delivered in connection with or as a consideration for such payment, said certificate shall list the property so to be transferred or delivered. The acceptance by the contractor of payment under any such certificate shall constitute a release of all the contractor's rights then existing or which may thereafter exist growing out of or relating to such item or items. ART. XI. In the event of the transfer or delivery to the United States of any property, the contractor shall expressly warrant all such property as free and clear of all encumbrances, either legal or equitable, and shall either deliver the same to the United States, or, if requested, shall care for, mark for identification, and arrange for storage of same in a manner which shall be mutually agreeable. ART. XII. This agreement shall not become a valid or binding obligation of either party hereto unless and until the approval of the_---. has been noted at the end of this instrument. (Claims Board of the Bureau.) In witness whereof, the parties hereto have executed and delivered this agreement in triplicate as of the date first hereinabove written. Witnesses: 19__. Dated, Washington, D. C., the‒‒‒‒‒‒‒‒‒‒day of--- NOTE 1.-Here insert the date of suspension or reduction of operations. NOTE 2. In any case where a board or officer charged with the negotiation of settlement agreements is satisfied that the contractor, through no fault of his own, is unable to classify and state promptly the items and outside figures provided for by this article, and that the case is one in which the total of the items already determined is clearly within the total amount which will certainly be due to the contractor from the United States on the final settlement, there may be substituted for this article the following: "ART. VII. The contracting officer has made a preliminary examination of the items and elements for which payments will be due to the contractor under the original contract, and this supplemental agreement, and finds that the total thereof will not be less than---_dollars ($.... NOTE 3.-Where the items already agreed upon relate to or include things other than payments to subcontractors, such as raw material, articles in process, etc., appropriate clauses should be substituted or added in a form similar to Forms A and B attached. FORM A. SETTLEMENT FOR RAW MATERIALS, COMPONENT PARTS, AND/OR ARTICLES IN PROCESS, ON DELIVERY. Section B.-Pending the completion of the investigations and determinations mentioned in Section A above, the United States agrees that under the provisions of Article IV hereof the contractor is entitled to be reimbursed and remunerated on account of certain raw materials and component parts and ar 1 ticles in process which are listed on Schedule hereto attached, in the total amount, if made at the present time, of $----------; that it is in the interest of the United States to make such reimbursement and remuneration immediately for the purpose of effecting a saving of amounts which would otherwise be properly payable under Sections C and E of Article IV, and the contractor agrees to accept such payment if made at this time. It is therefore agreed that upon receipt by the United States of the raw materials and component parts and articles in process1 listed in the said Schedule the United States shall pay to the contractor the said sum of $. The acceptance by the contractor of said payment shall operate forever to release and discharge the United States from every claim and demand of every nature whatsoever which the contractor may have or have had against the United States with relation to said raw materials and component parts and articles in process.1 FORM B. SETTLEMENT FOR RAW MATERIALS, COMPONENT PARTS, AND/OR ARTICLES IN PROCESS, ON DIFFERENCES. Section B.-Pending the completion of the investigations and determinations mentioned in Section A above, the United States agrees that under the provisions of Article IV hereof the contractor would be entitled to be reimbursed and remunerated on account of the raw materials and component parts and articles in process which are listed on Schedule hereto attached, in 1111 the total amount, if made at the present time, of $. provided the United States take title to and possession of such raw materials and component parts and articles in process.1 It is agreed that the present fair value of said raw materials and component parts and articles in process1 is $---The contractor is willing to retain the same, to deduct their fair value from the total remuneration above named, and to accept payment of the balance if made at this time. The United States had no use for said raw materials and component parts and articles in process,' and it is in the interest of the United States to make said reimbursement and remuneration immediately on the basis proposed by the contractor, for the purpose of effecting a saving of the amounts which would otherwise be properly payable under Sections C and E of Article IV and the extra payments which would be necessary if the United States took title and possession. It is therefore agreed that the United States shall pay the contractor said sum of $‒‒‒‒‒‒‒‒, and the contractor shall retain title and possession of said raw materials and component parts and articles in process. The receipt by the contractor of said payment shall operate to forever release and discharge the United States from every claim and demand of every nature whatsoever which the contractor may have or have had against the United States with relation to said raw materials and component parts and articles in process.1 1 Strike out the words not applicable. MEMORANDUM OF RESOLUTION OF WAR DEPARTMENT CLAIMS BOARD. Subject: Interpretation of Supply Circular No. 111. 1. At a meeting of the War Department Claims Board held February 19, 1919, the following resolution was adopted: 44 Resolved, That the following instructions be transmitted by the special members of this board to the respective bureaus for their information, future guidance, and action: "It has been brought to the attention of the War Department Claims Board that some diversity of interpretation and action exists in the various bureaus as to the principles to be applied in the adjustment of contracts under Supply Circular 111, where contracts are not being adjusted under the provisions of a termination clause. "The principle of adjustment which is intended to be applied by Supply Circular 111 is that in so far as the contractor has properly made expenditures and incurred obligations in the performance of his contract, which, because of the suspension, have not resulted in a finished product, the adjustment offered by the department should, in general, provide for reimbursement to the contractor of such expenditures properly incurred, with a reasonable remuneration for the use of the capital and services of the contractor in that part of his performance under the contract which does not result in finished products. Under Supply Circular 111 the contractor is thus compensated with respect to material in process by making a proper allowance up to 10 per cent on cost of articles in process under paragraph 5. To fairly compensate him for his investment properly made in raw material not in process he should be allowed, in addition to the cost-plus inward handling charges plus such proportion of overhead as is directly applicable, compensation for use of his capital tied up in such material at the rate of 6 per cent per annum, or, if the capital is borrowed, at the rate of interest which he pays for it, where the board has satisfied itself that such compensation is not included in the claim as carrying charges or otherwise and has not been taken into consideration in fixing the percentage of allowance under Supply Circular 111, paragraph 5. "It is recognized, however, that the negotiating boards may find exceptional cases where services have been rendered and capital used in the preparation for or performance of the contract and the method outlined above will not result in just compensation. Attention is invited to the fact that in such event the contractor may claim additional compensation under the second paragraph of subsection (5), paragraph 3, of Supply Circular 111, and when so claimed just and reasonable compensation should be allowed by the board. Great care, however, must be exercised in making such allowances to see that there is no duplication of remuneration to the contractor, and particular attention must be directed to such allowances and the basis upon which they are made in the papers submitted to the reviewing boards." SUPPLY CIRCULAR No. 46. SUPPLY CIRCULAR NO. 46. WAR DEPARTMENT, PURCHASE, STORAGE AND TRAFFIC DIVISION, Subject: Appeals in connection with claims under contracts made by War Department. The following statement is authorized by the War Department Claims Board and the Board of Contract Adjustment as to procedure to be followed in con nection with appeals to the Bureau Claims Boards and to the Board of Contract Adjustment. 1. Controversies arising as to the terms of settlement of contracts or agreements suspended prior to complete performance (including both contracts executed in the manner prescribed by law and agreements coming within the provisions of the Dent Act, approved Mar. 2, 1919). (a) In the event that the contractor is unwilling to accept the award or supplemental contract proposed by the board or officer with whom he has taken up the adjustment of his suspended or reduced contract or agreement he may within 10 days after receipt of notice of the determination of said board or officer inform such board or officer in writing that he desires to appeal to the claims board of the bureau in which the matter originated and make a statement as to the grounds of his objection. (b) The board or officer from whose determination the appeal is being taken shall upon receipt of such communication forward to said bureau board a complete file of the case, including a copy of the original contract, together with a statement of the reasons for its determination and its views as to the objections raised by the claimant. (c) Upon receipt of the file the bureau claims board shall notify the claimant and shall, as promptly as possible, investigate and review, and the claimant shall be given the opportunity to appear in person if he so desires or to submit written memoranda, or both. The bureau board in hearing the appeal shall consider the whole case and not merely the particular matters objected to by the claimant. (d) The bureau board shall with all possible expedition reach its determination as to the award or supplemental contract which it is prepared to tender and shall promptly submit a statement thereof to the claimant. (e) If the claimant is not willing to accept the award or supplemental contract proposed by the bureau claims board, he may within 20 days from the receipt of such proposal notify the bureau claims board in writing that he appeals to the Board of Contract Adjustment. In this notification to the bureau board the claimant should make a brief statement or explanation of the grounds of his objection to the action of the bureau board. (f) Upon receipt of such communication the bureau claims board shall promptly transmit same to the Board of Contract Adjustment, with a complete file of the case and a statement of its reasons for the determination made. (g) The Board of Contract Adjustment, on receipt of the notice of appeal and the file, shall proceed with the determination of the matter upon the papers presented and on any further investigation or hearing it may find necessary, without further pleadings or petitions; provided, however, that any appellant may, if he desires, present a petition in conformity with Information Circular No. 1 of the Board of Contract Adjustment. (h) Every effort should be made by the contractor to reach an agreement with the negotiating boards or officers and the bureau claims boards, and the Board of Contract Adjustment will in every case where it does not appear that full efforts have been made to reach an agreement send the matter back for further negotiations without passing on its merits. (i) The board to which any matter is appealed may, in its discretion, consider the same, notwithstanding that the appeal may not have been taken within the time herein specified, if under the circumstances it is deemed that such appeal was taken within a reasonable time. 2. Controversies other than those specified above arising out of contracts of the War Department.—The procedure as to the presentation of such controversies to the Board of Contract Adjustment is outlined in Information Circular No. 1 of the Board of Contract Adjustment. 3. This statement has no application to the issuance by the Board of Contract Adjustment of Certificate Form C on Class B claims under Supply Circular No. 17. 4. Further information, if found necessary, may be obtained from the War Department Claims Board, Room 2402, Munitions Building, Washington, D. C. By authority of the Secretary of War: GEO. W. BURR, Major General, Assistant Chief of Staff, GENERAL ORDER NO. 100. GENERAL ORDERS, WAR DEPARTMENT, Washington, August 12, 1919. IV. Board of Contract Adjustment.—Paragraph 2; paragraph 4, as amended by Section II, General Orders, No. 135, War Department, 1918; and paragraph 9. Section IV, General Orders, No. 103, War Department, 1918, are amended to read as follows: 2. The Board of Contract Adjustment shall consist of as many members as the Secretary of War shall from time to time determine and appoint. Such membership may in whole or in part be commissioned officers of the United States Army or civilians. 4. The Judge Advocate General will assign such judge advocates as may be necessary to assist the board as legal advisers and to act as counsel for the Government in the preparation, conduct, and hearing of the cases before the board. The Assistant Chief of Staff, the director of purchase, storage, and traffic, will appoint a recorder and one or more examiners, all or any of whom may be commissioned officers of the United States Army or civilians, and the necessary number of accountants, engineers, and other assistants, who shall be either commissioned officers or civilians. 9. Such members of the board, the judge advocate, the recorder, and the examiners as are commissioned officers of the United States Army shall have authority to administer the oath to any witness or witnesses testifying ʊr deposing in the course of any investigation, inquiry, or hearing in accordance with section No. 183, R. S., as amended by the act of Congress approved February 13, 1911 (Sec. VI, G. O., No. 45, W. D., 1911). |