The National Academies

NCHRP 20-06/Topic 17-04 [Final]

Legal Aspects of Performance-Based Specifications for Highway Construction and Maintenance Contracts
[ NCHRP 20-06 (Legal Problems Arising out of Highway Programs) ]

  Project Data
Funds: $40,400
Research Agency: Capital Project Strategies
Principal Investigator: James B. McDaniel
Effective Date: 1/1/2011
Completion Date: 12/31/2011

As state agencies have moved towards greater use of alternative contracting including design-build, warranty contracting, performance-based maintenance, and public-private partnerships for highway construction projects, these contracts use performance-based specifications to give contracting entities more flexibility to meet contract requirements. Whether delivered under a design-build or a traditional design-bid-build contract, construction contracts often contain both prescriptive (or method-based) and performance-based specifications. Under the Spearin doctrine, based on the landmark case United States v. Spearin, 248 U.S. 132 (1918), an owner using detailed design or method-based specifications is deemed to warrant that the specifications and other design information it provides to the contractor are accurate and suitable. However, when an owner decides to use a performance-based specification, setting forth general performance objectives and allowing the contractor to select design solutions, materials and methods to meet or exceed specified performance criteria, responsibility for the accuracy and sufficiency of the design and construction must shift to the contractor.
Should the constructed product prove defective or fail to meet specified performance requirements, disputes have arisen over responsibility for curing defects or achieving the required performance. Sorting out issues of liability often hinge upon (1) which aspects are considered design or prescriptive requirements prescribed by the owner; (2) which aspects of construction are based on a performance requirement and hence are under the contractor’s control; and (3) whether these requirements conflict in the specifications.
Highway agency staff drafting or reviewing specifications, particularly for alternative contracts, need a clear understanding of performance-based specifications, including how they differ from traditional design or method-based specifications and how risk allocation changes. A technical and legal overview should be provided to determine when performance-based specifications should or should not be used. Case studies should be identified and analyzed that present lessons-learned from legal issues and disputes that have arisen regarding their use. The case studies can provide guidance on how to minimize legal issues, claims or protests regarding specification interpretation or responsibility for performance in highway construction and maintenance contracts.
This research should result in a report that will be published in a NCHRP Legal Research Digest. The Digest should provide information that will assist agencies with determining the appropriateness of performance-based specifications.

STATUS: Research has been completed and published as NCHRP Legal Research Digest No. 61 and is available for download on the TRB website.

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