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Maj. GUNBY. By the addition of 16 quartermaster depots. 16 remount stations, the increasing of the figure for the hospitals from the two million-odd dollars appropriated to the estimates as finally made, and some other smaller items.

Mr. SHERLEY. Then, you have been running about upon the cost scale that you originally anticipated?

Maj. GUNBY. Yes, sir.

Mr. SHERLEY. And your increases are due to the increased areas of the buildings and additional accessories that were not contemplated in your original estimate?

Maj. GUNBY. Yes, sir.

Mr. SHERLEY. Is there any other building in connection with the Army in the United States that is not embraced within this financial statement?

Col. LITTELL. Yes, sir.

Mr. SHERLEY. What?

Col. LITTELL. We understand that there is much more in the way of storage buildings that will be necessary and that are wanted. That is what we spoke about the other day when we referred to the storage committee of the munitions board.

Gen. SHARPE. I understand that the Ordnance Department has presented another estimate of a considerable sum of money for the construction of storage. My attention was called to it just about 10 minutes ago.

Mr. SHERLEY. That does not come through you at all?

Gen. SHARPE. No, sir. You are speaking of the Army now, but some of the other departments have provided in their estimates for sums of money for storage.

Mr. SHERLEY. Yott do all the building for the Army, except ordnance buildings?

Col. LITTELL. They do some of their building.

Mr. SHERLEY. Is there anybody else that does his own building? Col. LITTELL. The aviation people.

Mr. SHERLEY. Leaving out the aviation people?

Col. LITTELL. No, sir.

Mr. SHERLEY. You were about to say that there were certain contemplated expenditures in connection with additional storage? Col. LITTELL. Yes, sir.

Mr. SHERLEY. Have the estimates for that been submitted?
Col. LITTELL. Not to my knowledge; no, sir.

Mr. SHERLEY. You do not by that mean the storage that the ordnance people are planning for and for which they have submitted an estimate of something like $25,000,000.

Col. LITTELL. There is a board in existence, or was in existence. called the depot heard. which had to do with ascertaining the neces sary amount of storage which the various departments of the Army required. On that board, I understand, there was a representative of each one of the different branches of the Army-that is, the Engi neers, the Quartermaster Corps, the Ordnance Department, and Signal Corps-and they have prepared a report, but there has been no estimate on that, so far as I know.

Mr. SHERLEY. This represents, then, all the work the quartermasters have submitted estimates for?

Col. LITTELL. Yes, sir.

Mr. SHERLEY. And it also represents practically $11,000,000 of additional work that you figure will be necessary over the estimates now submitted?

Col. LITTELL. It is all we have been directed to do.

Mr. SHERLEY. All of the hospital construction for the Army in the United States is paid for out of moneys appropriated for the use of the Quartermaster Department?

Col. LITTELL. For the construction and repair of hospitals, and it is turned over to the Quartermaster General for disbursement. Mr. SHERLEY. You actually do the constructing?

Col. LITTELL. Yes, sir.

Mr. SHERLEY. So that the headings here for construction and repair of hospitals would show the total amount to be expended for hospital construction in the United States?

Col. LITTELL. Yes, sir.

Mr. SHERLEY. I understand that it has been determined that the work done in Europe shall be done by and through the Engineer Corps, except as to those things that relate directly to the feeding and clothing of the troops? In other words, those depots and those matters will be constructed by the engineers rather than the quartermaster?

Col. LITTELL. I so understand it.

Mr. SHERLEY. The only item you have in here looking to work abroad is that relating to the ice plants?

Col. LITTELL. Yes, sir.

Mr. SHERLEY. That is the only item you know of?

Col. LITTELL, Yes, sir.

Mr. SHERLEY. There is nothing else that you now know of for the quartermaster to do in the way of construction abroad other than those ice plants?

Col. LITTELL. No, sir.

Gen. SHARPE. We have not included in our estimate any storage or any building for the Engineers; they are to take care of that out of their own appropriation.

Mr. SHERLEY. In the United States?

Gen. SHARPE, Yes, sir.

The CHAIRMAN. The amount of money required for necessary tents for these camps to start with is what?

Capt. MARSHALL. $5,204,000.

The CHAIRMAN. And your estimate of $15,000,000 is on the assumption that they will have to be replaced twice in a year?

Col. LITTELL. Three times; three sets of tentage in a year.

The CHAIRMAN. That is under abnormal conditions?

Col. LITTELL. Well, that is what was actually used on the frontier, the Mexican frontier.

The CHAIRMAN. But under abnormal conditions, as I understand. Col. LITTELL. Well, it would not always be the same.

The CHAIRMAN. That is the outside figure?

Col. LITTELL. Yes. It depends very much on climatic conditions. The CHAIRMAN. The contract for these cantonments is a uniform contract?

Col. LITTELL. Yes, sir.

The CHAIRMAN. And this is a copy of it?


Col. LITTELL. Yes, sir.

(Said contract follows:)



day of

Contract made and concluded this

, 1917, by and between

-, a corporation organized under the laws of the State of -, represented by its president, party of the first part (hereinafter called Contractor), and the United States of America, by Maj. W. A. Dempsey, Q. M. U. S. R. (hereinafter called the Contracting Officer), acting by authority of the Secretary of War, party of the second part.

Whereas the Congress having declared by joint resolution approved April 6, 1917, that war exists between the United States of America and Germany, a national emergency exists and the United States urgently requires the immediate performance of the work hereinafter described, and it is necessary that said work shall be completed within the shortest possible time; and

Whereas it is advisable, under the disturbed conditions which exist in the contracting industry throughout the country, for the United States to depart from the usual procedure in the matter of letting contracts and adopt means that will insure the most expeditious results; and

Whereas the Contractor has had experience in the execution of similar work, has an organization suitable for the performance of such work, and is ready to undertake the same upon the terms and conditions herein provided:

Now, therefore, this contract witnesseth, that in consideration of the premises and of the payments to be made as hereinafter provided, the Contractor hereby covenants and agrees to and with the Contracting Officer as follows:


Ertent of the work.-The Contractor shall, in the shortest possible time, furnish the labor, material, tools, machinery, equipment, facilities, and supplies and do all things necessary for the construction and completion of the following work: in accordance with the drawings and specifications to be furnished by the Contracting Officer, and subject in every detail to his supervision, direction, and instruction.

The Contracting Officer may, from time to time, by written instructions or drawings issued to the Contractor, make changes in said drawings and specifications, issue additional instructions, require additional work, or direct the omission of work previously ordered, and the provisions of this contract shall apply to all such changes, modifications, and additions with the same effect as if they were embodied in the original drawings and specifications. The Contractor shall comply with all such written instructions or drawings.

The title to all work completed or in course of construction shall be in the United States; and upon delivery at the site of the work, and upon inspection and acceptance in writing by the Contracting Officer, all machinery equipment, hand tools, supplies, and materials, for which the Contractor shall be entitled to be reimbursed under paragraph (a) of Article II hereof, shall become the property of the United States. These provisions as to title shall not operate to relieve the Contractor from any duties imposed hereby or by the Contracting Officer.


Cost of the work.-The Contractor shall be reimbursed in the manner hereinafter described for such of its actual net expenditures in the performance of said work as may be approved or ratified by the Contracting Officer and as are included in the following items:

(a) All labor, material, machinery, hand tools not owned by the workmen, supplies, and equipment necessary for either temporary or permanent use for the benefit of said work; but this shall not be construed to cover machinery or equipment mentioned in section (c) of this article. The Contractor shall make no departure from the standard rate of wages being paid in the locality where said work is being done without the prior consent and approval of the Contracting Officer.

(b) All subcontracts made in accordance with the provisions of this agreement.

(c) Rental actually paid by the Contractor, at rates not to exceed those mentioned in the schedule of rental rates hereto attached, for construction plant in sound and workable condition, such as pumps, derricks, concrete mixers, boilers, clam-shell or other buckets, electric motors, electric drills, electric hammers, electric hoists, steam shovels, locomotive cranes, power saws, engineers' levels and transits, and such other equipment as may be necessary for the proper and economical prosecution of the work.

Rental to the Contractor for such construction plant or parts thereof, as it may own and furnish, at the rates mentioned in the schedule of rental rates hereto attached, except as hereinafter set forth. When such construction plant or any part thereof shall arrive at the site of the work the Contractor shall file with the Contracting Officer a schedule setting forth the fair valuation at that time of each part of such construction plant. Such valuation shall be deemed final, unless the Contracting Officer shall, within five days after the machinery has been set up and is working, modify or change such valuation, in which event the valuation so made by the Contracting Officer shall be deemed final. When and if the total rental paid to the Contractor for any such part shall equal the valuation thereof, no further rental therefor shall be paid to the Contractor, and title thereto shall vest in the United States. At the completion of the work the Constructing Officer may at his option purchase for the United States any part of such construction plant then owned by the Contractor by paying to the Contractor the difference between the valuation of such part or parts and the total rentals theretofore paid therefor. Rates of rental as substitutes for such scheduled rental rates may be agreed upon in writing between the Contractor and the Contracting Officer, such rates to be in conformity with rates of rental charged in the particular territory in which the work covered by this contract is to be performed. If the Contracting Officer shall furnish or supply any such equipment, the Contractor shall not be allowed any rental therefor and shall receive no fee for the use of such equipment.

(d) Loading and unloading such construction plant, the transportation thereof to and from the place or places where it is to be used in connection with said work subject to the provisions hereinafter set forth, the installation and dismantling thereof, and ordinary repairs and replacements during its use in the said work.

(e) Transportation and expenses to and from the work of the necessary field forces for the economical and successful prosecution of the work, procuring labor and expediting the production and transportation of material and equip


(f) Salaries of resident engineers, superintendents, timekeepers, foremen, and other employees at the field offices of the Contractor in connection with said work. In case the full time of any field employee of the Contractor is not applied to said work but is divided between said work and other work, his salary shall be included in this item only in proportion to the actual time applied to this work.

(g) Buildings and equipment required for necessary field offices, commissary, and hospital and the cost of maintaining and operating said offices, commissary, and hospital, including such minor expenses as telegrams, telephone service, expressage, postage, etc.

(h) Such bonds, fire, liability, and other insurance as the Contracting Officer may approve or require; and such losses and expenses, not compensated by insurance or otherwise, as are found and certified by the Contracting Officer to have been actually sustained (including settlements made with the written consent and approval of the Contracting Officer) by the Contractor in connection with said work, and to have clearly resulted from causes other than the fault or neglect of the Contractor. Such losses and expenses shall not be included in the cost of the work for the purpose of determining the Contractor's fee. The cost of reconstructing and replacing any of the work destroyed or damaged shall be included in the cost of the work for the purpose of reimbursement to the Contractor, but not for the purpose of determining the Contractor's fee, except as hereinafter provided.

(1) Permit fees, deposits, royalties, and other similar items of expense incidental to the execution of this contract, and necessarily incurred. Expenditures under this item must be approved in advance by the Contracting Officer.

(j) Such proportion of the transportation traveling and hotel expenses of officers, engineers, and other employees of the Contractor as is actually incurred in connection with this work.

(k) Such other items as should in the opinion of the Contracting Officer be included in the cost of the work. When such an item is allowed by the Contracting Officer, it shall be specifically certified as being allowed under this paragraph.

The United States reserves the right to pay directly to common carriers any or all freight charges on material of all kinds, and machinery, furnished under this contract, and certified by the Contracting Officer as being for installation or for consumption in the course of the work hereunder; the Contractor shall be reimbursed for such freight charges of this character as it shall pay and as shall be specifically certified by the Contracting Officer; but the Contractor shall have no fee based on such expenditures. Freight charges paid by the Contractor for transportation of construction equipment, construction plant, tools, and supplies of every character, shall be treated as part of the cost of the work upon which the Contractor's fee shall be based; provided that charges for transportation of such construction equipment, construction plant, and tools over distances in excess of 500 miles shall require the special approval of the Contracting Officer.

No salaries of the Contractor's Executive Officers, no part of the expense incurred in conducting the Contractor's main office, or regularly established branch office, and no overhead expenses of any kind, except as specifically listed above, shall be included in the cost of the work; nor shall any interest on capital employed or on borrowed money be included in the cost of the work.

The Contractor shall take advantage to the extent of its ability of all discounts available, and when unable to take such advantage shall promptly notify the Contreting Officer of its inability and its reasons therefor.

All revenue from the operations of the commissary, hospital, or other facilities or from rebates, refunds, etc., shall be accounted for by the Contractor and applied in reduction of the cost of the work.


Determination of fee.-As full compensation for the services of the Contractor, including profit and all general overhead expense, except as herein specifically provided, the Contracting Officer shall pay to the Contractor in the manner hereinafter prescribed a fee to be determined at the time of completion of the work from the following schedule, except as hereinafter otherwise provided:

If the cost of the work is under $100,000, a fee of ten per cent (10%) of such cost.

If the cost of the work is over $100,000 and under $125,000, a fee of $10.000. If the cost of the work is over $125,000 and under $250,000, a fee of eight per cent (8%) of such cost.

If the cost of the work is over $250,000 and under $266.666.67, a fee of $20,000. If the cost of the work is over $266,666.67 and under $500,000, a fee of seven and one-half per cent (71%) of such cost.

If the cost of the work is over $500,000 and under $535,714.29, a fee of $37,500. If the cost of the work is over $535,714.29 and under $3,000,000, a fee of seven per cent (7%) of such cost.

If the cost of the work is over $3,000,000 and under $3,500,000, a fee of $210,000.

If the cost of the work is over $3,500,000 a fee of six per cent (6%) of such cost.

Provided, however, that the fee upon such part of the cost of the work as is represented by payments to subcontractors, under subdivision (b) above, shall in each of the above contingencies be five per cent (5%) and no more of the amount of such part of the cost.

The cost of materials purchased or furnished by the Contracting Officer for said work, exclusive of all freight charges thereon, shall be included in the cost of the work for the purpose of reckoning such fee to the Contractor, but for no other purpose.

The fee for reconstructing and replacing any of the work destroyed or damaged shall be such percentage of the cost thereof, not exceeding seven per cent (7%), as the Contracting Officer may determine.

The total fee to the Contractor hereunder shall in no event exceed the sum of $250,000.00, anything in this agreement to the contrary notwithstanding.

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