An older case deals with three important considerations: (1) defective specifications; (2) whether the defective specifications were misleading or misrepresentative; and (3) applying the jury verdict method in quantifying damages.

In Metric Construction Co., Inc. v. U.S., 80 Fed. Cl. 178 (Fed. Cl. 2008), a contractor was contracted by the federal government to construct a warehouse. There were defects in the structural steel design specifications underlying the standing seam metal roof installed by the contractor and, as a result, the roof system leaked causing damage. The contractor incurred significant costs in repairing the damage, and pursued recovery of these costs against the government. The contractor claimed the structural steel design serving as the framework for the metal roof was defective and misleading and caused the leaks.

1. Defective Specifications

The first issue pertained to the defective specifications.

The test for recovery based on inaccurate specifications is whether the contractor was misled by errors in the specifications. However, the government’s implied warranty of its specifications is generally voided if the contractor does not follow those specifications.

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Even if a specification is defective, however, contractors must be reasonable in their conduct during construction. Contractors have a duty to inquire as to inconsistent specifications which include patent, that is, obvious glaring defects. If the erroneous nature of a defective specification is not glaring or obvious, however, the contractor may recover if it has been misled by the specification.

Metric Construction, supra, at 185-86 (citations omitted).

Here, there was erroneous information (as to the dead loads) in the specifications. This erroneous information was not patent and resulted in defective specifications. The contractor also acted reasonable once the problem had been discovered.

2. Did the Defective Specifications Mislead the Contractor

The second issue pertained to whether the contractor was misled by the defective specification.

“To demonstrate that it was misled, the contractor-claimant must show both that it relied on the defect and that the defect was not an obvious omission, inconsistency or discrepancy of significance – in other words, a patent defect—that would have made such reliance unreasonable.” Metric Construction, supra, at 186 (included in parenthetical and citation omitted).  In other words, did the contractor rely on the misleading/misrepresentative specification to its detriment.  “In addition, if the government misrepresents information regarding its specifications in its communications to the contractor during performance, the government may be liable if the contractor relies on such information.”  Metric, supra, at 188 (citation omitted).

Here, the specifications misrepresented the dead loads and the contractor installed the roof in reliance on those specifications. Further, the government misrepresented its answer to an RFI regarding dead loads, which the contractor further relied on.

3. Damages: Applying Jury Verdict Method

The third issue pertains to damages related to the roof leaks and the Court applying the jury verdict method in quantifying damages.

“To the extent that plaintiff’s evidence could be argued to have not proved the exact quantum of the equitable adjustment to which it is entitled, in the alternative the court finds that $1,323,214.20 is also a fair and reasonable computation of the equitable adjustment due [contractor] according to the jury verdict method.” Metric, supra, at 196.

Importantly, regarding the jury verdict method, the Court noted:

As the Federal Circuit has explained:

In order to adopt the jury verdict method, “[a court] must first determine three things: (1) that clear proof of injury exists; (2) that there is no more reliable method for computing damages; and (3) that the evidence is sufficient for a court to make a fair and reasonable approximation of the damages.”  This court makes clear, however, that the jury verdict method may only be used when other, more exact, methods do not apply.

In this case, Metric [contractor] has clearly shown, and indeed the parties have stipulated to, the costs incurred as a result of the roof leaks. No better method (other than the rough calculations presented in this opinion) for computing damages exists, given the perplexing nature of the origin of roof leaks, which would provide a more precise dollar amount for the Corps’ [government’s] liability in this case. In addition, plaintiff presented clear and abundant evidence, in testimony and expert reports, which showed the relative importance of the residual camber issue in causing the most serious leaks in the roof and necessitating roof replacement, enabling the court to determine a fair and reasonable amount of damages due Metric. Thus, in the alternative, the figure of $1,323,214.20 is justified by the jury verdict method of computing damages.

Metric, supra, at n. 16.