Defective Specifications

A recent Federal Circuit case underscores a contractor's rights to equitable adjustment when the owner provides defective specifications. In this case, the contractor made a claim for a constructive change as a result of having to proceed under what it contended were omissions in the specifications. The Government took the position that since the specifications were defective the contractor should not have relied upon them. Citing to well established precedent, the trial court had expressed that

"[w]hen the government provides a contractor with defective specifications, the
government is deemed to have breached the implied warranty that satisfactory
contract performance will result from adherence to the specifications, and the
contractor is entitled to recover all of the costs proximately flowing from the
breach."

The Government also argued that the Contractor should have discovered the defect during the bid. However, this argument was rejected as well because discovery of the error would have required a calculation that a contractor making a bid would not reasonably be expected to make.

The Federal Circuit affirmed, and stated that the defective specifications made performance "impracticable," creating a constructive change that entitled the contractor to equitable adjustment.

For questions contact Matt Hjortsberg (410) 583-2400 or at Hjortsberg@bowie-jensen.com