The Oskaloosa herald., 1906-10-11
FORM OF CONTRACT
FOR WORK ON CANAL
WORK is TO BE DONE UNDER
PERCENTAGE SYSTEM.
sHoNTs uPHoLDs PLANS
Chairman of Commission Declares
Best Results Can Be Obtained
by Following the Scheme
Proposed by Board.

washington, Oct. 10.--lnvitationS for
proposals to complete the Panama
canal were issued Tuesday by the
canal commission, and. the form of
contract under which the work is to
be done was made public by Chairman
Shonts, who also gave out q letter
written to the secretary of war giving
the commissions reasons for contract
ing the work.
The contract provides that each bid.
der must, und ertake the entire work Of
construction. No bar will be offered
20 corporations associating in the un.
dertaking, but they must be legally or
ganized into single body with which
the government can deal, Bidders will
not be considered who do not have
available capital of $5,OO0,0Oo. A certi-
ned check for 100000 is required
with each proposal and bond of $3.-
900, 900 will be required from the sue
eessful bidder. The bidding is not
limited to American contractors All
proposals are to be In before noon Of
December IL, when they will be
opened. ,rs, aE..g ...aa :
PROPOSALS and Estimates.
Proposals are to be expressed in
terms Of percentage upon the estimat-
ed cost of construction, which is to be
fixed by a board of FIVE engineers,
three representing the government
and two representing the contractor.
The chief engineer of the canal COM
mission is to be chairman of the en-
gineering board. The engineering
board will also estimate reasonable
time for the completion of the canal,
and will agree upon system of pre-
miums and penalties to be paid to the
contractor according as the work is
completed within or beyond the esti-
mated cost and time. ALI the govern
ment plant for actual construction
work, including the railway. is to be
placed at the disposal Of the contrac-
tor and is to be maintained by the
government.
Control Of Engineering.
The contract specifies that the COM
mission is to retain control of all en-
cheering work in connection with the
construction of the canal, also NUM-
cipal engineering, the police, sanitary,
hospital and commissary departments,
mess houses, quarters, construction
and maintenance of buildings, opera
ton of the Panama railway, an audit
ing department to which contractors
accounts are to be open, and depart.
ment of materials and supplies.
Sixty days after the signing of the
contract actual work is to begin on
the isthmus, and the contractor is to
take over all employees on the isthmus
which the commission does not wish
to retain. No American employe is to
work more than eight hours.
Explains Percentage System.
Chairman Shonts defends the per.
eentage system of payment in his let,
ter to Secretary Taft as follows:
"This plan is being employed in,
creasingly by the Oldest, largest and
most successful corporations in the
country.
"The government will get the bene.
at of the combined efforts of the best
and most experienced contractors in
the world, each in charge of depart
ment IN which he is specialist and
cooperating with other specialists.
'The government will secure the co
operation of these powerful interests
in keeping mechanics of all classes.
"The plan offers every incentive for
speedy and economical construction
by penalizing extra time and cost and
rewarding better than contract per
formance as to either.
"By retaining control of the work
and exercising strict supervision
through its engineering force the gov
ernment will protect itself against
cheap or faulty construction.
Will Reduce the Time.
"The contract will be more flexible
The time and cost of completing the
canal as estimated will in all .proba
bility be reduced by the application oi
new principles which will be discov
cred as the work progresses. Finally
a termination of the contract, should
1t become necessary, would be less
A
disastrous to the contractor, while an
effective resumption of the worl
would be made easier to the govern
ment, owing to its close relations
thereto"
In support Of the commissions posi-
tion that the canal can be contracted
to greater advantage. than it can be
built by the government. Mr.. Shonts
letter says that because OF the unpre
cedented and greatly extended indus
trial activity of the time, and the con
sequent violent competition for al
classes OF superihtendents. foremen
{ sub-contractors, skilled mechanics
and even ordinary Iaborers, 1t would
take the commission years to secur,
men and build up departmental con
struction organizations which woult
fConfta,nnd am Rn0a Al