Procurement

Protection Against Unreasonable Liability

Issue
In today’s litigious environment, contractors providing professional services are often held to strict liability standards (i.e., held liable for damages even without fault) rather than to negligence standards. This situation allows and encourages lawsuits that damage firms, even when they successfully defend themselves. For government contractors performing to strict, pre-established guidelines and within tight budgets, the risks can become significant and are resulting in fewer firms seeking such work.

The government often decides to proceed with a contract based on a balance between budgetary restrictions and assessments of acceptable risk. Even though small, risk of a harmful outcome may still exist. A contractor performs work based on this understanding and desire to serve the client. If the actions of the contractor and the final product are completely successful and compliant with the government’s direction and decisions (i.e. they were not negligent), but harm still occurs because of circumstances that exceed contract requirements, the contractor can become the target of third-party lawsuits.

ACEC Position
ACEC urges that measures be enacted to dismiss lawsuits that are based on outcomes not a result of negligence, errors and/or omissions in meeting certain contractually required criteria, standards or guidelines. ACEC supports the clear identification of requirements and what constitutes negligence, including meeting identified industrial standards of care in contracts that involve acceptable risk decisions. Moreover, ACEC seeks measures to protect contractors from the damaging impacts of legal defense and/or court decisions that ignore or bypass defined negligence standards.

Specifically, ACEC supports legislation that would:

1. Require all contracts to clearly establish and define negligent performance under that contract;
2. Provide statements of acceptable performance and non-negligence by contractors performing on contracts with requirements that are based on an assessment of acceptable risk;
3. Require dismissal of all lawsuits based on strict liability considerations (i.e., not asserting negligence);
4. Establish protections for contractors caught in the legal disputes that extend beyond negligent performance of contracted work