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?
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.
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?
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?
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.