the experience, knowledge, and training which qualifies them to interpret the evidence. This evidence is frequently involved and not subject to being placed on paper. It often requires inspections of the site of the work, which must be made before the surface indications are changed from weather or other conditions. The contractor is an intensely interested party; the decision means money in his pocket or out of it, while the contracting officer is a representative of the Government who has no financial interest in the transaction. He is disinterested and only desires that the correct facts be ascertained. Under the existing law, where there is a dispute between the contracting officer and the contractor, the matter is referred to the head of the department or an authorized representative, who understands the language spoken and is able to make an authoritative decision as to the facts. It is at this point that the contractor is safeguarded against an overzealous contracting officer. If such a case were presented to the board proposed by this section, the decision would depend upon the ability of the representatives of the contractor and of the contracting officer as debaters, or upon their ability to paint a word picture in the form of reports of the conditions as they existed. The contractor having a large financial interest at stake would spare no expense in collecting an imposing mass of testimony. To the untrained person who has not the background and experience to separate nonessential evidence from that which is relevant the quantity and form of presentation exercises an undue weight.

The effect of this section would be largely to lessen, if not to destroy, the authority of contracting officers and consequently their power to protect the Government's interests by serving notice on contractors that the decisions of such officers (except as to interpretation of specifications or drawings) are not binding unless confirmed on appeal by the Comptroller General after the contract is completed.

The procedure provided by this section would prove particularly unwieldy and unworkable in time of war, when prompt decision of disputed questions is essential.

The argument that the contracting officer and the head of the department concerned are interested parties and should not be permitted to decide controversies that may arise is not valid. They have no financial interest whatever and no other interest in the matter except to see that the contractor is treated justly and the rights of the Government protected, but if the argument did have merit it would apply with equal force to the plan provided by this proposed legislation, because the Comptroller General and his assistants, who are Government officials and who must approve the award, thereby become interested parties to the same extent and in the same sense as the contracting officer and the department head. A strict adherence to the principle of arbitration (which the War Department does not advocate) would require a board composed of one member selected by the contractor (but not the contractor himself), one member selected by the contracting officer (but not the contracting officer himself), and a third member (having no relations with the contractor or the Government) selected by the other two.

Section 11 of the bill provides that every contract, and all papers relating thereto, shall be forwarded to the General Accounting Office within not more than 30 days after the award of the contract unless the time is extended by the Comptroller General.

It is perfectly proper for the General Accounting Office to be furnished the original or a certified copy of any paper or papers that it may require or desire in connection with the settlement of an account, and such is the present practice, but to require all papers relating to every contract, formal or informal, to be forwarded to the General Accounting Officer within 30 days would seriously interfere with necessary procurement activities of the War Department, and especially those outside the continental limits of the United States, and, unless they were duplicated, would deprive the War Department of its own files, in many cases while the contract was still being executed.

If this provision is enacted into law, the War Department estimates that it will be necessary for it to forward to the General Accounting Office every year more than a million papers in addition to those which are now being forwarded by it to that office.

For reference in connection with operations under such contracts, and to enable it to furnish any required information or explanation concerning them, it would be necessary for the War Department to retain copies of all such papers. The General Accounting Office, on its part, would be required to provide filing space and equipment for this great mass of papers, and clerks to handle and make them available for reference.

It is assumed that other departments of the Government would be similarly affected, and when that fact is remembered and the additional fact that this mass of material would continue to accumulate from year to year, it will be realized that such a plan will increase the expenses both of the departments and of the General Accounting Office.

The War Department feels that this section should be eliminated, but if it is to be retained that it should be amended in such manner as to cause it to apply to formal contracts only.

Section 12 of the bill provides in substance that a certified copy of any contract and related papers shall be furnished pursuant to a resolution of the Senate or House of Representatives, or on request of any committee thereof, notwithstanding the fact that the head of the department concerned has certified that such papers contain confidential or other matters which, in the public interest, shall not be disclosed. The War Department will always cooperate in such cases to the fullest extent, but considers that the right of the Secretary of War to determine whether the public interest will permit the disclosure of the contents of papers relating to the conduct of the business of the War Department rests on constitutional authority. Even if this were not true, the War Department considers that the transfer of this authority to any agency of another branch of the Government would be both unjustified and unwise.

Section 14 of the bill, if enacted, would modify the present law (act of Aug. 13, 1894, 28 Stat. 278; U. S. C., title 40, sec. 270), and the procedure thereunder by requiring two bonds in connection with contracts for the construction or repair of public works where the amount is in excess of $2,000, -one in favor of the Government guaranteeing performance, the other in favor of persons supplying labor or material for the work. The War Department does not desire to present any objection to subsections (a), (b), (c), and (d) of this proposed provision but feels that it should point out the possibility that its enactment will increase the cost of Government construction projects. Particularly is this true in connection with the provision of the third paragraph of subsection (2) which makes possible the bringing of suits on the additional bond protecting laborers and material men prior to the completion of the contract. This may result in material increases in the premiums charged for bonds which the Government will be required to pay in the final analysis. Subsection (e) of section 14 of the proposed bill is penal and would seem to require action by the Department of Justice alone for its enforcement. The War Department apprehends, however, that the practical result of this proposed provision will be to place a heavy burden on the officers in charge of construction projects in the investigation of complaints against a contractor for failing to make proper payments to his subcontractors, employees, and *materialmen. These investigations will involve the interpretation of subcontracts and agreements between the contractor and his employees and materialmen. Officers in charge of construction projects in the field are not prepared to make investigations of this character and have not the time to do so without serious interference with their principal duties.

Section 17 of the bill which prescribes preference for articles or materials of domestic production, corresponds in general with the language used in an early statute on that subject which proved unsatisfactory in practice, and differs materially from the provisions of the present "Buy American law (act of Mar. 3, 1933, 47 Stat. 1520; U. S. C. 41: 10a), which provisions have resulted from revision of several former acts upon that subject.

In addition to repealing certain specific acts, to which the War Department does not object, this bill provides, in section 20 (c), that "All other acts or parts of acts inconsistent with the provisions of this act are hereby repealed to the extent of such inconsistency" with certain specified exceptions. The effect of this provision cannot be forecast with certainty. There are now in force certain laws which are believed to be essential to the proper conduct of the business of the War Department and therefore to the national defense. Since it has been considered necessary, or at least desirable, specifically to exempt from the repeal provisions of section 20 (c) of the bill the act of July 2, 1926 (44 Stat. 780), entitled "An act to provide more effectively for the national defense by increasing the efficiency of the Air Corps of the Army of the United States, and for other purposes", and various other statutes, the War Department believes that, for the same reason, the acts named below should likewise be specifically exempted from repeal.

The act of June 3, 1916 (39 Stat. 166), as amended by the act of June 4, 1920 (41 Stat. 750).

This is the national defense act, which was the result of the accumulated experience of many years and every provision of which was given the most careful study and consideration while the lessons of the World War were fresh in the minds of all concerned. The repeal of any of the provisions of this act by possible implication would be most inadvisable.

The act of June 20, 1878 (20 Stat. 216; U. S. C., title 44, sec. 322), which provides that all advertisements, notices, proposals for contracts, etc., may be paid for at a price not to exceed the commercial rates charged to private individuals, with the usual discounts; but that the heads of the several departments may secure lower terms, at special rates, whenever the public interest requires it.

It is considered that this statute should be continued in force for the protection of the Government.

If section 7 is not amended so as to reserve to the Government the right to reject any and all bids, the act of July 5, 1884 (23 Stat. 109; U. S. C., title 10, sec. 1200) should be saved from repeal,

The act of August 11, 1888 (25 Stat. 423; U. S. C., title 33, sec. 622), which authorizes the Secretary of War to carry on authorized work for improvements of rivers and harbors by contract or otherwise as may be most economical and advantageous to the Government.

The act of June 25, 1906 (34 Stat. 463; U. S. C., title 50, sec. 177), which authorizes the Secretary of War to construct authorized fortifications and other works of defense by contract or otherwise as may be most economical and advantageous to the Government.

The act of July 25, 1912 (37 Stat. 222; U. S. C., title 33, sec. 622), which authorizes the Secretary of War to carry on all authorized works of improvement by contract or otherwise as may be most economical or advantageous to the United States.

These three statutes permit the Secretary of War to perform work by using Government facilities and hiring necessary labor where such action is advantageous to the Government and, therefore, furnish effective insurance against unreasonable contract prices. The removal of this authority would greatly increase the cost of such work to the Government. During the period from 1925 to 1929, in some 29 cases in which all bids for dredging work were rejected because they were considered excessive, the work was performed by using Government facilities and hired labor at an aggregate saving of approximately $1,458,000 over the lowest prices offered for performing the same work by private contracts.

The act of September 19, 1890 (26 Stat. 452; U. S. C., title 33, sec. 625), which permits the cumulation of two or more works of river and harbor improvement in the same proposal and contract where such works are situated in the same region and are of the same kind or character.

In many cases where two or more works are located in the same locality it is possible to obtain lower prices, especially on the larger enterprises, by advertising and awarding the combined work as a whole to a single bidder. This is due in large measure to the expense involved in moving the necessary plant and equipment to and from the location of the work.

The act of June 25, 1910 (36 Stat. 676; U. S. C., title 33, sec. 632), which authorizes the informal lease of lands or easements therein, buildings, rooms, wharves, wharfage and dockage rights, and hire of vessels, boats, and other floating craft for use in connection with river and harbor improvements for periods not to exceed 3 months.

It is frequently necessary in urgent and emergency cases, in which time does not permit the delay involved in the execution of a formal contract, to invoke the authority of this statute, and its repeal would create serious inconvenience and difficulty in such cases.

The act of March 2, 1913 (37 Stat. 718; U. S. C., title 40, sec. 36), which authorizes contracts for the lease of modern fireproof store accommodations in the District of Columbia at not to exceed 25 cents per square foot of available floor space for periods not to exceed 6 years.

The repeal of this statute would result in increased cost to the Government for necessary storage space.

The act of March 2, 1919 (40 Stat. 1287; U. S. C., title 33, sec. 622), which provides that in all cases where the project for a work of river or harbor improvement provides for the construction or use of Government dredging plant the Secretary of War may, in his discretion, have the work done by contract if reasonable prices can be obtained.

This statute is designed to reduce the cost of such work and should be retained.

The act of March 2, 1919 (40 Stat. 1290; U. S. C., title 33, sec. 624), which provides that no river and harbor improvement work shall be done by private contract if the contract price is more than 25 percent in excess of the estimated cost of doing the work by Government plant.

The effect of this statute is to prevent excessive charges by contractors for river and harbor work. Its retention is considered desirable and in the Government's interest.

The act of June 5, 1920 (41 Stat. 975; U. S. C., title 41, sec. 23), which provides that all orders or contracts for the manufacture of material pertaining to approved projects placed with Government-owned establishments shall be considered as obligations in the same manner as provided for similar orders placed with commercial manufacturers, and that the appropriations shall remain available for the payment of the obligations so created as in the case of contracts or orders with commercial manufacturers.

Manufacturing orders placed at Government arsenals cannot ordinarily be completed within the fiscal year in which they are placed. In executing such orders an arsenal is in the same position as a commercial manufacturing concern and should receive the same consideration with respect to the availability of appropriated funds.

Such an arrangement is essential to the operation of Government establishlishments in such cases; otherwise they cannot function.

The act of March 7, 1928 (45 Stat. 245; U. S. C., title 10, sec. 1206a), entitled "An act to provide for the purchase of horses and mules for the Military Establishment", which authorizes the purchase of horses and mules for the Military Establishment in the open market when practicable.

The necessity which prompted the enactment of this law is of a continuing nature. No specification can be written which will adequately describe horses and mules required for military needs. Their suitability for that purpose can be determined only by trained buyers at the time and place at which such animals may be found or offered for sale.

The act of July 3, 1930 (46 Stat. 948), which authorizes the Chief of Engineers, in the prosecution of river and harbor work, to engage under agreement, when deemed necessary, expert assistance in the various arts and sciences upon terms and rates of compensation in excess of the maximum of the salaries authorized by the classification act of March 4, 1923, as amended by the act of May 28, 1928.

This authority is essential to the proper prosecution of the work to which it applies, because the act of March 4, 1923, as amended, does not permit the payment for such services of more than $25 per day, and experience demonstrates that it is not possible to obtain the services of satisfactory consultants and other high-grade experts at that price. In the determination of the proper location of a dam, for example, where foundation or other conditions require special study, and where the expenditure of large sums is involved, it is essential that services of the highest class be obtained. The value of the return to the United States from the judicious use of this authority is far greater than the expenditures involved.

Specific exemption of the foregoing statutes from repeal will be accomplished by enumerating them as additional subparagraphs (6), (7), (8), etc., under section 20 (c).

The War Department recommends that the bill be amended as follows: Amend section 3 by adding thereto an additional subparagraph as follows: (h) When otherwise authorized by an existing law not specifically repealed by subparagraphs (a) and (b) of section 20 of this act.

Amend section 5 by striking out the words "leasing of quarters" and also the words "on the basis of specifications stating the needs of the United States in such terms as to permit of full and free competition of all qualified bidders." As thus amended that section will read:

"SEC. 5. Advertising: All contracts estimated to exceed $500 in amount for work, material, supplies, or services other than personal (whether rendered by individuals, firms, or corporations), shall be made after advertising for bids a sufficient time previously and not less than ten days before the day set for the opening thereof, except * * * 99

Amend section 5 by adding thereto an additional subparagraph as follows: "(i) When otherwise specifically authorized by an existing statute not repealed by subparagraphs (a) and (b) of section 20 of this act."

Strike out section 7 and substitute the following:

"SEC. 7. Award of contracts: All bids shall be publicly opened at the time. and place stated in the advertisement. Award shall be made with reasonable promptness by written notice to that responsible bidder whose bid, conforming to the specifications, will be most advantageous to the Government, price and other factors considered: Provided, That acceptance of any other than the lowest bid conforming to the specifications, or the rejection of any bid on the ground of the bidder's irresponsibility, shall be by the head of the department concerned, whose decision shall be final, and in each such case he shall file with the original contract a statement of his reasons therefor, an abstract of all bids received, and a copy of the advertisement: Provided further, That all bids may be rejected when it is in the public interest so to do: Provided further, That when the regular station of the head of the department concerned is located outside of continental United States he is hereby authorized to delegatehis authority under this section to such representative in the United States as he may deem advisable."

Strike out section 9 and substitute the following:

"SEC. 9. Liquidated damages: Whenever in contracts to which the United States is a party there is a provision for liquidated damages for delay, the head of the department concerned may, before any liquidated damages have accrued, grant in writing such extension of time for completion as he finds to be equivalent to the delays due to unforeseeable causes beyond the control and without the fault or negligence of the contractor as set forth in the contract, and such extension of time shall specify the causes and extent of delay and be filed with the original contract. Whenever liquidated damages have accrued under such contracts the Comptroller General of the United States may, on the written recommendation of the head of the department concerned,. remit the whole or any part of such damages as in his opinion may be just and equitable."

Strike out section 10 (Disputes under contract) and renumber the remaining sections.

Strike out section 11 (filing of contracts) and substitute the following as section 10 (due to the elimination of the present section 10 as above recommended):

"SEC. 10. Filing of contracts: The original of each formal contract for work, materials, supplies, services shall be forwarded to the General Accounting Office as soon as practicable, and the original of each such informal contract shall be forwarded to the General Accounting Office with a voucher covering the first payment thereon. All contracts so forwarded shall be accompanied by the performance bond, if any."

Amend the present section 17 of the bill to conform to the provisions of the present statute on this subject (47 Stat. 1520; U. S. C., title 41, secs. 10a and 10b).

Amend section 20 (c) by adding thereto subparagraphs as follows:

"(6) The Act of June 3, 1916 (39 Stat. 166), as amended by the Act of June 4, 1920 (41 Stat. 750).

"(7) The Act of June 20, 1878 (20 Stat. 216; U. S. C., title 44, sec. 322).

"(8) The Act of August 11, 1888 (25 Stat. 423; U. S. C., title 33, sec. 622).

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'(9) The Act of June 25, 1906 (34 Stat. 463; U. S. C., title 50, sec. 177). "(10) The Act of July 25, 1912 (37 Stat. 222; U. S. C., title 33, sec. 622). "(11) The Act of September 19, 1890 (26 Stat. 452; U. S. C., title 33, sec. 625). 66 '(12) The Act of June 25, 1910 (36 Stat. 676; U. S. C., title 33, sec. 632). (13) The Act of March 2, 1913 (37 Stat. 718; U. S. C., title 40, sec. 36). '(14) The Act of March 2, 1919 (40 Stat. 1287; U. S. C., title 33, sec. 622). "(15) The Act of March 2, 1919 (40 Stat. 1290; U. S. C., title 33, sec. 624). "(16) The Act of June 5, 1920 (41 Stat. 975; U. S. C., title 41, sec. 23). "(17) The Act of March 7, 1928 (45 Stat. 245; U. S. C., title 10, sec. 1206a). "(18) The Act of July 3, 1930 (46 Stat. 948; U. S. C., title 48, sec. 1399). "(19) The Act of July 5, 1884 (23 Stat. 109; U. S. C., title 10, sec. 1200), unless Section 7 of the bill is amended in the manner indicated in paragraph 4 above." To correct apparent errors in the bill the following changes are suggested: (1) Change "1933 ", in line 4, page 1, to read "1935."

(2) The word "of ", in line 22, page 9, after the word "department" and before the word "the", should be "to" (thus changing the expression from department of the" to "department to the ").

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(3) The word "his", in line 4, on page 13, after the word "and" and before the word "sureties", should be "the" (thus changing the expression from and his sureties" to "and the sureties ").