FREE WEBINAR : July 23, 2026 - Fair Contracts, Fewer Disputes
On May 22, 2025, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”), in affirming a decision of the Armed Services Board of Contract Appeals (“Board”), clarified and ultimately weakened the implied warranty protections afforded to government contractors under the Spearin doctrine. Sheffield Korte Joint Venture v. Secretary of the Army, No. 2024-1134, 2025 WL 1466934 (Fed. Cir. May 22, 2025), cert. denied sub nom. Sheffield Korte Joint Venture v. Driscoll, No. 25-560, 2026 WL 79969 (U.S. Jan. 12, 2026).
By way of background, Spearin is a long-standing (for over 100 years, now) doctrine that affords contractors certain protections, provided they strictly follow and adhere to the plans and specifications given to them by the project owner on public (i.e., government) construction projects. This can, in turn, shift liability (and the resulting damages) for any flaws in the resulting construction onto the owner who provided the plans and specifications rather than the contractor. This is particularly important on public projects where the sometimes extraordinarily competitive bidding process requires express adherence to said plans and specifications (with private projects having much more practical and contractual flexibility).
In Sheffield, however, the Board carved out an express distinction within Spearin by clarifying that the doctrine does not apply to items deemed “performance” (rather than design) specifications. Sheffield, a design builder, was awarded a contract with the United States Army Corps of Engineers (“Corps”) to design and build an Army Reserve Center in Charles County, Maryland. Part and parcel of this award was the requirement that Sheffield include within its development a stormwater management system. The solicitation documents provided by the Corps included conceptual drawings of the stormwater management system. Sheffield proposed a centralized system based on the solicitation’s conceptual drawings.
It was only after Sheffield commenced work that it learned that Maryland law required a decentralized stormwater management system. This was important, where in addition to having to pivot suddenly on its plans, Sheffield noted that a decentralized system was also significantly more expensive than a centralized one. Sheffield submitted a request for equitable adjustment under the Spearin doctrine, alleging that because the solicitation documents depicted what Sheffield contended was a centralized system, and because this system was not authorized by Maryland law, the Corps should be responsible for any and all costs to correct the mistake. The Corps denied the request as well as Sheffield’s subsequent certified claim, and the Board then denied Sheffield’s appeal of the contracting officer’s denial of the claim.
On appeal, the Federal Circuit affirmed the Board’s decision. The Federal Circuit held that because Sheffield’s contract afforded it significant design discretion, the conceptual stormwater management system drawings in the solicitation did not express a requirement for a centralized system. In so doing, Federal Circuit drew a critical distinction between “design specifications” and “performance specifications”. “Design specifications,” which trigger Spearin protections, “explicitly state how the contract is to be performed and permit no deviations”. Conversely, “performance specifications,” which fall outside the ambit of Spearin, “specify the results to be obtained, and leave it to the contractor to determine how to achieve those results.” Because the system depicted in the solicitation was deemed a performance specification, Sheffield was therefore not entitled to an equitable adjustment and needed to construct the decentralized system at its own cost in order to fulfill its obligations to the Corps under the contract.
The Federal Circuit further held that several other requirements in the contract, including the permits and responsibilities clause (likely FAR 52.236-7), obligated Sheffield to obtain all necessary permits and otherwise comply with local stormwater management requirements. Although not the subject of this article, contractors should be wary of the long reach of the permits and responsibilities clause, which agencies can and have used to defeat similar claims.
Sheffield appealed the Federal Circuit’s affirmation of the Board’s decision, and in January 2026, the United States Supreme Court declined Sheffield’s petition for certiorari (rendering the Federal Circuit’s decision final). This decision is expected to have significant repercussions for federal construction contractors and has already come into play in other cases. This exemplifies how now, even experienced design-builders bidding on federal jobs must anticipate or negotiate whether conceptual documents that they had previously been accustomed to relying upon as design specifications are instead, in whole or in part, performance specifications. It also forces contractors to not only increase their cost contingencies and the overall amounts of their bids, this decision will require far more pre-bid clarifications from agencies to confirm whether a particular portion of the project is a design or performance specification. Finally, this weakening of Spearin means that contractors should start looking elsewhere for persuasive authority to support claims against the government when confronted with what turns out to be misleading solicitation documents, and also should expect that the government will frequently attempt to quantify disputed sections as being “performance” rather than “design”.
The attorneys at Smith Currie Oles are ready to answer any questions you might have on this or any other issues of federal construction contracting.
Smith Currie Oles LLP provides comprehensive legal services to all parts of the construction industry across the nation. Smith Currie lawyers have decades of demonstrated success representing construction and federal government contracting clients “From the Ground Up,” including procurement matters, contract formation and negotiation, project administration, claims prosecution and, when necessary, in litigation and other forms of dispute resolution.
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