New-York tribune., 1906-10-24
APPROVE BIG CONTRACT.
ROOT AND TAFT CONFER.
WeU Pleased scith Work of Panama
Canal Commission.
Lrro.n IRE Tribune R,,r.s,, ,


Washington. Oct. 23.-Secretaries Root and
Taft have ended their examination of the speci-
ncations for the Panama Canal contract and
declare themselves we'll pleased with the work
OF the commission, which in their estimation
has devised most admirable contract With so
gigantic undertaking no ordinary type Of
contract would have served and Chairman
Shonts and his advisers have designed one
which is unique and which obviates difficulties
that for time seemed insuperabe
The usual forms OF contract for great enter
prises are based on the unit system, whereby
the contractor undertakes to remove for in
stance, given amount of material for given
price. or on a lump sum" basis where the con-
tractor takes all risk and adds an estimated
margin of profit sufficient to protect him
Obviously the latter form was not adapted to
the canal work because so many contingencies
are possible that any reputable contractor would
feel compelled to add a margin which would be
regarded by the government as prohibitive On
the other hand. had the unit system been
adopted there would have been little incentive
to the contractor TO perform the work with the
greatest economy to the government.
The contract which has been devised however
which Is known as a partnership agreement.
relieves the contractor from the dangers of un-
foreseen contingencies, affords ample incentive
for expeditions and economic work and gives
promise Of fnsuring the performance of the con-
structton at minimum profit TO the contractor
and cost to the government Under IT, the bid
ders merely state the commission for which they
will be willing to undertake the work One
engineering authority, not connected with the
government, believes that S per cent will be
about the bid OF the successful competitor al
though others place their guess as high as 10
per cent. The government will furnish all ma
tertal The cOutract vi furnish tha Iab
and perform the administrative work A COM
mittee, 70 consist of three engineers selected
by the government and two selected by the con-
tractor, will make a careful estimate Of the
probable cost. The government will pay to the
contractor the actual expense incurred by him
in the proper performance Of the work but If
the expense proves to be less than the estimate
the contractor will receive one-third the saving
! in addition to his commission If the work costs
more than the estimate, small percentage will
be deducted from the commission of the con-
tractor.
The report that flaws have been found in the
specifications as advertised, that insuperable
objections have presented themselves and that
the secretaries Of State and War have been n
gagged in effort to obviate grave defects in
the specifications is absolutely without founda-
ton. It hardly needs assertion that the placing
of this contract calls for the most careful con-
sideration, that the utmost must be given
to all is details Contractors have urged GER
tain changes. nominal IN themselves but of the
gravest Importance when the gigantic character
Of the work, which seems likely to aggregate
between SS0,000,O00 and 10OOOOOOO is taken
into consideration, and the advice of two Of
the abest lawyers in the country, who happen
to sit at the Presidents Cabinet table will
change is contemplated or even requested.
Especially is this true Of Secretary Root, whose
sagacity saved the city Of New York many
thousands of dollars in connection with the
aqueduct works there.