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6 Pub. Cont. Newsl. 1 (1970-1971)

handle is hein.journals/procurlw6 and id is 1 raw text is: SECTION OF PUBLIC CONTRACT LAW AMERICAN BAR ASSOCIATION Vol. 6, No. 1, October 1970 FEDERAL STATE & LOCAL GOVERNMENT CONTRACTS Paul Shnitzer, Editor, 1803 Cody Drive, Silver Spring, Md. 20902 Moody R. Tidwell, III, Assistant Editor THREE IMPORTANT PROGRAMS AT ANNUAL MEETING by Carl F. Paul of the N.Y. and D.C. Bar The Public Contract Law Section had three separate programs on August 10 and 11, 1970, at the Holiday Inn, Downtown, during the Annual Meeting in St. Louis, Missouri. The Annual Luncheon Meeting on the 11 th was piesided over by Marshall Doke, Jr., Chairman of the Section. The Speaker was the Honorable James W. Symington, Congressman of the 2nd District of Missouri, whose address on Problems in Procurement was both provocative and amusing. His selection was appropriate both as a Missourian as a member of the Committee on Science and Astronautics and as one who worked directly in procurement while in his later service in the U.S. Marine Corps. The program that was superbly timed was the Symposium on Cost Accounting Standards for Negotiated Contracts. A Blessing or a Curse? Robert F. Keller, U.S. Assistant Comptroller General was the Moderator, and before the end of the session on the 11 th he was able to report agreement on a bill by the Conference Committee, which was adopted by the Senate. This Conference Bill was subsequently passed by both houses, and has been signed by the President. William A. Newman, Special Assistant to the Comptroller General, presented a thorough analysis of The Comptroller General's Report of Feasibility. The report points up the differences in the treatment of costs which can be very high in amount. The Contractor selects tile Cost Methods to his benefit and then changes them when it is advantageous to him to do so. The Government selects Cost Methods most advantageous to it. Cost Accounting Standards will resolve this problem-with the objective of obtaining the most equitable result. Mr. Charles I. Derr, Senior Vice President, Machinery & Products Institute, discussed the genesis and development of the proposal for Cost Accounting Standards. Industry is concerned with the costs to it of adopting the Standards that are promulgated and the dollar savings affectuated must substantially exceed the cost of putting the Standards into effect. Industry is concerned that tile legislation has been adopted too hurriedly-and that the President's Commission on Procurement's recommendations should perhaps have been obtained first. Alan E. Peterson, a partner of Andersen & Co., made a thought-provoking presentation entitled An Accountant's Reaction - Feasibility and Desirability of Cost Accounting Standards. He pointed out that with today's massive cost overruns, large numbers of contract changes, and increasing terminations and cutbacks, the need is great for Cost Accounting Standards, which at present, he maintained, do not exist for Government contracts. This is particularly true since ASPR Section XV is a body of pricing rules that was developed years ago-and is in considerable part, obsolete. In the field of constructive changes for example, lawyers have established firm legal principles. The proper principles on accounting for changed work are yet to be expressed by accountants. The Cost Accounting Standards adopted must be of high quality and clear. Adequate time is required to develop them, and all parties should be heard, with some provision for a right of appeal. Fairness and reasonableness are essential, with fairness preferred over consistency. Robert Beach, Vice President, United Aircraft, concluded with a presentation coverning the need for savings under Uniform Cost Standards, over the costs of placing them in effect, and tile need for flexibility, as opposed to rigidity. Burton K. Philips, of St. Louis, was moderator of the Symposium on Contract Terminations, A Revisit by the Public Contracts Bar. A well documented presentation of the effects of terminations for the convenience of the Government in the St. Louis area was made by Richard D. Fitzgibbon. The termination of the Manned Orbiting Laboratory was a principal subject. Dr. Max Diamant, Chairman of the Board and Treasurer of Missouri Research Labs, Inc., with effective visual aids, presented tile plight of a small business with a contract terminated amounting to 1/3 of its sales, where the loss incurred exceeded the terminated portion of sales. He observed that wherever possible no single contract should exceed 10% of total sales, to avoid such a possibility. E. K. Gubin presented a workshop for use by industry, with specific reference to forms. His documented discussion of techniques in a prime's settlement with subcontractors was masterful. He concluded with details of the record needed by any lawyer to support the allowance of a proper fee. The new Chairman of the Section, F. Trowbridge vom Baur, was moderator for the Symposium: An All Disputes Provision for Government Contracts-Should Remedies Remain Fragmented? For the clause,effective presentations were made by Geoffry Creyke, Jr., and Robert Sheriffs Moss. While Mr. Creyke favors an overall code covering all aspects of public contract disputes procedures, until and unless such a complete code is adopted, he favors an all (continued on page 2)

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