United States v. Moorman

Background

A private contractor partnership entered a standard government contract to grade the site for a proposed aircraft assembly plant. The contract set a fixed price of 24 cents per cubic yard and incorporated specifications and drawings. A proposed taxiway appeared on the drawings but was not described as inside the plant site. The Government ordered the contractor to grade the taxiway point shown on the drawings. The contractor performed the work and demanded extra pay (84 cents per cubic yard). The contracting officer and then the Secretary of War’s authorized representative investigated and denied the extra‑pay claim. The specifications’ Paragraph 2-16 said the Secretary’s decision on such claims would be “final and binding.” The contractor sued in the Court of Claims, which re-examined the facts and awarded the contractor higher pay.

Reasoning

The Court asked whether the contract showed that the Secretary’s decision was meant to be final. It explained that parties are free to agree that a designated official’s findings will be final, and noted earlier cases enforcing similar clauses. Even if the dispute involved how to “interpret” the contract, Paragraph 2-16 expressly covered claims that required work “outside the requirements of the contract,” and Article 15 did not override specific settlement methods provided elsewhere in the contract. Because the contract language plainly made the Secretary’s decision final and binding, the Court held the Court of Claims erred in re-deciding the matter.

Real world impact

The ruling enforces contractual clauses that make agency decisions final in government construction contracts. Contractors will generally need to rely on the contract’s administrative appeals rather than expect courts to re‑decide disputes covered by clear finality clauses. One Justice did not participate in the decision.