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Show I WAR CONTRACTS 1 DOiTFUl BY I LATERULiNG 111 WASHINGTON, Nov. 29. Govern - IjK II a raent war contracts involving hund- mw reds of millions of dollars were ren- 3 El dered doubt'ful in status today by a nil a decision of Comptroller Warwick of ill the treasury that orders have not been ft i I I legally executed unless actually signed n by responsible government contracting fljk agents and the contractor, ft) Tho war department submitted to Wit. the comptroller a form of cancolla- gu lion agreement under which it was IS proposed to abandon without unjust ,' J? loss to contractors thousands of war IS supply contracts. He refused to ap- j provo the agreement, holding that the department may not agree with a ' S ll contractor on an arbitrary sum to Ml III tborizntion for this is given In a pro- ! jfi ji viously existing contract, f i- jjj A large proportion of war orders Ijfjj were given informally by telephone, tl telegraph or letter, it is said. In i US sucn caaes tne comptroller held new cjifll legislation will be necessary to permit i t framing of agreements for cancclla- Iln the confusion and haste of war, many manufacturers proceeded with tremendous orders on telegraphic instructions in-structions of subordinate army officers offi-cers and the termination of hostilities found them unprotected by legal contract. con-tract. The authority of the comptroller comptrol-ler who has rendered their position questionable grows out of his supervision super-vision of all payments by the treasury on order of other departments. In submitting the tentative form for a standard cancellation contract, Secretary Sec-retary Baker explained that "It is important im-portant in the interest oaf labor and tho industrial security of the country that these plants (referring mainly to munition factories) be returned to commercial work as speedily as practicable prac-ticable and so far as possible without a break in their continuous operation and employment of labor." Secretary Baker continued: "The wnr department believes that many such contractors are willing to forego the prospective profits on tho remainder of the work contemplated by the contract and terminate the existing ex-isting contract on a basis which would amount substantially to compensation for expenditures incurred and in profits prof-its not to exceed ten per cent on the cost of the unfinished articles on hand a basis more favorable to the government gov-ernment than the terms of tho contract con-tract would permit if they can secure promptly a substantial portion of this sum so as to release their working capital for switching back to commercial commer-cial work. "The department desires to enter Into In-to supplementary contracts with such contractors by which a sum well within with-in what it is certain would have to bo paid by the government on such basis of adjustment, will tie paid immedl-i immedl-i alely to the contractor upon his con-.jjR con-.jjR sent to termination of the original H;a contract and a releaso to tho govern -(ijffl ment from all its obligations thereun-jfj thereun-jfj der, the department agreeing to pay 5 ill substantially such additional sum as the secretary of war may determine will complete payment to the contractor contrac-tor on such basis of adjustment." Comptroller Warwick held that no blanket form of contract could bo devised de-vised to cover all cancellations. Secretary Baker issued a statement from tho war department's general policy In cancelling war supply contracts. con-tracts. Ho made it clear that the department de-partment proposes to do Its own cancelling can-celling instead of leaving the task to the war industries board. "When it becomes necessary In tho public interest to discontinue the production pro-duction of supplies or materials which are no longer needed by the army,' Secretary Baker said, "negotiations for prompt settlement of contracts will be undertaken by tho war department in a spirit of fairness and hopefulness to all concerned. "It is expected that contractors on their part will undertake to furnish definite stntcment which will facilitate facili-tate prompt payment of the obligations obliga-tions of the government. "An erroneous impression prevails that the responsibility of reduction orj cancellation of contracts rests in the war industries board. This is not the case. Tho war department is the principal in the matter of Its adjustments, adjust-ments, though it may, when it seems ndvisablc, advise with the war industries indus-tries board 'or other governmental agencies on matters of general policy. poli-cy. , "To prevent loo violent dislocation of Industry, accumulation by tho war department of either raw material or finished product will be distributed when and where liquidation of such supplies will least interfere with the return of industry to normal conditions." condi-tions." oo |