§ 108. — Interim financing.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 41USC108]
TITLE 41--PUBLIC CONTRACTS
CHAPTER 2--TERMINATION OF WAR CONTRACTS
Sec. 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.
(July 1, 1944, ch. 358, Sec. 8, 58 Stat. 655; 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.)
Codification
In subsec. (d), ``section 3713(a) of title 31'' substituted for
``Revised Statutes, section 3466 (31 U.S.C., sec. 191)'' on authority of
Pub. L. 97-258, Sec. 4(b), Sept. 13, 1982, 96 Stat. 1067, the first
section of which enacted Title 31, Money and Finance.
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, 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.
