For the principles of res judicata to apply, administrative determinations, like court judgments, must be valid, final and on the merits.

The typical construction contract between the Government and a private contractor provides for an equitable adjustments if the government orders certain changes in the work or if the contractor encounters changed conditions differing materially from those ordinarily anticipated.

It also provides that the contract shall not be terminated nor the contractor charged with liquidated damages if he is delayed in completing the work by unforeseeable conditions beyond his control.

), the finality accorded administrative fact finding by the disputes clause is limited by the provisions of the Wunderlich Act of 1954 which directs that such a decision "shall be final and conclusive unless the same is fra[u]dulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence.

A contract between a construction company and a Federal agency contained such equitable adjustment clauses determining how the parties would handle unexpected contingencies.