The Washington herald., 1918-06-19
CONTRACTORS
TO COVENANT
AGAINST FEES
Gregory Recommends Plan
to End Growing Evil in
u. S. Buying.

Attorney General Gregory recon-
mended to the heads Of all depart
ments Of the government today n
covenant in contracts which Is de-
signed to end the contingent fee sys-
tenn in all government contracts. It
is estimated that millions Of dollars
will be saved both to the government
and contractors by the elimination Of
the middleman in the negotiation of
government contracts.
The recommendation followed raids
all over the country for the purpose
of seizing papers of firms and in
dividuals having governmtnt con-
tracts. These papers reveal the exist
ence Of a system by which the con-
tractors have been bulldozed and
made to pay over a large share OF
their earnings. and purchasing officers
of the government have suffered in
reputation by the imputation or direct
claim that they could be Influenced.
Abuse Of Prominent Names.
In practically all the papers seized
Il Is clear that the use Of the names
of Members of Congress, prominent
RONeTntHtHL
officers was unauthorized and unwar-
ranted.
The object Of the Department of
Justice Is to put a stop to the sys-
tenn and end a growing evil. Where
there is evidence of a conspiracy in
the negotiation OF q contract, the
cases will be probed to the bottom and
prosecutions undertaken.
Gnr1on nontrar whn anpaar tn
have wIlfully violated the provision
against paying contingent fees will
suffer by having their contracts can
celed and the amount paid in illegal
fees deducted from the amount still
due them.
Attorney General Gregory asks that
the following form OF covenants.
which the President requests. will be
inserted in all government contracts.
Form Of the Agreement.
THE contractor expressly warrants
that he has employed no third persons
to solicit or obtain this contract in
his behalf, or to cause or procure the
same to be obtained upon compensa-
ton in any way contingent, in whole
or in part, upon such procurement:
and that he has not paid, or promised
dkECCu " pay " any pCi
sons, in consideration OF such procure
ment or for compensation for services
in connection Herewith. any broker
age commission or percentage upon
the amount receivable by him here
under. and that he has not. in esti-
mating the contract price demanded
by him, included any sum by reason
OF any such brokerage commission or
percentage. and that all moneys pay
able to him hereunder are free from
obligation to any other person for
services rendered, or supposed to
have been rendered, in the procure
ment Of this contract.
He further agrees that any breach
Of this warranty shall constitute ad-
equate cause for the annulment Of
this contract by the United States,
and that the United States may re-
tain to its own use from any sums
due or to become due thereunder an
amount equal to any brokerage. COM
mission or percentage so paid, or
agreed to be paid"
As an additional protection the
heads OF departments are requested
to adopt as a regulation the follow
ing language taken from Section 3722
page. 735. Revised Statutes, as applied
to the Navy Department:
And no person shall be received
as a contractor who Is not a manu-
facturer of or regular dealer in the
articles which he offers to supply"