Under the heading H, a number of profit-sharing methods have been tried and have proved to be more or less satisfactory. All of them necessarily presuppose a careful accounting of cost from start to finish. Unless the contract between the two parties clearly indicates how every main detail of cost is to be computed, there will be trouble before the work is finished. For instance, in respect to plant-does the contractor furnish it free of charge, or does he receive rental for it, with the rental charged as one of the items of cost of the work? How about paying for repairs and renewals to plant? Who stands the expense of these items-does the contractor, or is it charged as an item of cost of doing the work? Again, if extra work is done under the contract, how is it to be counted when making the final settlement?

It requires the service of an expert consulting engineer or that of an experienced contractor to draft a contract and specifications which will provide, in a manner satisfactory to both parties, for all possible contingencies. With such papers, however, and with a close system of cost-accounting, this general method of profit-sharing is the most satisfactory scheme for contract-letting which can be evolved.

None of the modified methods of the "cost-plus" system, involving some means or other of profit-sharing, which have yet been tried in practice, can be said to be entirely satisfactory to the owner, though possibly so to the contractor, in that they all fail to put a limit on the total cost of the construction or to penalize a contractor who, through either wilfulness or carelessness, allows the cost of construction to pass the bounds of reason. It does not suffice to stipulate in the contract that, when the total cost passes a certain amount, the allowance for profit is gradually to be reduced until a certain minimum limit, however small it may be, is reached. The setting of that limit leaves the contractor in a position to take life easily and to avoid personal worry after his hard luck has attained to a certain magnitude; for, subsequently to that, he will lose nothing but his time and the possible use of his plant on some remunerative contract, while the owner will have to pay whatever additional amount the job may cost. On this point the writer knows whereof he speaks; because one of the war-time contracts engineered by his firm was, of necessity, let on that basis, and the results thereof are simply sickening. The client was left at the mercy of the contractor, and the total cost proved to be excessive.

From the preceding it is evident that the "cost-plus," the "lump sum," and the "unit-price" methods of letting contracts are not only faulty, but also, unjust to one or other of the two parties to the agreement; consequently, the question arises: "Is there not some method which will be just and fair to both? That question, the writer claims, can truly be answered in the affirmative; but before proceeding to explain such a method in complete detail there will be presented a statement of the main requirements of an ideal system.

Salient Features of an Ideal System of Contract-Letting and Profit-Shar-