mandatory exemption for standard commercial articles and services

mandatory exemption for standard commercial articles and services Sec. 104. (a) (1) Paragraph (1) of section 106(e) of the Renegotiation Act of 1951, as amended (50 U.S.C. App,, sec. 1216(e)), is amended— (A) by striking out subparagraph (B), (B) by inserting “or” at the end of subparagraph (A), and (C) by redesignating subparagraph (C) as subparagraph (B). (2) Paragraph (3) of such section is amended by striking out “or (C)” each place it appears. (b) Paragraph (4) of section 106(e) of such Act is amended to read as follows: “(4) Definitions.— For the purposes of this subsection— “(A) the term ‘article’ includes any material, part, component, assembly, machinery, equipment, or other personal property; “(B) the term ‘standard commercial article’ means, with respect to any fiscal year, an article— “(i) which either is customarily maintained in stock by the contractor or subcontractor or is offered for sale in accordance with a price schedule regularly maintained by the contractor or subcontractor, “(ii) the price of which under any contract or subcontract subject to this title is not in excess of the lowest price at which such article is sold in similar quantity by the contractor or subcontractor for civilian industrial or82 Stat. 1346 commercial use, except for any excess attributable to the cost of accelerated delivery or other significantly different circumstances, and “(iii) from the sales of which by the contractor or subcontractor at least 55 percent of the receipts or accruals in such fiscal year are not (without regard to this subsection and subsection (c) of this section) subject to this title.; “(C) the term ‘service’ means any processing or other operation performed by chemical, electrical, physical, or mechanical methods directly on materials owned by another person; “(D) the term ‘standard commercial service’ means, with respect to any fiscal year, a service— “(i) the price of which under any contract or subcontract, subject to this title is not in excess of the lowest price at which such service is performed under similar circumstances by the contractor or subcontractor for civilian industrial or commercial purposes, and “(ii) from the performance of which by the contractor or subcontractor at least 55 percent of the receipts or accruals in such fiscal year are not (without regard to this subsection) subject to this title; “(E) a service is, with respect to any fiscal year, ‘reasonably comparable with a standard commercial service’ only if— “(i) such service is of the same or a similar kind, performed with the same or similar materials, and has the same or a similar result, without necessarily involving identical operations, as a standard commercial service from the performance of which the contractor or subcontractor has receipts or accruals in such fiscal year, “(ii) the price of such service under any contract or subcontract subject to this title is not in excess of the lowest price at which such service is performed under similar circumstances by the contractor or subcontractor for civilian industrial or commercial purposes, and “(iii) at least 55 percent of the aggregate receipts or accruals in such fiscal year by the contractor or subcontractor from the performance of such service and such standard commercial service are not (without regard to this subsection) subject to this title; and “(F) the term ‘standard commercial class of articles’ means, with respect to any fiscal year, two or more articles with respect to which the following conditions are met: “(i) at least one of such articles either is customarily maintained in stock by the contractor or subcontractor or is offered for sale in accordance with a price schedule regularly maintained by the contractor or subcontractor, “(ii) all of such articles are of the same kind and manufactured of the same or substitute materials (without necessarily being of identical specifications), “(iii) the price of each of such articles under any contract or subcontract subject to this title is not in excess of the lowest price at which such article is sold in similar quantity by the contractor or subcontractor for civilian82 Stat. 1347 industrial or commercial use, except for any excess attributable to the cost of accelerated delivery or other significantly different circumstances, “(iv) all of such articles are sold at reasonably comparable prices, and “(v) at least 55 percent of the aggregate receipts or accruals in such fiscal year by the contractor or subcontractor from sales of all such articles are not (without regard to this subsection and subsection (c) of this section) subject to this title.”