Warranty of Specifications:
No Substitute for Vigilance
There is a well established rule in Government contract law that there is an implied warranty that the specifications in the Request for Proposal are correct and free from error. Thus, a contractor has the right to rely on the accuracy of the specification when preparing its proposal.1 There is, however, an exception to this rule. If a contractor discovers an ambiguity or a defect in the specifications, then the contractor is obligated to submit questions to the procuring contracting officer to obtain a clarification. This is particularly true for detailed design specifications because, if they are followed exactly, the Government impliedly warrants an acceptable product will result from precisely following the design specifications.
This sounds like a fairly simple concept - follow the specifications exactly as written and there will be no problem with performance or, if there is, the Government will compensate the contractor for additional costs incurred. Generally, the Government specifications may describe the work to be performed in extensive detail or merely specify a desired result. The Government is usually liable if the requirements that it specifies result in problems for the contractor that it could not reasonably foresee. Under this implied warranty of specifications, the risk is allocated to the Government when the specifications it furnishes are not suitable for their intended purpose.2
This concept of implied warranty of specification is discussed by the United States Court of Appeals for the Federal Circuit (“CAFC” or the “Court”) in E. L. Hamm & Associates, Inc., v. Gordon R. England, Secretary of the Navy (“Hamm”), Case No. 03-1527, decided August 17, 2004. Although the case involved an appeal of a denial of a request for an equitable adjustment to the contract, it is instructive for actions during the proposal period. Hamm appealed a decision at the Armed Services Board of Contract Appeals (“ASBCA” or the “Board”) that denied Hamm's claim for the equitable adjustment. Hamm had claimed an equitable adjustment for additional work based on an alleged defect in the specifications.3
