14 FEBRUARY 1941, Page 3

Contracts for War Supplies The fourth report of the Select

Committee on National Expenditure is an important addition to the work which this practical body is doing in eliminating waste in Government war work, and incidentally in promoting greater efficiency. The object of inquiry in this case is the system of contract adopted by the Government in giving out war-work. What has to be aimed at is real economy, and not that of the penny-wise and pound-Coolish variety, which by imposing delays on the execution of work may lose millions by prolonging the war. It places in the forefront of its conclusions the necessity of sound principles of contract, and these demand a fixed price- basis, and not the vicious method still too often adopted of cost plus profits, which provides an inducement to extrava- gance, delay and inefficiency. It once again has to dwell on a number of lessons which " seemingly have to be relevant in every period of crisis." It points out that no good end is served by imposing complicated checks on extravagance which cost more than the money saved. It shows that the national output might be greatly increased by making much fuller use of the capacity of small firms, which, when employed, should be paid promptly so that they are not handicapped by their small capital resources. The Committee, approaching these problems in a businesslike way and from the outside, puts its finger on a host of practices adopted either from routine or in a hurry or from a false sense of economy which cumulatively are not only wasting money but holding up the national war-effort. What is now needed is a firm hand to insist that the reforms proposed are carried out with the least delay.