As you are doubtless aware, the usual practice in such cases is to arrange contracts as to carry out the work for a fixed price. Their profits will then depend upon their success in organisation and in effective economics, whilst their principals have to rely on supervision to ensure that the work is properly done. In practice, though supervision can be made effective, it is unsound in principle; and approaches adoption.
The system which M. Ormsby proposes would, it is true, affect the part of the contractors in keeping tenders low and carrying out the work at the cost of efficiency on the one hand, and economy at the other. It would finish down the cost, and Government would find it impracticable to attempt supervision to secure economies in construction. Any attempts, e.g., to interfere with the number of the staff or the wages of the workmen might be met by the argument that the Contractors will not be held responsible for the proper execution of the works under such matters allowed their own way in such matters.
10. It does not appear from your despatch and its enclosures that a definite arrangement has been made as to the position of the contracting firm in regard to the Director of Public Works. I presume, however, that there is an intention of vesting the Director of responsibility, both as regards...