DEFENCE WORKS

Marlborough Express, Volume LXXVI, Issue 249, 22 October 1942, Page 6

DEFENCE WORKS

CONSTRUCTION COSTS. REPLY TO CRITICISM. WELLINGTON, Oct. 21. The president of the Federation of Master Builders, Mr C. Luney, yes, terday replied to Mr W. Sullivan,' National member for Bay of Plenty, who, ln the House of Representatives on Saturday, criticised the cost of defence construction works under the schedule system. "If the statement made by Mr Sullivan had been made by a'membsr of the House not connected with I the building trade, I would have put I it down to ignorance," said Mr j Luney. " Mr Sullivan, however, is a member of a well-known building J firm at Whakatane which has carried out work on the defence master schedule, and the statement made was therefore all the more extraordinary. It. is perfectly obvious that Mr Sullivan could have no idea of the volume of the work work he considers that it should be carried out on the competitive tender basis:" Mr Luney said it was a known fact that before the appointment of Mr James Fletcher as Commissioner of Defence Construction. the comneti-

tive tender system had broken down. Many firms had been taking on work beyond the capacity of their labour or their organisations, with no possible hope of securing additional labour, and many of the major defence contracts were then months behind as far as the date of completion was concerned. Agaln, because of the lack of financial resources, large numbers of smal! builders who had been engaged on housing and other minor contracts Were being excluded, the value of these organisations as a consequence being lost to the Dominion 's war requirements. » Another and more serious factor was the inflation of wages ca.used by competition among the building interests to secure labour at any cost. The orderly system of allocation, therefore, introduced by the Commissioner of Defence Construction, while it did not altogether suit the larger interests, was the only sane and possible method that could have been introduced if results were to be achieved. To revert to the tender system for defence works, where materials and labour must be controlled, would, at this juncture, not produce the necessary results. STATEMENT OF CASE. "The statement that the cost of the work performed in the Whakatane district was 15 per cent. to 20 per cent. higher than it would have been under the tender system, is a gross misstatement of fact," said Mr Luney. "Mr SrUllivan should be definitely aware that the master schedule is divided into two sections — material and labour. He should know, too, that the builder is paid only on the net cost of the material, plus 5 per cent. and 21 per cent., so that a reduction in the net cost of the material by 15 per cent. to 20

per cent. is utterly absurd, because | the profit is based on the net cost i of materials. In any case, the j schedule definitely provides that adj justments will be made in each j district for variation of cost of materials, and that payment can only t be made on presentation of documentary evidence as to actual net cost. "Mr Sullivan, in making the statement about the master schedule, should have been aware that the Commissioner of Defence Construction had called a conference for , Thursday last, October 15, when re- ( presentatives of builders' associations t throughout the Dominion were present, together with the Government . architect and quantity surveyors ! attached to his department, to invesI tigate the labour costs on all defence , contracts, with a view to classifying I them into grades and types of build- : ings and to make such adjustments 1 in the labour factor from actual : evidence of building costs obtained j since the inauguration of the master ; schedule. Before making the state- | ment, Mr Sullivan should have ac- ' quainted himself with the result of that conference, and thereby obviated ; a p.ublic statement being made which was casting a definite reflection not j only on those responsible for the defence programme, but on the : building industry as a whole. LABOUR FACTOR.

"For the information of the members of the House of Representatives and the general public, to whom the statement was made, I have to state that, as a result of the conference, and from the evidence which had been collected by Public Works departmental officers, quantity surveyors and builders, the master schedule v/ as acknowledged to be the only be.sis on which the work could be satisfactorily carried out to-day. Some adjustments were made to the labour factor as follows : — Grade 1 buildings : The rates in the master schedule to apply with certain additions for superior finish where indicated by the Government architect. (This will apply to the hospital buildings which are shortly to be .undertaken.) Grade 2 buildings (camp buildings) : Master schedule rates to stand. Grade 3 buildings : Deduction on all labour rates of 7i per cent. Grade 4 buildings (open shelter type). Phase (1) (construction of defence works) : The master schedule rates to be reduced by 15 per cent.

"For the information of Mr Sullivan, few, if any, defence contracts have been finalised. The reason, well known to the building industry, is that these payments were being withheld until a definite check on costs was obtained; it being a specific requirement of the master schedule when contracts are entered into. New that this condition has been complied with, all defence contracts completed to date will be finalised accordingly. "The statement made that thcusands of pounds could be saved if the work of the defence programme were entrusted to the Housing Department and the Public Works Department," concluded Mr Luney, "shows a lack of knowledge on the part of Mr Sullivan, as he surely must he aware of the fact that both the Public Works Department and the Housing Department are to-day co-operating to them utmost, as the letting of the contracts and the supervision of all defence works are in their hands."