which the Navy Department has reaffirmed as being properly reimburseable under the Contract, but also to those payments, amounting to $ 351.77, which both the General Accounting Office and the Navy Department now agree should have been disallowed. Whether plaintiff has a right to retain the comparatively small sum of $ 351.77 is a dubious question concerning which I do not have sufficient facts on which to base a decision. There is no doubt, however, that plaintiff is entitled to retain the reimbursements for cost items amounting to $ 23,164.42 which were determined and redetermined by the Bureau of Supplies and Accounts to be allowable costs under the provision of Contract NOrd-957.
The Bureau's determinations of questions of fact under Article 7(b) of Contract NOrd-957 are final and conclusive in the absence of fraud. United States v. Wunderlich, 72 S. Ct. 154. For a court to set aside such determinations under Article 7(b), fraud, meaning conscious wrongdoing or an intention to cheat or be dishonest, must be alleged and proved. United States v. Wunderlich, 72 S. Ct. 156.
The Government alleges that there was fraud in the present case. There is no averment of fraud in the pleadings, the only averment of fraud being in the Government's belief. Since the question as to whether or not fraud existed has not been raised by the pleadings it might well be disregarded, but I will not do this because of the possibility of the allowance of an amendment to the pleadings.
A general averment of fraud without specification does not bring fraud into a case. An examination of the specifications of fraud in the Government's brief and an examination of the record do not disclose the issue of fraud in the present case. In order that there be fraud there must be an intentional perversion of the truth, a false representation of a matter of fact, for the purpose of inducing someone to part with something of value. During the progress of the work the plaintiff paid substantial sums as dues to certain associations
and contributed substantial sums to charities. It claimed and was allowed these payments as allowable costs in the performance of the contract. The Government argues that the allowance of these items was so 'excessive and erroneous' that it constitutes 'fraud or overreaching.' Perhaps the allowance of some of these costs was erroneous, but since there is nothing to indicate that anything was misrepresented to or concealed from the allowing officer and there is no allegation of bribery or other impropriety there is no fraud in the case.
The Government has also contended that plaintiff has not exhausted its remedies within the Navy Department. Since the Navy Department concedes the correctness of plaintiff's claim, there is no reason for plaintiff to exhaust the contractual administrative settlement procedure, by appealing to the Secretary of the Navy, as a prerequisite to court action.' James Graham Mfg. Co. v. United States, supra, 91 F.Supp.at page 716.
Plaintiff, Leeds & Northrup Company, is entitled to summary judgment in its favor on the complaint and counterclaim in all respects except as to the portion of the counterclaim amounting to $ 351.77, which represents those reimbursements which both the Navy Department and the General Accounting Office now agree should have been disallowed.
And now, December 27, 1951 in accordance with the foregoing opinion, it is ordered that plaintiff's motion for summary judgment as to the complaint be and it is hereby granted, and judgment may be entered in favor of plaintiff, Leeds & Northrup Company, and against defendant, United States of America, in the amount of $ 23,273.54, with interest and costs.
It is further ordered that plaintiff's motion for summary judgment as to defendant's counterclaim be and it is hereby granted in all respects except as to the portion of the counterclaim amounting to $ 351.77. As to the portion of defendant's counterclaim amounting to $ 351.77 plaintiff's motion for summary judgment is hereby denied.