiation, enters into a sales commission contract with a sales representative. Pursuant to such contract he makes sales on behalf of X company to

Y company, which is not engaged in renegotiable business, and also to the Department of the Army. The commissions on the sales to the Department of the Army are renegotiable since they are received for procuring a renegotiable prime contract. The commissions on the sales to Y company are not renegotiable even though all of the commissions are received pursuant to the single commission contract. It is immaterial in this instance whether the commission is a fixed amount or is measured by the amount of the renegotiable sales.

(b) All receipts or accruals which are contingent upon the procurement of renegotiable prime contracts or subcontracts or which are determined with reference to the amount thereof, are subject to the act without regard to whether they are paid or payable for the procurement of such prime contracts or subcontracts or for the servicing thereof.

Example. A sales organization is entitled by its contract with X Corporation to be paid 5% of all sales of X Corporation within a certain territory. Most sales during the year are repeat orders placed directly with X Corporation by regular customers who make their purchases in connection with renegotiable busiThe main function of the sales organization is to service the contracts, expedite shipments, and render engineering or other technical assistance to X Corporation in the improvements, use or maintenance of its products. All commissions received or accrued by the sales organization from X Corporation on renegotiable business are subject to the act.

ness.

(c) If the amount of the receipts or accruals under a subcontract described in section 103 (g) (3) of the act is not contingent upon the procurement of a renegotiable prime contract or subcontract, or measured by the amount thereof, but is received or accrued in whole or in part for soliciting, attempting to procure or procuring such a contract, that part of such receipts or accruals is subject to the act which the Board determines to be reasonably allocable to renegotiable sales.

Example. Pursuant to a fixed monthly retainer, a manufacturer's representative represents X Corporation, sells its products, assists in expediting shipment thereof, and performs engineering services in connection with such sales and the use of such products. Normally, segregation will be accomplished by apply. ing to the receipts or accruals from the retainer contract the same ratio which the renegotiable sales of X Corporation bear to total sales. If it should appear, however, that the application of such ratio would not correctly reflect the part of such receipts or accruals which is properly referable to renegotiable business, segreation will be accomplished on such basis as will correctly reflect such part.