CHAPTER 11.1
GENERAL

After the issuance of the Letter-of-Intent on September 16, 1948,

and immediately after a week of conferences between personnel of the
Atomic Energy Commission and of Holmes & Narver on the scope and nature
of the projected work, the Chief Fiscal Officer of H & N proceeded to
Los Alamos to confer with the AEC Director of Finance and others about
Documentary Audit Requirements, Accounting Procedures, Fiscal Records,
Funds, and other fiscal problems, pending the execution of the Definitive
Contract.

As a result of this meeting of September 25, 1948, together with

subsequent conferences and the exchange of correspondence, forms, etc.,
a very satisfactory understanding and agreement was reached for the adequate and timely processing of all fiscal records prescribed by the Commission. This agreement, in turn, permitted the Contractor to set up appropriate standard procedures, basic accounting records, and books in a
satisfactory manner and available at any time for audit by the Commission's
auditors.

In addition to the customary Documentary Audit Requirements, Books

of Account and Record, and basic supporting data for voucher assemblies,
such as Payrolls, Purchase Orders, Invoices, Receiving Reports, Travel
Records, Per Diem Records, Employment Records, Property Records, Cost
Records, Certifications, etc., a number of special matters were discussed
and agreed upon.

Among such matters was the advisability of introducing a mechanical
tabulating system of accounting control for the fiscal operations under
this contract. After a joint review by the Commission's fiscal representatives and those of the Contractor's staff, it was decided to defer

introduction of the mechanical tabulating system because:

(1) The Pro-

ject, as contemplated early in 1949, was to be of comparative short du-

ration; (2) The total overseas force was then estimated as not likely to

exceed ‘a maximum of 600 for a limited peak period; (3) The tabulating

equipment was not available for immediate delivery. Hence, decision vas
made to operate fiscal accounts and records under the manual systea, with
semimechanical payroll, addressograph, and other office reproduction
equipment.

As time progressed, particularly during the latter part of 1949 and

early 1950, the scope of the work under this contract was greatly expand-

ed. The overseas force was increased to an estimated 900, then to 1400,
and finally to 1800 workers at the Jobsite as a peak force to meet en-

gineering-construction, operation, maintenance and support requirements.

Consideration was again given to the introduction of mechanical tabu-

lating equipment, but the idea was abandoned because of the potential
hazards of changing a trained major accounting operation in the midst of

11-1

Select target paragraph3