CO129-509-15 Water supply- development scheme 30-1-1928 - 17-1-1929 — Page 171

169

-4-

consideration, see Page 39 Summary, Item 4. - I should take

exception to the method of payment.

ALTERNATIVE TENDERS.

Messrs. Armstring submit a second tender, based upon what they estimate as the actual cost of constructing the

works, to this they ask a sum for profit and administration in London and in the Colony to be added. In this tender no allowance

for contingencies and risks are included, and consequently it

makes a very considerable difference on the total amount of tender,

but it must be remembered that should any of the risks and

contingencies allowed for in Tender No.1 arise during the

contract the expense and responsibility for such would require

to be borne by the Government.

The amount of Messrs. Armstrong's tender No.2

is £138,000 this for executing the work and providing all

materials and labour, and they ask an additional sum of

£27,000 to be added for their expenses in administration and

profit. This is approximately 20% and is the same as would be

required by Messrs. Muirhead for similar purposes. This would,

however, be a matter for discussion and adjustment.

This tender, on the lines above, might be worth

consideration, as in the event of certain contingencies not

arising the Government would make a considerable saving on the

No.1 tender. On the other hand, they have the risk that this

estimate might be exceeded.

In an interview I had with Messrs. Armstrong'.

officials, I asked to be supplied with the difference that could

be deducted assuming that one of the 18" pipes was laid in the

first instance. As you will note from their letter of the 30th

September 1925, a copy of which is enclosed, they consider this

would reduce the estimate by £200,000 by £33,000, and the estimate

of £138,000 would be reduced to £109,000 plus a fixed fee of £23,000