Case: 24-1134 Document: 48 Page: 1 Filed: 05/22/2025
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit ______________________
SHEFFIELD KORTE JOINT VENTURE, Appellant
v.
SECRETARY OF THE ARMY, Appellee ______________________
2024-1134 ______________________
Appeal from the Armed Services Board of Contract Ap- peals in Nos. 62972, 62973, Administrative Judge J. Reid Prouty, Administrative Judge Richard Shackleford, Ad- ministrative Judge Stephanie Cates-Harman. ______________________
Decided: May 22, 2025 ______________________
MICHAEL WILSON, UB Greensfelder, LLP, Saint Louis, MO, argued for appellant.
BRYAN MICHAEL BYRD, Commercial Litigation Branch, Civil Division, United States Department of Justice, Wash- ington, DC, argued for appellee. Also represented by BRIAN M. BOYNTON, STEVEN JOHN GILLINGHAM, PATRICIA M. MCCARTHY. ______________________ Case: 24-1134 Document: 48 Page: 2 Filed: 05/22/2025
Before MOORE, Chief Judge, CHEN and CUNNINGHAM, Circuit Judges. MOORE, Chief Judge. Sheffield Korte Joint Venture (Sheffield) appeals from a summary judgment decision of the Armed Services Board of Contract Appeals (Board), which denied Sheffield’s re- quest for an equitable adjustment and granted the U.S. Army Corps of Engineers’ (Corps) request for repayment of improperly issued funds. We affirm. BACKGROUND The Corps solicited bids for a fixed-price design-build contract to construct an Army Reserve Center in Charles County, Maryland. J.A 2 ¶¶ 1–2. The solicitation docu- ments contained a specification describing general project requirements and conceptual drawings depicting major features of the project. J.A. 1825–59 (specification); J.A. 1441 (drawing). One major feature was a stormwater management system. J.A. 1441 (denoted by keynote 30). Sheffield submitted a bid for the project that included a design for a centralized 1 stormwater management sys- tem. See J.A. 3278–81. In August 2015, the Corps ac- cepted the bid and awarded Sheffield the contract for $21,427,802. J.A. 2 ¶¶ 1–2. In September 2016, Sheffield sent the Corps a letter explaining the stormwater manage- ment system depicted in the solicitation documents dif- fered from that required by the State of Maryland. J.A. 3278–81. Sheffield noted the conceptual drawings
1 A centralized system collects stormwater in a sin- gle feature like a pond, whereas a decentralized system uses multiple, small-scale features to control stormwater and is intended to replicate natural hydrology. J.A. 3294– 95. Case: 24-1134 Document: 48 Page: 3 Filed: 05/22/2025
SHEFFIELD KORTE JOINT VENTURE v. SECRETARY OF THE ARMY 3
included a centralized system but that local requirements mandated a decentralized system. Id. The Corps disa- greed that the requirements in the solicitation documents differed from those imposed by local officials. J.A. 3282. In April 2017, Sheffield submitted a request for an eq- uitable adjustment of $1.8 million based on changes to the stormwater management system. J.A. 3292–301. The Corps denied Sheffield’s request. J.A. 3370–71 (non-final decision). The Corps did, however, issue a series of unilat- eral contract modifications increasing the contract price by $418,406 to compensate Sheffield for expenses incurred in meeting local requirements. J.A. 7–14 ¶¶ 22–43. In November 2020, Sheffield certified its request for an equitable adjustment. J.A. 3402. In April 2021, the Corps denied Sheffield’s request and asked Sheffield to repay the $418,406, which the Corps claimed was issued in error. J.A. 3403–37 (final decision). Sheffield appealed to the Board. On summary judgment, the Board denied Shef- field’s request for an equitable adjustment and ordered it to repay the Corps. J.A 16–21 (citing United States v. Spearin, 248 U.S. 132 (1918)). Central to the Board’s anal- ysis was its conclusion the Spearin implied warranty does not apply to the contract between Sheffield and the Corps. Sheffield appeals. We have jurisdiction pursuant to 41 U.S.C. § 7107(a)(1)(A) and 28 U.S.C. § 1295(a)(10). DISCUSSION We review the Board’s legal conclusions de novo. Kel- logg Brown & Root Servs., Inc. v. Sec’y of the Army, 973 F.3d 1366, 1370 (Fed. Cir. 2020). The Board’s decision to grant or deny summary judgment is a legal conclusion. Cessna Aircraft Co. v. Dalton, 126 F.3d 1442, 1446 (Fed. Cir. 1997). So too is its interpretation of contracts, Triple Canopy, Inc. v. Sec’y of the Air Force, 14 F.4th 1332, 1338 (Fed. Cir. 2021), including deciding whether the Spearin implied warranty applies, Blake Const. Co. v. United States, 987 F.2d 743, 746 (Fed. Cir. 1993). Case: 24-1134 Document: 48 Page: 4 Filed: 05/22/2025
When the government provides a contractor with a de- fective design specification, the government is deemed to have breached the Spearin implied warranty that satisfac- tory contract performance will result from adherence to the specification. Rick’s Mushroom Serv., Inc. v. United States, 521 F.3d 1338, 1344–45 (Fed. Cir. 2008); see also Spearin, 248 U.S. at 135–36. Such a breach entitles the contractor to recover all costs proximately flowing from the breach. Rick’s, 521 F.3d at 1344–45. The Spearin implied war- ranty, however, does not attach to performance specifica- tions. Id. at 1344. Unlike design specifications, which “explicitly state how the contract is to be performed and permit no deviations,” performance specifications “specify the results to be obtained, and leave it to the contractor to determine how to achieve those results.” Stuyvesant Dredging Co. v. United States, 834 F.2d 1576, 1582 (Fed. Cir. 1987). A key factor in distinguishing a design specifi- cation from a performance specification is the amount of discretion given to the contractor in implementation. Blake, 987 F.2d at 746–47. Sheffield argues the Board legally erred by concluding the Spearin implied warranty does not apply to its contract with the Corps. Appellant Br. 39–75. Specifically, Shef- field argues the solicitation documents (i.e., the specifica- tion and conceptual drawings) show a centralized stormwater management system is a design requirement to which the Spearin implied warranty applies. We do not agree. While the conceptual drawings depict a “stormwater management facility” in the northern portion of the site, they do not specify the type of stormwater management system. J.A. 1441; J.A. 1511. The drawings do, however, state the stormwater management system depicted is only an approximation, and the contractor is responsible for de- termining the “actual size and location” of the system. J.A. 1441 (keynote 30); J.A. 1511 (keynote 30). Regardless, even if these drawings appear to depict a centralized Case: 24-1134 Document: 48 Page: 5 Filed: 05/22/2025
SHEFFIELD KORTE JOINT VENTURE v. SECRETARY OF THE ARMY 5
system, the specification makes clear it is not a design re- quirement. The specification shows Sheffield was required to de- sign the stormwater management system in accordance with local requirements, was responsible for obtaining all necessary permits, and had discretion to refine the concep- tual design accordingly. See, e.g., J.A.
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Case: 24-1134 Document: 48 Page: 1 Filed: 05/22/2025
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit ______________________
SHEFFIELD KORTE JOINT VENTURE, Appellant
v.
SECRETARY OF THE ARMY, Appellee ______________________
2024-1134 ______________________
Appeal from the Armed Services Board of Contract Ap- peals in Nos. 62972, 62973, Administrative Judge J. Reid Prouty, Administrative Judge Richard Shackleford, Ad- ministrative Judge Stephanie Cates-Harman. ______________________
Decided: May 22, 2025 ______________________
MICHAEL WILSON, UB Greensfelder, LLP, Saint Louis, MO, argued for appellant.
BRYAN MICHAEL BYRD, Commercial Litigation Branch, Civil Division, United States Department of Justice, Wash- ington, DC, argued for appellee. Also represented by BRIAN M. BOYNTON, STEVEN JOHN GILLINGHAM, PATRICIA M. MCCARTHY. ______________________ Case: 24-1134 Document: 48 Page: 2 Filed: 05/22/2025
Before MOORE, Chief Judge, CHEN and CUNNINGHAM, Circuit Judges. MOORE, Chief Judge. Sheffield Korte Joint Venture (Sheffield) appeals from a summary judgment decision of the Armed Services Board of Contract Appeals (Board), which denied Sheffield’s re- quest for an equitable adjustment and granted the U.S. Army Corps of Engineers’ (Corps) request for repayment of improperly issued funds. We affirm. BACKGROUND The Corps solicited bids for a fixed-price design-build contract to construct an Army Reserve Center in Charles County, Maryland. J.A 2 ¶¶ 1–2. The solicitation docu- ments contained a specification describing general project requirements and conceptual drawings depicting major features of the project. J.A. 1825–59 (specification); J.A. 1441 (drawing). One major feature was a stormwater management system. J.A. 1441 (denoted by keynote 30). Sheffield submitted a bid for the project that included a design for a centralized 1 stormwater management sys- tem. See J.A. 3278–81. In August 2015, the Corps ac- cepted the bid and awarded Sheffield the contract for $21,427,802. J.A. 2 ¶¶ 1–2. In September 2016, Sheffield sent the Corps a letter explaining the stormwater manage- ment system depicted in the solicitation documents dif- fered from that required by the State of Maryland. J.A. 3278–81. Sheffield noted the conceptual drawings
1 A centralized system collects stormwater in a sin- gle feature like a pond, whereas a decentralized system uses multiple, small-scale features to control stormwater and is intended to replicate natural hydrology. J.A. 3294– 95. Case: 24-1134 Document: 48 Page: 3 Filed: 05/22/2025
SHEFFIELD KORTE JOINT VENTURE v. SECRETARY OF THE ARMY 3
included a centralized system but that local requirements mandated a decentralized system. Id. The Corps disa- greed that the requirements in the solicitation documents differed from those imposed by local officials. J.A. 3282. In April 2017, Sheffield submitted a request for an eq- uitable adjustment of $1.8 million based on changes to the stormwater management system. J.A. 3292–301. The Corps denied Sheffield’s request. J.A. 3370–71 (non-final decision). The Corps did, however, issue a series of unilat- eral contract modifications increasing the contract price by $418,406 to compensate Sheffield for expenses incurred in meeting local requirements. J.A. 7–14 ¶¶ 22–43. In November 2020, Sheffield certified its request for an equitable adjustment. J.A. 3402. In April 2021, the Corps denied Sheffield’s request and asked Sheffield to repay the $418,406, which the Corps claimed was issued in error. J.A. 3403–37 (final decision). Sheffield appealed to the Board. On summary judgment, the Board denied Shef- field’s request for an equitable adjustment and ordered it to repay the Corps. J.A 16–21 (citing United States v. Spearin, 248 U.S. 132 (1918)). Central to the Board’s anal- ysis was its conclusion the Spearin implied warranty does not apply to the contract between Sheffield and the Corps. Sheffield appeals. We have jurisdiction pursuant to 41 U.S.C. § 7107(a)(1)(A) and 28 U.S.C. § 1295(a)(10). DISCUSSION We review the Board’s legal conclusions de novo. Kel- logg Brown & Root Servs., Inc. v. Sec’y of the Army, 973 F.3d 1366, 1370 (Fed. Cir. 2020). The Board’s decision to grant or deny summary judgment is a legal conclusion. Cessna Aircraft Co. v. Dalton, 126 F.3d 1442, 1446 (Fed. Cir. 1997). So too is its interpretation of contracts, Triple Canopy, Inc. v. Sec’y of the Air Force, 14 F.4th 1332, 1338 (Fed. Cir. 2021), including deciding whether the Spearin implied warranty applies, Blake Const. Co. v. United States, 987 F.2d 743, 746 (Fed. Cir. 1993). Case: 24-1134 Document: 48 Page: 4 Filed: 05/22/2025
When the government provides a contractor with a de- fective design specification, the government is deemed to have breached the Spearin implied warranty that satisfac- tory contract performance will result from adherence to the specification. Rick’s Mushroom Serv., Inc. v. United States, 521 F.3d 1338, 1344–45 (Fed. Cir. 2008); see also Spearin, 248 U.S. at 135–36. Such a breach entitles the contractor to recover all costs proximately flowing from the breach. Rick’s, 521 F.3d at 1344–45. The Spearin implied war- ranty, however, does not attach to performance specifica- tions. Id. at 1344. Unlike design specifications, which “explicitly state how the contract is to be performed and permit no deviations,” performance specifications “specify the results to be obtained, and leave it to the contractor to determine how to achieve those results.” Stuyvesant Dredging Co. v. United States, 834 F.2d 1576, 1582 (Fed. Cir. 1987). A key factor in distinguishing a design specifi- cation from a performance specification is the amount of discretion given to the contractor in implementation. Blake, 987 F.2d at 746–47. Sheffield argues the Board legally erred by concluding the Spearin implied warranty does not apply to its contract with the Corps. Appellant Br. 39–75. Specifically, Shef- field argues the solicitation documents (i.e., the specifica- tion and conceptual drawings) show a centralized stormwater management system is a design requirement to which the Spearin implied warranty applies. We do not agree. While the conceptual drawings depict a “stormwater management facility” in the northern portion of the site, they do not specify the type of stormwater management system. J.A. 1441; J.A. 1511. The drawings do, however, state the stormwater management system depicted is only an approximation, and the contractor is responsible for de- termining the “actual size and location” of the system. J.A. 1441 (keynote 30); J.A. 1511 (keynote 30). Regardless, even if these drawings appear to depict a centralized Case: 24-1134 Document: 48 Page: 5 Filed: 05/22/2025
SHEFFIELD KORTE JOINT VENTURE v. SECRETARY OF THE ARMY 5
system, the specification makes clear it is not a design re- quirement. The specification shows Sheffield was required to de- sign the stormwater management system in accordance with local requirements, was responsible for obtaining all necessary permits, and had discretion to refine the concep- tual design accordingly. See, e.g., J.A. 1831 §§ 1.2.4.2–3, 1833 § 1.3.1, 1852 § 3.1.8. 2 The specification also provides that federal, state, and local regulations are “considered the minimum design criteria” for designing “stormwater management systems” and that “[l]ow impact development strategies” can be used to restore “the natural hydrologic functions of a site.” J.A. 1859 § 3.4.5. Moreover, the spec- ification incorporates the 2010 Maryland Stormwater Man- agement Guidelines, J.A. 1843 § 2.2.1, which explain environmental site design 3 for stormwater management is required to the “maximum extent practicable,” J.A. 747– 62. Because Sheffield had significant discretion to design and build the stormwater management system in accord- ance with local regulations and the specification did not re- quire a centralized stormwater management system, this is a performance specification to which the Spearin implied warranty does not apply. Stuyvesant, 834 F.2d at 1582.
2 The contract between the parties also includes a “permits and responsibilities” clause that makes Sheffield “responsible for obtaining any necessary licenses and per- mits, and for complying with any Federal, State, and mu- nicipal laws, codes, and regulations applicable to the performance of the work.” J.A. 1692. 3 Environmental site design is a design for decen- tralized stormwater management systems. J.A. 754 ¶ 14; J.A. 3278–81. Case: 24-1134 Document: 48 Page: 6 Filed: 05/22/2025
CONCLUSION We have considered Sheffield’s remaining arguments and find them without merit. For the foregoing reasons, we affirm. AFFIRMED