Substandard is Not Defective

Recently, I posted about the Spearin Doctrine, which says that if a contractor follows the owner’s plans and specifications and something doesn’t work, the contractor is generally not at fault.  But, this only works if the contractor first follows the owner’s design.  It doesn’t work when the owner’s design will work as is, but you think it could be better.

In recently denying an HVAC Contractor’s appeal, the Armed Services Board of Contract Appeals stated, “the government may require performance [either] in excess of, or below, the standard normally accepted in a trade.”  In other words, the government need not follow the industry standard.  It can do less or more.

Under a firm, fixed-price contract managed by the Army Corps of Engineers, the Contractor agreed to upgrade the HVAC equipment at a Child Development Center at a facility in Hanover, NH.  The project was “limited by budget constraints,” but included work intended to remedy the “thermal discomfort” of the facility’s occupants.

The Contractor advised the Corps that certain design improvements would help the end-user.  The Corps considered the advice, but rejected the Contractor’s suggestion.  Thereafter, the Contractor “delayed the project because it disagreed with the government’s design choices.”  Ultimately, the Corps terminated the Contractor for default.

Appeals of Industrial Consultants, Inc., d/b/a W. Fortune & Co., ASBCA Nos. 59622, 60491 (March 10, 2017).

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