Whether Contractors Must Continue to File Financial Reports With the Renegotiation Board in Absence of Appropriation for the Board

August 6, 1979

79-58 MEMORANDUM OPINION FOR THE ACTING
ASSISTANT ATTORNEY GENERAL, CIVIL
DIVISION

Renegotiation Board—Reporting Requirement
(50 U.S.C. App. § 1215)—Effect of Absence of an
Appropriation—Repeals by Implication

You ask whether contractors must continue to file financial reports with
the Renegotiation Board in light o f the absence o f an appropriation for the
Board. It appears that the situation giving rise to the question results from
Congress’ failure to make an appropriation for the Renegotiation Board
without expressly repealing the Renegotiation Act, 50 U.S.C. App. § 1191
et seq. (1976). You note that, pursuant to 50 U.S.C. App. § 1215(e)
(1976), contractors holding contracts or subcontracts subject to the
Renegotiation Act must periodically file financial reports with the
Renegotiation Board. Further, you state that a willful failure to file such a
report constitutes a criminal offense, and that because o f this contractors
continue to mail financial reports to a nonexistent Board. The General
Services Administration is holding the reports.
Based on the above you have asked whether the financial reporting re­
quirements o f 50 U .S.C . App. § 1191(c)(5)(A) (1976) are suspended or
term inated. We believe that there is no requirement for the continued fil­
ing o f the reports.
The Renegotiation Act o f 1951, 65 Stat. 7, was enacted to eliminate ex­
cessive profits in contracts by which the United States procures property,
processes, services, and the construction o f facilities necessary for the na­
tional defense. The Renegotiation Board, following statutory guidelines,
was to determine whether contracts subject to the Act resulted in excessive
profits. 50 U.S.C. A pp. § 1217 (1976). The provisions o f the Act applied
only to receipts and accruals, under covered contracts, which were at­
tributable to perform ance on or before September 30, 1976. 50 U.S.C.
App. § 1212(c)(1) (1976).

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 Public Law No. 95-431, 95 Stat. 1043 (1978), the 1979 Appropriations
Act for the Departments o f State, Justice, Commerce, and others, pro­
vides that:
For necessary expenses o f the Renegotiation Board, including
termination or cessation o f the activities o f the Board, and in­
cluding hire o f passenger m otor vehicles and services as author­
ized by 5 U .S.C . 3109, $5,260,000, to be available only until
March 31, 1979: Provided, That all property (including records)
o f the Board shall be transferred to the Administrator, General
Services Administration, upon cessation o f the B oard’s ac­
tivities, or on March 31, 1979, whichever first occurs.
This provision was explained in the Senate report as follows:
C ontractors’ liability to report their receipts and accruals to the
Renegotiation Board under the Renegotiation Act o f 1951 ex­
pired on September 30, 1976 [see 50 U.S.C. App. § 1212(c)(1) ]
and has not yet been extended beyond that date * * * .
As a result o f extensive hearings the Committee has concluded
that the Board is not effective and by its emphasis on profits it is
not an incentive to reducing costs. The appropriation recom­
mended by the Committee is for the Board’s activities during the
period October 1, 1978 through May 31, 1979' to allow the
Board sufficient time to close its offices, transfer its property and
records to the General Services Administration, and provide for
the orderly termination o f activities, including the payment o f
terminal leave and severance pay to eligible employees. [Senate
Rept. 1043 , 95th Cong., 2d sess. 80-81 (1978).]
The House report likewise expressed dissatisfaction with certain o f the
Board’s actions and made clear its intention that the B oard’s activities be
completed prior to March 31, 1979, and thereafter cease (H. Rept. 1253,
95th Cong., 2d sess. 50-51 (1978) ). The House report further deemed it
appropriate to consider termination o f the Board in light o f Congress’
failure to extend the Renegotiation Act after its September 30, 1976 ex­
piration. Id. at 50.
We believe that Congress, by implication, repealed the Act and thus
eliminated the A ct’s reporting requirements. In Lewis v. United States,
244 U.S. 134 (1917), the Court considered the effect o f Congress’ failure
to appropriate for a particular Government office while augmenting the
appropriation o f the Interior Department for the Secretary o f the Interior
to finish the work “ caused by the discontinuance” o f the office. The
Court stated:
It is true that repeals by implication are not favored. The
repugnancy between the later act upon the same subject and the
formal legislation must be such that the first act cannot stand

'The Senate later receded to the H ouse's proposed March 31, 1979, term ination date.

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 and be capable o f execution consistently with the terms o f the
later enactment. As we view it, such conflict does appear in this
instance.
It must be assumed that Congress was familiar with the action
o f the executive departm ent undertaking to terminate the office
and when Congress acted upon the assumption that the office
was abolished and provided for the unfinished work * * *
“ caused by the discontinuance” o f the office, such action was
tantam ount to a direct repeal o f the act creating the office and
had the effect to abolish it. [Id. at 144.]
We think that this principle applies here.2 The Act is not capable o f execu­
tion in light o f the B oard’s abolition.
In this connection, it should be noted that since Congress intended to
eliminate the B oard’s functions it follows that the reporting requirements
under the Renegotiation Act were intended to cease with the Board’s ter­
mination. This is for the simple reason that the reporting requirements
were merely to assist the Board in carrying out its functions. Since those
functions no longer exist, reporting would accomplish nothing.

L eon U lm an

D eputy Assistant A ttorney General
Office o f Legal Counsel

'H ere, as in Lewis v. United States, Congress acted through an appropriation measure.
Thus, Lewis also stands for the proposition that Congress may repeal substantive laws by
way o f an appropriation provision. See also, City o f Los Angeles v. Adams, 556 F. (2d) 40
(D .C . Cir. 1977).