Contractor’s Responsibility for Substitution of Specified Materials

A contractor for a portion of the subway system in Washington, D.C. was found liable for a specified materials substitution. The specification required either natural rubber or lode bearing fiberglass isolation pads to support the reinforced concrete floating slabs. Norair Engineering Corp. ENG BCA No. 5244 92-2 BCA – S2500.

The furnishing and installation of the slabs were subcontracted to Floating Slab Contractors, Inc. In turn, Floating Slab contracted with Amber/Booth to supply the isolation pads. Approximately one year later, Amber/Booth offered a newly developed product in substitution for the specified pads. This “newly developed product” was polyurethane isolation pads. Polyurethane pads were submitted as being equal to or exceeding the requirements of the specifications. The reason given for the substitution was difficulty in the procurement of the specified materials. The contractor submitted this substitution proposal to the owner’s engineer for approval. The proposal included an independent consultant’s opinion supporting the polyurethane pads as an equal to or superior compound as those required by the specifications. Subsequently, the owner’s engineer approved the substitution of the polyurethane isolation pads for the specified rubber or fiberglass pads.

The pads failed. The owner declared the pads to be defective and called on the contractor for responsibility. The matter was submitted to the BCA. The BCA held that the pads were defective and that the defect was hidden. Further, the BCA found that the contractor had warranted that the pads were fit for a known end use.

The BCA held that “where a contractor proposes to perform its own specifications, it assumes the risk that specifications will work.” Here, the owner’s specifications remained, but Amber/Booth put forth a proposal with explicit assurances of equal and/or better performance than the specifications and the suitability for the owner’s use. The decision holds the contractor to a warranty that the pads were fit for a known end use.

In our view, the holding in the context of the recited facts begs the issue. Did the contractor propose its own design specifications? If the contractor only sought approval to substitute one specified product for another, then the contractor should not be held to a warranty of the substituted product just as the contractor should not be held in warranty of the original specified products. On the other hand, if the contractor truly guaranteed that the product would perform in some manner, then it must assume the risk of product nonperformance. The general rule of construction law is that a contractor is not liable for defects in work constructed in accordance with the owner’s plans and specifications furnished to the contractor when the defects are due to faults of the plans and specifications (La. R.S. 9:2771). The rule likewise applies to defective materials called for the owner’s specification. The contractor puts itself in a position of liability when it guarantees the equipment or materials furnished for the construction.

In New Orleans Unity Society v. Standard Roofing Co, 224 So.2d 60 (La.App. 4th Cir. 1969), the court held a roofing contractor liable for damages from roof leakage where it had persuaded the architect to use new and untested roof materials and furnished a written guarantee, along with the materials supplier, that when installed, the roof would remain watertight for ten years. The court simply enforced contractually assumed obligations. When the costs and risks of design are considered and accepted, there can be no complaint. The difference can be very important.