Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-08-12
.CANT0NMENT CONTRACTS
On PERCENTAGE BASIS
Profits OF Contractors Will Range
From 10 TO q Per
Cent.
GOVERNMENT is sAFEGUARDED
Commanding Officer Says Great Ma
Jority OF Contractors Have Shown
Loyalty and Patriotism ~ my
willing to Work on Cost Basis.

great number of people have been |
curious to know what sort Of an ar |
ranssment was reached between the !
government and the cantonment con-
tractors In the matter of remuneration. |
TIE Council Of Defense has issued an |
explanation OF the fee system adopted |
ny tn" government.
The fees vary from 10 per cent on |
small contracts of 100000 or less. TO |
rcr cent en- contracts Of more than |
900. with final upset limit of |
s25o.0oo The fees in all cases cover i
both profit and overhead expense
IN deciding on the cantonmcnt con- |
tracts there were three main points OF |
practically equal Importance to be con-
siderec. The first was the absolute |
necessity OF speed: the second. proper |
Gonstru";ion the third. economy TAX |
in= ELL three into consideration. and F!
AIS" the fact that time would not per- |
mt Tho completion or drawings and !
specifications which would be ncces- |
sary in order to ask for competitive |
blu.t before the work had to be started |
IN" Tuarternaster corps. acting in con- !
Junction with the emergency construc- !
t0r committee, decided to make con-
tracts on tho percentage, cost plus. |
basis at the same time using all pos
s.tic safeguards in the shape OF guar
antics from the contractors as TO their |
capaclt! and integrity.
The profit system was decided on,
only after weeks Of study TO find a /
basis for the fees which would assure |
the country the highest grade Of work |
from the contractors. and. at the same !
iimc. prevent extravaganza through the |
payment OF excessive profits. In speak |
ms OF the contractors, Colonel |. w.
littcl!. CT the Quartermastcr's Depart
men' OF the Army, who is in charge of !
tho work Of building the army can
tcrncnts. said: 1T is pleasure TO
tism OF tho great majority of con-
tractors who have come here to discuss
the question with me. With few cx-
ccptions. they have acQuiesccd willing
l. N our cont.Etion that the profits
must b. kept down to the lowest level |
consIstcD; with high-grade work. Some
firm. have offered to do the work on 4
cost ba.is but we have considered this
unwise policy. both economically |
and nationally. The utmost speed and
efficiency must be developed in these !
and future building jobs for the gov
eminent and the acceptance Of offers |
az free service might easily disrupt the |
high grade contracting firms best quail
a. j I" do the work effectively"
STEPS TAKEN TO SAFEGUARD
AGAINST UNREASONABLE PRICES
Steps have been taken by the com
mittees also TO safeguard the govern
ment from paying unreasonable prices
for materials. These committees by
mob!liZing the resources OF materials in
the various branches. and co-ordinat-
ing the supply and demand. have fixed
prices which give the material inter
csts fair, low margin OF profit. but
with tendency in all cases to max.
these prices somewhat Iowcr than the
prevailing market rates for each com
munity.
), The schedule OF fees for .hc canton
,rcnt contractors Is as follows:
If the cost OF the work is under $780,
600. fec OF 10 per cent OF such cost
II the cost of tho work is over $780,
00c. and under Sl25.o6o 4 fee OF 10000.
II the cost Of the work is over sl25.
600 and under s25o.Ooo. a fee OF S per
cent OF such cost.
II the cost of the work is over $3.50.
600 and under s266,66667. a fee OF
$4,000
II the cost OF the work is over SEQ
G65.67 and under 100000. a fee of d.
per cent OF such cost
II the cost of the work IS over $500
600 and under s535,7l4.2y. a fee or
$4,000.
If the cost OF the work is over $3.50
1l4.29 and under s3,00O.0O0. "A fee of :
per cent of such cost.
If the cost of the work is over 49,
100000 and under s3,5o0.o00. fee OF
$4,000
If Ahe cost of the work is over So
900. j00,a fee Of per cent OF such con-
tract.
The total fee TO the contractor here
under shall in no event exceed the sum
of s25o.ooo. anything in this agreement
to the contrary Notwithstanding.