struction was completed, in 248 working days. Certain additions had been made to the work, which properly would have entitled us to 60 additional working days, but you will note that we did not only the original work, but the additions in 248 days, or 52 days less than the time bid by the best contractor. The total cost of this construction was $215,000.00, including the additional work. We had estimated the original plan at $175,000.00. The value of this work done at the unit prices bid by the engineering department was $219,000.00. Our actual cost was $215,000.00, or a saving on our bid of $4,000.00, approximately. The value of that work at the low bidder's price on the second bidding would have been $254,340.00, or approximately $39,318.00 over what it cost the Engineering Department. The criticism was made that we didn't make any money on this job, that $4,000.00 was not a reasonable profit on a job of that magnitude. That is not true, for the reason that all of these subcontractors with whom we contracted to do various portions of the work made their profit on their portion of the work, and they probably made the same profit they would have made if they had been subbing this from some other contractor who bid at one or the other of those biddings. figuring all costs as a contractor should figure them, charging proper rental for floor space in the city hall, a proper portion of the city purchasing agent's overhead expense, and all other reasonable expenses incident to the prosecution of such work by a properly equipped contractor, we figured that the total. reasonable cost of this work would have been $209,000.00. That would then have left a profit, at the engineer's cost of $9,839.00, or a profit at the low bidder's price of $44,376.00 and a profit at the second low bidder's figure of $83,853.00. The Associated General Contractors were still not satisfied. They employed a firm of accountants to go thoroughly into our accounts. They employed a firm of engineers to measure up the work and test it. Both of these reports were submitted to the Contractors, and by agreement copies were submitted to the city. also. Both of these organizations were very strongly urged by the Contractors' Association to investigate every possible source of cost that might be hidden in some way or other in some other city activity. But both the accountants and the engineers reported that they were unable to find any case anywhere showing a deficiency in our accounts. No other department of the

But

city had been called upon to do any work in connection with the construction of this job. The engineers' report is rather interesting. The sewers constructed ranged from monolithic concrete sewer 8 feet in diameter down to smaller sizes as low as 18 inches of either cement-concrete pipe or clay pipe. In the concrete sewers the engineers made a total of 31 test holes. Of these 31 they found 5 under specification thickness, with 26 tests correct or over. That gives 83.8 per cent of these tests showing correct or over, and only 16,2 per cent under. The total average excess thickness of all these holes was 18 per cent. On account of this showing that was made by day labor I believe we have been enabled to get more reasonable prices upon our construction than had we permitted the contractor to take the job at his prices, which we consider excessive. At the time this investigation was being made I took the matter up and went pretty thoroughly into the methods adopted by cities over the country in handling their work. I find that the work seems to divide itself into three classes. Some cities undertake to do all of their work; other cities contract it all, while quite a few cities adopt the policy of doing a certain amount of work which they can handle by their own forces and lose no time, contracting any surplus work that may come up. Personally I would rather contract all work; and whenever the contractors submit prices that seem anywhere within reason I would recommend that a contract be awarded, and it is only in an emergency like this, where it seems that we are unable to get a reasonable bid on such work that I would undertake to do the work by day labor. (Applause.)

MR. ELLISON: Mr. Chairman, may I have just another minute in which to make my position clear?

PRESIDENT-ELECT HATTON: I wanted to find out whether any other gentlemen wanted to discuss it. You are on rebuttal, the defense, so to speak. Is there any other person in the room that desires to speak upon this matter before we open for rebuttal? Is Mr. Horner in the room?

MR. HORNER: Mr. Chairman.

PRESIDENT-ELECT HATTON: Your sewers have been attacked. MR. HORNER: Our sewers have been attacked by a good many things, but this is the first case of this kind that I recall. I

haven't a great deal to say on that incident. The incident cited was a political accident. The City of St. Louis had been contracting all of its work from time immemorial. During the war time the bids were received on a certain concrete sewer and I think were about $10,000.00 in excess of the available appropriation. It was suggested an additional appropriation of ten thousand dollars be procured. Certain persons in the administration objected to that and insisted that the city proceed to do the work itself. It was turned over to the engineering department which had neither equipment nor organization for carrying out the work. It was finally built, and I think Mr. Ellison's figures are about correct. In those figures are included the whole first cost of equipment, the cost of the labor by an entirely unorganized force, organized for that one purpose, and under war time conditions. The equipment on completion of that work lay idle for a long time, and was finally sold principally as junk, so the excess cost of $60,000.00 in there involved the price of junking that equipment. The City of St. Louis has not since that time engaged in another such operation. The engineering department has no desire to do so. It might have been possible if a series of projects had been offered on which a permanent organization could have been developed, and on which the equipment could have been used from one project to another, to have carried that through approximately within the engineer's estimate. But that condition did not arise, and Mr. Ellison's figures, I think, are approximately correct. This instance has no bearing on the subject of day labor as against contract work.

PRESIDENT-ELECT HATTON: Mr. Ellison, we will hear you in rebuttal, sir. if you make it short and snappy.

MR. ELLISON: I question whether an attorney would designate what I have to say as proper rebuttal; I simply want to make the position of the Associated General Contractors clear, as I understand it, and the position of their unworthy representative here on the floor. We do not claim, and I have never claimed and never will claim that there was never a case in which a city, state or federal government can not do work on the day labor basis cheaper than they can let it by contract. There are a great many pieces of construction work offered where the conditions are so indeterminate in advance that any

self-respecting pocketbook or contractor must insist on adding a very large item for those contingent expenses which he can not accurately forecast. We do not claim that the contractors themselves are not in part responsible for this condition, but I just want to leave the thought that we are not attacking day labor in every and all instances, but simply as what we regard an over extension and over expansion of that method of doing work. Thank you.

PRESIDENT-ELECT HATTON: I want to say in regard to this that there is no municipal engineer in this organization who has had very long experience, but who has felt that the Contractors' Association are not all angels by any means.

MR. ELLISON: Conceded.

PRESIDENT-ELECT HATTON : And they do get into combinations sometimes, where the municipal engineer finds himself in the position of letting a lot of work, exhausting the contractors' abilities so much that they finally get together and they say, "If I am going to take that job I am going to get a reasonable profit, because I have got enough work anyway." That has come before me and every one of you, and then comes the time when the municipal engineer says, "We will do the job by day labor and show these contractors that they are not going to make all this money out of the taxpayers, of whom Mr. Ellison's association is so very careful."

Is there any discussion, gentlemen, on this paper? I want to thank Mr. Ellison, however, on behalf of the Society for the very able paper, which I will be glad to see in the proceedings, because I think ordinarily we are all with you, but at times we must do some work by the day labor method to show you gentlemen that we have to train you sometimes.

MR. ELLISON: We recognize our need of training and education.

THE IRRESPONSIBLE BIDDER

By Ralph L. Warren, Vice-President and General Manager Warren Brothers Company, Boston, Mass.

During recent years the Irresponsible Bidder has become a continuingly greater menace to the stability of the engineering contracting industry, and unless some adequate means of elimination are found,, the responsible, reliable and experienced contractors will be forced to seek some other and less hazardous fields, where their efforts can be applied to greater advantage, and the public will be the loser. A bidder may be "irresponsible" as a contractor for a given project for a number of reasons, prominent among which are the following:

1st. Insufficient financial resources to carry out the project. 2nd. Insufficient organization.

3rd. Insufficient experience in the particular kind of work. 4th. Insufficient or inadequate equipment.

5th. Overextension, which may be caused by taking a large contract or several small contracts requiring more capital, equipment and organization than the bidder has available.

6th. The gambling instinct.

7th. Dishonesty.

The principal officer of one of the largest Surety Companies has publicly classified the causes of losses sustained by his Company as follows:

Inadequate financial responsibility and overextensions..
Incompetency

50%

25%

15%

Dishonesty

Scattering reasons, such as hard luck, unexpected and
difficult situations

10%

100%

Whatever may be the cause of the "irresponsibility," the result is equally damaging to the public interest. Only superficial reasoning will place the damage alone upon the defaulted contractor and his surety because in our complex civilization the citizens at large are vitally interested in the stability of the engineering-contracting profession. The elimination of the irresponsible bidder is, therefore, of great public interest.