Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1918-11-30
MANY CONTRACTS
FOR SUPPLIES OF
WAR HELD FAUL TY
Comptroller Declares That the
Minor Officers Cut Red
Tape and Actions May Be
Considered Unauthorized

ICY MORNING JOURNAL SPECIAL LEASED WtRal
Washington, Nov 29.--Government
war contracts involving hundreds of
millions of dollars were rendered
doubtful in status today by a decision
Of Comptroller Warwick of the treas
ury, that orders have not been legally
executed unless actually signed by
responsible government contracting
agents and the contractor
The war department submitted to
the comptroller a form of cancellation
agreement unde4 which it was pro-
posed to abandon without unjust loss
to contractors thousands of war sup
ply contracts. He refused to approve
the agreement, holding that the de-
partment may not agree with a con-
tractor on an arbitrary sum to cover
liabilities unless specific authorization
for this is given under previously ex-
listing contract.
A large proportion of war orders
were given informally by telephone,
telegraph or letter, it is said. In such
cases the comptroller held that new
legislation will be necessary to per-
nit framing OF agreements for cancel
lation.
The authority of the comptroller,
who has rendered the position ques-
tionable, grows out of his supervision
of all payments by the treasury on
order of other departments.
Tentative Form Submitted.
In submitting the tentative form for
a standard cancellation contract, Sec
rotary Baker explained that ut is inn
portant in the interest Of labor and
the industrial security of the country
that these plants (referring mainly to-
munitlon factories) be returned to
commercial work as speedily as practi-
cable, and so far as possible without a
break in their continuous operation
and employment of labor"
Secretary Baker continued:
THE war department believes that
many such contractors are willing to
forego the prospective profits on the
remainder of the work contemplated
by the contract and terminate the ex-
listing contract on a basis which would
amount substantially to compensation
for expenditures incurred and profits
not to exceed 10 per cent on the costl
of the unfinished articles on hand
a basis more favorable to the govern
ment than the terms of the contract |
would permit-if they can secure |
sum SO as to release their working |
capital for switching back to COM
work.
1.-THE department, therefore, desires
TO enter into supplementary contracts
with such contractors by which a |
sum we'll within what it is certain
would have to be paid by the govern
nent on such basis of adjustment, will
be paid Immediately to the contractor
lpon his consent to a termination of I
he original contract and a release to |
he government from all It's obligationsl
here under, the department agreeing
o pay substantially such additional |
sum as the secretary of war may de-
ermine will complete payment to the
contractor on such basis of adjust
nent. Comptroller Warwick held that
10 blanket fofm of contract could be
levised to cover all cancellations"
Secretary Baker issued q statement
# the war departments general poll
cy in cancelling war supply con-
raets. He made it clear that the de-
)artment proposes to do its own can
ceiling instead of leaving the task to
he war Industries board.
when it becomes necessary in the
public interest to discontinue the prof.
luction of supplies or materials which
lro no longer needed by the army"
Secretary. Baker said, negotiations for
,rompt settlement of contracts will be-
Undertaken by the war department in
spirit of fairness and hopefulness
o all concerned
1T is expected that contractors on
heir part will undertake to furnish
lefinite statements which will faciIi-
ate prompt payment of the obligations
4 the government.
An erroneous impression prevails
hat the responsibility of reduction or
of contracts rests in the1
var industries board. That is not the
ase. The war department is the prin-
ipal in the matter of its adjustments,
hough 1t may, when it seems adyisa-
lie, advise with the war industries
oard or other governmental agencies
n matters of general policy,
To prevent too violent dislocation
I industry, accumulation by the war
Of either raw material or
lnished product will be distributed
Then and where Liquidation Of such
upplies will least Interfere with the
eturn Of industry to normal cendi-
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