Contracts (Supervision).

Oral Answers to Questions — Royal Navy. – in the House of Commons on 11th February 1942.

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Photo of Mr William Robinson Mr William Robinson , St Helens

asked the First Lord of the Admiralty whether he is satisfied that his costing system and check upon the activities of private contractors in their relationship with his Department adequately safeguards the Exchequer and taxpayers?

Photo of Captain Bertie Kirby Captain Bertie Kirby , Liverpool Everton

asked the First Lord of the Admiralty whether he can make a statement upon the practice of his Department in relation to the supervision of contracts let to private firms; and to the check exercised by his accountants or other representatives upon the costing charges of such contractors in relation to the use of materials, delivery of orders, number of men employed, and the number of hours worked; and whether he is satisfied that contractors cannot be overpaid in relation to the goods supplied, and/or services rendered, at any point during the running period of the contract?

Photo of Mr George Hall Mr George Hall , Merthyr Tydfil Aberdare

Wherever possible, contracts are let on a fixed price basis. In such contracts, it is in the interest of the contractor to exercise every economy in the use of labour and material. Nevertheless, costing by means of accountants or technical officers is employed over a very large field in the settlement of these contracts. Where contracts have to be let on the basis of actual cost, an Admiralty representative is normally associated directly with the work, and it is his responsibility to ensure, as far as possible, that only expenditure actually and necessarily incurred, is admitted for payment, and if excessive costs are found to have been incurred, they are disallowed; the Admiralty have also the right to allow only a reduced profit in such cases. In both types of con- tract, any progress payments made are regulated by the value of the work done and of the materials accumulated.

Photo of Captain Bertie Kirby Captain Bertie Kirby , Liverpool Everton

Will my hon. Friend explain in rather more detail the methods of the Department in regard to the check on progress payments as there is a feeling that more could be done in this direction?

Photo of Mr George Hall Mr George Hall , Merthyr Tydfil Aberdare

I cannot admit that everything possible is not already being done. We are doing what we can to check expenditure to the best of our ability.

Photo of Mr William Robinson Mr William Robinson , St Helens

Is the same system applied in checking for the Admiralty from Scapa Flow to Singapore?

Photo of Mr George Hall Mr George Hall , Merthyr Tydfil Aberdare

As far as I know, a similar system is applied.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

If the Minister is satisfied that an adequate check is applied, how does he explain the scandals now appearing before the Liverpool courts arising out of the failure to exercise such a check?

Photo of Mr George Hall Mr George Hall , Merthyr Tydfil Aberdare

The percentage of Admiralty work at the place referred to by the hon. Member is very small.

Photo of Captain Bertie Kirby Captain Bertie Kirby , Liverpool Everton

Will my hon. Friend look further into the question? Is he aware that many hon. Members doubt whether a proper check is made and that there is a considerable amount of feeling on this subject outside the House?

Photo of Mr George Hall Mr George Hall , Merthyr Tydfil Aberdare

If the hon. Member would care to submit any cases he has in mind, I know that my right hon. Friend the First Lord and the officers at the Admiralty would be very pleased to see them.