§ 107. — Settlement of subcontractors' claims.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 41USC107]
TITLE 41--PUBLIC CONTRACTS
CHAPTER 2--TERMINATION OF WAR CONTRACTS
Sec. 107. Settlement of subcontractors' claims
(a) Conclusiveness of settlement
Where, in connection with the settlement of any termination claim by
a contracting agency, any war contractor makes settlements of the
termination claims of his subcontractors, the contracting agency shall
limit or omit its review of such settlements with subcontractors to the
maximum extent compatible with the public interest. Any contracting
agency (1) may approve, ratify, or authorize such settlements with
subcontractors upon such evidence, terms, and conditions as it deems
proper; (2) shall vary the scope and intensity of its review of such
settlements according to the reliability of the war contractor, the
size, number, and complexity of such claims, and other relevant factors;
and (3) shall authorize war contractors to make such settlements with
subcontractors without review by the contracting agency, whenever the
reliability of the war contractor, the amount or nature of the claims,
or other reasons appear to the contracting agency to justify such
action. Any such settlement of a subcontract approved, ratified, or
authorized by a contracting agency shall be final and conclusive as to
the amount due to the same extent as a settlement under subsection (c)
of section 106 of this title, and no war contractor shall be liable to
the United States on account of any amounts paid thereon except for his
own fraud.
(b) Supervision of payments to war contractors
Whenever any contracting agency is satisfied of the inability of a
war contractor to meet his obligations it shall exercise supervision or
control over payments to the war contractor on account of termination
claims of subcontractors of such war contractor to such extent and in
such manner as it deems necessary or desirable for the purpose of
assuring the receipt of the benefit of such payments by the
subcontractors.
(c) Group settlements
The Administrator of General Services shall prescribe policies and
methods for the settlement as a group, or otherwise, by any contracting
agency of some or all of the termination claims of a war contractor
under war contracts with one or more (1) bureaus or divisions within a
contracting agency, (2) contracting agencies, or (3) prime contractors
and subcontractors, to the extent he deems such action necessary or
desirable for expeditious and equitable settlement of such claims. After
consulting with the contracting agencies concerned, the Administrator of
General Services may provide for assigning any war contractor to a
contracting agency for such settlement, and such agency shall have
authority to settle, on behalf of any other contracting agency, some or
all of the termination claims of such war contractor.
(d) Direct settlement by contracting agency
Any contracting agency may settle directly termination claims of
subcontractors to the extent that it deems such action necessary or
desirable for the expeditious and equitable settlement of such claims.
In making such termination settlements any contracting agency may
discharge the claim of the subcontractor by payment or may purchase such
claim, and may agree to assume, or indemnify the subcontractor against,
any claims by any person in connection with such claim or the
termination settlement. Any contracting agency undertaking to settle the
termination claim of any subcontractor shall deliver to the
subcontractor and the war contractor liable to him written notice
stating its acceptance of responsibility for settling his claim and the
conditions applicable thereto, which may include the release, or
assignment to the contracting agency, of his claim against the war
contractor liable to him; upon consent thereto by the subcontractor, the
Government shall become liable for the settlement of his claims upon the
conditions specified in the notice.
(e) Amount of settlement
Any contracting agency may make settlements with subcontractors in
accordance with any of the provisions of this chapter without regard to
any limitation on the amount payable by the Government to the prime
contractor.
(f) Equitable payments
If any contracting agency determines that in the circumstances of a
particular case equity and good conscience require fair compensation for
the termination of a war contract to be paid to a subcontractor who has
been deprived of and cannot otherwise reasonably secure such fair
compensation, the contracting agency concerned may pay such compensation
to him although such compensation already has been included and paid as
part of a settlement with another war contractor.
(July 1, 1944, ch. 358, Sec. 7, 58 Stat. 654; Ex. Ord. No. 9809, Sec. 8,
eff. Dec. 12, 1946, 11 F.R. 14281; 1947 Reorg. Plan No. 1, Sec. 201,
eff. July 1, 1947, 12 F.R. 4534, 61 Stat. 951; June 30, 1949, ch. 288,
title I, Sec. 102(b), 63 Stat. 380.)
Transfer of Functions
Functions of Secretary of the Treasury transferred to Administrator
of General Services by section 102(b) of act June 30, 1949, ch. 288, 63
Stat. 380, which was classified to section 752(b) of former Title 40,
Public Buildings, Property, and Works, and was repealed by Pub. L. 107-
217, Sec. 6(b), Aug. 21, 2002, 116 Stat. 1304.
``Secretary'' substituted for ``Director'' by section 8 of Ex. Ord.
No. 9809 and section 201 of Reorg. Plan No. 1 of 1947. Reorg. Plan No. 1
of 1947 is set out in the Appendix to Title 5, Government Organization
and Employees.
Effective Date of Transfer of Functions
Transfer of functions by act June 30, 1949, effective July 1, 1949,
see section 605, formerly section 505, of act June 30, 1949, ch. 288, 63
Stat. 403; renumbered by act Sept. 5, 1950, ch. 849, Sec. 6(a), (b), 64
Stat. 583.
Application to Terminated War Contracts
For application of this section to war contracts terminated at or
before July 21, 1944, see section 124 of this title.
Section Referred to in Other Sections
This section is referred to in section 124 of this title.
