v2669-1263

Appendix A

UNITED STATES MARITIME COMMISSION

Washington

January 31, 1947

Thelen, Marrin, Johnson & Bridges, Esqs.

Ill Sutter Street

San Francisco 4, California

Attention : Mr. Bruce Walkup

Dear Sirs :

The Permanente Metals Corporation Richmond

Shipyard Number Two vs. Birnie Electric Company

I have your letter of January 21, 1947, requesting my

opinion as to the validity of the profit limitation provi-

sions in subcontracts Nos. VS-14 and VS-28 between

Permanente Metals Corporation and Birnie Electric

Company. Both subcontracts were awarded under prime

contract MCc-15762 betAveen Permanente Metals Corpora-

tion and the Maritime Commission.

The profit limitation provisions were identical in both

subcontracts and, insofar as material to your question,

provided :

"Special Provisions:

IV. Report of Cost Excess Profits:

The subcontractor agrees to account for and pay

to the contractor certain profits derived under this

contract, and for such purposes agrees:

(b) To pay to the contractor profit as shall be

determined by the Commission in excess of ten

(10) per cent of the total contract price which

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