July 1951 COMMERCIAL FISHERIES REVIEW 65 



Department of Defense 



QUARTERMASTER CORPS 



CAMNBD SALI^iON COIfTRAOTS SUBJECT TO RElilEGOTIATI ON ACT OF 1951 ; Contracts for 

 canned salmon made by the Department of Defense axe subject to the Renegotiation 

 Act of 1951, according to a letter from the Legal Office of the Oakland Quarter- 

 master Procurement Agency, 



During a meeting of the Canned Salmon Industry advisory Committee in Seattle 

 on May 15, some discussion arose as to the applicability of the Renegotiation Act 

 of 1951 to the Defense Departments' contracts for canned salmon. A request for 

 an interpretation by the Defense Fisheries Administration of the Department of the 

 Interior brought the following reply: 



"in response to your request made to major r. l. hoff of this agency that 



YOU BE provided WITH AN INTERPRETATION OF THE APPLICABILITY OF THE RE- 

 NEGOTIATION ACT OF 1951 TO DEFENSE CONTRACTS FOR CANNED SALMON, THE FOL- 

 LOWING IS TRANSMITTED FOR YOUR PERUSAL: 



'all CONTRACTS ENTERED INTO BY THE DEPARTMENT OF THE ARMY, OF 

 WHICH THIS AGENCY IS A PART, ARE SUBJECT TO RENEGOTIATION 

 UNDER THE RENEGOTIATION ACT OF 1951 UNLESS SPECIFICALLY EX- 

 EMPTED BY THE ACT ITSELF. 



'CONTRACTS WITHIN THE CLASS DESCRIBED BY THE ACT WILL NOT BE 



RENEGOTIATED UNLESS THE AGGREGATE ACCRUALS DERIVED THEREFROM 



BY A MANUFACTURER OR REGULAR DEALER EXCEED $250,000.00 FOR A 

 FISCAL YEAR. 



'section 106 (2) OF THE ACT PROVIDES A MANDATORY EXEMPTION FROM 

 RENEGOTIATION OF ALL CONTRACTS FOR THE PURCHASE OF AN AGRICUL- 

 TURAL COMMODITY IN ITS RAW OR NATURAL STATE, OR IF THE COM- - 

 MODITY HAS NO ESTABLISHED MARKET IN THAT STATE, THEN IN THE 

 FIRST FORM OR STATE, BEYOND THE RAW OR NATURAL STATE, IN WHICH 

 IT IS CUSTOMARILY SOLD OR HAS AN ESTABLISHED MARKET. 



'salmon AS FISH IS DEFINED AS AN AGRICULTURAL COMMODITY WITHIN 

 THE TERMS OF THIS EXEMPTION. HOWEVER, CANNED SALMON IS NOT 

 THE FIRST FORM OR STATE IN WHICH THIS COMMODITY IS CUSTOMARILY 

 SOLD OR HAS AN ESTABLISHED MARKET. RAW OR FRESH SALMON HAS 

 AN ESTABLISHED RETAIL MARKET. THEREFORE, THE EXEMPTION SET 

 FORTH IN SECTION 106(2) OF THE ACT DOES NOT APPLY TO CONTRACTS 

 FOR THE PURCHASE OF CANNED SALMON SUCH CONTRACTS BEING SUBJECT 

 TO THE RENEGOTIATION ACT OF 1951.' 



WE TRUST THIS ADEQUATELY COVERS THE POINT RAISED BY YOU IN YOUR REQUEST TO 

 MAJOR R. L. HOFF.,, ANY ADDITIONAL CLARIFICATION MAY BE OBTAINED UPON YOUR 

 SPECIFIC REQUEST." 



"very TRULY YOURS 

 /sgd/ F. E. MCGUIRE 

 CHIEF, LEGAL OFFICE 

 OAKLAND QM PROCUREMENT AGENCY 

 U. S, ARMY 



OAKLAND ARMY BASE „ 

 OAKLAND 14, CALIFORNIA 



