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REAL ESTATE
AND
BUILDERS
m®
Vol. CII.
NEW YORK, JULY 13, 1918
No. 2
Cantonment Contracts Fair To Government
Modified Gost-Plus Plan Secured Prompt Beginning and Efficient
Garrying Out of Work
By PAUL STARRETT
President George A. Fuller Company
TO ask whether one indiis-
try or another has had
fair treament from the Gov-
ernment is to inquire into a
subject which is of very minor
interest to the pubhc, and is
of small importance in com-
parison with the object being
striven for by those in charge
of the conduct of the war.
Considering the results
which have been attained by
the Government, one cannot
fail to be impressed by the
courage and general good
judgment which have been
exercised to obtain them. It
is undoubtedy true, as in all
great undertakings, that the
pame men would avaid inis-
takes which have been made
if they had the same problems
to solve over again. The im-
portant fact is that the results
have been wonderful and the
men who accomphshed them
were at the same time patriotic and sacrificing.
In an emergency such as confronts the country, it would
seem good judgment to mobiHze all the abihty and e.xperi-
ence available in all lines. This would call for the em-
PAUL STARRETT
work before employíng the
contractor, and therefore calls
for adequate time to prepare
such plans and study out all
the details in advance. Lump-
sum work on a rising market
is e-xtremely hazardous, and
no prudent contractor would
undertake a contract of any
niagnitude under present con-
ditions unless he were pro-
tected by a very large margin
and a margin which niight
have appeared adequate at thé
time of our entrance intq the
war would look ridiculus
now, in view of the enorriious
advance in the price of build-
ing materials and the advance
in the price of labor and de'-
terioration in its efíiciency.
Therefore the second plan
would seem to be the only
practical one under the cir-
cumstances. The situation
confronting the Government
at the beginning of the war was one where an enormous
volume of work was thrown upon it. All of this work
had to be done in the shortest time possible. There was
no time to get plans ready, as the requirements" of the
ployment in building work, for example, of tried building army and navy and the various manufacturing plants
organizations, allotting the work in scale with the ability, which had to be built entirely or added to in order to take
experience, and responsibility of the existing building care of the needs of the war needed careful study, and it
(-;i-ms. was necessary to start Work on difYerent enterprises j.n
such a manner as to get the quickest completion, studyíng
out and completing the plans as the work progressed.
In this emergency the Government worked out a plan
of percentage contract, which was adopted on all the
cantonnient contracts, whereby a sliding scale of commisr
sion was paid, the rate of commission decreasing as the
size of contract increased. A limit of $2.S0.00O was placed
011 the amount of commission a contractor could receive
on one contract, and this limit was arrived at when the
work amounted to $5,000,000, which allowed the cotitrac-
to 5 per cent of his work. .A.s none of the contractor's
overhead expenses could be charged under this form of
contract, it can readily be seen that thc profit a contractor
could make was very reasonable.
After the amount of the contract paásed $5,000,000 thc
balance of the vvork had to he donc for no additionrfl
compensation, which resulted in each contractor pêrform-
ing from $2,500,000 to $6,000,000 worth of work for..no
This is no time for experiments, when the lives of our
soldiers depend on quick results. Therefore, however
jnteresting it might be for an ambitious department to
build up an organization to do its own building, the wis-
clom of so doing is questionable, as experience and training
in the art of building are as important for good results
as practice and study are to produce good results in any
line.
The question of a plan of producing results at the lowest
final cost to the Government is first in importance. The
two plans of contracting in ordinary civilian business are
the "lump suni" plan, where the contractor undertakes to
turn over a piece of work complete for a certain fixed
-sum, and the "cost-plus" plan, which has several forms,
but ali are based on the principle of an agreed-upon fee
for the service of the builder, the owner paying the cost.
The lump sum plan can only be successfully used where
the owner has complete plans and specifications for his
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