asked the Secretary to the Admiralty if firms constructing standard ships or ships of war are paid either by a percentage on the cost of labour or a fixed sum for management expenses and profit?

So far as standard ships are concerned, the contract is on the time and line system, that is to say, after material and labour are paid for, a certain amount is allowed for establishment charges, and in addition an overall profit is allowed; these last two items are fixed according to the type of vessel under construction. As regards ships for the Royal Navy; in some cases, namely, those of the smaller auxiliary vessels, a fixed price for the whole ship is as a rule the system of payment. For warships proper, the contracts are on the time and line system, the expenses of management and the profit being paid for as a rule by fixed sums.