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War Economy

The Master Schedule

The Master Schedule

The master schedule system for defence construction work had been introduced in March 1942, by which time all other methods page 349 of allocating work had proved inadequate to meet the increasing demand.1

Under the master schedule system the proposed work was divided into its component parts and an initial contract price was arrived at ‘by multiplying such component parts by the unit prices (labour and materials) allowed in the master schedule.2 To the initial contract price were added extras allowed in country work and other appropriate adjustments plus 5 per cent profit and 2 ½ per cent overheads, thus making up the final contract price.’3

Meantime public criticism of the abuses of wartime contracts was becoming much more vocal. In July 1942, the Commissioner of Defence Construction, Mr James Fletcher, was moved to say:4

‘There is no such thing as a contractor being allowed to do a job and then put into the Government a bill for all his costs, and on top of that a percentage for his profit.

‘We work to a master schedule,’ continued Mr Fletcher. ‘The cost of all materials is fixed and supplied at those prices. The amount of material necessary for the job is measured beforehand by Quantity Surveyors who are experienced experts in their particular work. The labour cost of doing a particular job connected with any contract is assessed by experienced practical men on a man-hour basis. The complete total of the cost of the contract includes transport, board for workmen, allowance for waste, and a percentage as the contractor's profit for the completed work.

‘The contractor is responsible for engaging the men and assessing the number of men he requires to do the work in the prescribed time. If he overmans, or the men are not efficient and do less per hour or day or week than what an efficient workman should do, then the contractor will find his profits diminishing or disappearing altogether. The contractor has all the facts in front of him when he takes on the job.’

This was a very good summary of the purpose of the master schedule system, but unfortunately all did not work out according to plan. One of the essentials of the master schedule scheme, the assessment of contract details in advance, was frustrated by lack of staff. The Works Department later wrote:5 ‘In practice, the ideal aimed at in this proposed procedure was never attained. It page 350 was, indeed, obvious right from the start that the quantity surveyors, with the limited trained staff at their disposal, could not possibly prepare price schedules beforehand for each and every one of the hundreds of works which were being allocated week by week, and, which, regardless of other considerations, had to be put in hand forthwith.’

It was equally obvious that, if quantities of materials and labour could not be scheduled in advance, work under the master schedule would have many of the disadvantages of work under the old ‘cost-plus’ system, in that there was no longer a proper incentive for the contractor to save materials or labour, or even to be accurate in his measurement of materials or his charges for labour.

1 See also pp. 2401.

2 The Commissioner of Defence Construction sought the co-operation of the builders to arrive at mutually acceptable unit prices.

3 Official War History of the Public Works Department, Vol. I, p. 194. For some types of work the rates were revised in October 1942. See also p. 350.

4 ‘James Fletcher Talks about War Contracts: High Wages and Output’—New Zealand Truth, 8 July 1942.

5 Official War History of Public Works Department, Vol. I, p. 239.