The U.S. Court of Appeals for the Federal Circuit recently issued a decision that reinforces the boundaries of the government's liability for design defects in federal construction contracts using the design-build bridging project delivery method. In Balfour Beatty Construction v. General Services Administration, the court partially overturned a ruling by the Civilian Board of Contract Appeals (CBCA), finding that the bridging documents of the General Services Administration (GSA) contained design specifications that carried an implied warranty under the well-established Spearin doctrine.
Specifically, the court held that GSA was responsible for design defects relating to the thickness of the project's mat slab foundation. However, the court affirmed the CBCA's denial of claims related to ventilation requirements, concluding those were governed by performance specifications for which no design warranty applied. The decision serves as a critical reminder to contractors and government agencies alike about the legal consequences of ambiguous or incomplete design documents in federal construction contracts.
Background Facts
In 2016, the GSA solicited proposals from a shortlist of prequalified contractors for Phase 2 of the Central Utilities Plant, part of the U.S. Department of Homeland Security Headquarters at the former St. Elizabeth's Hospital site. The procurement used a design-build bridging project delivery method, with bridging documents that were approximately 30% complete. The solicitation made clear that these documents were conceptual, preliminary and not fully coordinated, serving only to convey the general design intent and required performance criteria. The contract obligated the winning contractor to validate the design within 60 days of the notice to proceed and then complete the full design and construction.
GSA awarded the contract to Balfour Beatty Construction. During performance, Balfour encountered significant challenges, including alleged defects in the government's bridging documents, unforeseen site conditions and project delays. Despite these issues, GSA declared the project substantially complete in 2019 and fully complete in early 2020. Balfour then submitted a claim seeking compensation for increased costs. GSA's contracting officer denied the claim in its entirety, prompting Balfour to appeal to the Civilian Board of Contract Appeals. The Board granted some claims and denied others. Balfour timely appealed the partial denial to the Federal Circuit Court.
Design Defect Claims for Mat Slab and Ventilation Requirements
Balfour raised multiple issues on appeal, but the Court focused on two key claims: (1) the mat slab foundation, and (2) ventilation requirements. Balfour argued that the deficiencies in GSA's bridging design documents forced it to incur significant additional costs for redesign and construction. Specifically, Balfour contended it had to substantially thicken the mat slab to support building loads and increase the interior space height to accommodate larger ventilation equipment.
The Court's analysis centered on the Spearin doctrine which held that when the government provides design specifications then it implicitly warrants the adequacy of those specifications. United States v. Spearin, 248 U.S. 132, 136 (1918). The Court later clarified "the implied warranty attaches in contracts that contain design specifications, which explicitly state how the contract is to be performed and permit no deviations.” Stuyvesant Dredging Co. v. U.S., 834 F.2d 1576, 1582 (Fed. Cir. 1987). In other words, the warranty does not apply when the contract is based solely on performance specifications, which define end results but leave the means of achieving them to the contractor. Id.
The Slab Claim
The Board concluded that the bridging documents did not create a design warranty for the mat slab, partly because one contract drawing directed the contractor to match an existing 18-inch foundation, while separate government-provided calculations called for a 24-inch slab. The Board reasoned this inconsistency should have prompted Balfour to raise the issue before award. Based on this, it denied recovery.
The Federal Circuit disagreed. It found that the contract's directive to "match existing foundations" was sufficiently precise to constitute a design specification, not merely a performance guideline. As such, it triggered the Spearin doctrine. The Court further noted that regardless of the discrepancy with the government's calculations, the mat slab Balfour ultimately had to construct was between 43 and 53 inches thick, which far exceeded even the 24-inch calculation. The Court vacated the Board's denial of Balfour's mat slab claim and remanded for further proceedings.
The Ventilation Claim
The Court affirmed the Board's decision regarding the ventilation claim. It agreed the ventilation requirements were clearly identified as performance specifications during the bidding process. GSA had advised offerors to assume compliance with certain ventilation standards as part of their proposal. Because the bridging documents did not dictate how the contractor should achieve those standards, no design warranty applied.
Conclusion
The Federal Circuit's ruling offers important guidance for both contractors and government entities operating under the design-build bridging project delivery model. Where the government's bridging documents cross the line from performance guidance into explicit design specifications, the Spearin doctrine applies and the government bears the risks of design flaws. The court's decision in favor of Balfour on the mat slab issue reinforces that even partially complete designs can create binding design warranties if the specifications are sufficiently definite. At the same time, the court's rejection of the ventilation claim confirms that when specifications merely define outcomes, without prescribing how to achieve them, the contractor assumes the design risk. The split decision underscores the critical importance of precise drafting and clear risk allocation in government construction contracts.
