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Two recent Board of Contract Appeals decisions addressed the conflict between the Government’s implied warranty of its design and its attempt to disclaim that warranty through the use of performance specifications.  In both cases, the Boards allowed the contractors to recover damages.

In Edsall Construction, Inc., ASBCA No. 51,787, 01-1 BCA 31,425, the Government awarded a contract to Edsall for the construction of two aircraft hangars.  The drawings provided Edsall showed three lift points to be used to distribute the weight of each hangar door.  A note on the drawings stated that the door details and loads were to be verified by Edsall prior to bidding.  The specifications stated that the weight of each door must be evenly distributed among the lift points.  Edsall submitted shop drawings showing a fourth lift point, which was approved by the Government.  The Government refused, however, to approve the extra costs associated with the extra point.

The Government claimed that the specifications were performance specifications and that the note on the drawings shifted the risk of the design to the contractor.  While the Board agreed that the specification was of the performance type, it found that, as the designer of how the door would be installed, the Government warranted that the load could be adequately distributed to the three specified lift points.  The Government’s drawing details were defective in that regard because the contractor could not achieve the performance standards while adhering to the design requirements.

In another Board decision, Trateros Construction, Inc., GSBCA No. 14,875, 01-BCA 31,306, the contractor’s scope of work included the fabrication and installation of certain fiberglass panels, which were to be mounted on a building by a steel support system.  The contractor submitted engineered shop drawings revising the Government’s design of the support system because the contractor’s engineer determined that the support system shown in the Government’s design was inadequate.  The contractor then submitted a claim for the increased costs associated with its revised design.  The Government rejected the claim on the basis that it furnished only performance-type specifications, and argued that the purpose of the engineered shop drawing requirement was to allow the contractor to design an appropriate system.  The Board, however, found that the contractor was entitled to recover its increased costs associated with the revised support system.  According to the Board, the Government gave the contractor specific requirements for how the system should be designed, and the contractor was not given the discretion to ignore those requirements.
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** Article Copyright: 2001 – Seyfarth Shaw. This article was written and originally published in the Fall Issue of the Seyfarth Shaw law firm’s Construction Practice Group newsletter, “Construction Law Report.”  The firm has a national and international practice with emphasis on construction and governmental contracting.  For further information: 815 Connecticut Ave., N.W., Suite 500, Washington, D.C. 20006, phone: 202-463-2400.  Visit http://www.seyfarth.com.   The firm also has offices in Atlanta, Boston, Chicago, Houston, Los Angeles, New York, Sacramento, San Francisco and Brussels.

ConstructionRisk.com Report, Vol. 4, No. 1 (Jan 2002)