This was not yet the desideratum of standardization in contracts, but it was a step in that direction and perhaps as much as could be done in an organization as ill-articulated as that of the War Department then was. The Interdepartmental Conference possessed only advisory powers, but it was able to establish a policy for the Government in its contracting function. By pointing to the more desirable forms of contracts, its report was at least a moral force in securing greater uniformity in war contracts. It must be remembered, too, that most of the contracting officers were men of considerable business experience and ability. Many of the leading business men of the country were serving the United States either in uniform or as officers of such agencies as the Council of National Defense and the War Industries Board, and the procurement bureaus had the benefit of their study and advice in the making of contracts.
Under such conditions a great volume of war department business was placed in the latter part of 1917 and during the early months of 1918. Then the conditions of war industry finally forced a reorganization of the War Department, bringing all of its supply activities (with one or two important exceptions) under the single direction of the Division of Purchase, Storage, and Traffic, of the General Staff. The Division of P., S., and T., as it was called, was created early in 1918. One of the first acts of its director was to appoint a committee to study the various forms of war department contracts in use and to recommend standard forms which should keep errors at a minimum and make the War Department certain at all times as to its rights under its contracts.
Simultaneously the new Division was assuming a centralized control of war department contracts. Early in June the Secretary of War appointed a Surveyor of Contracts, who in turn appointed a board of contract review within each procurement bureau. A bureau board was to pass upon all proposed contracts drawn by contracting officers, except the few contracts which involved the Government for trivial amounts of money. This system, with the Surveyor of Contracts dictating policies and passing them on down through the bureau boards, was effective control of the contracting function under a single direction; but in late July the Secretary of War still further strengthened the scheme by appointing the Superior Board of Contract Review. The Director of Purchases and Supplies and the Surveyor of Contracts were the general members of this Board, and each procurement bureau sent to it a member, who was either the chief procurement officer of the bureau or a member of the bureau’s board of contract review. This Superior Board of Contract Review became the great policy-forming agency of the War Department in respect of its contracting activities.
Note, however, that not yet had there been any standardization of contracts. In early August the committee appointed by the Director of Purchase, Storage, and Traffic to study war contracts and recommend standards, made its report. The Superior Board of Contract Review received this report, and early in September promulgated, on the basis of the report, a series of twenty-four standard contract provisions, nineteen of them to be included in all war department fixed-price and cost-plus contracts, and five particular provisions pertaining either to cost-plus or fixed-price contracts, but not to both. Most of the standard provisions, except perhaps in their phraseology, were not new, but had been used in substance variously by the contracting officers. The importance of standardization was that it required the use of all of them in the war contracts and also dictated the phraseology. One or two of the standard clauses, particularly those which anticipated the end of the war and the termination of the war industry, were new and most important.
The first six provisions dealt with the Government’s obligations to furnish raw materials and component parts to the manufacturer, with the packing and marking of supplies, with the changing of specifications and the Government’s assumption of increased costs or savings wrought thereby, with inspection, with the storage of finished products at plants, and with extensions of the time of the contract under certain conditions.
Photo by Signal Corps
SENDING OUT THE STARS AND STRIPES
Photo by Signal Corps