In the 1923 case Electric Boat Company v. United States, the Supreme Court ruled in favor of the U.S. government and against Electric Boat Company (EBC). The EBC had sued for additional compensation under a contract with the Navy Department to build submarines during World War I. The company claimed that due to changes in design requested by the department, it incurred extra costs which were not covered by their original agreement. However, Justice Oliver Wendell Holmes Jr., writing for a unanimous court, found that these alterations did not constitute an entirely new project but rather modifications within scope of what was originally agreed upon between both parties. Therefore, he concluded that EBC was not entitled to further payment beyond what had been stipulated in their initial contract.

The dissenting opinion in the case of Electric Boat Company v. United States argued that the majority's decision to allow a contract between the government and a private company to be modified without Congressional approval was unconstitutional. The dissenters believed this violated Article I, Section 9, Clause 7 of the Constitution which states that no money shall be drawn from the Treasury but in consequence of appropriations made by law. They contended that allowing such modifications essentially gave executive officials control over public funds without proper legislative oversight or authorization, undermining checks and balances within government branches. Furthermore, they expressed concern about potential corruption if companies could renegotiate contracts for additional compensation after completion under these circumstances.