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Recovery Under the Spearin Doctrine Due to Defective Specifications

Under the Spearin doctrine, when the government furnishes design specifications directing the contractor on how to undertake performance on a contract, it provides an implied warranty that the contractor will be able to perform the contract satisfactorily if it adheres to the government’s specifications. The doctrine allows contractors to transfer to the government the risk of increased costs resulting from defective specifications. Notably, however, the Spearin doctrine only applies when the defective specifications are design specifications as opposed to performance specifications. Design specifications expressly describe how contract performance must be undertaken and do not permit the contractor to make any deviations. Meanwhile, performance specifications state the overall objectives that must be achieved but leave the decisions on how to achieve those objectives at the discretion of the contractor. Since design specifications do not allow deviations or grant the contractor discretion in achieving contractual objectives, the government implicitly warrants that design specifications are free from defects. Consequently, when the government’s design specifications are defective or result in unsatisfactory performance the government is deemed to have breached its implied warranty of specifications under the Spearin doctrine. In such cases, the contractor may recover all proximate costs stemming from the government’s breach.

In Armed Services Board of Contract Appeals (ASBCA) No. 61184, a decision issued on December 30, 2022, the Board found that the Spearin doctrine applied and allowed the contractor to recover its considerable additional costs stemming from the government’s defective design specifications. The United States Army Corps of Engineers (USACE) had issued the underlying contract for the construction of the U.S. Strategic Command and Control Facility Headquarters (STRATCOM) at the Offutt Air Force Base in Nebraska. The construction portion of the design-bid-build project was awarded in the amount of $524,445,824. The construction needed to adhere strictly to the design specifications provided by the USACE, which were previously developed by a different contractor for the agency. The facility had three underground levels below the water table and featured the widespread use of a fibrous, rigid duct liner for about half of the 22-mile-long HVAC metal ductwork. The design required the lined duct to be more heavily concentrated in the building’s lower levels, where the moisture levels were higher.

During the construction phase of the project, mold was discovered in the fiberglass duct liner located within the project’s HVAC system. Soon after, USACE revoked approval of a particular adhesive sealant or ‘mastic’ that was the root cause of the mold and directed the contractor to submit for approval a different antimicrobial mastic. Once the ductwork containing the mold was replaced with the antimicrobial mastic, the contractor submitted a claim in the amount of $40,719,678 along with a 209-day time extension relating to the deficiencies in the design provided by USACE. In the appeal that followed, the contractor argued that, under the Spearin doctrine, the government impliedly warranted that the contractor’s adherence to the ductwork specification containing the mastic requirement would result in satisfactory performance. However, the mold growth had occurred despite the contractor’s substantial compliance with the specifications. On the other hand, the USACE took the position that the design it had provided for the construction was not defective.

In rendering its decision, the Board first determined that the relevant ductwork specification containing the mastic requirement was a design specification. The USACE had supplied the entire design for the project, which included the ductwork specification containing the mastic requirement. The specification required the contractor to cover the corners, joints, and seams in the ductwork with mastic but did not initially require the mastic to have any antimicrobial properties. Thus, USACE had approved the use of the defective mastic. Importantly, the government did not merely specify the results it wanted to achieve and leave it to the contractor’s discretion on how to achieve them. Instead, it provided a highly detailed 64-page specification that governed the manufacturing and installation of the duct system. Under these circumstances, the relevant ductwork specification was deemed to be a design specification, making the Spearin doctrine applicable. Given that the doctrine was applicable, the government had impliedly warranted that contractor’s compliance with the ductwork design specifications would result in satisfactory performance.

However, despite the contractor’s adherence to the design specification, mold was discovered in the ductwork. Moreover, when the original mastic was replaced with an antimicrobial mastic, the ductwork became mold-free. Therefore, the ASBCA concluded that the agency’s decision not to require an antimicrobial mastic in the first design caused the mold growth, which made the design defective. Significantly, while the Spearin doctrine did not eliminate the contractor’s duty to investigate or inquire about patent defects, the design defect in this case was not sufficiently obvious or so glaring as to trigger that duty. Finally, there was a causative link between the defective ductwork specification and the contractor’s additional costs and time spent to successfully resolve the mold issue. The mold growth had consistently followed the defective mastic throughout the ductwork, and once the defective mastic was replaced with antimicrobial mastic, the mold did not return. Therefore, the defective specification directly caused the contractor’s increased costs. Ultimately, based on these conclusions, and in applying the Spearin doctrine, the ASBCA sustained the contractor’s appeal and remanded the matter to the parties for the determination of quantum.

To recover under the Spearin doctrine, contractors need to prove that the government’s design specifications were defective and show a causal connection between the defect and any additional costs or time incurred to fix the issue. The first inquiry in applying the Spearin doctrine is determining whether the defective specifications qualify as design specifications because the doctrine does not apply to performance specifications. If the government-supplied design specifications lead to unsatisfactory performance outcomes, the specifications are deemed defective, and the government is in breach of the implied warranty of specifications. However, before the contractor may recover its costs, it must also demonstrate that the defect in the specifications was not so glaring or obvious that it would cause a reasonable contractor to investigate. This is because the Spearin doctrine does not release the contractor from its duty to inquire about or investigate patent defects. Once the contractor establishes the applicability of the Spearin doctrine due to a defective design specification supplied by the government, the contractor may recover proximate costs stemming from the government’s breach of its implied warranty of specifications.

This Federal Contract Claims Insight is provided as a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.

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The apportionment of risk of increased performance costs in a government contract depends primarily on the type of contract and its included clauses. If a specifically included contract clause assigns the financial risk of an event on either the government or the contractor, that clause usually dictates which party bears the increased costs of performance due to the occurrence of that event. However, even if the contract does not specifically contemplate the occurrence of a particular event, dispute adjudicative forums may look to relevant clauses included in the contract to determine which party must bear the increased costs. A good indicator of whether an included clause apportions the risk of increased performance costs on the government is if the clause points to the contract’s changes clause. In ASBCA No. 62712, a decision issued on October 2, 2024, the Armed Services Board of Contract Appeals (ASBCA) held the government liable for increased costs associated with COVID-19-related quarantine of contractor employees due to a specifically included contract clause dictating the health and safety requirements under the contract. Notably, the relevant clause also pointed to the clause at Federal Acquisition Regulation (FAR) 52.243-4 “Changes,” which was incorporated in the contract by reference.

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In Armed Services Board of Contract Appeals (ASBCA) No. 63615, a decision issued on May 19, 2025, the Board granted the agency summary judgment on the issue of commercial impracticability when the contractor suffered a 37% cost overrun on a construction contract. The U.S. Army Corps of Engineers (USACE) issued the underlying contract for construction work at Placement Area No. 10 in the Corpus Christi Ship Channel. The total adjusted contract price following all modifications was $11,046,369.04. During performance, the contractor encountered excessive erosion on the south side of the placement area. Subsequently, the work to address the erosion was added to the contract via two bilateral contract modifications addressing the inland and shoreline sides of the placement area, totaling $909,332.04. However, even after the modifications, the contractor continued to incur costs and expend additional resources. A year after the contract was deemed substantially complete, the contractor submitted certified claims asserting entitlement to roughly $3,560,723.65 in cost overruns for work associated with the first modification and $447,522.64 in cost overruns for the second modification. These claims were denied by the contracting officer (CO) in their entirety.

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Recovery Under the Spearin Doctrine Due to Defective Specifications

TILLIT LAW Federal Contract Claims Insights