Legal Aspects of Performance-Based Specifications for Highway Construction and Maintenance Contracts (2013) / Chapter Skim
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Pages 33-58
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From page 33... ...
33 One project that has received much national attention is the Federal Center South project currently being built by the U.S. General Services Administration (GSA)
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From page 34... ...
34 The general rules of law applicable to these facts are wellsettled. Where one agrees to do, for a fixed sum, a thing possible to be performed, he will not be excused or become entitled to additional compensation, because unforeseen difficulties are encountered.
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From page 35... ...
35 the cause and effect of any problems. Importantly, courts have not generally been swayed by an owner's argument that it can completely design a project and then, by requiring the contractor to pass a test, shift the risk of performance to the contractor.120 Spearin and Helene Curtis make it clear that an owner has liability for defective design specifications.
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From page 36... ...
36 tions, particularly because contract language does not always fall squarely within either category and because contracts may exhibit both design and performance characteristics. While there are no "bright line" tests, there are a number of "rules of thumb" that courts use to determine how to label a specification.
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37 tional costs in achieving that standard were not compensable. The watertightness clause in the contract specified the end objective (e.g., watertightness)
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38 It is apparent to the court from the contract requirements outlined above that the contract never contemplated that PCL's performance could be accomplished using only the contract documents. The contract required that PCL also use numerous types of drawings and data prepared by its own forces, including coordination layout drawings, concrete placement drawings, concrete reinforcement drawings, various types of submittals including its own designs, shop drawings and layout drawings of all crafts.
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From page 39... ...
39 fications defective. An omission regarding the methodology of the reconnection of the diffusers and grilles to the ductwork does not invite a claim of defective drawings, as plaintiff would like the court to decree.150 Examining the specification at hand, and applying the tests described above, the court concluded that the contractor had the obligation to comply with a performance specification relative to the connections of the diffusers and grilles: In this instance, the aspect of the contract involving the replacement of diffusers and grilles clearly reflects performance specifications and Conner has failed to demonstrate that it lacked discretion in performing the contract in order to warrant a finding of defective specifications.
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From page 40... ...
40 a composite of these two types of specifications. When there is such a composite, it is necessary to test each portion of the specification, insofar as responsibility is concerned." 158 Given the above, cases dealing with these "composite" or "mixed" specifications tend to look carefully at how much discretion the contractor ultimately had in performing the work and whether flawed design specifications actually created the contractor's alleged problems.
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From page 41... ...
41 quirements" of the work and "within these parameters the contractor is responsible for the design and engineering of the window system." The specifications also stated that the curtainwall was to be designed to accommodate, among other things, "27 mm maximum long term depiction (creep) at edge of structure at the midpoint between columns." As it was developing shop drawings, the curtainwall subcontractor determined that the curtainwall would not accommodate the long-term creep limitation.
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From page 42... ...
42 The drawings told Trataros to construct the support structure using stainless steel angles of a certain size, configured a particular way, connected in a particular way, and running in specified directions. The drawings said that the structure was to be attached to the building using stainless steel bolts of a specified diameter, and showed the configuration of that attachment.
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From page 43... ...
43 that it was liable under warranty and guarantee clauses of the contract. Costello demonstrates that the contractor faces the burden of proving that the design component of a composite specification is defective and created its problems.
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44 tractor's arguments. Regardless of the label of "design" or "performance," the court stated that a specification is to be construed reasonably and consistent with the entire contract: There is no question that the diagrammatic notes gave the electrical contractor some discretion to work around the other trades…[however]
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From page 45... ...
45 tion,185 where the specifications required the contractor to "provide a skin plate with a smooth, non-corded ‘true radius' forming surface, equal to that manufactured by Symons." The contractor used the entire Symons forming system, and encountered difficulty in installing the architectural concrete within the specified contract tolerances. The contractor contended that the specification was a proprietary, design specification and that the owner bore responsibility for the failure of the Symons system to meet expectations.
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46 tions in the channel. The contractor developed its production rates and equipment plans based on this information.
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47 structural systems, including calculations for these systems. Mortenson's estimators, in originally pricing the work, did a take-off of the structural concrete and rebar quantities indicated in the solicitation design documents.
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48 purchased whatever was necessary for the installation of the VA-furnished sterilizer. The Board of Contract Appeals disagreed with the government, holding it liable for the additional cost of upsizing the boiler, stating: Specifications included in a design-build contract, however, to the extent specific requirements, quantities, and sizes are set forth in those specifications, place the risk of design deficiencies on the owner.
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From page 49... ...
49 to be "site adapted" for specific projects, including the Astana project. The design-builder was specifically charged with conducting its own geotechnical investigation and advised not to rely upon any geotechnical information provided by DOS.
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50 this point in time, given the general principles behind Spearin and performance specification responsibility, it is clear that Spearin theories of recovery are available to the design-builder when the owner has been prescriptive in the design (i.e., has created a roadmap or has given the design-build proposers RFP documents that are detailed) and has taken discretion away from the design-builder in terms of what is to be ultimately designed.
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From page 51... ...
51 contained detailed specifications, including requirements for components of the HVAC system. During the 90-percent design review, a dispute arose between the design-builder and the VA over whether the registers, grilles, and diffusers in the operating rooms were required to be aluminum or stainless steel.
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52 owner sued for breach of warranty and fraud. The owner prevailed on both theories.
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53 the furnace and an inability to comply with state air pollution control standards. The primary reason for this was that the furnace system designed by Pitt could not support combustion at a temperature low enough to produce quality ash without the aid of fuel oil when the outside temperature fell below a certain level.
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54 have to be decided in a trial. However, the court did note that by including the term "overall plant performance guarantee," the agreement memorialized the engineer's "assurance" regarding overall plant performance.
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From page 55... ...
55 possibility and commercial impracticability has also arisen under a number of government contract cases, often focusing on contracts for research and development (R&D) or for technology creating or advancing the state of the art.244 Included among the cases finding impossible or impracticable contracts are manufacturing contracts where an extensive R&D effort makes it impossible to meet production rates and when no contractor would be able to meet specified tolerances without significant waivers of contract requirements.245 The caselaw does contain some examples of performance specification cases where the doctrine of impossibility/commercial impracticability has been upheld.246 One of the leading cases is Foster Wheeler Corp.
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56 Because of the potential for abuse, the boards and courts have not applied the commercial impracticability standard with frequency or enthusiasm. The mere fact that performance is more expensive than originally contemplated is not sufficient to invoke the standard.
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57 arising from the inability of the design to meet the owner's performance goals. Austin Co.
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From page 58... ...
58 construction due to what they perceived as structural defects. The owner retained its own engineer to correct the defects.
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