Current Problems in Cost Determinations.

Abstract In placing contracts for tremendous quantities of equipment and materials needed to meet requirements of war, the United States Navy Department, as well as other government departments, used the cost-plus-fixed-fee type of contract extensively. This type of contract requires continuous audit of costs incurred by the contractor as a necessary part of the procurement and payment procedures. The performance of this audit work for all Navy cost-plus-fixed-fee contracts constituted the major portion of the work-load of the Cost Inspection Division. In organizing to meet this responsibility three primary phases required attention, the development of a sound plan of organization structure for the Washington office and for the field offices in the various Naval Districts of the country. It also required the recruiting of experienced and unqualified accounting personnel and the preparation of a codified and understandable manual of instructions for the guidance of cost inspection personnel.