Page:United States Statutes at Large Volume 56 Part 1.djvu/1011

 77TH CONG. , 2D SESS.-CH. 619-OCT. 21, 1942 "(4) a provision for the retention by the United States from amounts otherwise due the contractor, or for repayment by him to the United States, as the Secretary may direct, of the amount of any reduction in the contract price of any subcontract under such contract, which the contractor is directed, pursuant to clause (3) of this subsection, to withhold from payments otherwise due the subcontractor and actually unpaid at the time the contractor receives such direction. "The provision for the renegotiation of the contract price, in the discretion of the Secretary, (i) may fix the period or periods when or within which renegotiation shall be had; and (ii) if in the opin- ion of the Secretary the provisions of the contract or subcontract are otherwise adequate to prevent excessive profits, may provide that renegotiation shall apply only to a portion of the contract or subcon- tract or shall not apply to performance during a specified period or periods and may also provide that the contract price in effect during any such period or periods shall not be subject to renegotiation. (c) (1) Whenever, in the opinion of the Secretary of a Depart- ment, the profits realized or likely to be realized from any contract with such Department, or from any subcontract thereunder whether or not made by the contractor, may be excessive, the Secretary is authorized and directed to require the contractor or subcontractor to renegotiate the contract price. When the contractor or subcon- tractor holds two or more contracts or subcontracts the Secretary in his discretion, may renegotiate to eliminate excessive profits on some or all of such contracts and subcontracts as a group without sep- arately renegotiating the contract price of each contract or subcontract. "(2) Upon renegotiation, the Secretary is authorized and directed to eliminate any excessive profits under such contract or subcontract (i) by reductions in the contract price of the contract or subcontract, or by other revision in its terms; or (ii) by withholding, from amounts otherwise due to the con- tractor or subcontractor, any amount of such excessive profits; or (iii) by directing a contractor to withhold for the account of the United States, from amounts otherwise due to the sub- contractor, any amount of such excessive profits under the subcontract; or (iv) by recovery from the contractor or sub- contractor, through repayment, credit or suit, of any amount of such excessive profits actually paid to him; or (v) by any com- bination of these methods, as the Secretary deems desirable. The Secretary may bring actions on behalf of the United States in the appropriate courts of the United States to recover from such contractor or subcontractor, any amount of such excessive profits actually paid to him and not withheld or eliminated by some other method under this subsection. The surety under a contract or subcontract shall not be liable for the repayment of any excessive profits thereon. All money recovered by way of repayment or suit under this subsection shall be covered into the Treasury as miscellaneous receipts. "(3) In determining the excessiveness of profits realized or likely to be realized from any contract or subcontract, the Secre- tary shall recognize the properly applicable exclusions and deduc- tions of the character which the contractor or subcontractor is allowed under Chapter 1 and Chapter 2E of the Internal Rev- enue Code. In determining the amount of any excessive profits to be eliminated hereunder the Secretary shall allow the con- tractor or subcontractor credit for Federal income and excess profits taxes as provided in section 3806 of the Internal Revenue Code. 983 Contracts involving excessive profits. Ante, p. 245. Elimination of ex- eessive profits. Determination of excessiveness of profits. 53 Stat. 4; Stat. 975. 26U.8.C. ii1-36 710-752: Supp. I, ii 4- 404, 710-743. Ante, pp . 802, 899. Ante, p. 896 56 STAT.]

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