54 STAT.] 76TH CONG. , 3D SESS.-CH. 440-JUNE 28, 1940 contracts entered into under the authority of this section: Provided further, That contracts negotiated pursuant to the provisions of this section shall not be deemed to be contracts for the purchase of such materials, supplies, articles, or equipment as may usually be bought in the open market within the meaning of section 9 of the Act entitled "An Act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes", approved June 30, 1936 (49 Stat. 2036; U. S. C., Supp. V, title 41, sees. 35-45): Provided further, That nothing herein contained shall relieve a bidder or contractor of the obligation to furnish the bonds under the requirements of the Act of August 24, 1935 (49 Stat. 793; 40 U. S . C. 270 (a) to (d)) : Provided further, That the cost-plus-a- percentage-of-cost system of contracting shall not be used under the authority granted by this subsection to negotiate contracts; but this proviso shall not be construed to prohibit the use of the cost-plus-a- fixed-fee form of contract when such use is deemed necessary by the Secretary of the Navy: And provided further, That the fixed fee to be paid the contractor as a result of any contract entered into under the authority of this subsection, or any War Department contract entered into in the form of cost-plus-a-fixed-fee, shall not exceed 7 per centum of the estimated cost of the contract (exclusive of the fee as determined by the Secretary of the Navy or the Secretary of War, as the case may be). (b) After the date of approval of this Act no contract shall be made for the construction or manufacture of any complete naval vessel or any Army or Navy aircraft, or any portion thereof, under the provisions of this section or otherwise, unless the contractor agrees, for the purposes of section 3 of the Act of March 27, 1934 (48 Stat. 505; 34 U. S . C . 496), as amended- (1) to pay into the Treasury profit in excess of 8 per centum (in lieu of the 10 per centum and 12 per centum specified in such section 3) of the total contract prices of such contracts within the scope of this subsection as are completed by the particular con- tracting party within the income taxable year; (2) that any profit in excess of 8.7 per centum of the cost of performing such contracts except prime contracts made on a cost- plus-a -fixed-fee basis as are completed by the contracting party within the income taxable year shall be considered to be profit in excess of 8 per centum of the total contract prices of such contracts; and (3) that he will make no subcontract which is within the scope of such section 3, unless the subcontractor agrees to the foregoing conditions. SEC. 3 . The provisions of section 3 of the Act of March 27, 1934 (48 Stat. 505), as amended by the Acts of June 25, 1936 (49 Stat. 1926), and April 3, 1939 (53'Stat. 560; U. S . C., Supp. V title 34, sec. 496) and as made applicable to contracts for aircraft or any portion thereof for the Army by such Act of April 3, 1939, shall, in the case of contracts or subcontracts entered into after the date of approval of this Act and during the period of the national emergency declared by the President on September 8, 1939, to exist, be limited to contracts or subcontracts where the award exceeds $25,000. SEC. 4 . In the case of every contract or subcontract for the con- struction or manufacture of any complete naval vessel or Army or Navy aircraft or any portion thereof which is entered into (whether before or after the date of approval of this Act), the Secretary of War or the Secretary of the Navy, as the case may be, after agree- ment with the contractor or subcontractor, shall certify to the Com- 677 Contracts, restric- tion on meaning. Bonds. 40 U. S. C., Supp. , §§ 270a-270d. Cost-plus contracts Limitation on fixed fee. Ante, pp. 395, 401; post, p . 973. Contract agreement. Post, pp. 883,1003. 34 U. S. C., Supp. V, § 496. Profit in excess of 8 per centum, disposi- tion. Profit in excess or 8.7 per centum of cost of performing con- tracts. Asent toconditions by subcontractor. Designated provi- sions limited to con- tracts, etc., in excess of $25,000 . Certification to Commissioner of In- ternal Revenue.
�
