§ 32. Mr. ASHLEYasked the Parliamentary Secretary to the Admiralty if he will state, in the case of contracts in which the terms are that the contractor is paid the cost of production plus a percentage on that cost, how many such contracts have been entered into and completed since the outbreak of war; what amount of money they represent; and what is the average percentage paid to the contractor?
§ Dr. MACNAMARAI am afraid I cannot undertake to give precise particulars 446 respecting Navy contracts, as desired by my hon. Friend. Obviously that would not be in the public interest. Nevertheless, I may say that practically all our repair contracts have been put out, and will be put out, under the net cost and percentage system. My hon. Friend will realise that this is inevitable for the reason that speed in effecting repairs is of primary importance and that much valuable time would be lost in calling for tenders and examining the same. As regards new construction, roughly the proportion, in number of vessels, of orders placed is as follows: About three firm price to one net cost and percentage. On this, however, I should say that we have for some time past now found it possible to reduce the number of contracts placed under the latter system, and new construction contracts are now practically all being placed and will, so far as I can see, be placed on a firm price basis. In all cases of contracts placed under the net cost and percentage system, the profit is almost invariable 10 per cent, on actual wages paid to workmen while on Admiralty work, actual net cost of material used, and establishment charges allowed.