134 SECTIONAL ADDRESSES. 



ability their values and the contingencies arising from them, he must 

 make allowance first in the unit prices of the work he is called upon to 

 do, and finally in the gross amount arrived at through the detailed 

 computations. None of the foregoing suggestions are academic. They 

 have all occurred more or less in my forty-five years' experience of doing 

 work for public bodies, governments and private companies in connection 

 with my firm at home and abroad. 



There are some risks it clearly would be better for the employing 

 authority to assume rather than he should place them on the contractor. 

 I refer, of course, to those which cannot be attributed to the incapacity or 

 neglect of the contractor himself. For example, taking the risks arising 

 from sea action, unfavourable foundations, uncertain geology, excessive 

 amounts of water necessitating heavy pumping, risks arising out of, or due 

 to war, and the adverse influence war or revolutions have upon commodity 

 and labour prices : these are not things that with any amount of acumen 

 on the part of the contractor can be provided for. If he adds to his estimate of 

 cost sufficient to cover fully such possibilities, his estimates would probably 

 be unduly high, and in that case the employing authority may have to pay 

 for these risks not only what is in his estimate to cover them but on charges 

 and profits upon these amoimts in addition. Clearly it would be better 

 for the employer, be it government, municipality or otherwise, to guarantee 

 that the borings taken and other data given are correct, that the water 

 pumped shall be paid for at so much per million gallons raised so njany 

 units in height, that should there be a cataclysm, either an earthquake or 

 a sweeping away of the structure by unusual and heavy storms, quite 

 uninsurable, then those things should be at the cost of the employing 

 authority. In any event when the work is completed the employer gets 

 the benefit of the overcoming of such risks and dangers and difficulties, 

 therefore clearly he ought to pay for them and would be wise to pay only 

 the nett cost. If he takes the responsibility for them on his own shoulders 

 it will be cheaper for him rather than if the contractor includes sufficient to 

 cover them in the prices for the work with profit added thereto. On the 

 other hand, if the contractor has not allowed for and cannot face the loss, 

 the employer will have to make a new bargain with some other contractor 

 at much higher prices. The same may be said of the consequences 

 arising from epidemics which again cannot be controlled by the 

 contractor, although with proper sanitary organisation he may reduce 

 them considerably. 



The values of all raw materials required for construction might be fixed 

 with advantage to everybody, to be increased or reduced according to 

 what they actually cost and according to the rates of exchange. It is 

 almost impossible, for instance, for a contractor doing work in South 

 America to ensure any specific price for coal or for cement and timber if 

 required in large quantities over a period of many years, except with 

 considerable margins. Clearly cheaper offers would be given for construc- 

 tive works if a number of these risks were excluded, and no profits were 

 attached or sums added to the tender prices to cover possible and indeter- 

 minate risks. 



It might be thought, after this recital of the large risks contractors have 

 to take, that they would of necessity come to grief sooner or later. That 



