watter was not settled at this meeting, but-was later corrected_as a result of further discussions at Los Alamos on February 27, 19502 Revised statements through January 31, 1950, were then prepared; and after careful review by Messrs. Holmes and Narver, the Chief Fiscal Officer, Budget Director, Chief Estimater, and Controller, they were sub- mitted to the Commission.© ‘They were then reviewed with the AEC Con- | tracting Officer, Contract Administrator, Deputy Director of Finance, a representative of the Commission's Washington Contreller, and subsequently with the Deputy Manager. By letter the Atomic Energy Commission Contracting Officer approved the proposed method of presentation, with the addition of three items by his office.3 Subsequent “Cost Reports - Projects in Progress” have been presented in strict conformance to the original estimate as revised and supplemented from time to time; and Charts of Accounts and Records have similarly been revised from time to time to conform to the items and features of these estimates. Subsequent modifications were made to the Contract, also con- forming to the arrangement of estimates. Further illustrations of the difficulties encountered and coopera- tively surmounted in adhering te the reporting requirements of the Conm- mission's Finance Division while at the same time attempting to present a realistic picture of costs in relation to estimates may be found in the following accounts ef the handling of specific problems such as field engineering costs, indirect costs, depreciation, and others: During meetings at Los Alamos, February 27 through March 2, 1950, the H & NW Controller pointed out to a representative of the ARC's Washing- ton Controller that the arrangement of reports required by Controller's Release No. 9 resulted in distorting the reflected cost of "Engineering Design and Inspection" inasmuch as items of field engineering normally performed by the construction contractor were being included in this item of cost. It was acknowledged that because Holmes & Narver was the only AEC Integrated Architect-Engineer Contractor performing construction work, the AEC standard reporting requirements for exclusively A-E contractors resulted im reflecting distorted and untrue engineering design costs. The AKController's representative advised that he was not authorized to approve deviation from the standard requirements as prescribed by CR-9, but that H & Wo was authorized to contimme qualifying the report by means of a foetnote euch as that appearing on the Jamuary 31, 1950, Statement. That foetnete was as follows: Overseas costs in the amount of $57,949.43 covered direct ex- pense of Topographical and Other Surveys and Maps, Supervision, leontroller's Trip Report, Section 1, Los Alamos Meetings February 27 and 28, 1950. 2H & N letter HN-3267, February 24, 1950, 3ARC letter SD-5364, March 3, 1950 (HN-5898). 11-16