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JOHN H. MATHIS CO. v. UNITED STATES

September 3, 1948

JOHN H. MATHIS CO.
v.
UNITED STATES



The opinion of the court was delivered by: MADDEN

This is a suit brought by plaintiff, John H. Mathis Company, a corporation of New Jersey, operating a shipyard at Camden, New Jersey against the United States, under Title 28 U.S.C.A. ยง 1346, and was tried by the court without a jury. The amount involved ($ 7521.61) is under $ 10,000 and the court has jurisdiction of the subject matter.

 The disputes are assessed against each contract in proper proportion for the expense in relation to the amount of the contract so that these problems will be dealt with generally and not in relation to each contract separately.

 The contracts are naturally lengthy and will not be set forth here. The pertinent parts are as follows:

 Contract No. 1114, in relation to disputes, provides:

 'Page 8 (supplement) Article 23. Disputes and Claims. Except as otherwise specifically provided in the contract, if any doubts or disputes arise concerning any question under the contract or as to anything in the plans or specifications, or if any discrepancy appears between said plans or specifications and the contract, the matter shall be referred at once to the Chief of the Bureau of Ships for determination; and his decision in the premises (made after a hearing, if desired by the Contractor) shall be conclusive and binding upon the parties hereto, subject, however, to review by the Secretary of the Navy at the Contractor's request made in writing within 30 days after rendition of such decision. No claim arising under the contract will be considered unless submitted in writing to the Chief of the Bureau of Ships within six (6) months from the date of final acceptance of the vessel with respect to which the claim arose.'

 Contract NObs-220, in relation to disputes, provides:

 'Page 6 (supplement) Article 17. Disputes. -- All disputes arising under the contract and not resolved as otherwise specifically provided herein shall be determined by the Secretary of the Navy, such determination to be final and conclusive as to all questions of fact involved therein.'

 Compensation for Contract 1114 and the method of determining costs was fixed in said contract as follows:

 'Page 6, Article 11, paragraph (c) -- For the purpose of determining the amount payable under the contract, costs will be determined by the Bureau of Supplies and Accounts in accordance with the procedure in Treasury Department Regulations T.D. 5000 insofar as applicable, and insofar as not applicable, in accordance with sound accounting practice.'

 Compensation for Contract NObs-220 and the method of determining costs was fixed in said contract as follows:

 'Page 2, Article 9, paragraph (b) -- Allowable cost shall constitute the cost incurred by the Contractor in the performance of the contract and accepted by the Bureau of Supplies and Accounts as chargeable in accordance with 'Explanation of Principles for Determination of Costs Under Government Contracts, War Department-Navy Department' printed by the United States Government Printing Office, April 1942, provided that paragraphs 9 and 44 thereof shall be modified to require the deduction of all cash discounts (without excepting one percent (1%) cash discounts)'

 The pertinent parts of 'Treasury Decision No. 5000', referred to in Contract 1114 and thereby incorporated therein, are as follows:


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