§ 9. Mr. WATTasked the Minister of Munitions whether contracts are now entered into by his Department on the principle of cost plus percentage; and, if not, will he say at what date that system was abandoned?
§ Sir WORTHINGTON EVANS (Joint Parliamentary Secretary to the Ministry of Munitions)The cost plus percentage form of contract is adopted only where there is great difficulty in fixing prices owing to the amount of work being indeterminate. The undesirability of this form of contract is recognised and its use is restricted to the minimum, e.g., for experimental work, repairs, and certain build- 1292 ings, particularly where it is impossible to prepare detailed designs in advance. To minimise the objection to this form of contract a stipulation is now made that the percentage shall not be calculated upon the amount of any increase of wages awarded after the date of the contract.
§ Mr. WATTHas it been found in practice that this system of cost plus percentage is not a money-saving device?
§ Sir W. EVANSIt is not a money-saving device, but sometimes it is inevitable because you cannot save the money in any other form.