GOVT. BUILDING CONTRACTS

Greymouth Evening Star, 14 September 1945, Page 8

GOVT. BUILDING CONTRACTS

UNDUE PROFITS ALLEGED “In my last report I indicated that J-inc tie profits had been earned on building contracts let on a master schedule basis, and that a contracts adjustment committee had been set up to review these profits and renegotiate the contracts,” states the Controller and Auditor-General (Mr C. G. Collins) in his annual report lor the year ended March 31, which nas been presented to Parliament. “I now have to report that the committee has not functioned, and that no adjustments on the grounds that master schedule prices permitted conii actors to earn excessive profits have been made.

“The Audit Office was represented at several conferences of departmental officials, and as a result of the exchange of views I am of opinion that the authority given by Section 2 of the Finance Act (No. 3), 1943, to investigate Government contracts is unlikely to lead to the adjustment of excess profits unless such adjustment is specially provided for in the relative contract itself. It appears, therefore, that the value of the statutory power to investigate will lie mainly m the direction of securing information which may enable Government departments to negotiate further contracts on terms more favourable than might otherwise have been secured.”

Referring to the use of timber for defence buildings, the Controller and Auditor-General states that under arrangements made about April, 1942; practically all timber used in the construction of defence buildings was ordered by contractors through the Timber Controller. Payment to sawmillers and timber merchants was made by the Timber Controller, and recovery from contractors made by deductions from moneys due under the contracts.

Difficulty has been experienced by the Public Works Department in reconciling the quantities of timber as measured into buildings by the department’s quantity surveyors with the quantities actually paid for by the Timber Controller.' Many were in disagreement to a comparatively small extent, and by agreeing to a 5 per cent, tolerance on the quantity surveyor’s figures the department found it possible to settle with the great majority of contractors, but there are still six cases in which the sums in dispute are large and well outside the tolerance. The report states also that defence works camps have continued in operation, and at June 28 were accommodating 476 men, The weekly cost for each man over the last quarter was 34/7.3d, as against 32/9.1d for the previous quarter. The contemplated cost when the camps were opened was 30/- a week. The Public Works Department considered that the cost would be reduced if one of the three camps now operating was closed, and a recommendation to that effect was now under consideration.