Omaha daily bee., 1905-09-15
MARLEL CONTRACT STANDS
President Approves Report on the Subject
Made to Him by Nr, shOnts
RIVALS HAVE NO REASON FOR COMPLAINT
one Firm Raises Bid Because of
MisunderstandinE of specIhca-
tions while Omaha Man
stands Pat.

for the hotel and subsistence concession
on the Panama canal zone, awarded to
Jacob E Markell OF Omaha, Neb.. by Presi-
dent Theodore p. Shonts Of the Panama
Railroad company will stand
This, in effect, is the decision OF President
Roosevelt who today approved a report
on the subject made TO him by Mr. Shonts.
The contract amounts, in the aggregate,
to many millions of dollars, but Mr.. Shonts
report indicates that it may be abrogated
at the will of the government. which ac-
tually will own the permanent plant used
by Mr. Markell in illing the terms OF his
contract
The president today authorized the pub
lication of report he had received from
Mr. Shonts as president of the Panama
Railroad company, regarding the protest
received by him from Hudgins & Dumas
and II. Balfe of New York against the
award of the contract to Mr.. Markell. The
protest forwarded to the president by
Hudsins & Dumas and II. Balfe alleged
that they had not been accorded fair treat
ment by President Shonts and that through
a leak in Mr.. shonts' office Mr.. Markell
had been informed of the nature Of their
proposal and had been enabled thereby to
incorporate in his bid the menu which
Hudgins & Dumas had submitted.
In this letter TO the president Mr. Shonts
says that on his arrival at the isthmus
on July 26 he found a most pressing neces-
sity for immediate arrangements for feed
ing the employees and that It was deter
mined by Governor Magoon. Mr. Stevens
and himself that this matter should be
handled by the Panama railroad and not
by the Isthmian Canal commission, as the
commlssary department was already in
charge Of the railroad company, that COM
pany operating one hotel at Colon.
MIR. shonts' Explanation.
Continuing, he says:
l found Jacob e. Markell on the isthmus
he having gone down at the instance Of
Mr. Wallace to study the situation II was
decided while on the isthmus that the
railroad company should furnish the plant.
Including the building and equipment, that
II should maintain the buildings and the
contractor the equipment, that in the
event Of II becoming necessary for the
control the entire plant When our gem
eral purchasing officer, Mr.. Ross, and
gan the preparation OF such specifications
as we thought necessary to enable us TO
properly reGeiye proposals for the feeding
isthmus we had told him we expected to
take this step on our return and would
we got ready 70 submit specifications. we
later received communication from Messrs.
Hudgins & Dumas and Mr., Balfe asking
Tor opportunity to make proposals. As
soon as the specifications were drafted we
mailed to Mr. Markell, to Hudgins & Dumas
nd nrted " dd nds ad%rT
ttse because 1t was railroad matter and
because OF the urgency OF the case. ] have
since my return. asking me to expedite the
arrangement, as existing conditions were
cations to the firms named | came to New
York and met all these parties. I ex-
planned TO them that l was not a hotel
man; that we had done the best we could
as to the specifications but would be glad
to receive any suggestions from them as
TO the form Of the specifications. Our
specifications, 1t appeared, had included
general menu, in order to establish a
Dumas attended the conference referred to
they suggested the insertion Of a weekly
menu in the Specifications instead Of a gem
weekly menu. When they brought II to
me examined Il. and, considering II an
to have II inserted as a part of our speci-
fcations, applicable to all alike, so that
all could make proposals on the same basis.
All were notified OF our amended specifica-
tions and all submitted proposals on that
basis. OF course there is nothing original
specifications It satisfied Hudgins & Dumas
and Mr.: Balfe, as we'll as ourselves, and
1t placed all parties on an equality.
HudsinE q Dumas Raise BID
It was not until after this that the three
proposals were submitted. All proposals
we're made upon precisely the Same form
Of specification, When the proposals were
received I found Mr.. Balfe was so per cent
higher than Mr.. Markets in some items and
that Hudgins & Dumas were so much under
the others that l feared there was some
misunderstanding on their parts as to tho
meaning of the specifications. i thereupon
wrote them a letter amplifying the specih-
cations, going more into detail and partic-
ularly calling their attention TO two things
first. that the privilege in regard to un-
cooked food and other things might have TO
be withdrawn because Of our treaty agree
ments with the Republic of Panama 0n
case local prices for the Panama merchants
were again reduced to reasonable hasis)
and. second, that the low rates OF freight
we had made via our steamship line and
limited absolutely to food supplies to he
used by our employees; and | gave them an
opportunity III they did not understand the
They Immediately amended their proposal.
raising their prices on some items over 100
per Seat ana Enen nv tnFS s tSe1 ISrought th ths
me for having given them the additional in
formation and for calling attention to points
above mentioned, also stating that they had
not thoroughly understood the situation be-
fore and had made their prices on cooked
meals at cost or lower, expecting 70 make
their profits on the sale of other goods.
Markell stands Pat.
simultaneously. after writing this letter
to Hudgins Dumas, wrote exactly the
same letter to Mr.. Markell. so that n he
had labored under any misapprehension he
also could amend HIS proposal
Mr.. Markell replied that having thor
Ough knowledge or the situation on the
isthmus, he had considered these matters
in making his proposal and stated he stood
pat" on the same. l did not write Mr.
Baife because his prices were so high that
II was not necessary to longer consider him
in the matter.
When these amended proposals were
ceived Il was found that i'm every item eX-
cept one that Mr.. Markell was as low or
lower than Messrs. Hudgins Dumas
Experience of Bidders,
In making the award l took into consid-
Grafton not only the prices but the expert
ence of the bidders, and the organization
for the business that they now have l
found that Messrs. Hudgtns and Dumas
have had no experience in this business ex-
cept a three years contract on Ellis ISL
and a purely local proposition: that Mr.
Markell has had thirty years experience
i'm this special held of operating railroad
hotels and construction camps on the Union
Pacific. Illinois Central, Chicago Burling-
ton & Quincy Kansas City Southern and
other roads; that he now has large camps
on two or three OF these roads; that ne
has such a large force that he can with
draw from Il suficient help TO promptly
equip the hotels we have constructed and
win also be in a position Qf the climate
Affects his stah) to keep supplying new
men from his force i'm the United States as
eXigency demands and letting those on the
isthmus return here TO recuperate, thus
having a constant chain OF fresh employees
going TO the isthmus,
Markets Prices Lowest.
In view of the fact that Mr.. Markell has