High Prices May Lose Britain Big Dollar Contracts

Press, Volume LXXXIX, Issue 26987, 12 March 1953, Page 9

High Prices May Lose Britain Big Dollar Contracts

(Special Correspondent N.Z.P.A.) (Rec. 11 p.m.) LONDON, March 11. Off-shore contracts for about 150,000,000 dollars worth of ammunition may well be lost to Britain because of the high prices she has demanded, says the “Financial Times,” discussing tenders which have been called on behalf of N.A.T.O. countries under the United States foreign aid scheme. “About three-quarters of the total of 1,000,000,000 dollars earmarked for off-shore procurement out of American foreign aid funds for the fiscal year 1952-53 is to be spent on ammunition. Tenders were invited from all N.A.T.O. countries in Europe at the beginning of this year and on any reasonable allocation of orders, Britain’s share, it was thought, would probably be about 150,000,000 dollars worth. “However, according to reliable reports, British prices have proved to be the highest in Europe and are also considerably above the American level. “The difference between British and Continental prices is reported to exceed 10 per cent, for several types of ammunition, and the prospect at present is that the off-shore contracts will go to French, Italian and Belgian ordnance factories unless the British bid is made more competitive.

“United States authorities, both in Europe and Washington, appear to be puzzled by what looks like a change m British policy. No difficulties were encountered last year in placing 49,000,000 dollars worth of on-shore orders for ammunition in Britain out of foreign aid funds. The tenders submitted were fully competitive “Now the prices of comparable itemsi have been markedly increased. The

United States impression appears to be that the estimates of production costs have been inflated in one way or-an-other. “It is hard to say precisely where the responsibility for this lies. However, American officials have stated that in their experience tenders from private firms tend to be significantly lower than those from the governments. The Supply Ministry is the sole bidder for the contracts in the pre“If, as has been suggested, a new British price policy for off-shore procurenient tenders nas been adopted as the result of official instigation, the dispute which now appears to be in the making is likely to become a matter for negotiation between the British and American Governments.”