In the case of Class C. the purchase by an agent Department
of goods for delivery direct from a contractor's works, mo
question of additional charges arises, unless possibly in cases
where the agent Department incurs substantial charges in in-
specting the goods.
We have had it in evidence from the Director of Army Con-
fracts that in the case of certain articles (e.g., condensed milk
and certain textile materials) the Contracts Co-ordinating Com-
mittee have made recommendations in favour of combined pur-
chase subject to the proviso that no charges for departmental
expenses should be raised by the buying Department.* Further
to facilitate progress in this direction we suggest that, wherever
possible, it should be arranged that payment for goods ordered
through an agent Department should be made direct to the con-
fractor by the using Department.
Class D. Works Services.—In considering Works Services
we have been greatly assisted by a Report of July, 1924, sub-
mitted to the Inter-Departmental Committee on Works Ser-
vices by a Sub-Committee on Agency Services represent-
ing the Service Departments. That Report recommends
(1) that, in determining the question which of the three
Service Departments could best undertake a new building
service required by any one of them, the extra charges that
would be incurred by one or other of the three Departments
should be ascertained, and that the service should be carried out
by the Department whose extra cost would be least; (2) that
In making the charge to the Department requiring the work,
the agent Department should add to the contract price or other
direct cost a fixed 15 per cent. for departmental expenses.
We think that the Report proceeds on sound lines, but we
See no reason why the arrangement it recommends should be
zonfined to the Service Departments. The question of extend-
ing it does not appear as yet to have been thoroughly thrashed
out. We find on enquiry that the Office of Works consider that
a charge of 10 per cent. would cover their expenses. So far as
we could ascertain, the difference between the figures is mainly
accounted for by the fact that the Office of Works charge direct
to each job the payment of quantity surveyors and of the Clerk
of the Works, while the corresponding expenses in the Service
Departments, where the conditions are rather different, are
included in the overhead percentage.
We think a further expert enquiry is needed to establish
whether charges of 15 per cent. in the Service Departments
and 10 per cent. in the case of the Office of Works are the best
that can be chosen and whether the arrangements cannot be
tet cei rat ee eee A tthe iterate.
* We understand that this does not apply %o Inspection, for which a
charge is made if of material amount.