ConstructionRisk Report (March 2026)

Inside this Issue

• A1 - Res Judicata and Collateral Estoppel Preclude New Law Suit
• A2 - Spearin Doctrine Applied to Design-Build Contract, so Government Held to Have Warranted the Plans it Provided

Article 1

Res Judicata and Collateral Estoppel Preclude New Law Suit

See similar articles: Arbitration | Collateral Estoppel | Res Judicata

A federal district court confirmed an arbitration award in favor of homeowners over disputes concerning a cabinet and closet job for a luxury home.  The U.S. Court appeals affirmed the judgment. Res judicata and collateral estoppel figure prominently in the appeal. Dissatisfied with the arbitration result, the cabinet maker and its owners brought the case in federal court. They sued some of the parties to the arbitration, as well as a newcompany and new individuals, some of whom the cabinet maker had unsuccessfully tried to bring into the arbitration.

The defendants in the new case moved to dismiss and for summary judgment, arguing primarily that res judicata and collateral estoppel precluded the new lawsuit. The district court agreed. It dismissed and grantedsummary judgment to the defendants on most of the claims on those principles and granted summary judgment to the defendants on others because they were barred by the statute of limitations, waiver or laches.

Most of the claims were brought either against the same parties to the arbitration or those in privity with them. And the claims and issues in this lawsuit either were decided in the arbitration or arose from the same factsand thus could have been brought in those proceedings. So, res judicata and collateral estoppel preclude many of Design Gaps’ claims.  The court also affirmed the lower court’s dismissal of the other issues that were distinct from those that were previously arbitrated. Design Gaps, Inc. v. Distinctive Design & Construction LLC, No. 24-1860, U.S Ct of Appeals (4th Cir. 2025).

Comment:  The court does not state how much money was in dispute, but it is difficult to imagine that the amount in dispute could justify the expenses incurred for the years spent arbitrating, litigating and appealing.  Generally, arbitration awards sustained by courts in the absence of proof that the arbitrator made a mistake of fact or misapplied the law.  In this case the court affirmed the arbitration award and further concluded that the principles of res judicata and collateral estoppel protected parties that were not part of the arbitration proceedings.

When ConstructionRisk, LLC reviews design professional contracts, we strike out the arbitration provisions and replace them with litigation of disputes to be held in courts of competent jurisdiction in the state in which the project is located.  We believe motions practiced in courts are an important means of cost effectively disposing of issues in dispute.  We also believe litigation can be more cost effective, and we like that adverse decisions can be appealed in contrast to how difficult it is to successful appeal from an arbitration decision.

 

About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk Report, Vol. 28, No. 2 (March 2026).

Copyright 2026, ConstructionRisk, LLC

Article 2

Spearin Doctrine Applied to Design-Build Contract, so Government Held to Have Warranted the Plans it Provided

See similar articles: Balfour Beatty | Design-Build | Spearin | Warranty

The GSA issued a solicitation for a Request for Proposals on a project. The Request for Qualifications specifiedthat GSA was using a design-build bridging project delivery method and that the bridging documents wereapproximately 30% complete.

GSA awarded the contract to Balfour. Balfour alleged that it ran into a variety of issues with the government’sdesign, the site conditions, and various delays.

Balfour submitted a claim for increased costs. GSA’s contracting officer denied the claim in full. Balfour appealed to the Civilian Agency Board of Contract Appeals and the Board denied most of the claims. The Board determined that the bridging documents did not contain a warranty for the design of the mat slab at a particular thickness. Balfour then filed suit in federal court. In reviewing the merits of the case, the court applied the Spearin Doctrine from the caser of United States v. Spearin.

The court, in contrast to the Board, found that “the contract drawing indicated that Balfour should “match existing building foundations,” which were 18 inches thick. We determine the language in the drawing is sufficiently definite to constitute a design specification, and the Board erred in construing this as a performance specification. The court concluded that there was an implied warranty with respect to the mat slab thickness. Balfour Beatty Construction, LLC v. General Services Administration, U.S. Ct of Appeals, Fed. Circuit (2023-2229), March 13, 2025.

The government’s RGQ stated:

“[t]he Bridging Documents are conceptual in nature and are intended to depict the overall intent of the project terms of general design concept, the major architectural elements, and describe the required performance of the other systems. As Bridging Documents they are preliminary in nature, are not fully coor-dinated and are not intended to indicate or de-scribe the scope of work required for the full performance or completion of the project.

Balfour alleged that it incurred increased costs from “additional design and work scopeassociated with the required redesign . . . that arose out of deficiencies in the Bridging Design Documents provided by GSA. Specifically, Balfour contended it needed to redesign and depart from the bridging design to accommodate a thicker mat slab, which was re-quired to handle the loads of the equipment and building columns, and from having to increase the height of the space to accommodate the equipment needed toprovide ad-equate ventilation.

The Spearin Doctrine is based on the decision in United States v. Spearin, where the Supreme Court held that “if 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.” 248 U.S. 132, 136 (1918) (in-ternal citations omitted).  This implied warranty attaches in contracts that contain design specifications, which “explicitly state how the contract is to be performed and permit nodeviations.”

The Board determined that the bridging documents did not contain a warranty for the design of the mat slab at a particular thickness. It stated that, in addition to the contract drawing that directed the contractor to match the existing foundation thickness of 18inches, GSA provided calculations from GSA consultants that called for a 24-inch foundation. The Board concluded that because these documents “raised a question aboutthe mat slab thickness that should have caused Balfour to raise the issue before contract award,” Balfour was not entitled to recover costs related to designing the thicker mat slab.  The court disagreed with this opinion of the Board.

The contract drawing indicated that Balfour should “match existing building foundations,” which were 18 inches thick. According to the Court, the language in the drawing is sufficiently definite to constitute a design specification, and the Board erred in construing this as a performance specification. For this reason, the Court concluded that there was an implied warranty with respect to the mat slab thickness. Further, said, the court, even if there were a conflict between the drawing and the calculations, the mat slab Balfour ended up having to build was between 43 and 53 inches thick—almost double what the calculations required.  The Board decision was therefore reversed and remanded.

Comment: The Spearin doctrine is an important tool for government contractors.  Where the government provides bridging documents that are 30 percent complete, as in this matter, a design-builder should be able to rely upon the implied warranty of those specifications.  The court decision in this case further solidifies the applicability of this important doctrine to design specifications provided by the government as part of design-build procurements.

 

About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk Report, Vol. 28, No. 2 (March 2026).

Copyright 2026, ConstructionRisk, LLC