Uniform Contracts And Cost Accounting Definitions And Methods : Recommendations By Interdepartmental Conference Consisting of Delegates From the Departments of War, Navy, And Commerce, the Federal Trade Commission, And the Council of National Defense. Jul

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(2) United States to pay for raw material when delivered to contractor.
(3) United States to have the right itself to supply material and component parts.
(4) United States to adjust price on increased material costs above estimated costs.
(5) United States to adjust price on increase in labor costs.
(6) Liquidated damages.
(7) War clause termination.
Although a straight purchase-and-sale contract for a fixed price adjusted as indicated is greatly to be preferred, nevertheless in niunerous inst
...ances the United States will be obhged to obtain pro- duction by paying for the entire cost of the same and in addition a fair profit to the contractor. Such cost-plus contract may be necessary under the following conditioiis : (1) Where the production is novel and the contractor has had no past experience upon which to base a price; for example, steel hehnets, large caliber guns and shells for same, aeroplane motors, and the like.
(2) Where the production involves difficult and complicated manu- facturing effort subject to changing plans and specifications, or wide fluctuations in material costs; for example, steel and wooden ships, aeroplanes, optical glasswork, and the like.


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