Price Fire & Water Proofing Co. v. United States

Background

A private company that finished fireproofing and waterproofing cloth had an arrangement with the Government in 1917 to process government-supplied cloth after January 1, 1918 at an agreed per-yard price. Deliveries and removals were often delayed, and the Armistice led to cancellation of unfinished orders. The company was paid for finished goods but claimed large additional losses and expenses. It sought adjustment under the Dent Act, rejected the Secretary’s offer, and sued in the Court of Claims for $641,313.64. The court allowed nine small claims totaling $47,700.08 but denied a $590,000 claim for commercial loss; that denial is the issue on appeal.

Reasoning

The Court addressed whether the company could recover postwar business losses and costs of keeping its plant running after government work ended. The Dent Act permits compensation only for expenditures necessarily incurred in performing or preparing to perform the contract and for costs made before November 12, 1918, and it bars awards for prospective profits. The Court found the company’s operating losses to preserve its business were not necessarily incurred in performing the contract and were largely after November 12, 1918, so they fall outside the statute. The Court noted there was no wrongful act or taking by the Government and that some early 1918 expenses had already been allowed and included in the $47,700.08 judgment.

Real world impact

Companies that did government finishing work cannot recover broad postwar business losses under the Dent Act; recoveries are limited to specific, statutory categories and to costs incurred before November 12, 1918. The Court affirmed the lower judgment and left the detailed findings and awards intact.