/>iHistorically, the Boards of Contract Appeals and Courts have reviewed design-builders’ reliance on government-provided conceptual drawings or bridging documents in support of constructive change claims under a reasonableness standard (see M. A. Mortensen Company, ASBCA No. 39978, 93-3 BCA ¶ 26,189). However, in two recent cases, the Spearin doctrine – under which the government warrants that government-provided “design specifications,” if followed, will produce a satisfactory result (see United States v. Spearin, 248 U.S. 132, 136 (1918)) – has been applied by the boards and courts to analyze constructive change claims. Specifically, the conceptual drawings or bridging documents were reviewed to determine if they constituted design specifications that the government would warrant were adequate under Spearin. As set forth below, this alternative approach has ended with mixed results and may inadvertently make recovery from the government more difficult.
Sheffield Korte Joint Venture
In Sheffield Korte Joint Venture, ASBCA No. 62972, 23-1 BCA ¶ 38,417, aff’d, 2025 WL 1466934 (Fed. Cir. May 22, 2025),Sheffield (the design-builder) was awarded a contract with the United States Army Corps of Engineers to design and construct a new Army Reserve Center located near Waldorf, Charles County, Maryland. As part of the design, Sheffield was required to design and construct a stormwater management system to support the new center. The bid documents included conceptual drawings that depicted a centralized stormwater management system (versus a decentralized system). A centralized system is defined as one that collects stormwater in a single feature like a pond, whereas a decentralized system uses multiple, small-scale features to control stormwater and is intended to replicate natural hydrology.
The bid documents also indicated that the depicted stormwater management system was only an approximation, and that the contractor was ultimately responsible for determining the actual size and location of the system. Sheffield based its bid price for this scope of work on the conceptual drawings, which depicted a centralized stormwater management system.
Once performance of the design commenced, it became apparent to Sheffield that a centralized stormwater management system was not feasible under applicable state and local permitting requirements. Instead, Sheffield was required to design and construct a substantially more expensive decentralized stormwater management system. Thereafter, Sheffield submitted a certified claim to the government for its increased costs, which was subsequently denied by the government on the grounds that the Permits and Responsibility Clause, FAR 52.236-7, precluded entitlement.
Rather than argue its reliance on the conceptual drawings depicting a centralized stormwater management system was reasonable for bidding purposes, Sheffield based its claim for recovery under the Spearin doctrine (i.e., the government was responsible for the additional costs of construction since the conceptual drawings depicted a system that would not work for the project). Ultimately, the Armed Services Board of Contract Appeals (ASBCA) (and the Federal Circuit on appeal) denied Sheffield’s claim on the basis that the conceptual drawings were not “design specifications” for the warranty of constructability to apply under Spearin. In denying recovery, both forums relied on Sheffield’s significant discretion to design and build the stormwater management system in accordance with local regulations pursuant to FAR 52.236-7 and the fact that the bidding documents did not mandate a centralized stormwater management system. Importantly, there was no discussion of the implied warranty of the adequacy of the conceptual drawings for providing information for purposes of bidding as determined in the Mortensen case.
Balfour Beatty Construction LLC
In Balfour Beatty Construction LLC, CBCA 6750, 2023 WL 428747 (March 31, 2023), aff’d, 2025 WL 798865 (Fed. Cir. Mar. 13, 2025),the Civilian Board of Contract Appeals (CBCA) similarly considered to what extent a 30% bridging document provided to bidders should be considered design or performance specifications under a Spearin analysis for a number of claims submitted by the design-builder. In this case, the CBCA expressly found that Mortenson was not controlling and distinguishable because, in the board’s view, the bridging documents did not contain any warranty of accuracy for bidding purposes.
One particularly noteworthy claim addressed by the CBCA related to the thickness required for a mat slab. The CBCA found that the bridging documents at issue did not constitute design specifications as to the thickness of the mat slab because the bridging documents merely provided a minimum thickness, and the CBCA felt that Balfour Beatty should have validated the actual thickness that would be required. That ruling by the CBCA was appealed and overturned by the Federal Circuit. According to the Federal Circuit, a statement in the bridging documents indicating that the contractor should “match existing building foundations” was sufficiently definite to constitute a design specification, and, therefore, an implied warranty with respect to the mat thickness applied, which entitled the contractor to recover for the deviation from the specified thickness. So, while the CBCA refused to find any warranty by the bridging documents, the Federal Circuit concluded an implied warranty existed under Spearin.
Key Takeaways
The Sheffield Korte and Balfour Beatty cases demonstrate the challenges to design-builders presented by the application of the Spearin doctrine to adjudicate constructive changes based on faulty conceptual drawings or bridging documents. More importantly, these cases indicate a potential shift in Board and Federal Circuit jurisprudence away from the reasonableness standard articulated in Mortenson (see also Metcalf Construction Company, Inc. v. United States, 742 F.3d 984, 996 (Fed. Cir. 2014)).
The Sheffield Korte and Balfour Beatty cases place a burden on bidders of design-build projects to analyze conceptual drawings or bridging documents provided by the government for accuracy, especially if those documents are relied upon for bidding. Indeed, design-builders may not be able to recover additional costs if those documents are found to be defective absent an additional finding that the documents constitute “design specifications.” Whether the document constitutes “design specifications” can be highly technical, time-consuming, and unreasonably expensive for the bidders at bid time.
These recent decisions may also inadvertently increase the costs of design-build projects to the government. Wary design-builders may include higher cost contingencies in their bid price to account for the possibility of constructive change claims being denied because conceptual drawings or bridging documents do not constitute “design specifications.” As a corollary, this recent shift to a Spearin analysis on conceptual drawings and bridging documents may increase the burden on the government to respond to Requests for Information during the bidding stage as bidders seek certainty on mandatory versus discretionary design requirements.
Going forward, design-builders pursuing claims under similar circumstances should consider focusing the government’s attention on the fact that there is a material difference between design-build and design-bid-build contracting regarding the assumption of design risk and the application of the Spearin doctrine. In a design-bid-build delivery system, the Spearin doctrine applies where the government warrants that the fully designed plans and specifications are adequate to meet the government’s needs. In the design-build context, the Spearin doctrine should only apply where the government provides a fully developed design specification that the design-builder must follow for the construction of the project. The Spearin doctrine should not apply to conceptual drawings or bridging documents where the primary purpose of those documents is to inform the bidders of the scope of the project and assist them in assembling the price of completing it.
In summary, for a design-build project, there is an implied warranty that the conceptual drawings and bridging documents are adequate for the purposes of submitting a proposal as concluded by the ASBCA in Mortensen. Design-builders should focus on this warranty when making claims for constructive changes. Design-builders should not rely upon the application of the Spearin doctrine for constructive change claims stemming from defective conceptual drawings or bridging documents. Rather, consistent with the ruling in Mortensen, the focus of the analysis should be on fundamental fairness and reasonableness standards when determining whether a design-builder reasonably relied upon conceptual drawings or bridging documents in order for the government to obtain the most competitive price. In that circumstance, the government should assume the risk of providing inaccurate bidding information to the design-builder.
It is not clear whether the decisions in Sheffield Korte or Balfour Beatty signal a shift away from Mortenson, but, as described above, such a shift could prove problematic for a number of reasons. Regardless, in the future, design-builders pursuing the government for defective conceptual drawing and bridging documents would be wise to consider reverting to the Mortensen analysis to support their claims and avoiding reliance on the Spearin doctrine.
