An Act to provide for the renegotiation of contracts, and for other purposes
PL 82-9 (H.R.1724), enacted 03/23/1951

65 
STAT.] 
PUBLIC LAW 9—MAR. 23, 1951 
CONTINGENT EXPENSES OF THE H O U S E 
Special and select committees: For an additional amount for 
expenses of special and select committees, $150,000, 
Approved March 19, 1951. 
Public Law 8 
CHAPTER 
14 
JOINT RESOLUTION 
To continue for a temporary period the provisions of tiie Housin}? and Rent Act 
of 1947, as amended. 
Resolved hy the Senate and House of Representatives 
of the United 
States of America, in Congress assemhled, That section 204 (f) of 
the Housing and Rent Act of 1947, as amended, is amended to read 
as follows: 
"(f) The provisions of this title shall cease to be in effect at the 
close of June 30, 1951, or upon the date of a proclamation by the 
President or upon the date specified in a concurrent resolution by 
the two Houses of the Congress, declaring that the further contin-
uance of the authority granted by this title is not necessary because 
of the existence of an emergency, whichever date is the earlier; except 
that as to rights or liabilities incurred prior to such termination date, 
the provisions of this title and regulations, orders, and requirements 
thereunder shall be treated as still remaining in force for the purpose 
of sustaining any proper suit or action with respect to any such right 
or liability.' 
Approved March 23, 1951. 
March 23,1961 
[S. J. Res. 39] 
61 Stat. 199. 
50 U.S. C , Sup. IV 
app. § 1894 (f). 
Public Law 9 
CHAPTER 15 
AN ACT 
To provide for the renegotiation of contracts, and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
nited States of America in Congress assen " 
' 
be cited as the "Renegotiation Act of 1951". 
March 23, 1961 
[H. R. 1724] 
United States of^merica 
in Congress assembled^ That this Act may ofm°^^°"^"°° ^^^ 
TITLE I—RENEGOTIATION OF CONTRACTS 
SEC. 101. DECLARATION OF POUCY. 
It is hereby recognized and declared that the Congress has made 
available for the execution of the national defense program extensive 
funds, by appropriation and otherwise, for the procurement of prop-
erty, processes, and services, and the construction of facilities necessary 
for the national defense; that sound execution of the national defense 
program requires the elimination of excessive profits from contracts 
made with the United States, and from related subcontracts, in the 
course of said program; and that the considered policy of the Congress, 
in the interests of the national defense and the general welfare of the 
Nation, requires that such excessive profits be eliminated as provided 
in this title. 
SEC. 102. CONTRACTS SUBJECT TO RENEGOTIATION. 
(a) I N GENERAL.—The provisions of this title shall be applicable 
(1) to all contracts with the Departments specifically named in section 
103 (a), and related subcontracts, to the extent of the amounts received 
8 
PUBLIC LAW 9—MAR. 23, 1951 
[65 STAT. 
or accrued by a contractor or subcontractor on or after the first day 
of January 1951, whether such contracts or subcontracts were made 
on, before, or after such first day, and (2) to all contracts with the 
Departments designated by the President under section 103 (a), and 
related subcontracts, to the extent of the amounts i^eceived or accrued 
by a contractor or subcontractor on or after the first day of the first 
month beginning after the date of such designation, whether such 
contracts or subcontracts were made on, before, or after such first day; 
but the provisions of this title shall not be applicable to receipts or 
accruals attributable to performance, under contracts or subcontracts, 
after December 31, 1953. 
(b) PERFORMANCE PRIOR TO JULY 1, 1950.—Notwithstanding the 
provisions of subsection (a), the provisions of this title shall not 
apply to contracts with the Departments, or related subcontracts, to 
the extent of the amounts received or accrued by a contractor or sub-
contractor on or after the 1st day of January 1951, which are 
attributable to performance, under such contracts or subcontracts, 
prior to July 1, 1950. This subsection shall have no application in 
the case of contracts, or related subcontracts, which, but for subsection 
(c), would be subject to the Renegotiation Act of 1948. 
Nonappiicabiiity. 
(c) RENEGOTIATION AcT OF 1948.—The Renegotiation Act of 1948 
50u!U'a!sup. IV, shall not be applicable to any contract or subcontract to the extent 
app. § 1
1
9
3 a). 
Q
j
f ^}jg amounts received or accrued by a contractor or subcontractor 
on or after the 1st day of January 1951, whether such contract or 
subcontract was made on, before, or after such first day. In the case 
of a fiscal year beginning in 1950 and ending in 1951, if a contractor 
or subcontractor has receipts or accruals prior to January 1,1951, from 
contracts or subcontracts subject to the Renegotiation Act of 1948, 
and also has receipts or accruals after December 31, 1950, to which 
the provisions of this title are applicable, the provisions of this title 
shall, notwithstanding subsection (a), apply to such receipts and 
accruals prior to January 1, 1951, if the Board and such contractor 
or subcontractor agree to such application of this title; and in the case 
50u**s'^!sup IV ^^ ^^^^•'^ ^^ agreement the provisions of the Renegotiation Act of 1948 
app. §
1
1
9
3 (1^ 
' shall not apply to any of the receipts or accruals for such fiscal year, 
(d) SUSPENSION or CERTAIN PROFIT LIMITATIONS.—Notwithstand-
ing any agreement to the contrary, the profit-limitation provisions 
^
^
3
4 u. s. c. j§ 4
9
4
- of the Act of March 27, 1934 (48 Stat. 503, 505), as amended and 
supplemented, and of section 505 (b) of the Merchant Marine Act, 
49 Stat. 1998. 
1936, as amended and supplemented (46 U. S. C. 1155 (b)), shall not 
apply, in the case of such Act of March 27, 1934, to any contract or 
subcontract if any of the receipts or accruals therefrom are subject to 
4
6 u^*s.^^a" § 1
2
4
5
; ^^is title, and, in the case of the Merchant Marine Act, 1936, to any 
Sup. iv,''§ nil a seq. coutract or subcontract entered into after December 31, 1950, if any 
of the receipts or accruals therefrom are subject to this title. 
SEC. 103. DEFINITIONS. 
For the purposes of this title— 
(a) DEPARTMENT.—The term "Department" means the Department 
of Defense, the Department of the Army, the Department of the 
Navy, the Department of the Air Force, the Department of Com-
merce, the General Services Administration, the Atomic Energ;^' 
Commission, the Reconstruction Finance Corporation, the Catial 
Zone Government, the Panama Canal Company, the Housing and 
Home Finance Agency, and such other agencies of the Government 
exercising functions having a direct and immediate connection with 
the national defense as the President shall designate. 
65 STAT.] 
PUBLIC LAW 9—MAR. 23, 1951 
9 
(b) SBCRETART.—The term "Secretary" means the Secretary of 
Defense, the Secretary of the Army, the Secretary of the Navy, the 
Secretary of the Air Force, the Secretary of Commerce, the Admin-
istrator of General Services, the Atomic Energy Commission, the 
Board of Directors of the Reconstruction Finance Corporation, the 
Governor of the Canal Zone, the president of the Panama Canal 
Company, the Housing and Home Finance Administrator, and the 
head of any other agency of the Government which the President 
shall designate pursuant to subsection (a) of this section. 
(c) BOARD.—^The term "Board" means the Renegotiation Board 
created by section lOT (a) of this Act. 
•^"*'' ''• ^^• 
(d) RENEGOTIATE AND RENEGOTIATION.—The terms "renegotiate" 
and "renegotiation" include a determination by agreement or order 
under this title of the amount of any excessive profits. 
(e) EXCESSIVE PROFITS.—The term "excessive profits" means the 
portion of the profits derived from contracts with the Departments 
and subcontracts which is determined in accordance with this title to 
be excessive. 
In determining excessive profits favorable recognition 
must be given to the efficiency of the contractor or subcontractor, with 
particular regard to attainment of quantity and quality production, 
reduction of costs, and economy in the use of materials, facilities, and 
manpower; and in addition, there shall be taken into consideration 
the following factors: 
(1) Reasonableness of costs and profits, with particular regard 
to volume of production, normal earnings, and comparison of 
war and peacetime products; 
(2) The net worth, with particular regard to the amount and 
source of public and private capital employed; 
(3) Extent of risk assumed, including the risk incident to 
reasonable pricing policies; 
(4) Nature and extent of contribution to the defense effort, 
including inventive and developmental contribution and coopera-
tion with the Government and other contactors in supplying 
technical assistance; 
(5) Character of business, including source and nature of 
materials, complexity of manufacturing technique, character and 
extent of subcontracting, and rate of turn-over; 
(6) Such other factors the consideration of which the public 
interest and fair and equitable dealing may require, which factors 
shall be published in tne regulations of the Board from time to 
time as adopted. 
(f) PROFITS DERIVED FROM CONTRACTS W I T H THE DEPARTMENTS AND 
SUBCONTRACTS.—The term "profits derived from contracts with the 
Departments and subcontrects" means the excess of the amount 
received or accrued under such contracts and subcontracts over the 
costs paid or incurred with respect thereto and determined to be 
allocable thereto. 
All items estimated to be allowed as deductions and 
exclusions under chapter 1 of the Internal Revenue Code (excluding 
26U^s;c.§!«<««?.; 
taxes measured by income) shall, to the extent allocable to such con- sup. iv, isetseq. 
tracts and subcontracts, be allowed as items of cost, except that no 
amount shall be allowed as an item of cost by reason of the application 
of a carry-over or carry-back. 
Notwithstanding any other provision 
of this section, there shall be allowed as an item of cost in any fiscal 
year, subject to regulations of the Board, an amount equal to the 
excess, if any, of costs (computed without the application of this 
sentence) paid or incurred in the preceding fiscal year with respect to 
receipts or accruals subject to the provisions of this title over the 
10 
PUBLIC LAW 9—MAR. 23, 1951 
[65 STAT. 
amount of receipts or accruals subject to the provisions of this title 
which were received or accrued in such preceding fiscal year, but only 
to the extent that such excess did not result from gross inefficiency of 
the contractor or subcontractor. For the purposes of the preceding 
sentence, the term "preceding fiscal year" does not include any fiscal 
year ending prior to January 1, 1951. Costs shall be determined in 
accordance with the method of accounting regularly employed by the 
contractor or subcontractor in keeping his records, but, if no such 
method of accounting has been employed, or if the method so employed 
does not, in the opinion of the Board, or, upon redetermination, in 
the opinion of The Tax Court of the United States, properlj reflect 
such costs, such costs shall be determined in accordance with such 
method as in the opinion of the Board, or, upon redetermination, in 
the opinion of The Tax Court of the United States, does properly reflect 
such costs. In determining the amount of excessive profits to be elim-
inated, proper adjustment shall be made on account of the taxes meas-
ured by income, other than Federal taxes, which are attributable to the 
portion of the profits which are not excessive. 
(g) SUBCONTRACT.—^The term "subcontract" means— 
(1) any purchase order or agreement (including purchase 
orders or agreements antedating the related prime contract or 
higher tier subcontract) to perform all or any part of the work, 
or to make or furnish any materials, required for the performance 
of any other contract or subcontract, but such term does not 
include any purchase order or agreement to furnish ofiice supplies; 
(2) any contract or arrangement covering the right to use any 
patented or secret method, formula, or device for the perform-
ance of a contract or subcontract; and 
(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 procure-
ment 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 a 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 procur-
ing a contract or contracts with a Department or a subcon-
tract or subcontracts. 
Nothing in this subsection shall be construed (i) to affect in any way 
the validity or construction of provisions in any contract with a 
Department or any subcontract, heretofore at any time or hereafter 
made, prohibiting the payment of contingent fees or commissions; or 
(ii) to restrict in any way the authority of the Board to determine 
the nature or amount of selling expense under subcontracts as defined 
in this subsection, as a proper element of the contract price or as a 
reimbursable item of cost, under a contract with a Department or a 
subcontract. 
5
3 Stat. 4. j ^ ^ ^ ^ ^ . 
(h) FISCAL YEAR.—The term "fiscal year" means the taxable year 
Sup.iv,§3rf»«?*"•' of the contractor or subcontractor under chapter 1 of the Internal 
6
3 8tat^469. ^ ^
^
^
^ Revenue Code, except that where any readjustment of interests occurs 
(a) (2).' 
in a partnership as defined in section 3797 (a) (2) of such code, the 
65 STAT.] 
PUBLIC LAW 9—MAR. 23, 1951 
11 
fiscal year of the partnership or partnerships involved in such read-
justment shall be determined in accordance with regulations prescribed 
by the Board. 
(i) 
RECEIVED OR ACCRUED AND PAID OR INCURRED.—The terms 
"received or accrued" and "paid or incurred" shall be construed accord-
ing to the method of accounting employed by the contractor or sub-
contractor in keeping his records, but if no such method of accounting 
has been employed, or if the method so employed does not, in the 
opinion of the Board, or, upon redetermination, in the opinion of The 
Tax Court of the United States, properly reflect his receipts or accruals 
or payments or obligations, such receipts or accruals or such payments 
or obligations shall be determined in accordance with such method 
as in the opinion of the Board, or, upon redetermination, in the opinion 
of The Tax Court of the United States, does properly reflect such 
receipts or accruals or such payments or obligations. 
(j) PERSON.—The term "person" shall include an individual, firm, 
corporation, association, partnership, and any organized group of 
persons whether or not incorporated. 
(k) MATERIALS.—The term "materials" shall include raw materials, 
articles, commodities, parts, assemblies, products, machinery, equip-
ment, supplies, components, technical data, processes, and other per-
sonal property. 
(1) AGENCY OF THE GOVERNMENT.—The term "agency of the Govern-
ment" means any part of the executive branch of the Government or 
any independent establishment of the Government or part thereof, 
including any department (whether or not a Department as defined in 
subsection (a) of this section), any corporation wholly or partiv owned 
by the United States which is an instrumentality of the United States, 
or any board, bureau, division, service, office, officer, employee, author-
ity, administration, or other establishment of the Government Avhich 
is not a part of the legislative or judicial branches. 
SEC. 104. RENEGOTIATION CLAUSE IN CONTRACTS. 
Subject to section 106 (a) the Secretary of each Department specif- Post, p. 17. 
ically named in section 103 (a) shall insert in each contract made by 
such Department thirty days or more after the date of the enactment 
of this Act, and the Secretary of each Department designated by the 
President under section 103 (a) shall insert in each contract made 
by such Department thirty days or more after the date of such 
designation, a provision under which the contractor agrees— 
(1) to the elimination of excessive profits through renego-
tiation ; 
(2) that there may be withheld by the United States from 
amounts otherwise due the contractor, or that he will repay to the 
United States, if paid to him, any excessive profits; 
(3) that he will insert in each subcontract described in section 
103 (g) a provision under which the subcontractor agrees— 
(A) to the elimination of excessive profits 
through 
renegotiation; 
(B) that there may be withheld by the contractor for the 
United States from amounts otherwise due to the subcon-
tractor, or that the subcontractor will repay to the United 
States, if paid to him, any excessive profits; 
(C) that the contractor shall be relieved of all liability to 
the subcontractor on account of any amount so withheld, or 
so repaid by the subcontractor to the United States; 
(D) that he will insert in each subcontract described in 
Ante, p. 10. 
12 
PUBLIC LAW 9~MAR. 23, 1951 
[65 
STAT. 
Ante, p. 10. 
Post, p. 13. 
Notice. 
Agreement 
with 
contractor, etc. 
Post, p. 21. 
section 103 (g) provisions ^rresponding to those of sub-
paragraphs 
(A), (B), and (C), and to those of this 
subparagraph; 
(4) that there may be withheld by the United States from 
amounts otherwise due the contractor, or that he will repay to the 
United States, as the Secretary may direct, any amounts which 
under section 105 (b) (1) (C) the contractor is directed to with-
hold from a subcontractor and which are actually unpaid at the 
time the contractor receives such direction. 
The obligations assumed by the contractor or subcontractor under 
paragraph (1) or (3) (A), as the case may be, agreeing to the 
elimination of excessive profits through renegotiation shall be binding 
on him only if the contract or subcontract, as the case may be, is subject 
to this title. A provision inserted in a contract or subcontract, which 
recites in substance that the contract or subcontract shall be deemed 
to contain all the provisions required by this section shall be sufficient 
compliance with this section. Whether or not the provisions specified 
in this section are inserted in a contract with a Department or sub-
contract, to which this title is applicable, such contract or subcontract, 
as the case may be, shall be considered as having been made subject to 
this title in the same manner and to the same extent as if such provisions 
had been inserted. 
SEC. 105. RENEGOTIATION PROCEEDINGS. 
(a) PROCEEDINGS BEFORE THE BOARD.—Renegotiation proceedings 
shall be commenced by the mailing of notice to that effect, in such 
form as may be prescribed by regulation, by registered mail to the 
contractor or subcontractor. The Board shall endeavor to make an 
agreement with the contractor or subcontractor with respect to the 
elimination of excessive profits received or accrued, and with respect 
to such other matters relating thereto as the Board deems advisable. 
Any such agreement, if made, may, with the consent of the contractor 
or subcontractor, also include provisions with respect to the elimination 
of excessive profits likely to be received or accrued. 
If the Board 
does not make an agreement with respect to the elimination of exces-
sive profits received or accrued, it shall issue and enter an order 
determining the amount, if any, of such excessive profits, and forth-
with give notice thereof by registered mail to the contractor or sub-
contractor. In the absence of the filing of a petition with The Tax 
Court of the United States under the provisions of and within the 
time limit prescribed in section 108, such order shall be final and 
conclusive and shall not be subject to review or redetermination by 
any court or other agency. The Board shall exercise its powers with 
respect to the aggregate of the amounts received or accrued during 
the fiscal year (or such other period as may be fixed by mutual agree-
ment) by a contractor or subcontractor under contracts with the 
Departments and subcontracts, and not separately with respect to 
amounts received or accrued under separate contracts with the Depart-
ments or subcontracts, except that the Board may exercise such powers 
separately with respect to amounts received or accrued by the con-
tractor or subcontractor under any one or more separate contracts with 
the Departments or subcontracts at the request of the contractor or 
subcontractor. By agreement with any contractor or subcontractor, 
and pursuant to regulations promulgated by it, the Board may in its 
discretion conduct renegotiation on a consolidated basis in order prop-
erly to reflect excessive profits of two or more related contractors or 
subcontractors. 
Renegotiation shall be conducted on a consolidated 
65 STAT.] 
PUBLIC LAW 9—MAR. 23, 1951 
13 
basis with a parent and its subsidiary corporations which constitute 
an affiliated group under section 141 (d) of the Internal Revenue Code 
^u^^g'a; sup.iv, 
if all of the corporations included in such affiliated group request §i4i(d)." 
renegotiation on such basis and consent to such regulations as the 
Board shall prescribe with respect to (1) the determination and elimi-
nation of excessive profits of such affiliated group, and (2) the determi-
nation of the amount of the excessive profits of such affiliated group 
allocable, for the purposes of section 3806 of the Internal Revenue 
Code, to each corporation included in such affiliated group. When- 
26u.^s.c. §
3
8
0
6
. 
ever the Board makes a determination with respect to the amount of 
excessive profits, and such determination is made by order, it shall, at 
the request of the contractor or subcontractor, as the case may be, 
prepare and furnish such contractor or subcontractor with a statement 
of such determination, of the facts used as a basis therefojr, and of its 
reasons for such determination. Such statement shall not be used in 
The Tax Court of the United States as proof of the facts or conclusions 
stated therein. 
(b) METHOI>S OF ELIMINATING EXCESSIVE PRorrrs.— 
(1) I N GENERAL.—^Upon the making of an agreement, or the 
entry of an order, under subsection (a) of this section by the 
„ 
Board, or the entry of an order under section 108 by The Tax 
*'*'^' 
Court of the United States, determining excessive profits, the 
Board shall forthwith authorize and direct the Secretaries or 
any of them to eliminate such excessive profits— 
(A) by reductions in the amounts otherwise payable to 
the contractor under contracts with the Departments, or by 
other revision of their terms; 
(B) by withholding from amounts otherwise due to the 
contractor any amount of such excessive profits; 
(C) by directing any person having a contract with any 
agency of the Grovernment, or any subcontractor thereunder, 
to withhold for the account of the United States from any 
amounts otherwise due from such person or such subcon-
tractor to a contractor, or subcontractor, having excessive 
profits to be eliminated, and every such person or subcon-
tractor receiving such direction shall withhold and pay over 
to the United States the amounts so required to be withheld; 
(D) by recovery from the contractor or subcontractor, or 
from any person or subcontractor directed under subpara-
graph (C) to withhold for the account of the United States, 
through pay^ment, repayment, credit, or suit any amount of 
such excessive profits realized by the contractor or subcon-
tractor or directed under subparagraph (C) to be withheld 
for the account of the United States; or 
(E) by any combination of these methods, as is deemed 
desirable. 
(2) INTEREST.—^Interest at the rate of 4 per centum per annum 
shall accrue and be paid on the amount of such excessive profits 
from the thirtieth day after the date of the order of the Board 
or from the date fixed for repayment by the agreement with the 
contractor or subcontractor to the date of repayment, and on 
amounts required to be withheld by any person or subcontractor 
for the account of the United States pursuant to paragraph (1) 
(C), from the dat« payment is demanded by the Secretaries or 
any of them to the date of payment. When The Tax Court of the 
Post, p 2
1 
United States, under section 108, redetermines the amount of 
14 
PUBLIC LAW 9—MAR. 23, 1951 
[65 STAT. 
excessive profits received or accrued by a contractor or subcon-
tractor, interest at the rate of 4 per centum per annum shall 
accrue and be paid by such contractor or subcontractor as follows: 
(A) When the amount of excessive profits determined by 
the Tax Court is greater than the amount determijied by the 
Board, interest shall accrue and be paid on the amount 
determined by the Board from the thirtieth day aftei* the 
date of the order of the Board to the date of repayment and, 
in addition thereto, interest shall accrue and be paid on the 
additional amount determined by the Tax Court from the 
date of its order determining such excessive profits to the 
date of repayment. 
(B) When the amount of excessive profits determined by 
the Tax Court is equal to the amount determined by the 
Board, interest shall accrue and be paid on such amount from 
the thirtieth day after the date of the order of the Board 
to the date of repayment. 
(C) When the amount of excessive profits determined by 
the Tax Court is less than the amount determined by the 
Board, interest shall accrue and be paid on such lesser amount 
from the thirtieth day after the date of the order of the 
Board to the date of repayment, except that no interest shall 
accrue or be payable on such lesser amount if such lesser 
amount is not in excess of an amount which the contractor 
or subcontractor tendered in payment prior to the issuance 
of the order of the Board. 
Notwithstanding the provisions of this paragraph, no interest 
shall accrue after three years from the date of filing a petition 
^°'^' P
- ^
^
- 
with the Tax Court pursuant to section 108 of this title in any 
case in which there has not been a final determination by the Tax 
Court with respect to such petition within such three-year period. 
(3) Surrs FOR RECOVERY.—^Actions on behalf of the United 
States may be brought in the appropriate courts of the United 
States to recover, (A) from the contractor or subcontractor, any 
amount of such excessive profits and accrued interest not withheld 
or eliminated by some other method under this subsection, and 
(B) from any person or subcontractor who has been directed 
under paragraph (1) (C) of this subsection to withhold for the 
account of the United States, the amounts required to be withheld 
under such paragraph, together with accrued interest thereon, 
(4) SURETIES.—The, surety under a contract or subcontract 
shall not be liable for the repayment of any excessive profits 
thereon. 
(5) ASSIGNEES.—Nothing herein contained shall be construed 
(A) to authorize any Department or agency of the Government, 
except to the extent provided in the Assignment of Claims Act of 
3
1 ^u^^s^^c' § 2
0
3 
1940, as now or hereafter amended, to withhold from any assignee 
Sup. IV, §203; 4
1 u.s! 
referred, to in said Act, any moneys due or to become due, or to 
recover any moneys paid, to such assignee under any contract with 
any Department or agency where such moneys have been assigned 
pursuant to such Act, or (B) to authorize any Department or 
agency of the Government to direct the withholding pursuant 
to this Act, or to recover pursuant to this Act, from any bank, 
trust company or other financing institution (including any 
Federal lending agency) which is an assignee under any subcon-
tract, any moneys due or to become due or paid to any such 
assignee under such subcontract. 
C. § 15. 
U. S. C.§3806. 
65 STAT.] 
PUBLIC LAW 9—MAR. 23, 1951 
1 5 
(6) INDEMNIFICATION.—^Each person is hereby indemnified bj^ 
the United States against all claims on account of amounts with-
held by such person pursuant to this subsection from a contractor 
or sul>contractor and paid over to the United States. 
(7) TREATMENT OF RECOVERIES.—All money recovered by way 
of repayment or suit under this subsection shall be covered into 
the Treasury as miscellaneous receipts. 
Upon the withholding 
of any amount of excessive profits or the crediting of any amount 
of excessive profits against amounts otherwise due a contractor 
from appropriations from the Treasury, the Secretary shall 
certify the amount thereof to the Treasury and the appropria-
tions of his Department shall be reduced by an amount equal to 
the amount so withheld or credited. 
The amount of such reduc-
tions shall be transferred to the surplus fund of the Treasury. 
(8) CREDIT FOR TAXES PAID.—In eliminating excessive profits, the 
Secretary shall allow the contractor or subcontractor credit for 
Federal income and excess profits taxes as provided in section 3806 
^ ^^l' ^-^ 
of the Internal Revenue Code. 
(c) 
PERIODS OF LIMITATIONS.—No proceeding to determine the 
amount of excessive profits for any fiscal year shall be commenced 
more than one year after the statement required under subsection 
(e) (1) of this section is filed with the Board with respect to such year, 
and, ii such proceeding is not commenced prior to the expiration of 
one year following the date upon which such statement is so filed, all 
liabilities of the contractor or subcontractor for excessive profits 
received or accrued during such fiscal year shall thereupon be dis-
charged. 
If an agreement or order determining the amount of exces-
sive profits is not made within two years following the commencement 
of the renegotiation proceeding, then upon the expiration of such two 
years all liabilities of the contractor or subcontractor for excessive 
profits with respect to which such proceeding was commenced shall 
thereupon be discharged, except that (1) if an order is made within 
such two years pursuant to a delegation of authority under subsection 
(d) of section 107, such two-year limitation shall not apply to review 
^°^^' P- ^• 
of such order by the Board, and (2) such two-year period may be 
extended by mutual agreement. 
(d) AGREEMENTS TO ELIMINATE EXCESSIVE PROFITS.—For the pur-
poses of this title the Board may make final or other agreements with 
a contractor or subcontractor for the elimination of excessive profits 
and for the discharge of any liability for excessive profits under this 
title. 
Such agreements may contain such terms and conditions as the 
Board deems advisable. Any such agreement shall be conclusive 
according to its terms; and, except upon a showing of fraud or mal-
feasance or a willful misrepresentation of a material fact, (1) such 
agreement shall not for the purposes of this title be reopened as to the 
matters agreed upon, and shall not be modified by any officer, employee, 
or agent of the United States, and (2) such agreement and any deter-
mination made in accordance therewith shall not be annulled, modified, 
set aside, or disregarded in any suit, action, or proceeding. 
Notwith-
standing any other provision of this title, however, the Board shall 
have the power, pursuant to regulations promulgated by it, to modify 
any agreement or order for the purpose of extending the time for 
payment of sums due under such agreement or order. 
(e) INFORMATION AVAILABLE TO BOARD.— 
(1) FURNISHING OF FINANCIAL STATEMENTS, ETC.—Every person 
who holds contracts or subcontracts, to which the provisions of 
76100 O - 52 (PT. I) - 4 
16 
PUBLIC LAW 9—MAR. 23, 1951 
[65 STAT. 
this title are applicable, shall, in such form and detail as the 
Board may by regulations prescribe, file with the Board, on or 
before the first day of the fourth calendar month following the 
close of his fiscal year, a financial statement setting forth such 
information as the Board may by regulations prescribe as neces-
sary to carry out this title. In addition to the statement required 
under the preceding sentence, every such person shall, at such 
time or times and in such form and detail as the Board may by 
regulations prescribe, furnish the Board any information, records, 
or data which are determined by the Board to be necessary to 
^*'°*"^' 
carry out this title. Any person who willfully fails or refuses 
to furnish any statement, information, records, or data required 
of him under this subsection, or who knowingly furnishes any 
such statement, information, records, or data containing informa-
tion which is false or misleading in any material respect, shall, 
upon conviction thereof, be punished by a fine of not more than 
$10,000 or imprisonment for not more than one year, or both. 
(2) AUDIT OF BOOKS AND RECORDS.—For the purpose of this title, 
the Board shall have the right to audit the books and records of 
any contractor or subcontractor subject to this title. In the 
interest of economy and the avoidance of duplication of inspection 
and audit, the services of the Bureau of Internal Revenue shall, 
upon request of the Board and the approval of the Secretary of 
the Treasury, be made available to the extent determined by the 
Secretary of the Treasury for the purpose of making examina-
tions and audits under this title. 
(f) MINIMUM AMOUNTS SUBJECT TO RENEGOTIATION.— 
(1) I N GENERAL.—^If the aggregate of the amounts received or 
accrued during a fiscal year (and on or after the applicable effec-
Arae,p.7. 
tive date specified in section 102 (a)) by a contractor or subcon-
tractor, and all persons under control of or controlling or under 
common control with the contractor or subcontractor, under con-
tracts with the Departments and subcontracts described in section 
Ante, p. 10. 
103 (g) (1) and (2), is not more than $250,000, the receipts or 
accruals from such contracts and 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 contracts and subcontracts is more than $250,000, no deter-
mination of excessive profits to be eliminated for such year with 
respect to such contracts and subcontracts shall be in an amount 
greater than the amount by which such aggregate exceeds $250,000. 
Ante,T>. 10. 
(2) SUBCONTRACTS DESCRIBED I N SECTION IO3 (g) (3).—^If the 
aggregate of the amounts received or accrued during a fiscal year 
(and on or after the applicable effective date specified in section 
Arue,p.7. 
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 aggre-
gate 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. 
(3) COMPUTATION.—In computing the aggregate of the amounts 
received or accrued during any fiscal year for the purposes of 
65 
STAT.] 
PUBLIC LAW 9—MAR. 23, 1951 
17 
Ante, p. 8. 
paragraphs (1) and (2) of this subsection, there shall be eliminated 
all amounts received or accrued by a contractor or subcontractor 
from all persons under control of or controlling or under common 
control with the contractor or subcontractor and all amounts 
received or accrued by each such person from such contractor or 
subcontractor and from each other such person. 
If the fiscal year 
is a fractional part of twelve months, the $250,000 amount and the 
$25,000 amount shall be reduced to the same fractional part 
thereof for the purposes of paragraphs (1) and (2). In the case 
of a fiscal year beginning in 1950 and ending in 1951, the $250,000 
amount and the $25,000 amount shall be reduced to an amount 
which bears the same ratio to $250,000 or $25,000, as the case may 
be, as the number of days in such fiscal year after December 31, 
1950, bears to 365, but this sentence shall have no application if 
the contractor or subcontractor has made an a^eement with the 
Board pursuant to section 102 (c) for the application of the pro-
visions of this title to receipts or accruals prior to January 1,1951, 
during such fiscal year. 
SEC. 106. EXEMPTIONS. 
(a) MANDATORY EXEMPTIONS.—The provisions of this title shall not 
apply to— 
(1) any contract by a Department with any Territory, posses-
sion, or State, or any agency or political subdivision thereof, or 
with any foreign government or any agency thereof; or 
(2) any contract or subcontract for an agricultural commodity 
in its raw or natural state, or if the commodity is not customarily 
sold or has not an established market in its raw or natural state, 
in the first form or state, beyond the raw or natural state, in which 
it is customarily sold or in which it has an established market. 
The term "agricultural commodity" as used herein shall include 
but shall not oe limited to— 
(A) commodities resulting from the cultivation of the 
soil such as grains of all kinds, fruits, nuts, vegetables, hay, 
straw, cotton, tobacco, sugarcane, and sugar beets; 
(B) natural resins, saps, and gums of trees; 
(C) animals, such as cattle, hogs, poultry, and sheep, fish 
and other marine life, and the produce of live animals, such 
as wool, eggs, milk and cream; or 
(3) any contract or subcontract for the product of a mine, oil 
or gas well, or other mineral or natural deposit, or timber, which 
has not been processed, refined, or treated beyond the first form or 
state suitable for industrial use; or 
(4) any contract or subcontract with a common carrier for trans-
portation, or with a public utility for gas, electric energy, water, 
communications, or transportation, when made in either case at 
rates not in excess of published rates or charges filed with, fixed, 
approved, or regulated by a public regulatory body. State, Fed-
eral, or localj or at rates not in excess of unregulated rates of such 
a public utility which are substantially as favorable to users and 
consumers as are regulated rates. In the case of the furnishing 
or sale of transportation by common carrier by water, this para- sup. iv, i^osetseq. 
graph shall apply only to such furnishing or sale which is subject 
to the jurisdiction of the Interstate Commerce Commission under 
Part I I I of the Interstate Commerce Act or subject to the jurisdic-
tion of the Federal Maritime Board under the Intercoastal Ship-
ping Act, 1933; or 
Agricultural com-
modity. 
54 Stat. 929. 
49 U. 8. C. S 901; 
47 Stat. 1426. 
46 U. S. C. § 848. 
18 
PUBLIC LAW 9—MAR. 23, 1951 
[65 STAT. 
(5) any contract or subcontract with an organization exempt 
from taxation under section 101 (6) of the Internal Revenue 
^j3 Stat. 33; 6
4 Stat. 
Codc, but ouly if the income from such contract or subcontract 
2
6 u. s. c. Sup. IV, 
is not includible under section 422 of such code in computing the 
§j 101 (6), 422. 
unrelated business net income of such organization; or 
(6) any contract which the Board determines does not have a 
direct and immediate connection with the national defense. 
The 
Board shall prescribe regulations designating those classes and 
types of contracts which shall be exempt under this paragraph; 
and the Board shall, in accordance with regulations prescribed 
by it, exempt any individual contract not falling within any such 
class or type if it determines that such contract does not have a 
direct and immediate connection with the national defense. 
Not-
'^•^'' P
- 2
1 
withstanding section 108 of this title, regulations prescribed by 
the Board under this paragraph, and any determination of the 
Board that a contract is or is not exempt under this paragraph, 
shall not be reviewed or redetermined by the Tax Court or by 
any other court or agency; or 
(7) any subcontract directly or indirectly under a contract 
or subcontract to which this title does not apply by reason of this 
subsection. 
(b) COST ALLOWANCE.—^In the case of a contractor or subcontractor 
who produces or acquires the product of a mine, oil or gas well, or 
other mineral or natural deposit, or timber, and processes, refines, or 
treats such a product to and beyond the first form or state suitable 
for industrial use, or who produces or acquires an agricultural product 
and processes, refines, or treats such a product to and beyond the first 
form or state in which it is customarily sold or in which it has an 
established market, the Board shall prescribe such regulations as may 
be necessary to give such contractor or subcontractor a cost allowance 
substantially equivalent to the amount which would have been realized 
by such contractor or subcontractor if he had sold such product at 
such first form or state. 
Notwithstanding any other provisions of 
this title, there shall be excluded from, consideration in determining 
whether or not a contractor or subcontractor has received or accrued 
excessive profits that portion of the profits, derived from receipts and 
accruals subject to the provisions of this title, attributable to the 
"Exoessinventory." increment in value of the excess inventory. 
For the purposes of this 
subsection the term "excess inventory" means inventory of products, 
hereinbefore described in this subsection, acquired by the contractor 
or subcontractor in the form or at the state in which contracts for such 
products on hand or on contract would be exempted from this title 
by subsection (a) (2) or (3) of this section, which is in excess of 
the inventory reasonably necessary to fulfill existing contracts or 
orders. That portion of the profits, derived from receipts and 
accruals subject to the provisions of this title, attributable to the 
increment in value of the excess inventory, and the method of exclud-
ing such portion of profits from consideration in determining whether 
or not the contractor or subcontractor has received or accrued exces-
sive profits, shall be determined in accordance with regulations pre-
scribed by the Board. 
(c) PARTIAL MANDATORY EXEMPTION FOR DURABLE PRODUCTIVE EQUIP-
MENT.— 
(1) I N GENERAL.—^The provisions of this title shall not apply 
to receipts or accruals (other than rents) from subcontracts for 
new durable productive equipment, except to that part of such 
65 STAT.] 
PUBLIC LAW 9--MAR. 23, 1951 
19 
receipts or accruals which bears the same ratio to the total of such 
receipts or accruals as five years bears to the average useful life 
of such equipment as set forth in Bulletin F of the Bureau of 
Internal Revenue (1942 edition) or, if an average useful life is 
not so set forth, then as estimated by the Board. 
(2) DEFINITIONS.—^For the purpose of this subsection— 
(A) the term "durable productive equipment" means 
machinery, tools, or other equipment which does not become 
a part of an end product acquired by any agency of the 
Government under a contract with a department, or of an 
article incorporated therein, and which has an average useful 
life of more than five years; and 
(B) the term "subcontracts for new durable productive 
equipment" does not include subcontracts where the purchaser 
of such durable productive equipment has acquired such 
equipment for the account of the Government, but includes 
pool orders and siiriilar commitments placed in the first 
instance by a Department or other agency of the Government 
when title to the equipment is transferred on delivery thereof 
or within one year thereafter to a contractor or subcontractor. 
(d) PERMISSIVE EXEMPTIONS.—The Board is authorized, in its dis-
cretion, to exempt from some or all of the provisions of this title— 
(1) any contract or subcontract to be performed outside of the 
territorial limits of the continental United States or in Alaska; 
(2) any contracts or subcontracts under which, in the opinion 
of the Board, the profits can be determined with reasonable 
certainty when the contract price is established, such as certain 
classes of (A) agreements for personal services or for the purchase 
of real property, perishable goods, or commodities the minimum 
price for the sale of which has been fixed by a public regulatory 
body, (B) leases and license agreements, and (C) agreements 
where the period of performance under such contract or sub-
contract will not be in excess of thirty days. 
(3) any contract or subcontract or performance thereunder 
during a specified period or periods if, in the opinion of the Board, 
the provisions of the contract are otherwise adequate to prevent 
excessive profits; 
(4) any contract or subcontract the renegotiation of which 
would jeopardize secrecy required in the public interest; 
(5) any subcontract or group of subcontracts not otherwise 
exempt from the provisions of this section, if, in the opinion of the 
Board, it is not administratively feasible in the case of such 
subcontract or in the case of such group of subcontracts to deter-
mine and segregate the profits attributable to such subcontract or 
group of subcontracts from the profits attributable to activities 
not subject to renegotiation. 
The Board may so exempt contracts and subcontracts both individually 
and by general classes or types. 
SEC. 107. RENEGOTIATION BOARD. 
(a) CREATION OF BOARD.—There is hereby created, as an inde-
pendent establishment in the executive branch of the Government, a 
Renegotiation Board to be composed of five members to be appointed 
b^^ the President, by and with the advice and consent of the Senate. 
The Secretaries of the Army, the Navy, and the Air Force, respec-
tively, subject to the approval of the Secretary of Defense, and the 
Administrator of General Services shall each recommend to the Presi-
dent, for his consideration, one person from civilian life to serve as a 
member of the Board. The President shall, at the time of appoint- 
chairman. 
ment, designate one member to serve as Chairman. 
The Chairman 
2 0 
PUBLIC LAW 9—MAR. 23, 1951 
[65 STAT. 
shall receive compensation at the rate of $17,500 per annum, and the 
other members shall receive compensation at the rate of $15,000 per 
annum. No member shall actively engage in any business, vocation, 
seaJ- 
or employment other than as a member of the Board. The Board 
shall have a seal which shall be judicially noticed. 
(b) PLACES OF MEETINGS AND QUORUM.—The principal office of the 
Board shall be in the District of Columbia, but it or any division 
thereof may meet and exercise its powers at any other place. The 
Board may establish such number of offices as it deems necessary to 
expedite the work of the Board. Three members of the Board shall 
constitute a quorum, and any power, function, or duty of the Board 
may be exercised or performed by a majority of the members present 
if the members present constitute at least a quorum. 
(c) PERSONNEL.—The Board is authorized, subject to the Classifi-
es stat. 9
5
4 
cation Act of 1949 (but without regard to the civil-service laws and 
§fo7inote." "^' ' regulations), to employ and fix the compensation of such officers and 
employees as it deems necessary to assist it in carrying out its duties 
under this title. The Board may, with t"he consent of the head of the 
agency of the Government concerned, utilize the services of any officers 
or employees of the United States, and reimburse such agency for the 
services so utilized. Officers or employees whose services are so utilized 
shall not receive additional compensation for such services, but shall 
be allowed and paid necessary travel expenses and a per diem in lieu 
of subsistence in accordance with the Standardized Government Travel 
Regulations while away from their homes or official station on duties 
of the Board. 
(d) DELEGATION OF POWERS.—The Board may delegate in whole or 
in part any function, power, or duty (other than its power to pro-
mulgate regulations and rules and other than its power to grant per-
missive exemptions under section 106 (d)) to any agency of the Gov-
ernment, including any such agency established by the Board, and may 
authorize the successive redelegation, within limits specified by it, of 
any such function, power, or duty to any agency of the Government, 
including any such agency established by the Board. But no function, 
power, or duty shall be delegated or redelegated to any person pur-
suant to this subsection or subsection (f) unless the Board has 
determined that such person (other than the Secretary of a Depart-
ment) is responsible directly to the Board or to the person making such 
delegation or redelegation and is not engaged on behalf of any Depart-
ment in the making of contracts for the procurement of supplies or 
services, or in the supervision of such activity; and any delegation or 
redelegation of any function, power, or duty pursuant to this sub-
section or subsection (f) shall be revoked by the person making such 
delegation or redelegation (or by the Board if made by it) if the 
Board shall at any time thereafter determine that the person (other 
than the Secretary of a Department) to whom has been delegated or 
redele^ted such function, power, or duty is not responsible directly 
to the Board or to the person making such delegation or redelegation 
or is engaged on behalf of any Department in the making of contracts 
for the procurement of supplies or services, or in the supervision of 
such activity. 
(e) ORGANIZATION AND OPERATION OF BOARD.—^The Chairman of the 
Board may from time to time divide the Board into divisions of one 
or more members, assign the members of the Board thereto, and in 
case of a division of more than one member, designate the chief 
thereof. The Board may also, by regulations or otherwise, determine 
the character of cases to be conducted initially by the Board through 
an officer or officers of, or utilized by, the Board, the character of cases 
to be conducted initially by the various agencies of the Government 
Ante, p. 19. 
65 STAT.] 
PUBLIC LAW 9—MAR. 23, 1951 
21 
ATUe, p. 12. 
authorized to exercise powers of the Board pursuant to subsection (d) 
of this section, the character of cases to be conducted initially by the 
various divisions of the Board, and the character of cases to be con-
ducted initially by the Board itself. 
The Board may review any 
determination in any case not initially conducted by it, on its own 
motion or, in its discretion, at the request of any contractor or sub-
contractor aggrieved thereby. Unless the Board upon its own motion 
initiates a review of such determination within ninety days from the 
date of such determination, or at the request of the contractor or sub-
contractor made within ninety days from the date of such determina-
tion initiates a review of such determination within ninety days from 
the date of such request, such determination shall be deemed the 
determination of the Board. If such determination was made by an 
order with respect to which notice thereof was given by registered mail 
pursuant to section 105 (a), the Board shall give notice by registered 
mail to the contractor or subcontractor of its decision not to review 
the case. If the Board reviews any determination in any case not 
initially conducted by it and does not make an agreement with the 
contractor or subcontractor with respect to the elimination of excessive 
profits, it shall issue and enter an order under section 105 (a) determin-
ing the amount, if any, of excessive profits, and forthwith give notice 
thereof by registered mail to the contractor or subcontractor. 
The 
amount of excessive profits so determined upon review may be less 
than, equal to, or greater than, that determined by the agency of the 
Government whose action is so reviewed. 
(f) 
DELEGATION or 
RENEGOTIATION FUNCTIONS TO BOARD.—The 
Board is hereby authorized and directed to accept and perform such 
renegotiation powers, duties, and functions as may be delegated to it 
under any other law requiring or permitting renegotiation, and the 
Board is further authorized to redelegate any such power, duty, or 
function to any agency of the Government and to authorize successive 
redelegations thereof, within limits specified by the Board. 
Notwith-
standing any other provision of law, the Secretary of Defense is secretary^of Defense"^ 
hereby authorized to delegate to the Board, in whole or in part, the 
powers, functions, and duties conferred upon him by any other 
renegotiation law. 
SEC. 1
0
8
. 
REVIEW 
BY 
THE 
TAX 
COURT. 
Any contractor or subcontractor aggrieved by an order of the Board 
determining the amount of excessive profits received or accrued by such 
contractor or subcontractor may— 
(a) if the case was conducted initially by the Board itself— 
within ninety days (not counting Sunday or a legal holiday in the 
District of Columbia as the last day) after the mailing under 
section 105 (a) of the notice of such order, or 
(b) if the case was not conducted initially by the Board itself— 
within ninety days (not counting Sunday or a legal holiday in the 
District of Columbia as the last day) after the mailing under 
section 107 (e) of the notice of the decision of the Board not to 
review the case or the notice of the order of the Board determining 
the amount of excessive profits, 
file a petition with The Tax Court of the United States for a redeter-
mination thereof. 
Upon such filing such court shall have exclusive 
jurisdiction, by order, to finally determine the amount, if any, of such 
excessive profits received or accrued by the contractor or subcontractor, 
and such determination shall not be reviewed or redetermined by any 
court or agency. 
The court may determine as the amount of excessive 
profits an amount either less than, equal to, or greater than that 
determined by the Board. 
A proceeding before the Tax Court to 
finally determine the amount, if any, of excessive profits shall not 
Ante, p. 12. 
22 
PUBLIC LAW 9—MAR. 23, 1951 
[65 STAT. 
be treated as a proceeding to review the determination of the Board, 
but shall be treated as a proceeding de novo. For the purposes of this 
section the court shall have the same powers and duties, insofar as 
applicable in respect of the contractor, the subcontractor, the Board, 
and the Secretary, and in respect of the attendance of witnesses and 
the production of papers, notice of hearings, hearings before divisions, 
review by the Tax Court of decisions of divisions, stenographic 
reporting, and reports of proceedings, as such court has under sections 
1110, 1111, 1113, 1114, 1115 (a), 1116, 1117 (a), 1118, 1120, and 1121 
5
3 st^t. i|)-i^. ^
^ QJ ^j^g Internal Revenue Code in the case of a proceeding to redeter-
sVm^^^^' ^"^' ^^' ^W© a deficiency. 
In the case of any witness for the Board, the fees 
and mileage, and the expenses of taking any deposition shall be paid 
out of appropriations of the Board available for that purpose, and 
in the case of any other witnesses shall be paid, subject to rules pre-
scribed by the court, by the party at whose instance the witness 
appears or the deposition is taken. The filing of a petition under 
this section shall operate to stay the execution of the order of the 
Ante. p. 13. 
Board under subsection (b) of section 105 if within ten days after 
the filing of the petition the petitioner files with the Tax Court a 
good and sufficient bond, approved by such court, in such amount as 
may be fixed by the court. 
Any amount collected by the United 
States under an order of the Board in excess of the amount found 
to be due under a determination of excessive profits by the Tax Court 
shall be refunded to the contractor or subcontractor with interest 
thereon at the rate of 4 per centum per annum from the date of 
collection by the United States to the date of refund. 
SEC. 109. RULES AND REGULATIONS. 
The Board may make such rules, regulations, and orders as it deems 
necessary or appropriate to carry out the provisions of this title. 
SEC. 110. COMPLIANCE WITH REGULATIONS, ETC. 
No person shall be held liable for damages or penalties for any act 
or failure to act resulting directly or indirectly from his compliance 
with a rule, regulation, or order issued pursuant to this title, notwith-
standing that any such rule, regulation, or order shall thereafter be 
declared by judicial or other competent authority to be invalid. 
SEC. 111. APPLICATION OF ADMINISTRATIVE PROCEDURE ACT. 
The functions exercised under this title shall be excluded from the 
sup^iv.^iooiTar*'' operation of the Administrative Procedure Act (60 Stat. 237) except 
as to the requirements of section 3 thereof. 
SEC. 112. APPROPRIATIONS. 
There are hereby authorized to be appropriated such sums as may 
be necessary and appropriate for the carrying out of the provisions and 
purposes of this title. Funds made available for the purposes of this 
title may be allocated or transferred for any of the purposes of this 
title, with the approval of the Bureau of the Budget to any agency of 
the Government designated to assist in carrying out this title. 
Funds 
so allocated or transferred shall remain available for such period as 
may be specified in the Acts making such funds available. 
SEC. 113. PROSECUTION OF CLAIMS AGAINST UNITED STATES BY 
FORMER PERSONNEL. 
isu^sc^^sup IV 
Nothing in title 18, United States Code, sections 281 and 283, or in 
§§28i;283. •' 
• ' section 190 of the Revised Statutes (U. S. C , title 5, sec. 99) shall be 
deemed to prevent any person by reason of service in a Department 
or the Board during the period (or a part thereof) beginning July 1, 
1950, and ending December 31, 1963, from acting as counsel, ageiit, or 
attorney for prosecuting any claim against the United States: Pro-
vided, That such person shall not prosecute any claim against the 
app. 
65 STAT.] 
PUBLIC LAW 9—MAR. 23, 1951 
23 
United States (1) involving any subject matter directly connected 
with which such person was so employed, or (2) during the period 
such person is engaged in employment in a Department or the Board. 
TITLE II—MISCELLANEOUS PROVISIONS 
SEC. 201. FUNCTIONS UNDER WORLD WAR II RENEGOTIATION ACT. 
(a) ABOLITION OF WAR CONTRACTS PRICE ADJUSTMENT BOARD.— 
The War Contracts Price Adjustment Board, created by the Renego- 
5o^u*.*s^c. app. 
ti ation Act, is hereby abolished. 
| //gf 
(jf 
^ • ^"P- ^ "^' 
(b) TRANSFER OF FUNCTIONS IN GENERAL.—^All powers, functions, 
and duties conferred upon the War Contracts Price Adjustment Board 
by the Renegotiation Act and not otherwise specifically dealt with in 
tnis section are transferred to the Renegotiation Board. 
(c) AMENDMENT OF THE RENEGOTIATION ACT.—Subsection (a) 
(4) 
(D) of the Renegotiation Act is amended by inserting at the end 
5o^u*.*s^c. app. 
thereof the following: "A net renegotiation rebate shall not be repaid § ii^^ (a) (4) (D). 
unless a claim therefor has been filed with the Board on or before the 
date of its abolition, or unless a claim shall have been filed with the 
Administrator of General Services (i) on or before June 30, 1951, or 
(ii) within ninety days after the making of an agreement or the entry 
of an order under subjection (c) (1) determining the amount of exces- 
5o^u!l^c 
sive profits, whichever is later. A claim shall be deemed to have been 5 "M (C) (i). 
filed when received by the Board or the Administrator, whether or 
not accompanied by a statement of the Commissioner of Internal 
Revenue showing the amortization deduction allowed for the renego-
tiated year upon the recomputation made pursuant to section 124 (d) 
2
6 u. si c. J
1
2
4 (d). 
of the Internal Revenue Code." 
(d) TRANSFER or CERTAIN FUNCTIONS.—^All powers, functions, and 
duties conferred upon the War Contracts Price Adjustment Board by 
^ g
^
^
^ ^ 
subsection (a) (4) (D) of the Renegotiation Act, subject to the amend- 
50 u.s. b. app. 
ment thereof by subsection (c) of this section, are hereby transferred * "^^ ^
*
^ ^^^ ^^^' 
to the Administrator of General Services. 
(e) FUNCTIONS AND RECORDS.—Each Secretary of a Department is 
authorized and directed to eliminate the excessive profits determined 
under all existing renegotiation agreements or orders by the methods 
enumerated in siibsection (c) (2) of the Renegotiation Act in respect 
so u . s . c . app. 
of all renegotiations conducted by his Department pursuant to dele- ^ ^
^
^
^ ^''^ ^^^' 
gations from the War Contracts Price Adjustment Board. The sev-
eral Departments shall retain custody of the renegotiation case files 
covering renegotiations thus conducted for such time as the Secretary 
deems necessary for the purposes of this section, and thereafter they 
shall be made available to the Renegotiation Board for appropriate 
disposition. 
The renegotiation records of the War Contracts Price 
Adjustment Board shall become records of the Renegotiation Board 
on the effective date of this section. 
(f) REFUNDS.—All refunds under subsection (a) (4) (D) of the 
ggstat so s 
Renegotiation Act (relating to the recomputation of the amortization 
sou.s.'c.app. 1
1
1
9
1 
deduction), all refunds under the last sentence of subsection (i) (3) W(4)(D),(i)o). 
of such Act (relating to excess inventories), and all amounts finally 
adjudged or determined to have been erroneously collected by the 
United States pursuant to a determination of excessive profits, with 
interest thereon in the last mentioned case at a rate not to exceed 4 
per centum per annum as may be determined by the Administrator of 
General Services or his duly authorized representative computed to 
the date of certification to the Treasury Department for payment, 
shall be certified by the Administrator of General Services or his duly 
authorized representative to the Treasury Department for payment 
from such appropriations as may be available therefor: 
Provided, 
24 
PUBLIC LAW 9—MAR. 23, 1951 
[65 STAT. 
That such refunds shall be based solely on the certificate of the Admin-
istrator of General Services or his duly authorized representative. 
(g) EXISTING POLICIES, PROCEDURES, ETC., To REMAIN IN EFFECT.— 
All policies, procedures, directives, and delegations of authority pre-
scribed or issued (1) by the War Contracts Price Adjustment Board, 
5
8 Stat 9
0 
or (2) by any Secretary or other duly authorized officer of the Govern-
5ou.s.c.app.§ii9i ment, under the authority of the Renegotiation Act, in effect upon the 
(I); Sup. IV, § 1
1
9
1 (j). effective date of this section and not inconsistent herewith, shall remain 
in full force and effect unless and until superseded, or except as they 
may be amended, under the authority of this section or any other 
appropriate authority. All functions, powers, and responsibilities 
transferred by this section shall be accompanied by the authority to 
issue appropriate regulations and procedures, or to modify existing 
procedures, in respect of such powers, functions, and responsibilities. 
(h) SAVINGS PROVISION.—This section shall not be construed (1) to 
prohibit disbursements authorized by the War Contracts Price 
Adjustment Board and certijfied pursuant to its authority prior to the 
effective date of this section, (2) to affect the validity or finality of any 
agreement or order made or issued pursuant to law by the War Con-
tracts Price Adjustment Board or pursuant to delegations of authority 
from it, or (3) to prejudice or to abate any action taken or any right 
accruing or accrued, or any suit or proceeding had or commenced in 
any civil cause; but any court having on its docket a case to which 
the War Contracts Price Adjustment Board is a party, on motion or 
supplemental petition filed at any time within twelve months after the 
effective date of this section, showing a necessity for the survival of 
such suit, action, or other proceeding to obtain a determination of the 
questions involved, may allow the same to be maintained by or against 
the United States. 
(i) RENEGOTIATION ACT NOT REPEALED.—Except as by this Act 
5ou^f o'app §
1
1
9
1 specifically amended or modified, all provisions of the Renegotiation 
(
Z
)
; sup.iv, § 1
1
9
1 (j). Act shall remain in full force and effect. 
(j) DEFINITIONS.—The terms which are defined in the Renegotia-
tion Act shall, when used in this section, have the same meaning as 
when used in the Renegotiation Act, except that where a renegotiation 
function has been transferred by or pursuant to law the terms "Secre-
tary" or "Secretaries" and "Department" or "Departments" shall be 
understood to refer to the successors in function to those officers or 
offices specifically named in the Renegotiation Act. 
(k) EFFECTIVE DATE OF SECTION.—This section shall take effect sixty 
days after the date of the enactment of this Act. 
SEC. 202. PERIOD OF LIMITATIONS FOR RENEGOTIATION ACT OF 1948. 
5
0 u^s.c.!sup.IV, 
No proceeding under the Renegotiation Act of 1948 to determine 
app. §ii93 (i). 
^Jie amovmt of excessive profits for any fiscal year shall be commenced 
more than one year after the mandatory statement required by the 
regulations issued pursuant to such Act is filed with respect to such 
year, or moi'e than six months after the date of the enactment of this 
title, whichever is the later, and if such proceeding is not so com-
menced (in the manner provided by the regulations prescribed pur-
suant to such Act), all liabilities of the contractor or subcontractor 
under such Act for excessive profits received or accrued during such 
fiscal year shall thereupon be discharged. If an agreement or order 
determining the amount of excessive profits under such Act is not 
made within two years following the commencement of the renegotia-
tion proceeding, then upon the expiration of such two years all lia-
bilities of the contractor or subcontractor for excessive profits with 
respect to which such proceeding was commenced shall thereupon be 
discharged, except that (1) such two-year period may be extended by 
mutual agreement, and (2) if within such two years such an order 
65 STAT.] 
PUBLIC LAW 10—MAR. 23, 1951 
25 
is duly issued pursuant to such Act, such two-year limitation shall not 
apply to the review of such order by any renegotiation board duly 
authorized to undertake such review. 
SEC. 203. AMENDMENT OF SECTION 3806 OF THE INTERNAL REVENUE 
CODE. 
Section 3806 (a) (1) of the Internal Revenue Code is hereby 
26u**s^. 5 a
g
o
e 
amended by striking out subparagraphs (A), (B), and (C) and *
^
a
) (i) (A)- (B). (C). 
inserting in lieu thereof the following: 
"(A) The term 'renegotiation' includes any transaction 
which is a renegotiation within the meaning of the Federal 
renegotiation act applicable to such transaction, any modifica-
tion of one or more contracts with the United States or any 
agency thereof, and any agreement with the United States 
or any agency thereof in respect of one or more such contracts 
or subcontracts thereunder. 
"(B) The term 'excessive profits' includes any amount 
which constitutes excessive profits within the meaning 
assigned to such term by the applicable Federal renegotiation 
act, any part of the contract price of a contract with the 
United States or any agency thereof, any part of the subcon-
tract price of a sul)contract under such a contract, and any 
profits 
derived from 
one or more such contracts 
or 
subcontracts. 
"(C) The term 'subcontract' includes any purchase order 
or agreement which is a subcontract within the meaning 
assigned to such term by the applicable Federal renegotiation 
act. 
"(D) The term 'Federal renegotiation act' includes section 
403 of the Sixth Supplemental National Defense Appropria-
tion Act (Public 528, 77th Cong., 2d»Sess.), as amended or 5
6 stat. 245; 6
2 stat. 
supplemented, the Renegotiation Act of 1948, as amended or ^
^
5
0 u. s. c. app. 
supplemented, and the Renegotiation Act of 1951, as amended L^lgV^ ^im V
n 
or supplemented." 
^' 
SEC. 204. SEPARABILITY PROVISION. 
If any provision of this Act or the application of any provision to 
any person or circumstance is held invalid, the validity of the 
remainder of the Act and of the application of its provisions to other 
persons and circumstances shall not be affected thereby. 
Approved March 23, 1951. 
Public Law 10 
CHAPTER 16 
JOINT RESOLUTION 
March 23,1951 
To amend and extend the provisions of the District of Columbia Emergency 
fH. J. Res. 1
7
3
] 
Rent Act, as amended. 
Resolved hy the Senate and House of Representatives 
of the United 
States of America in Congress assernbled^ That section 1 (b) of the 
District of Columbia Emergency Rent Act, as amended (D. C. Code, 
1940 edition, sec. 45-1601 (b)), is hereby amended by striking out 
6
4 stat. 1
1
1
5
. 
"March 31, 1951" and inserting in lieu thereof "June 30, 1951". 
Approved March 23, 1951.