# Petition for Writ of Certiorari — Silas Mason Co. v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386416_0637%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1946 - **Citation:** 329 U.S. 713 ## Text FILE COPY SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1945 No. Mi 100 SILAS MASON COMPANY, INC., WALSH CONSTRUC- TION COMPANY, ATKINSON-KIER COMPANY, Petitioners, vs. THE UNITED STATES PETITION FOR A WRIT OF CERTIORARI TO THE COURT OF CLAIMS AND BRIEF IN SUPPORT THEREOF. SamvueEt T. ANSELL, Counsel for Petitioners. ee RC RS EES SN a a So CT A LILLE IDE DEI LED LOT rer INDEX Sussect Inpex Page Petition for writ of certiorari..................... 1 GR NE ee ea cake badin c CA Ae 1 SSRIS ALE a0 Saha adn Sapir a age br 1 ana Sarre renee ae ar 2 a ae ee a errr 5 Specification of errors to be urged............ 12 Reasons for granting the writ................ 15 GRE ko cc cok ks sch eh ana e ace Ved Ka cwns 18 Brief in support of petition........................ 19 Opinion of the Court below, Jurisdiction of the Court, Statement of the case, and Specification OF arses Ub OO WOES o 5 5o cc Sik 19 NE 55, Sas Sei EON butane 8s 8 20 Appendix ‘‘A’’—Article 15 of contract involved. ... 25 Appendix ‘‘B’’—Specifications No. 570............ 25 Appendix ‘‘C’’—Order for changes No. 1.......... 26 Appendix ‘‘D’’—Findings of fact and decision of er eee ee ee 27 Appendix ‘‘E’’—Correspondence between Depart- ment of Interior and Mason-Walsh-Atkinson-Kier SE S's ods « Cae EE nie a Oke d A ee 31 TaBLe oF Cases CrTEp Merrill-Ruckgaber Co. v. United States, 241 U.S8.387 15 Ripley v. United States, 223 U. S. 695............. 17 S.J. Groves & Sons Co. v. Warren, 135 F. (2d) 264. . 15 United States v. Beuttas, 324 U.S. 768............ 15, 16 United States v. Blair, 321 U. S. 730.............. 15, 17 United States v. Callahan Walker Constr. Co., 317 ih or Pee ae eS ee at ei 15 United States v. McShain, 308 U. 8. 512............ 15, 16 United States v. Smith, 256 U.S. 11................ 17 Statute Crrep Act of February 13, 1925, Section 3(b), as amended wy the Ant of Bay Th BOGD. . <. . 5 inn ccc cineen, 2 —4614 PP LORELEI APRA eee a SOMA O SUPREME COURT OF THE UNITED STATES OOTOBER TERM, 1945 No. 1200 SILAS MASON COMPANY, INC., WALSH CONSTRUC- TION COMPANY, ATKINSON-KIER COMPANY, io Petitioners, THE UNITED STATES PETITION FOR A WRIT OF CERTIORARI TO THE COURT OF CLAIMS The petitioners pray that a writ of certiorari issue to review the judgment of the Court of Claims entered in this case October 1, 1945. Opinion Below The opinion of the Court of Claims (R. 86-98) is re- ported in 62 F. Supp. 432. Jurisdiction The judgment of the Court of Claims sought to be re- viewed was entered October 1, 1945 (R. 98). A motion by the petitioners for a new trial was denied February 4, 1946 (R. 99). The jurisdiction of this Court is invoked 2 under Section 3 (b) of the Act of February 13, 1925, as amended by the Act of May 22, 1939. Questions Presented 1. Petitioners and the United States entered into an agree- ment upon a government standard form contract covering the construction by petitioners of the first development of the Grand Coulee Dam (R. 72, Fdg. 2; Exhibit ‘‘A”’ an- nexed to Petition). Article 15 of such contract contains an agreement between petitioners and the United States for final and conclusive decision by the head of the department of all disputed contract questions, both of fact and law (Appendix ‘‘A,”’ infra, p. 25; R. 79, Fdg. 14; R. 96-97). Peti- tioners sued in the Court of Claims on disputed contract questions without prior decision by the head of the de- partment (R. 95-97). On these facts arise two closely related questions: a. Whether the head of the department can make final and conclusive decisions on questions of law arising under government contracts; and if not then— b. Whether a contractor, who has bargained for final and conclusive decisions by the head of the department on all questions, both fact and law, is required, before bringing suit in the Court of Claims, to obtain a decision by the head of the department which settles only questions of fact— a procedure not agreed upon between the parties. 2. Petitioners, without admitting the validity or applica- bility of Article 15 of the contract, appealed to the head of the department from a decision by the contracting officer on 28 claims for breach of the contract (R. 87-89, 135-140, 141-143). While the claims were pending for decision by | 3 the head of the department, petitioners brought suit in the Court of Claims (R. 1, 84). Throughout the consideration , of the claims by the contracting officer petitioners com- plained repeatedly to the head of the department that the contracting officer was arbitrary and unfair in his handling of the claims and that it was his avowed purpose to build a defense to the claims rather than to decide them on their ? merits (R. 147-149, 150-153, 153-159, 160-163). These protests went unheeded by the head of the department; his only reply as characterized by the court below being ‘‘in bad temper’’ and indulging ‘‘in a wholly irrelevant and improper reflection upon counsel’’ for petitioners (R. 90, 7 147-160, 164, 204-205, 208-209). The department head’s atti- tude toward, and conception of fair dealing with, the peti- tioners, their counsel, and their claims is further shown by his own testimony: it was the duty of a contracting officer considering claims under Article 15 to require a claimant to make out his case by a preponderance of tha evidence (R. 203); he (the department head) would accept more readily the statement of a government official than the statement of a witness for the contractor (R. 204); he believed that the immediate interests of a contracting officer engaged in considering claims under Article 15 lay in spending new money rather than in correcting past mistakes (R. 207); the statement of petitioners’ counsel made formally to him that the contracting officer’s repre- sentative had advised counsel that the time being consumed f in the consideration of the claims was necessary to prepare the best defense possible was just a ‘‘further building-up”’ of what counsel was apparently preparing to urge in the Court of Claims (R. 208) ; it was a fair inference from a tele- gram sent by him to petitioners’ counsel that he thought 4 counsel was disloyal to the government in pressing these claims (R. 209-210) ; in imputing disloyalty to petitioners’ counsel in this telegram, he was ‘‘hitting back’’ for so many offensive letters he had received from counsel (R. 210); whereas at that time he had received three letters from petitioners’ counsel making the same charge against the contracting officer of constructing the best defense possible, to none of which did he ever reply except through subor- dinates and then only to state that action on the claims was being expedited (R. 147-157, 164). The question thus pre- sented is whether, assuming the validity and applicability of Article 15 of the contract, these facts standing uncontro- verted in the record made a sufficient showing of prejudice and bad faith in the head of the department to justify petitioners in suing in the Court of Claims without a deci- sion by the head of the department. 3. Whether the Court of Claims may properly refuse to consider claims for damages sustained by contractors under a standard form government construction contract upon the ground that the contractors had unjustifiably aban- doned their appeal to the head of the department required under the terms of Article 15 of the contract without making findings in respect of the bad faith of the department head and the other inadequacy of the appeal procedure estab- lished by Article 15 as to which allegations are made by the contractors (R. 15-17) and substantial evidence is con- tained in the record (R. 101-217). If a writ of certiorari is granted, petitioners intend to sub- mit argument on the following additional questions: 4. Whether Article 15 of the contract, assuming it to be valid, applies to petitioners’ claims for breach of the contract. 5 5. Whether, upon the facts presented on this record, the appeal to the head of the department has been abandoned. 6. Whether an order for changes issued to petitioners by the government after the work was well under way, changing the construction undertaken by petitioners from a low dam to the low development of a high dam (Appendix “‘C,”’ infra, pp. 26-27, R. 76, Fdg. 11), dropped Article 15 as a provision of petitioners’ contract. Statement of the Case 1. On July 16, 1934, the petitioners entered into a con- tract with the government, signed by R. F. Walter, Chief Engineer, Bureau of Reclamation, representing the Govern- ment (R. 72, Fdg. 2) and approved by Harold L. Ickes, Public Works Administrator (Exhibit ‘‘A’’ annexed to Petition). The contract was for the construction of the ‘*first development’’ of the Grand Coulee Dam on the Columbia River (R. 72, Fdg. 2). The contract consisted of Government Form PWA No. 51, Specifications No. 570, and numerous drawings (Exhibit ‘‘A’’ annexed to Petition). With a few exceptions, it was a unit price con- tract (R. 72, Fdg. 3). Petitioners were to do the work and furnish the labor, plant and equipment; the government was to supply the material (R. 72, Fdg. 2). The stated consideration was $29,399,301.50 (R. 72, Fdg. 2). 2. The structure called for by petitioners’ contract was for a low dam—a core of the contemplated high dam which by the ‘‘second development’’ was to be constructed by building over the low dam a high concrete cowl extending the low dam to the height and width of the high dam (R. 74, Fdg. 9; R. 76, Fdg. 11). The high dam was to be a 2a — 6 power dam. Petitioners began work October 4, 1934 (R. 73, Fdg. 5). On June 5, 1935, petitioners received Order for Changes No. 1, signed by the contracting officer (R. 76- 77, Fdg. 11) and approved by Secretary Ickes (Exhibit ‘‘B”’ annexed to Petition), which effected a complete change (Appendix ‘‘C,”’ infra, pp. 26-27) : the entire dam was to be built as a single structure; the dam was to be not only a power dam but an irrigation dam as well, with pumphouses, pumps and equipment for lifting the water from the pool into the Grand Coulee of the Ice Age for supplying water to the arid lands beyond (Exhibits ‘‘A’’ and ‘‘B’’ annexed to Petition). Of this high dam petitioners were directed to build the lower part and the foundations of the power and pumphouses (Exhibit ‘‘B’’ annexed to Petition). This order stated that, ‘‘In lieu of constructing the Grand Cou- lee Dam and the appurtenant works in accordance with the drawings and Specifications No. 570 you are directed to construct the dam and appurtenant works in accordance with the revised designs as shown on the attached general drawings * * *’’ (Appendix ‘‘C,”’ infra, pp. 26-27; R. 76- 77, Fdg. 11). The Order further provided that all work shall be done under the detailed instructions contained in Specifi- cations No. 570 where these were applicable as determined by the contracting officer and otherwise in accordance with new instructions and drawings which were to be furnished (Appendix ‘‘C,”’ infra, pp. 26-27; R. 77, Fdg. 11). The Order also fixed the time for the adjustment of compensa- tion (Appendix ‘‘C,”’ infra, pp. 26-27; R. 77, Fdg. 11). This dam is the largest man-made structure on earth (R. 78, Fdg. 13). The water of the Columbia river im- pounded by the dam extends 151 miles to the Canadian border (R. 73, Fdg. 4). It is 4300 feet long at the = 7 crest, 550 feet high, and 500 feet wide at the base (R. 78, Fdg. 13). Petitioners’ organization consisted of over 5000 workmen, working in three shifts daily (R. 73, Fdg. 7). The government’s organization consisted of from 500 to 1000 officers and men (R. 73, Fdg. 7). 3. Work upon the new structure described by Change Order No. 1 proceeded immediately (R. 76, Fdg. 11). In December, 1935, an ‘‘Adjustment of Compensation’’ was entered into by the parties and approved by the Secretary (R. 77, Fdg. 12). This document carried many new de- sign drawings and some twenty pages of new specifica- tions (Exhibit ‘‘B’’ annexed to Petition). This new and larger work required by Order for Changes No, 1 and the Adjustment of Compensation resulted in increasing the consideration stated in the original contract from approxi- mately $29,000,000 to almost $40,000,000 (R. 76, Fdg. 11). The government accepted petitioners’ work March 21, 1938 (R. 73, Fdg. 5). 4. Differences as to the work required to be performed under the contract and as to other matters relating thereto arose from time to time (R. 79-80, Fdg. 16). Many of these differences were adjusted by informal communication be- tween the contracting officer’s representative on the job and the petitioners’ representatives (R. 79-80, Fdg. 16). Others were not adjusted in such fashion, and protests were made to the contracting officer or to the contracting offi- cer’s representative (R. 80, Fdg. 16). When adjustment could not then be reached and adverse decision was made by the contracting officer, the petitioners upon occasion appealed in writing to the Secretary of the Interior (R. 80, Fdg. 16; R. 106-108; Plaintiffs’ Exhibit ‘‘J,’’ pp. 17-21, 296, 581-582; Appendix ‘‘E,’’ infra, pp. 38-40), submitting ST eee ee, ore wm DS 8 their appeal to the contracting officer for transmittal to the Secretary as required by the contracting officer (R. 106-107). The contracting officer had no fixed rule for handling appeals but, as in the case of one claim which is the subject of this suit, might receive an appeal to the Secretary of the Inter- ior and fail to transmit it to the Secretary because, ‘‘We did not feel this matter would ripen into a claim that was neces- sary to submit to the Secretary at that time, in view of the fact that there were numerous other claims, which, in the or- derly process, would be transmitted to the Secretary, even- tually’’ (R. 107-108; Appendix ‘‘E,’’ infra, pp. 31-40). In this instance, petitioners had no further word from the Bureau of Reclamation or the Department after submitting their appeal (R. 106-107). 5. Order for Changes No. 1 did not expressly bring for- ward the provisions of the original contract and specifica- tions for protest and appeal (Appendix ‘‘C,’’ infra, pp. 26-27 ; R. 76-77; Exhibit ‘‘B’’ annexed to Petition). 6. The petitioners, on November 22, 1937, formally filed claims which constitute causes of action in suit with the head of the department (R. 80, Fdg. 17). .The petitioners accompanied the claims with a letter in which they charged the contracting officer and other government representa- tives with wrongful, unfair, and arbitrary conduct (R. 87- 88). No action was taken by the head of the department in respect of the petitioners’ charges (R. 185, 194). The act- ing head of the department referred the claims and letter back to the contracting officer (R. 80, Fdg. 17), although such claims had previously been decided by the contracting officer (R. 93; Plaintiffs’ Exhibit ‘‘J’’, pp. 3, 82, 91, 154, 155, 158, 202, 250, 253, 262, 265, 285, 296, 309, 312, 327, 368, 370, 373, 388, 419, 481, 487, 488, 490, 492, 576). Between November 22, 1937, and February 14, 1938, ten additional claims of the same character were sent to the head of the department, who also referred them to the contracting officer (R. 88). By letter of April 13, 1938, three additional claims were filed with the contracting officer (R. 88-89). The amount represented by the claims thus submitted to the Secretary and the contracting officer was in excess of $5,000,000 (R. 89). The petitioners pressed for early administrative consideration of the claims (R. 97). The policy of the head of the department and the contracting officer was to give priority to new projects and contracts and to postpone the consideration of claims growing out of work already done (R. 207). The petitioners also in- sisted that the contracting officer grant them and their of- ficers and witnesses a hearing upon the merits of the claims (R. 89). 7. In July, 1938, the contracting officer informed the petitioners’ representatives that a hearing was superfluous (R. 89, 90-91). On July 14, 1938, the petitioners in writ- ing complained of such attitude to the head of the depart- ment and reported that the contracting officer had clearly indicated to them that he intended to construct such de- fense against the claims as the evidence available to him might seem to him to justify (R. 91). The letter of July 14, 1938, and later letters dated August 11 and October 12, 1938, requesting the head of the department to take remedial action respecting the contracting officer were acknowledged by subordinates without making reference to this matter (R. 147-157, 164). Counsel for petitioners renewed this request by telegram of October 23, 1938, to the Secretary who responded in terms of resentment, anger, and insult (R. 90, 157-160). The head of the de- mane Sms arr mat - emcee : IRIE oe meee fe ie Rp Se TT 0 A SALA IATOOD PB be 10 partment refused to exercise remedial supervision over the contracting officer and testified that he regarded the re- quests for such action and the complaints against the con- tracting officer as a personal and official affront to him in ‘thitting at me’’ over the contracting officer’s shoulder (R. 210). 8. Under date of December 5, 1938, the contracting offi- cer made his ‘‘Findings of Fact and Decision’’ and trans- mitted a copy to the petitioners’ counsel (R. 80, Fdg. 18). On January 4, 1939, petitioners appealed from these find- ings to the head of the department without recognizing any requirement therefor and with full reservation of their rights to have all issues adjudicated by the proper courts (R. 82, Fdg. 21; R. 93). The Secretary was so rushed that he could not see counsel on the subject of procedure (R. 172). He turned the claims over to Mr. Margold, the department solicitor, for consideration and report (R. 82-83, Fdg. 23). The department solicitor saw counsel February 6, 1939 (R. 83, Fdg. 23). On this occasion, counsel requested a full hearing with the right to offer the oral testimony of wit- nesses and to examine the contracting officer on the facts and any of his subordinates from whom he had obtained the facts used by him in support of his findings (R. 83, Fdg. 23). Petitioners’ counsel understood that Mr. Mar- gold rejected such procedure (R. 94, 111-112). Accordingly, counsel wrote the Secretary February 7, 1939, advising him in detail of the nature of the hearing counsel had re- quested Mr. Margold to conduct and of counsel’s under- standing that Mr. Margold had denied this request (R. 94, 171, 174). By letter of February 11, 1939, to petitioners’ counsel, Mr. Margold informed counsel that he had ‘‘de- cided to grant, without any qualification, the request which you made during your personal conference with me last ei | 11 Monday for a full and complete hearing of the merits of the controversy’? (R. 94), This letter also informed counsel that Mr. Margold contemplated an arrangement whereby an attorney of the Department of Justice would represent the government’s interests (R. 94, 174-175). In this letter, the solicitor stated that circumstances had arisen which required him immediately to leave for Cali- fornia and which ‘‘may delay my return for a few weeks’’ (tbid.). On February 16, petitioners’ counsel replied that the solicitor’s decision in respect of the hearing was entirely agreeable (R. 94). On February 24, the solicitor in re- sponse to counsel’s request agreed that counsel and Mr. Miller, the attorney of the Department of Justice named by the solicitor to represent the government, might have pre-trial conferences for the purpose of stipulating such facts as they might agree upon (R. 117, 177-178). Counsel for petitioners then visited the Department of Justice for the purpose of thus conferring with Mr. Miller and was there informed that the solicitor had not made, and could not make, arrangement in which the Department of Justice would represent the government’s interest at the hearing (R. 94, 126, 179-180). 9. On February 27, 1939, counsel wrote the acting head of the department, Mr. Slattery, relating the abortive re- sults of the solicitor’s arrangement as counsel learned them upon his visit to the Department of Justice (R. 94). On March 9, 1939, the acting head of the department, Mr. Burlew, wrote counsel saying that the falling-through of that arrangement in no way affected the hearing, except in so far as it concerned the fixing of a date, and concluded by writing that ‘‘It appears that there now exists no reason why a date may not be set for the inauguration of the hear- ing. Accordingly, in the near future you will be notified LNG RNG RT ITEP 12 by the solicitor as to a date which is agreeable to him and advised as to the procedure which is deemed appro- priate.”” (Emphasis supplied) (R. 95). Nothing more was heard from the department or from the solicitor until, on May 1, 1939, petitioners filed their original petition in the Court of Claims, over 17 months after the submission of the original 16 claims to the Secretary and 78 days after Mr. Margold left Washington to be gone a few weeks (R. 95). 10. The amended petition was filed in the Court of Claims February 14, 1940 (R. 10). The court referred the case to a commissioner, who took over 8,000 pages of testimony (R. 71). The court in its opinion rested its decision on the ground that Article 15 of the contract obligated petitioners to appeal the contracting officer’s decision to the head of the department and to exhaust that appeal and that, having abandoned the appeal without justification, they could not resort to the Court of Claims (R. 96-97). Specification of Errors to Be Urged First Group The court erred— 1. In failing to hold that Article 15 of the contract is invalid as an unlawful impairment of the jurisdiction of the Court of Claims; and 2. In failing to hold that Article 15 is invalid as ultra vires the authority of the Secretary of the Interior because thereby he presumes the power (a) to limit and control the jurisdiction of the Court of Claims and (b) to make deci- sions final and conclusive upon the United States. a EB 13 Second Group The court erred— 3. In failing to hold that Article 15 was rescinded by Change Order No. 1. 4. In failing to hold that petitioners’ compliance with Article 15 was waived by the government; and 5. In failing to find that petitioners’ compliance with Article 15 was prevented by the government. Third Group The court erred— 6. In failing to hold that Article 15, construed in the light of paragraph 14 of Specifications 570, does not contemplate or require appeal of the decisions of the contracting officer to the head of the department. 7. In holding that Article 15, even if it is not valid to authorize final decisions upon questions of law, is neverthe- less valid to authorize final decisions upon questions of fact; and 8. In failing to hold that, if Article 15 is invalid to au- thorize final decisions upon questions of law, it is invalid to require the submission of any questions to the head of the department for any purpose. Fourth Group The court erred— 9. In failing to consider and determine the distinct causes of action upon their substantive merits. 3a 7 10. In failing to consider the testimony of Secretary Ickes as to his unfairness, bias, and prejudice. 14 11. In failing to hold that Secretary Ickes was so biased, prejudiced, and arbitrary that the appeal to him was futile. 12. In finding that it had not been proved that the con- tracting officer was arbitrary or capricious or lacking in good faith. 13. In failing to find that the head of the department failed to exercise effective control over his subordinates to relieve petitioners of the effect of the arbitrary conduct of such subordinates. 14. In finding that petitioners abandoned their appeal to the head of the department. 15. In failing to find that the procedure of Article 15 was inadequate to accomplish its purposes. 16. In failing to find that petitioners were excused from persisting in their appeal to the head of the department, assuming that compliance therewith was not waived or pre- vented by the government. 17. In finding that the head of the department did not fail or refuse to entertain petitioners’ appeal. 18. In failing to find that the failure of the solicitor of the department to set a day for the commencement of hearing on appeal was unreasonable; and 19. In failing to enter judgment for the petitioners as to each cause of action. 15 Reasons for Granting the Writ The questions here involved are of far-reaching impor- tance. They affect not only the field of construction con- tracts but also the even broader field of government con- tracts in general. This Court has consistently recognized the substantial nature of questions arising out of the appli- cation of Article 15 and similar contractual provisions and the desirability of settlement of such questions by the high- est judicial authority. It has clarified the attitude of the courts upon most of the questions arising under Article 15 when the application of the provision is limited to fact through the frequent exercise of its jurisdiction to review judgments of the Court of Claims. Merrill-Ruckgaber Co. . v. United States, 241 U. 8. 387; United States v. Callahan Walker Constr. Co., 317 U. S. 56; and numerous other cases. It is now being increasingly confronted, however, with the desirability of settling questions under Article 15 when it is employed without limitation upon the authority of execu- tive officers and employees finally to determine all ques- tions. United States v. McShain, 308 U. 8S. 512; United States v. Blair, 321 U. S. 730; United States v. Beuttas, 324 U. S. 768. The case herein, as disposed of by the Court of Claims, raises fundamental questions affecting the inherent availability of Article 15 as a proper and effective provision for the just determination of disputes in respect of law, economy, and public administration. It is, at least, salu- tary that these questions be finally settled as to the standing and scope of the Article in law. This is so for the guidance of the government. S.J. Groves & Sons Co. v. Warren, 135 F, (2) 264. It is so for the direction of the contracting in- dustry, basic to the welfare of the Nation, which finds its most considerable opportunities in these times in the field of government contract. It is especially so for the assur- ance of final justice to these petitioners who are now de- ieee net 16 prived of all recourse to any tribunal which may determine the merits of their claims totalling over $5,000,000, claims which have never been considered by any public office or officer other than the contracting officer out of whose con- duct all of them arose. In the premises and with specific reference to the par- ticular questions presented in this case, the petitioners assign the following reasons for granting the writ: 1. At the outset it must be determined whether the head of the department can make final determinations on all questions. If he cannot, the question is squarely presented as to whether Article 15 would then still impose the neces- sity of appealing to him before suing in the Court of Claims. The latter question, although of the utmost importance to those contracting with the government, has never been presented to this Court for decision; and the question whether the head of a department can make final decisions on questions of law has not been, but should be, settled by this Court. This latter question was expressly left open in the recent case of United States v. Beuttas, 324 U. 8. 768, although the Court noted in its opinion that there- tofore the decisions of this Court had not explicitly drawn any distinction between questions of fact and law. This leaves uncertainty as to the state of the law, especially in view of this Court’s per curiam decision in United States v. McShain, 308 U. 8. 512. The confusion on this point is acutely reflected in the recent wide contrariety among the decisions of the Court of Claims. These two related questions present the pressing need for exploration and determination by this Court of the extent, if any, that the doctrine of the exhaustion of admin- istrative remedies is applicable to consensual agreements. 2. The decisions of the court below that petitioners were not justified in suing in the Court of Claims without a eee 17 decision by the head of the department is probably in con- flict with the decisions of this Court. United States v. Smith, 256 U. 8. 11, 16; Ripley v. United States, 223 U. 8. 695, 702; cf. United States v. Blair, $21 U. 8. 730. It is submitted that the degree of prejudice and bad faith in the head of the department here was as great as was found by this Court to have existed in the Smith and other cases decided by this Court. It would have been as useless here, as 'it was found by this Court to have been in the Smith case, for petitioners to have tried to get a fair decision from the head of the department. The court below overlooked the view admittedly taken by the head of the department with respect to the contract and his functions in making decisions thereunder. Although the contracting parties stood on an equal footing, the department head would have required petitioners to make out their case by a preponder- ance of the evidence, and in making his decision on the claims he says that he would accept more readily the state- ment of a government official than the statement of a witness for the contractor. These views, it is submitted, go to the very roots of our judicial system’s conception of fair deal- ing, and this Court has held that the presupposition of fair dealing underlies government contracts. Ripley v. United States, 223 U. 8. 695, 702; United States v. Smith, 256 U. 8. 11, 16; United States v. Blair (dissenting opinion), 321 U. 8. 730, 738-739. It is submitted that in substance the basis for the decision in the Smith and other applicable cases decided by this Court is that forfeitures are to be abhorred, and for that reason the doctrine in the Smith case must be strictly and vigorously adhered to by the courts that apply it. Should the decision of the court below be allowed to stand petition- ers would be denied all right to have their claims adjudi- cated on the merits. This, in fact and result, would con- stitute that forfeiture which the law abhors. 3. The Court of Claims avoided making any finding as to the bad faith on the part of Secretary Ickes. Government contracts are phrased so as by their terms to condition access to the courts for determination of the merits of all controversy which may arise thereunder upon complete exhaustion of an administrative procedure except when the bad faith of the head of the governmental department con- cerned may be shown. Under these circumstances it is manifest that, where the prescribed procedure is admittedly not followed by a contractor who assigns, for excuse there- from, that compliance with the procedure would be futile because of the bad faith of the departmental head and adduces substantial evidence in the record tending to show the existence of that bad faith, the essential question in the case is whether the requisite bad faith has been proved. Thus, it is equally manifest that an answer to this question which may be and frequently is determinative of every issue is of greatest consequence to the contractor. It follows, therefore, that it is an important question of the law of government contracts whether, when pertinent allegations “are made and substantial evidence is of record, the Court of Claims may properly omit to make its finding as to the existence or non-existence of bad faith in declining to con- sider the merits of disputes arising under contracts which are presented to it for determination. Conclusion For the foregoing reasons it is respectfully submitted that this petition for a writ of certiorari should be granted. Samvuet T. ANSELL, Counsel for Petitioners. May 3, 1946. mene wren