"points with pride" and says "I told you so." Second, the contractor enhances his reputation for doing work at low cost and thus increases his chances for securing future contracts on favorable terms. Third, if a sufficient amount of money is accumulated by savings in costs it makes possible an extension of the scope of the work, which in turn entitles the contractor to an increase in the amount of his fee.

The proposition that the public should have a chance to secure contracts for public works constructed by the Federal Government with funds collected from the public, represents a sound public policy. This means, of course, competitive bidding. In normal times and under normal conditions, it is unquestionably the more expedient procedure. It allays the ever-present suspicion of favoritism and graft and thus tends to sustain the confidence of the people in their government. It also tends to keep prices low, but, where the contract price is too low to promise any profit for the contractor or indicates a certain loss, this seeming advantage is often turned into a disadvantage on account of skimping by the contractor on the work in an effort to prevent a loss or to make a profit. Work taken at a low price must be given rigid inspection and the Government representatives on the work must be constantly vigilant; this often leads to disputes and appeals. The accomplishment of the work is thus often delayed and the indirect costs increased.

On works of magnitude or complexity, which require detailed plans and specifications as a basis for competitive bids, the initiation of work in the field is usually delayed beyond the time that would be required under the cost-plus contract method.

In times of emergency involving the national defense, when it has been determined administratively, by those charged with the burden of making the decision, that certain projects are of such importance that their accomplishment with the utmost speed and certainty is imperative, the cost-plus form of contract is practically essential. In some cases, as where the location is isolated and the engineering data available are meager, it is the only contract method that will bring the desired results. Where the early completion of a project is important, any time that can be saved in starting construction work in the field will contribute to that end. Contract work in the field cannot be started until a contract has been made and a contract based upon competitive bidding cannot be made until prospective bidders have been furnished plans and specifications sufficiently descriptive of the work to enable them to estimate what it will cost to do it. To be sufficiently descriptive the plans and specifications must generally be comprehensive and indicate all details that may affect costs. This means numerous plans and complete specifications which require much time for their preparation.

On the other hand, a cost-plus contract can be made without the prospective contractor having more than a general outline of the work to be done, because he does not have to figure accurately the cost. Changes in requirements can be met without the delay and paper work incident to supplemental agreements or change orders required under the competitive-bidding form of contract. The requisite working plans and specifications are prepared after the contract is made

and as the work progresses and as they are required. Much preliminary work can often be gotten under way, or even completed, · from sketch plans which can be prepared quickly. Thus, most of the time ordinarily required for the preparation of bidding plans and specifications and their distribution to prospective bidders, the preparation of bids, the opening of bids and the awarding of the contract can be saved. It is estimated that it would have taken at least 12 months to have prepared competitive plans and specifications for the Pacific islands naval air bases projects now under contract (NOy-3550). Funds for those projects were appropriated by the Act approved May 25, 1939, and the cost-plus contract was executed August 5, 1939. Estimating 3 months for the preparation and opening of bids, analysis of bids received, award and execution of contract, it will be seen that the work in the field under the costplus contract mentioned is now practically a year ahead of what would have been the status on a competitive-bidding basis.

Furthermore, had the usual competitive-bidding procedure been followed in this particular case, it is certain that bidders would have included in their proposals a large contingent item to protect themselves against the unusual hazards of long sea voyages for personnel, plant, and materials; of housing and caring for employees, including maintenance of their health and morale on isolated islands having no existing facilities; uncertainties of labor supply for outlying islands; uncertainties of weather conditions in the mid-Pacific; and other unforeseeable contingencies. This would have resulted in high bids and might have forced an award to an imprudent, and hence an unreliable, bidder who had gambled on the contingent item, and who, if a serious loss appeared would stop work and throw the job in the lap of his sureties. In that event the Government would have increased indirect costs and a lawsuit on its hands and face a delay of uncertain duration in the accomplishment of its projects. On the other hand, if any or all of the contingencies did not materialize, the Government would pay for something of no benefit to it and the contractor's profit would become unduly large.

During the World War period the Bureau of Yards and Docks awarded approximately 100 contracts for emergency work on the basis of cost plus a percentage of the cost. These contracts involved approximately $60,000,000. Similar contracts were made by the War Department.

A correct concept of a Government cost-plus-a-fixed-fee contract involves three vital propositions. First, the Contracting Officer representing and speaking for the United States, and all of his administrative assistants, must be competent and possess a clear understanding of the peculiar relationships of the parties to the contract. Second, the contractors must be experienced, reliable, conscientious, energetic, resourceful, and also have a clear understanding of the peculiar relationships of the parties. Third, there must be a high degree of cooperative confidence and trust by each of the parties in the other and this confidence and trust must extend throughout the organization of each party.

To insure a successful accomplishment of the purpose of a costplus contract there must be the utmost of cooperation. There should be no distinction, in thought or action, between Government person

nel and the contractor's personnel; it must be assumed and accepted as a fact that they are all working to the same end and all doing what to them at the time is or seems to be the best thing to do in the interest of the contract work. Errors of judgment and mistakes will, of course, be made, but the good faith of the person involved should not be questioned; to do so only creates resentment and makes inroads on the spirit of cooperation.

There must be a generous recognition of the attainments, experience, and judgment of others. No one knows all the answers. No one knows so much that he cannot be told something he did not know. Humility and a wholesome sense of humor both pay good dividends. A village simpleton, according to an anecdote, found a horse that was lost, after all others had failed, by thinking where he would go if he were a horse and were lost. He could have told the others something if he had been asked.

There must also be a high degree of individual courage and willingness to assume responsibility in those who are charged with the burden of making decisions. Where speed of accomplishment is of prime importance, as it almost always is under a cost-plus contract, prompt decisions are essential. In making decisions the full purpose of the contract should be kept clearly in mind; the speedy and certain accomplishment of highly important emergency work by cooperative effort. Precedents should not be permitted to hamper any action which appears desirable, unless all the facts and circumstances are identical, particularly any precedent which rests upon a decision of other than a court of last resort. The injunction "Be just and fear not" is as potent now as when the words were penned by Shakespeare. A contract represents a meeting of minds. The minds of the contracting parties meet first upon a general purpose or intent. Then they undertake to set down various specific understandings upon which they agree. But it is manifestly impossible for them to specify every obligation and responsibility that will arise under any construction contract and this is particularly true as to cost-plus contracts. Even if it were possible it would be undesirable, because there is a perversity of human nature, natural conditions, and even inanimate things which would effectually prevent adherence to minute specifications. It has been said judicially that a contract consists not only of the stipulations which the parties have expressed in words but also of the obligations that are reasonably implied as concomitants of those stipulations. Hence, it is logical to indicate the general purpose or intent and allow it to control in the interpretation of any specific provisions. Any provision which tends to curtail or restrict the general intent should be strictly construed; that is, any exception should be specifically stated, while any provision which tends to give effect to the general intent should be given a liberal interpretation. In the absence of any specific provision for a particular situation or requirements, the general intent is the controlling consideration.

Interpretations should be made by those in the best position to make them at the time they must be made, subject to any applicable provision of law or the contract. The primary rule is to ascertain and give effect to the mutual intention of the parties, so far as it may be

done without contravention of legal principles. Greater regard is to be had to the clear intent of the parties than to any particular words which they may have used in the expression of their intent (13 Corpus Juris 521). A contract must be construed as a whole and the intention of the parties is to be collected from the entire instrument and not from detached portions. Individual clauses and particular words must be considered in connection with the rest of the agreement, and all parts of the writing and every word of it, will, if possible be given effect (13 Corpus Juris 525). The words of contracts should be given a reasonable meaning rather than an unreasonable one and a court will endeavor to give a construction most equitable to the parties and which will not give one of them an unfair or unreasonable advantage over the other (13 Corpus Juris 540). In arriving at the intention of the parties, where the language of a contract is susceptible of more than one construction it should be construed in the light of the circumstances surrounding them at the time it is made, so as to place oneself as nearly as may be in the situation of the parties at the time so as to view the circumstances as they viewed them and so to judge of the meaning of the words and the correct application of the language of the contract. There should be considered the nature of the agreement itself, together with all the facts and circumstances leading to and attending its execution, the relation and condition of the parties, the nature and situation of the subject matter, and the apparent purpose of making the contract (13 Corpus Juris 542).

Doubtful expressions in a contract should be construed strongly against the party who prepared the paper (20 Ct. Claims 315, 120 U. S. 115). Where the parties to a contract have given it a practical construction by their conduct, as by acts in partial performance, such construction is entitled to great if not controlling weight in determining its proper interpretation (13 Corpus Juris 546). The same principles of right and justice which prevail between individuals should control in the construction and carrying out of contracts between the Government and individuals (U. S. v. Stage Co., 199 U. S. 414). A Government contract should be interpreted as are contracts between individuals with a view to ascertaining the intention of the parties and to give it effect accordingly, if it can be done consistently with the terms of the instrument (Hollerbach v. U. S., 233 U. S. 165). In the case of Cooke v. U. S. (91 U. S. 389) the Supreme Court said:

If it [the United States] comes down from its position of sovereignty and enters the domain of commerce it submits itself to the same laws that govern individuals there.

In the case of Noonan v. Bradley (9 Wallace 407) the court said: If there were any doubt as to the construction which should be given to the agreement of the intestate, that construction should be adopted which would be more to the advantage of the defendant, upon the general ground that a party who takes an agreement prepared by another, and upon its faith incurs obligations or parts with his property, should have a construction given to the instrument favorable to him, and on the further ground that when an instrument is susceptible of two constructions-the one working an injustice and the other consistent with the right of the case-that one should be favored which standeth with the right.

In the case of Hollerbach v. U. S. (233 U. S. 165) the syllabus says: A positive statement in a contract as to present conditions of the work must be taken as true and binding upon the Government, and loss resulting from a mistaken representation of an essential condition should fall upon it rather than on the contractor, even though there are provisions in other paragraphs of the contract requiring the contractor to make independent investigations of facts.

Under a cost-plus-a-fee contract with the United States, the general intent is that the contractor will accomplish the work and that he will be paid whatever it costs him to do so, plus a fee. It may be agreed that the cost of this, that, or another thing will not be considered to be a part of the cost of the work. Any provision reciting such an agreement must be specific. All costs not so specifically excluded constitute the cost of the work whether they are specifically mentioned in the contract or not. It does not follow that the contractor would be free to make needless or extravagent expenditures because he would then be violating the general intent of the contract and the contracting officer would be warranted in disallowing reimbursement.

Coming now to some specific cases, it is found that there were many decisions of the Comptroller of the Treasury upon matters involved in various cost-plus contracts executed during the World War and in a number of cases such decisions were overruled by the Courts.

It is well known that past decisions of the Comptroller General have been based generally upon strict constructions of the law and the provisions of contracts. Court decisions, including some of the Supreme Court of the United States, show that the powers of the Comptroller have often been exceeded; the force of his decisions is thus weakened and the degree of weight to which they are entitled is diminished.

In the case of Bates & Rogers Construction Co. v. U. S. (58 Court of Claims 392), decided May 28, 1923, the syllabus included the following:

Where plaintiff, acting under instructions of the representative on the work of the contracting officer, took out policies of liability insurance, and its action in taking out such insurance was subsequently approved by the contracting officer, the premiums paid on such policies by plaintiff were part of the cost of the work under said contract, and plaintiff is entitled to recover the amount of such premium withheld by the Government.

The question of payment in a similar case had been submitted to the Comptroller of the Treasury, who decided that the amount paid for insurance should not be reimbursed. This case was not appealed by the Government, the parties having stipulated that the decision of the Supreme Court of the United States in the case of Mason and Hanger, mentioned below, should control.

The case of Mason and Hanger Co. v. U. S. was tried in the Court of Claims and decided April 18, 1921. It was appealed by the Government, judgment having been rendered for the plaintiff. The decision of the Court of Claims was affirmed by the Supreme Court, December 4, 1922 (260 U. S. 323). The syllabus is as follows:

A building contract, made through the War Department, provided that the contractor should be reimbursed for such actual net expenditures in the performance of the work as might be approved or ratified by the contracting officer, including "such bonds, fire, liability, and other insurance as the contracting