In U.S. for benefit of Bonita Pipeline, Inc. v. Balfour Beatty Construction LLC, et. al., 2017 WL 2869721 (U.S. Dist. Ct., S.D. Cal.), the United States District Court for the Southern District of California ruled the Spearin Doctrine, in which an entity providing plans or specifications is liable for deficiencies in the plans or specifications, applies to subcontractors in design-build projects, even when plans or specifications are by definition meant to be further refined by the subcontractor.

Naval Facilities Engineering Command Southwest (“NFECS”) contracted with Balfour Beatty Construction, LLC (“BBC”) to design-build a hangar replacement at Camp Pendleton (the “Project”). BBC provided schematic design documents to potential subcontractors, including Bonita Pipeline, Inc. (“Bonita”), so it could bid on the structural steel work on the Project. Bonita was awarded the design-build subcontract in an agreement which stated Bonita was not entitled to increased costs associated with refinement of the plans and specifications.

Bonita issued 93 Requests for Information and 37 Change Orders on the Project, and completed its work in 721 days as opposed to the scheduled 431 days. Bonita asserted claims against BBC, seeking damages associated with the extra work and delays, arguing the defective plans and specifications caused the alleged damages.

BBC argued the nature of a design-build subcontract inherently calls for plans that are incomplete at the time of the initial subcontracts. Bonita responded by admitting it expected to refine the design, but argued the extended time needed to refine the drawings was unforeseeable and only necessary due to the original defective schematic design by BBC. Bonita admitted it assumed the plans were incomplete, but believed they were at least correct. The Court agreed with Bonita, holding the Spearin Doctrine necessitates plans being correct, even if incomplete, and allowing recovery for costs associated with the extra work caused by the incomplete plans and specifications.

The Court’s ruling in this matter emphasizes potential liability for architects and engineers when their plans are not finalized and they leave it up to others to do so.  Any incomplete plans should provide a large note disclaimer stating any reliance on the plans until completed is at the user’s own and sole risk.