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    Government Contracting Database

    Implied Warranty in Specifications

    Implied Warranty in Specifications

    When the government specifies a specific procedure for implementation, the Contractor has a right to rely on that procedure to accomplish the intended results, if the procedure is properly followed by the Contractor. An implied warranty runs from the government to the Contractor that the detailed design specification, if followed, will produce an acceptable result. See Martin Const., Inc. v. United States, 102 Fed. Cl. 562, 575 (2011) (quoting United States v. Spearin, 248 U.S. 132, 136 (1918)) ; Hol – Gar Mfg. Corp. v. United States, 175 Ct. Cl. 518, 360 F.2d 634 (1966); J. D. Hedin Construction Co., Inc., 171 Ct.Cl. 70, 347 F.2d 235 (1965); Lionsgate Corporation, Eng BCA No. 5391, 91 – 1 BCA ¶ 23368.

    The various agency boards of contract appeals all apply the long-standing principle established by United States v. Spearin, 248 U.S. 132 (1918), that by including a method of performance or particular process in the specification, the government impliedly warrants the adequacy of that method or process to accomplish the desired results. See, e.g., Martin Const., Inc. v. United States, 102 Fed. Cl. 562, 575 (2011) . In the event the information provided by the government is defective, the contractor is entitled to recover any increased costs of performance resulting from its reliance on the specification. See Appeal of Am. Ordnance LLC, ASBCA No. 54718, 10 – 1 BCA ¶ 34386 (citing SPS Mechanical Co., Inc., ASBCA No. 48643, 01 – 1 BCA ¶ 31,318; and R.C. Hedreen Co., ASBCA No. 20599, 77 – 1 BCA 12,328 ) ; see also Turner Construction Co, GSBCA No. 3549, 74 – 2 BCA ¶ 10,934 (1974).

    To obtain an equitable adjustment from the government as a consequence of defective specifications, “a contractor must show three necessary elements – liability, causation, and resultant injury.” Appeal of Am. Ordnance LLC, ASBCA No. 54718, 10 – 1 BCA ¶ 34386 (citing Servidone Construction Corp. v. United States, 931 F.2d 860, 861 (Fed. Cir. 1991 )).

    This warranty applies to any method or process provided by the government in the specifications, regardless of whether the contractor is obligated to follow it in performance. For example, in Maitland Brothers Company, ASBCA No. 23849, 83 – 1 BCA ¶ 16,434 (1983), the government indicated in the specification that a particular type of equipment could effectively be used to perform the required excavation work, but stopped short of mandating the use of such equipment. Although the contractor was therefore free to use any equipment or means of performance available to it, the Board interpreted the specification reference to such equipment as an affirmative representation upon which the contractor was entitled to rely. 83 – 1 BCA at ¶ 81,756 – 81,757. Given the contractor’s election to use the specified equipment, the Board concluded that the contractor could recover those additional costs flowing from the failure of the equipment to perform as indicated. 83 – 1 BCA at ¶ 81,759.

    In reaching its decision, the Board analogized the situation before it to one where the specification provides the contractor a choice of alternative methods of operation or materials. It is well – settled that, in such circumstances, the implied warranty of specifications extends to each identified alternative and that the contractor is entitled to recover those additional costs resulting from the failure of the method selected. See Southern Paving Corp., AGBCA No. 74 – 103, 77 – 2 BCA ¶ 12,813 at p.62,363 (1977). As the decision in Maitland Brothers illustrates, this principle applies equally where the performance alternatives include one provided by the government in the specification, regardless of whether the contractor also is free to develop and implement its own.

    The rule, however, applies only to design specifications. Caddell Const. Co. v. United States, 78 Fed. Cl. 406, 411 (2007) . “Design specifications and drawings describe in precise detail the materials to be incorporated and the manner in which the work is to be performed, from which the contractor is not permitted to deviate. J. L. Simmons Co. v. United States, 412 F.2d 1360, 1362 (Ct. Cl. 1969); Cable and Computer Technology, Inc., ASBCA Nos. 47420, 48846, 03 – 1 BCA ¶ 32,237 at 159,408. Performance specifications, in contrast, set forth an objective or standard to be achieved, and the contractor may use its ingenuity to select the means to achieve that objective or standard of performance while assuming responsibility for meeting contract requirements. J. L. Simmons Co., 412 F.2d at 1362. The distinction between design and performance specifications is not absolute; it is the obligation imposed by the specification which determines the extent to which a contract contains performance or design specifications. Blake Construction Co. v. United States, 987 F.2d 743, 746 (Fed. Cir. 1993). Contracts may have both design and performance characteristics; the former limit the contractor’s flexibility, while the latter grant some leeway in how the work is to be accomplished. There is an implied warranty that government design specifications detailing the actual method of performance are free of errors and the contractor can successfully perform based upon the specifications with a resulting satisfactory product. United States v. Spearin, 248 U.S. 132, 136 (1918); White v. Edsall Construction Co., 296 F.3d 1081, 1085 – 86 (Fed. Cir. 2002).”

    Appeal of Am. Ordnance LLC, ASBCA No. 54718, 10 – 1 BCA ¶ 34386.

    Updated: June 27, 2018

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