This recent Court of Federal Claims decision involves a USDA contract for the construction of a vegetable laboratory in Charleston, South Carolina. The contractor was terminated for default and the bonding company, Travelers Casualty and Surety of America, took over under the terms of the performance bond.
While there is nothing particularly noteworthy about the Court’s lengthy recitation of the facts, the Court did restate some important rules governing the determination of defective specifications. The Court referred to one of the landmark cases in federal government contracting, Spearin v. U.S., where Justice Brandeis wrote the Supreme Court opinion that established the “Spearin Doctrine’ (a contractor will not be liable to an owner for loss or damage which results solely from insufficiencies or defects in plans and specifications). As the Supreme Court explained:
[I]f the contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications. This responsibility of the owner is not overcome by the usual clauses requiring builders to visit the site, to check the plans, and to inform themselves of the requirements of the work . . . . In Spearin, the Supreme Court held that contract provisions “prescribing the character, dimensions and location of” a structure to be constructed “imported a warranty that, if the specifications were complied with, the [structure] would be adequate.”
Continue Reading A Contractor is Not Liable for the Consequences of Defective Specifications