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PUBLIC LAW 9—MAR. 23, 1951
[65 STAT.
amount of receipts or accruals subject to the provisions of this title which were received or accrued in such preceding fiscal year, but only to the extent that such excess did not result from gross inefficiency of the contractor or subcontractor. For the purposes of the preceding sentence, the term "preceding fiscal year" does not include any fiscal year ending prior to January 1, 1951. Costs shall be determined in accordance with the method of accounting regularly employed by the contractor or subcontractor in keeping his records, but, if no such method of accounting has been employed, or if the method so employed does not, in the opinion of the Board, or, upon redetermination, in the opinion of The T a x Court of the United States, p r o p e r l j reflect such costs, such costs shall be determined in accordance with such method as in the opinion of the Board, or, upon redetermination, in the opinion of The Tax Court of the United States, does properly reflect such costs. I n determining the amount of excessive profits to be eliminated, proper adjustment shall be made on account of the taxes measured by income, other than Federal taxes, which are attributable to the portion of the profits which are not excessive. (g) SUBCONTRACT.—The term "subcontract" means— (1) any purchase order or agreement (including purchase orders or agreements antedating the related prime contract or higher tier subcontract) to perform all or any part of the work, or to make or furnish any materials, required for the performance of any other contract or subcontract, but such term does not include any purchase order or agreement to furnish office supplies; (2) any contract or arrangement covering the right to use any patented or secret method, formula, or device for the performance of a contract or subcontract; and (3) any contract or arrangement (other than a contract or arrangement between two contracting parties, one of whom is found by the Board to be a bona fide executive officer, partner, or full-time employee of the other contracting party) under which— (A) any amount payable is contingent upon the procurement of a contract or contracts with a Department or of a subcontract or subcontracts; or (B) any amount payable is determined with reference to the amount of a contract or contracts with a Department or of a subcontract or subcontracts; or (C) any part of the services performed or to be performed consists of the soliciting, attempting to procure, or procuring a contract or contracts with a Department or a subcontract or subcontracts. Nothing in this subsection shall be construed (i) to affect in any way the validity or construction of provisions in any contract with a Department or any subcontract, heretofore at any time or hereafter made, prohibiting the payment of contingent fees or commissions; or (ii) to restrict in any way the authority of the Board to determine the nature or amount of selling expense under subcontracts as defined in this subsection, as a proper element of the contract price or as a reimbursable item of cost, under a contract with a Department or a subcontract. 53 Stat. 4. j ^ ^ ^ ^ ^. (h) FISCAL YEAR.—The term "fiscal year" means the taxable year Sup.iv,§3rf»«?*"•' of the contractor or subcontractor under chapter 1 of the Internal 63 8tat^469. ^ ^^^^ Revenue Code, except that where any readjustment of interests occurs (a)(2).' in a partnership as defined in section 3797(a)(2) of such code, the
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