the same. Such products are often sold on purchase orders, which are expressly included in the statutory definition of the term "subcontract" (see act, section 103 (g) (1); § 1452.4 of this chapter). It is assumed that subcontract sales of such renegotiable products are affected by the extent of the subcontractor's advertising. It is therefore considered appropriate that such sales should bear an allocable portion of such expense.

(h) No change has been made in subdivision (ii), authorizing allocation of a portion of advertising expense incurred by either a prime contractor or a subcontractor to forestall a loss of competitive position. The Board has retained the provision for the allowance of such costs when it can be demonstrated that the contractor engaged in renegotiable business to the detriment of his normal commercial business in the fiscal year under review. On this subject, see Renegotiation Bulletin No. 1 (§ 1499.2-1).

(i) Subdivision (iii) of paragraph (b) (2) has not been carried over into paragraph (c) (2). This provision pertains to the allowance to prime contractors of the expense of advertising brand name products purchased by a Department for free issue to Government personnel. Such expense is no longer allowable under Public Law 87-144.

(j) One further change was effected by the amendments of March 21, 1962. Section 1459.7 (b) (1) of this chapter provides for the allocation of the expense of catalogues and technical pamphlets designed to aid users of the contractor's products, and house organs and other publications directed to labor and personnel management and relations. Although many contractors record such expenses as advertising expenses, they are not generally considered to be such. Accordingly, these items have not been included in the new paragraph (c) (1) but now appear in § 1459.8 (f) of this chapter, where provision is made for their allowance and allocation to renegotiable business.

§ 1499.2-17 Renegotiation Bulletin No.

17: Procedure for exemption of contracts with Military Airlift Command under § 106 (a) (4) of the act.

(a) This section describes the procedure for the exemption of contracts with the Military Airlift Command (MAC) of the Department of the Air Force for air transportation of military cargo or personnel.

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(b) Section 106(a) (4) of the Renegotiation Act of 1951, as amended, exempts "any contract or subcontract with a common carrier for transportation, *when made * * at rates not in excess of published rates or charges filed with, fixed, approved, or regulated by a public regulatory body, State, Federal, or local * **" Implementing regulations under this section are set forth in § 1453.3 of this chapter.

(c) Under its statutory authority and the authority of its regulations, the Civil Aeronautics Board has established minimum rates for certain military traffic. In establishing such minimum rates, the Civil Aeronautics Board takes into consideration the use by the carriers of certain military facilities, services, and personnel, and the fact that the carriers are thereby relieved, in whole or in part, from incurring certain expenses incident to ordinary commercial transportation.

(d) The fixing of such rates represents an exercise of the regulatory authority of the Civil Aeronautics Board under the Federal Aviation Act of 1958. As such, they are regulated rates within the meaning of section 106(a) (4) of the Renegotiation Act of 1951.

(e) Accordingly:

(1) In any case in which the Department of the Air Force has advised the Board that a contract was awarded at minimum rates established by the Civil Aeronautics Board, such contract will be considered exempt under § 1453.3 (e) (1) of this chapter to the extent of performance at such minimum rates.

(2) In any case in which the Air Force has not advised the Board that a contract was awarded at minimum rates established by CAB, but the contractor claims that it was so awarded, the contractor will be asked to furnish the number and date of the contract, the type of load involved (cargo or personnel, or both), and the flight destination; to certify that the rate provided in the contract is the minimum rate authorized to be charged; and to furnish evidence of the authority upon which such certification is based. If the contractor's certification is corroborated by the Air Force, the contract will be considered exempt under § 1453.3 (e) (1) of this chapter to the extent of performance at such minimum rates.

(3) In any case in which a contract is performed in part at minimum rates established by the Civil Aeronautics Board, and in part at rates in excess of such

minimum rates, the portion of the contract which is performed at rates in excess of such minimum rates will not be considered exempt under subparagraph (1) or (2) of this paragraph. Exemption of any such portion will be determined in accordance with the procedures described in subparagraph (4) of this paragraph.

(4) In any case in which the Air Force has not advised the Board that a contract was awarded at minimum rates established by CAB, and the contractor has not furnished a certification to that effect but claims an exemption of a contract for air transportation, the contractor will be asked to furnish a copy of the contract involved, a copy of the tariff with which the contract rate is to be compared, and an evaluation of any benefits available to the contractor under the contract. When received, such evaluation will be transmitted to the appropriate Air Force authority, to determine whether the contractor has evaluated all benefits under the contract, and, if so, whether such evaluation is fair and reasonable. If the Board concludes that the contract rate, aggregated with the prorated fair value of any Governmentfurnished benefits or other advantages, does not exceed the comparable regulated rate, the contract will be considered exempt under § 1453.3(e) (2) (ii) of this chapter.

(f) In order that exemption claims may be processed expeditiously, contractors are urged to observe the foregoing procedures and to avoid delay in furnishing required information.

§ 1499.2–18 Renegotiation Bulletin No. 18: Concurrent renegotiation.

(a) Section 105(a) of the act requires consolidated renegotiation upon the request of an affiliated group of contractors who consent to the Board's regulations, and authorizes it in the case of a related group. The Board has also authorized, in certain circumstances, consideration of commonly-owned contractors on a group basis without the formalities of consolidation. This is the procedure known as "concurrent renegotiation." In concurrent renegotiation, a loss or profit deficiency of one member of a group can be offset against excessive profits of any other member or members.

(b) The allowance and conduct of concurrent renegotiation will be subject to the following rules and conditions:

(1) Contractors desiring concurrent renegotiation for a fiscal year shall file a request therefor with the Board on or before the first date on which any member of the group files the Standard Form of Contractor's Report for such fiscal year. The Board may grant requests filed after that date if no inconvenience to the Board will result (cf. § 1464.7 (a) of this chapter). The Board may conduct concurrent renegotiation of contractors upon its own motion if, in the opinion of the Board, such treatment is necessary or appropriate, but the Board will not do so in any case in which any member of the group sustained a renegotiation loss unless such member files a Waiver of Loss Carryforward as provided in subparagraph (5) below.

(2) Notwithstanding any other provisions of this section, the allowance of concurrent renegotiation to any group of contractors is subject to the discretion of the Board. Thus, even if the conditions prescribed in subparagraph (3) below exist, the Board in its discretion may deny concurrent renegotiation in a particular case.

(3) Concurrent renegotiation will not be allowed unless (i) all members of the group have the same fiscal year and were members of the group for such entire fiscal year, except that any differences resulting from the organization or dissolution of a member during such fiscal year will be disregarded; and (ii) all members of the group would, upon their request, be allowed consolidated renegotiation as a group for such fiscal year (see §§ 1464.2 and 1464.4 of this chapter).

(4) A renegotiation loss sustained in a prior fiscal year by a member of the group will be allowed as a carryforward to the concurrent renegotiation of the group for the fiscal year under review only if the members of the group would have qualified for consolidated renegotiation in the loss year; and the aggregate amount so allowed will be limited to the amount, if any, which would have been the consolidated renegotiation loss of the group in the loss year (cf. § 1464.12 (d) (2) of this chapter).

(5) With the request for concurrent renegotiation, each loss member of the group shall file, in form acceptable to the Board, a waiver of any right to carry forward its loss, except to the same extent as that provided in § 1464.12(c)

of this chapter for a contractor who was a loss member of a consolidated group in the loss year. The Board will not permit a loss to be used once in offsetting profits within the group for the year in which the loss was sustained, and then used a second time as a carryforward to the years following the loss year. Thus, as in consolidated renegotiation, both the profit deficiency of a loss member, as well as the loss of such member, will be included in the concurrent renegotiation for the loss year. The waiver shall be in substantially the following form:

Waiver of Loss Carryforward

A. The undersigned is a member of a group of contractors requesting concurrent renegotiation for the fiscal year of the group ended

B. The undersigned sustained a renegotiation loss, as that term is defined in section 103 (m) (2) (B) of the Renegotiation Act of 1951, as amended, for its fiscal year ended

C. The undersigned hereby waives any and all rights that it has or may have to carry forward the amount of such renegotiation loss pursuant to section 103 (m) of the act, except as provided in § 1464.12 (c) of this chapter, if applicable, and agrees that the amount of loss carryforward so waived will not be claimed or included as a cost for renegotiation purposes in any fiscal year subsequent to the fiscal year ended

accrued as a main entry.