The Spearin Doctrine

Posted by: on Mon, Nov 30, 2015

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A basic principle of construction law is that one who furnishes plans and specifications for a particular project impliedly warrants that the plans and the specifications are workable and sufficient.  See, Bruner and O’Connor on Construction Law §9:78 at seq.  The origin of this implied warranty of design adequacy was the landmark case of United States v. Spearin, 248 U.S. 132, 169, 39 S.Ct. 59, 63 L. Ed. 166 (1918), which virtually every American jurisdiction now follows.

In Spearin, a contractor (Spearin) agreed to construct a dry dock at the Brooklyn Navy Yard under a contract with the United States.  The government’s detailed plans and specifications required the contractor to excavate the site and then relocate and reconstruct the six-foot brick sewer line that intersected the site.  After the sewer was relocated and reconstructed, heavy rains caused it to back up which in turn created internal water pressures that broke the line in several places and flooded the dry dock evacuation.  Based upon a contract clause that made the contractor responsible for the work until the completion and final acceptance, the government insisted that the contractor clean up the site and reconstruct the damaged line at its own expense.  The government nevertheless redesigned the line to reinforce it against future ruptures under heavy rain conditions.  The United States Supreme Court ruled that the government was liable for breach of its own implied warranty of the adequacy of its own plans and specifications, and awarded the contractor its costs and profits, notwithstanding the government’s lack of negligence, lack of knowledge or special expertise and the use of general boilerplate disclaimer clauses that were contained in the contract.

Although the Spearin case is now almost 100 years old, it effectively created a doctrine whereby the owner impliedly warranted the plans and specifications, if followed, will result in a functioning system.  Spearin holds that if a contractor is required to build according to plans and specifications prepared by the owner, or the owner’s representative, then the contractor will not be responsible for the consequences of defects in the plans.  As Justice Brandeis held in Spearin, “the insertion of the articles [in the contract] prescribing the character, dimensions and location of the [work to be performed] imported a warranty that if the specifications were complied with [the work] would be adequate.  Id. 248 U.S. at 137.  The Supreme Court ruled that Spearin had no responsibility for the flood because the internal dam was not shown on the plans and specifications that the government gave to Spearin, which specifically dictated how and where the sewer should be relocated.  Thus the government warranted the adequacy of the specifications and the Spearin Doctrine was borne.

The Spearin Doctrine has also been used as a sword offensively, to recover compensation for extra work where other express contract provisions such as a different site conditions clause are unavailable.  For example, in Fairbanks North Star Borough vs. Kandik, Inc. & Associates, 795 P.2d 795 (Alaska 1990), vacated in part on other grounds, 823 P.2d 832 (Alaska 1991), the plans and specifications provided to the contractor by the government understated the amount of material that needed to be excavated.  The government however had deleted the differing sites conditions clause from the contract.  The Supreme Court of Alaska allowed the contractor to recover extra costs incurred by performing pursuant to the defective specifications provided by the government owner.

In Halcrow, Inc. v. District Court, 129 Nev. Adv. Op. 42, 12, 302 P.3d 1148 (Nev. 2013), the Nevada Supreme Court adopted the Spearin Doctrine, noting that a rebar subcontractor “cannot be liable for loss or damage resulting from defects in the plans and specifications, when the contractor simply followed the plans as provided.”  Id. at footnote 3.

Today the modern approach to Spearin often assigns responsibility for a defective construction issue according to whether the specification prescribing the construction is a “performance” or a “design” specification.  See, PCO Construction Services, Inc. v. United States, 47 FEd. Co. 745 (2000).  According to some courts, the contractor can invoke the Spearin Doctrine only when it builds a system according to a “design” specification.  Design specifications precisely state how the work is to be performed.  Design specifications describe in detail the materials to be used and the manner in which the work is to be executed.  There is no flexibility allowed to a contractor’s approach, and as one court put it “the contractor is required to follow [the specifications] as one would a road map.”  IdBlake Construction Co. v. United States, 987 F.2d 743, 745 (Fed. Cir. 1993).

Performance specifications on the other hand, set forth an objective or a general standard that is supposed to be achieved, and the contractor is “expected to exercise his ingenuity in achieving that objective or standard of performance, select the means and assume a corresponding responsibility for the selection.”  See, Blake Construction Co., 987 F.2d at 745.

Thus, the level of discretion that exists within a given specification is the key to a court’s analysis that the difference is between design as compared to performance specifications.  As one court held, “discretion serves as the touchstone for assessing the extent of implied warranty and intended liability.”  Connors Brothers’ Construction Co., Inc. v. United States, 65 FEd. Cl. 657, 685 (2005).  Of course many difficulties frequently arise when attempting to determine whether a specification is a design or a performance specification, given that many specifications may combine elements of both.  A contractor who is trying to claim that a particular specification is a design rather than a performance specification, must establish that the specification does not allow any kind of meaningful discretion in how the work is performed and further that the defective specification is the cause of the injury.  Id.  In other words, the contractor has to prove that he or she followed the design precisely and that any deviation was a result of the design itself not the contractor’s work product.  The degree of discretion, rather than the specificity provided, is often what helps determine how the specification will be designated.

The government implicitly warrants that its contract specifications are free from defects.  James Harrington, et al. v. The Owner’s Warranty of the Plans and Specifications for the a Construction Project, 14 Public Construction Law Journal 240, 241 (1984) (“When the owner of a construction project furnishes a set of detailed specifications to be followed by his contractor in carrying out the work on a project, he is deemed by law to impliedly warrant that those plans and specifications are accurate and suitable for their intended use.”)  See, also, Blake Construction, Co., GSBCA No. 3590, 73-1 B.C.A. CCH §9819, December 1, 1972 (“Where the government orders a structure to be built and in doing so prepares the project specifications, it does so upon the presumed expertise of the government and implicitly warrants that if specifications are complied, satisfactory performance will result.”)  J.D. Hedin Construction, Co. vs. United States, 347 F.2d 235 (Ct. Cl. 1965).

However, the rules behind this warranty are highly technical in the government context because of its relevance to the government contractor defense.  The guidelines established through extensive litigation hold that the government’s warranty only extends to contract specifications that are “design” in nature.  “Design” specifications “set forth precise measurements, tolerances, materials, in process and finished product test, quality control, inspection requirements and other specific information.”  See Monitor Plastics, Co., ASBCA No. 14447, 72-2 B.C.A. 1972.

Under a design specification, the government is responsible for the design, engineering, and performance of the item described in the specification.  Conversely, under a “performance” specification, “the contractor accepts general responsibility for design, engineering, and achievement of the stated performance requirements.”  Id.  Performance specifications set forth optional characteristics designed for the item.  Design, measurements, and other specific details are not stated nor considered important so long as the performance requirement is met.

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