41 U.S.C. § 108 : US Code - Section 108: Interim financing

Search 41 U.S.C. § 108 : US Code - Section 108: Interim financing

(a) Prime contractors
It is the policy of the Government, and it shall be the
responsibility of the contracting agencies and the Administrator of
General Services, in accordance with and subject to the provisions
of this chapter, to provide war contractors having any termination
claim or claims, pending their settlement, with adequate interim
financing, within thirty days after proper application therefor.
(b) Method of financing; amounts payable
Each contracting agency shall, to the greatest extent it deems
practicable, make available interim financing through loans and
discounts, and commitments and guaranties in connection therewith,
in contemplation of or related to termination of war contracts.
Where interim financing is made by advance payments or partial
payments, it shall, insofar as practicable, consist of the
following:
(1) An amount equal to 100 per centum of the amount payable, at
the contract price, on account of acceptable items completed
prior to the termination date under the terms of the contract, or
completed thereafter with the approval of the contracting agency;
plus
(2) An amount equal to 90 per centum of the cost of raw
materials, purchased parts, supplies, direct labor, and
manufacturing overhead allocable to the terminated portion of the
war contract; plus
(3) A reasonable percentage of other allowable costs, including
administrative overhead, allocable to the terminated portion of
the war contract not included in the foregoing; plus
(4) Such additional amounts, if any, as the contracting agency
deems necessary to provide the war contractor with adequate
interim financing.
(5) In lieu of the costs referred to in clauses (2) and (3) of
this subsection, where a detailed ascertainment of such costs is
not suitable to the conditions of any war contractor and is apt
to cause delay in the obtaining of interim financing by him, that
portion of such interim financing shall be equal to an amount not
greater than 90 per centum of the estimated costs which are
allocable to the terminated part or parts of the war contract or
group of war contracts, and are ascertained in accordance with
such methods and standards as the Administrator of General
Services shall prescribe.
(6) There shall be deducted from the amount of such interim
financing any unliquidated balances of advance and partial
payments theretofore made to such war contractor, which are
allocable to the terminated war contract or the terminated part
of the war contract.
(c) Evidence to support financing
The Administrator of General Services shall prescribe (1) the
types of estimates, certificates, or other evidence to be required
to support such interim financing; (2) the terms and conditions
upon which such interim financing shall be made including the use
of standard forms for agreements with respect to such interim
financing to the extent practicable; (3) the classes of cases in
which such interim financing shall be refused; and (4) such methods
of supervision and control over such interim financing as he deems
necessary or desirable to assure adequate and speedy interim
financing to subcontractors of the war contractor.
(d) Penalty for overstatement of claims
In case of an overstatement by any war contractor of the amount
due on his termination claim or claims in connection with any
interim financing under this chapter, such contractor shall pay to
the United States, as a penalty, an amount equal to 6 per centum of
the amount of the overstatement, but the Administrator of General
Services may suspend or modify any such penalty if in his opinion
the imposition thereof would be inequitable. Any penalty may be
deducted from any amounts due the war contractor upon such
termination claim or claims, or otherwise, or may be collected from
the war contractor by suit. The obligation to pay any penalty
imposed and to repay any interim financing made or assumed by the
United States under this chapter shall constitute a debt due to the
United States within the meaning of section 3713(a) of title 31.
(e) Advance payments as part of termination settlement
Any contracting agency may allow any advance payments, previously
made or authorized by it in connection with the performance of a
war contract, to be used for payments and expenses related to the
termination settlement of such contract, upon such terms and
conditions as it deems necessary or appropriate to protect the
interest of the Government.
(f) Liquidation of loans, etc., prior to final settlement
No interim financing shall be made by any contracting agency
under this chapter unless the terms of such financing provide for
the liquidation by the war contractor of all loans, discounts,
advance payments, or partial payments thereunder not later than the
time of final payment of the amount due on the settlement of the
termination claim or claims of the war contractor involved or such
time thereafter as the contracting agency deems necessary for the
liquidation of such interim financing in an orderly manner.
(g) Settlement of claims; validation of prior financing
Any contracting agency may settle, upon such terms and conditions
as it deems proper, any claim or obligation due by or to the
Government arising from or related to any interim financing made,
acquired, or authorized by it. Any interim financing made,
acquired, or authorized by any contracting agency before July 21,
1944, shall be valid to the extent it would be authorized under the
provisions of this chapter if made after its effective date.