Best Practices for Due Diligence in Government Contractor M&A Transactions
Mergers and acquisitions (M&A) involving government contractors present unique challenges and considerations that require meticulous due diligence. Unlike purely commercial deals, government contracts introduce layers of regulatory compliance, security requirements, and approval processes that can significantly affect deal structure, valuation, and risk. This blog post outlines some of the basic best practices for due diligence when acquiring or selling a business that performs U.S. government contracts.
Assess Government Contracting Status Early
Early in the due diligence process, buyers should determine whether the target is a prime contractor, subcontractor, or both, and identify all relevant contracts, subcontracts, and task orders. It is important to understand the customer base — whether it’s DoD, civilian agencies, or state/local governments — as each target presents different risks and obligations.
Review Contract Performance and Compliance History
Key questions to answer during due diligence include:
Has the contractor met performance milestones and delivery requirements?
Are there any pending or past disputes, cure notices, terminations for default, or performance issues?
Are there any audit findings or noncompliance issues reported by the Defense Contract Audit Agency (DCAA) or inspector general?
Moreover, understanding the target’s history with compliance — including adherence to the Federal Acquisition Regulation (FAR), Cost Accounting Standards (CAS), and agency supplements (like DFARS) — is essential.
Analyze Past Performance
The target company’s past performance record is a key asset in government contracting. However, an acquiring company must ensure that this past performance will be recognized in future bids. The FAR allows agencies discretion in considering the past performance of predecessor companies (FAR 15.305(a)(2)(iii)).
Evaluate Representations, Certifications, and Registrations
Ensure that all representations and certifications made in the System for Award Management (SAM) and on contract solicitations are accurate and current. Check for proper registrations, including:
SAM.gov
NAICS code alignment
Small business or socioeconomic certifications (e.g., 8(a), HUBZone, SDVOSB, WOSB, etc.)
Misrepresentations can lead to False Claims Act liability and/or suspension or debarment.
Identify Organizational Conflicts of Interest (OCI)
Conduct a thorough analysis of potential OCIs that could impair objectivity or create unfair competitive advantages post-closing. This is especially important if the buyer already holds government contracts that could overlap with the target’s portfolio.
Understand Novation Requirements
Government contracts are not automatically assignable. If the transaction constitutes a change of ownership requiring a novation agreement under FAR 42.1204, the buyer must:
Notify the relevant contracting officer(s)
Prepare a novation package, including the purchase agreement and corporate documentation
Be aware that novation approval is discretionary and can delay closing or transition
Some buyers structure transactions to avoid novation altogether, such as through equity purchases.
Review Security Clearances and Facility Requirements
If the target holds facility security clearances (FCLs) or performs classified work, due diligence must verify:
That the clearances are active and match the scope of work
Personnel clearances (PCLs) and any foreign ownership, control, or influence (FOCI) mitigation plans
Compliance with the National Industrial Security Program Operating Manual (NISPOM)
Post-closing, the Defense Counterintelligence and Security Agency (DCSA) will review the transaction to ensure continued eligibility for classified contracts.
Scrutinize Pricing and Cost Accounting Practices
For cost-reimbursable and time-and-materials contracts, buyers must understand the target’s accounting systems, indirect cost rates, and billing practices. Ensure systems are compliant with government standards and validated by relevant audits.
Additionally, evaluate potential exposure to cost disallowances, overbillings, or defective pricing under the Truthful Cost or Pricing Data statute (formerly TINA).
Analyze Paycheck Protection Program (PPP) Loans
PPP loans, forgiveness applications, and supporting documentation should also be analyzed.
Analyze Subcontracting Plans and Flowdowns
Examine the target’s subcontracting compliance, especially for large businesses with small business subcontracting plans. Confirm that required FAR clauses have been flowed down to subcontractors and that appropriate monitoring systems are in place.
Assess Export Control and ITAR Compliance
If the target deals with defense articles or technical data, review its compliance with:
International Traffic in Arms Regulations (ITAR)
Export Administration Regulations (EAR)
Export licenses and technology control plans
Violations may not only carry penalties but also restrict post-acquisition operations.
Assess False Claims Act and Compliance Risks
M&A due diligence for government contractors should include a rigorous review of compliance with the False Claims Act (FCA) (31 U.S.C. §§ 3729–3733), the Procurement Integrity Act, and other federal statutes. Undisclosed compliance violations or internal investigations can result in successor liability or post-closing enforcement actions.
Tailor the Purchase Agreement to Government Contract Risks
The purchase agreement should include:
Robust representations and warranties regarding government contracts
Indemnities for known risks (e.g., outstanding investigations, pending audits)
Covenants related to novation, change-of-control notifications, and post-closing cooperation
Conclusion
Government contractor M&A requires far more than standard commercial diligence. By proactively identifying regulatory risks, understanding contract transfer limitations, and ensuring compliance, parties can better structure the transaction, protect value, and avoid costly surprises. Buyers and sellers alike should involve counsel with deep experience in government contracts early in the process to guide these critical due diligence steps.
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Supreme Court Ruling Will Result In Less NEPA Requirements For Projects
On May 29, 2025 the Supreme Court issued its decision in Seven County Infrastructure Coalition v. Eagle County. The case addressed a proposal considered by the U.S. Transportation Board by a group of seven counties in Utah for the construction and operation of an 88-mile rail line in northeastern Utah. The proposed rail line would facilitate the transportation of crude oil from Utah to the gulf states, and elsewhere. While the project was approved in December 2021 following review of a 3,600-page Environmental Impact Statement (“EIS”), the U.S. Court of Appeals for the D.C. Circuit faulted the EIS for not sufficiently considering the upstream effects of increased oil drilling in the Uinta Basin, and downstream environmental effects of increased oil refining along the Gulf Coast, outside of the railroad line itself. As a result of this, the D.C. Circuit ultimately vacated the EIS and the Board’s approval, pausing construction indefinitely.
In its May 29 decision, the Supreme Court reversed the D.C. Circuit’s decision on the basis that the D.C. Circuit “did not afford the Board the substantial judicial deference required” under NEPA, and faulted the D.C. Circuit for ordering “the Board to address the environmental effects of projects separate in time or place from the construction and operation of the railroad line.” Ultimately, the Court concluded that under NEPA, the Board’s EIS did not need to address the upstream or downstream effects of the proposed project, and instead only need concern itself with the effects of the 88-miles of railroad line itself.
In the majority opinion, authored by Justice Kavanaugh, the Court emphasized that NEPA imposes no substantive environmental obligations or restrictions, and instead is purely a procedural statute that requires an agency to prepare an EIS weighing environmental consequences of a proposed action as the agency reasonably sees fit under its governing statute and any substantive environmental laws. Put simply, the Court expressed that NEPA “does not mandate particular results but simply prescribes the necessary process’ for an agency’s environmental review of a project.” The Court expressed its view that NEPA had transformed from a simple procedural requirement, into a “blunt and haphazard tool employed by project opponents” to try and stop or slow down new infrastructure and construction projects. To address this perceived overgrowth of NEPA from its original procedural purpose, the Court called for a “course correction of sorts” to “bring judicial review under NEPA back in line with statutory text and common sense.” Thus, the Court held that “the bedrock principle of judicial review in NEPA cases can be stated in a word: Deference.” Thus, under this ruling, agencies will be given large judicial deference in reviewing EIS and decisions, with those decisions only being reversed in cases where the agencies decision was wholly unreasonable in light of the fact-dependent and context-specific analyses.
To this end, the Court held that requiring the EIS to consider the upstream and downstream effects of the 88-mile project was outside of the scope of the necessary considerations for an EIS and held that an EIS “need not address the effects of separate projects.” Thus, the Court held that EIS need not consider the effects a proposed project could lead to on the periphery, but instead only need to consider the environmental impact of the project itself.
While the exact impact of this change in the requirements of EIS and judicial review of decisions made under NEPA remains to be seen, this decision will undoubtably lead to agencies being required to follow less strict requirements in considering the potential wide-ranging effects of proposed projects. It can be expected that this limiting of the scope of EIS requirements under NEPA will lead to both increased approval of proposed infrastructure and construction projects, while also carrying the risk of increased environmental impacts resulting from these projects.
Supreme Court Decision Limits the Opportunity for NEPA to Derail Projects
The U.S. Supreme Court’s recent 8-0 ruling limited the scope of the National Environmental Policy Act (NEPA), the national environmental law that mandates federal agencies to assess the environmental effects of their proposed actions before making decisions. In the May 29, 2025, decision in Seven County Infrastructure Coalition v. Eagle County, Colorado, the Supreme Court found that substantial judicial deference should be afforded to agencies under NEPA, and that NEPA does not require agencies to consider the environmental effects of projects that are separate in time or place from the project at hand.
The case concerned construction of an 88-mile railroad line connecting Utah’s oil-rich Uinta Basin to the national freight rail network to facilitate the transportation of crude oil to refineries along the Gulf Coast. As part of its project review, the Surface Transportation Board (Board) prepared a 3,600-page environmental impact statement (EIS) that addressed significant environmental effects of the project and identified feasible alternatives, as required under NEPA. The Board concluded that the project’s transportation and economic benefits outweighed its environmental impacts and approved the railroad line. Eagle County, Colorado, and several environmental organizations challenged the Board’s EIS and final approval order in federal court. The U.S. Court of Appeals for the D.C. Circuit ultimately vacated the Board’s EIS and final approval order, holding that the Board’s analysis of environmental effects should have included reasonably foreseeable impacts from upstream oil drilling and downstream oil refining projects.
The Supreme Court characterized the D.C. Circuit’s decision as belonging to a line of NEPA cases guided by an overly aggressive judicial approach. According to the Court, NEPA is a purely procedural statute that requires an agency to prepare an EIS, but does not require an agency to weigh environmental consequences in any particular way. The Court further emphasized that NEPA is a “procedural cross-check” to inform agency decision-making, not a “substantive roadblock.” It further criticized the use of NEPA by project opponents as a “blunt and haphazard tool” to stop or slow new infrastructure and construction projects.
When determining whether an agency’s EIS is compliant with NEPA, the Court affirmed that courts should afford “substantial deference” to the agency. The essential determination is “not whether an EIS in and of itself is inadequate, but whether the agency’s final decision was reasonable and reasonably explained.” Thus, courts must defer to agencies so long as they are operating within this “broad zone of reasonableness.”
The Court distinguished Seven County from its recent landmark decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which applied de novo judicial review in cases when an agency interprets a statute. In cases in which an agency exercises discretion granted by statute, judicial review is conducted under the Administrative Procedure Act’s “arbitrary and capricious” standard, under which a court asks whether the agency action was reasonable.
This judicial deference in NEPA cases extends to factual determinations made by agencies about what details are relevant in an EIS. The Court affirmed that an EIS must address the reasonably foreseeable environmental effects of the project at hand. However, the Court also noted that courts should defer to agencies about the scope of analysis, including decisions about how far to go in considering indirect environmental effects from the project at hand and whether to analyze environmental effects from other projects separate in time or place from the project at hand.
Seven County’s limitations on the required scope of agency analysis under NEPA to the direct and indirect environmental effects of the project at hand may streamline agency review of infrastructure, construction, and energy projects. However, uncertainty remains as agencies determine the extent of analysis required during project review, which may differ by agency or types of projects or may change with administrations. The ruling may also cause environmental groups to reconsider when and how to mount challenges to projects under NEPA.
Alexandra Prendergast contributed to this article
Supreme Court Scales Back the NEPA Roadblock to Infrastructure Projects
Overview
On May 29, 2025, the U.S. Supreme Court issued a significant decision clarifying the scope of environmental review required under the National Environmental Policy Act (“NEPA”) for major infrastructure projects. The Court recognized and reined in what infrastructure practitioners have long understood: NEPA strayed far beyond its “procedural” and “informational” roots to become an obstruction to infrastructure projects across the country.
As brief background, a project developer filed an application with the Surface Transportation Board (“STB”) for a proposed 88-mile railroad line in Utah. The STB, pursuant to its NEPA requirements, issued a 3,600-page environmental impact statement (“EIS”) analyzing the environmental effects of the project and ultimately approved the railroad line. Groups challenged the STB’s approval, and the D.C. Circuit vacated the STB’s decision, ordering the STB to analyze the potential “upstream” impacts of the proposed railroad, which included possible increased oil and gas drilling activities in Utah, and potential “downstream” impacts of the railroad, such as increased oil refining in Texas.
The Supreme Court reversed the D.C. Circuit Court’s prior decision, finding that the D.C. Circuit: (1) did not afford substantial deference to the STB required in NEPA cases, and (2) incorrectly ordered the STB to review the environmental effects of projects separate in time and place from the actual 88-mile railroad under consideration.
Substantial Deference to Agencies in NEPA Reviews
First, the Court emphasized that lower courts should provide deference to agencies when evaluating the agencies’ NEPA review of a project. This is because an agency’s environmental review will include “a series of fact-dependent, context-specific, and policy laden choices about the depth and breadth of [the agency’s] inquiry….” Courts should thus afford agencies “substantial deference” when the agencies’ choices are “within a broad zone of reasonableness,” described further as “a rule of reason.”
Reasonably Close Causal Relationship to the Project
Second, the Court reined in the scope of what the environmental review must consider, i.e., the “proposed action.” Future or geographically separate projects that may be built or expanded are not generally part of NEPA’s scope. The Court characterized this finding in legal terms as “proximate causation,” those effects that have a reasonably close causal relationship between the project at hand and the environmental effects of other projects would be included in a NEPA review.
The Court rejected, however, a “but for” causal relationship, providing that even though environmental effects may be reasonably foreseeable, such as increased oil and gas development from the proposed railroad line, lower courts should not second guess an agency’s decision to exclude from NEPA review projects that are separate in time or place from the actual project being considered. The Court noted that the agency may draw a “manageable line” for what it reasonably concludes should be considered. Summarizing this point, the Court stressed that “[a] relatively modest infrastructure project should not be turned into a scapegoat for everything that ensues from upstream oil drilling to downstream refinery emissions.”
Conclusion
While a significant victory for project proponents, this decision does not foreclose the scope of the extent of an environmental review in a NEPA EIS beyond the confines of the actual project. Project proponents should evaluate potential environmental impacts beyond the actual project and analyze whether or not those environmental impacts would be considered “reasonable,” for example:
Does the agency that is making the decision regulate the potentially foreseeable environmental effects?
Are the potentially foreseeable environmental effects geographically separate from the actual project?
Are the potentially foreseeable environmental effects a hypothetical future event?
Are the potential environmental effects speculative?
Cutting Deep: How Design Professionals Can Combat Widespread Federal Budget Cuts
Recent federal budget cuts enacted to optimize the federal workforce have had a widespread impact on design professionals and construction firms. These reductions have resulted in the elimination of many government programs, mass layoffs, and the cancellation of large-scale government contracts. Faced with dwindling opportunities for revenue and lagging confidence in the economic market, design professionals are searching for new solutions.
Scope of the Federal Budget Cuts
One of the most significant government programs to be cancelled is the Building Resilient Infrastructure and Communities (BRIC) program. Originally created by the Federal Emergency Management Agency (FEMA), this program was established to support local response to emergencies such as flooding or wildfires. With this cut, all applications from 2020 to 2023 have been cancelled, and unused grant funds are being reclaimed. BRIC had allocated approximately $1 billion, with $133 million already distributed to approximately 450 applicants. These projects represented a critical source of funding for many construction and design firms charged with addressing flood mitigation and water intrusion, creating a fire-resistant infrastructure, and responding to property damage and housing needs following natural disasters. Billions of dollars in federal grants instantly disappeared, leaving construction and design firms that relied on these funds without their primary source of income and forcing them to quickly pivot to maintain financial viability.
The construction industry sustained another deep cut when the Department of Defense recently eliminated more than $580 million in defense contracts and programs. As a result, design professionals and contractors involved in erecting military housing, base installations, and infrastructural improvements are in limbo, either placed on hold or without funding amid ongoing projects. At the state and local level, many communities also have been forced to pause infrastructure improvements and other public works projects due to lack of funding, causing delays and increasing risk exposure to design and construction teams charged with completing those projects on time and under budget.
Repercussions in the Private Sector
The private sector is likely to experience the effects of deep cuts as well. With a reduction in federal spending, public-private design projects are being put on hold and firms are seeing a sharp drop in requests for proposals (RFPs). The American Institute of Architects (AIA) reports that design firms are now instituting their own staffing reductions and placing capital investment plans on hold. In addition, the AIA recently reported a decline in the Architecture Billings Index (ABI), indicating decreasing revenue in the field. In February 2025, the ABI fell to 45.5, well below the standard score of 50 that signifies growth within the industry. As a result, the AIA is reporting that design firms are tightening their belts with hiring freezes, staff reductions, and pauses in internal investment projects.
For example, Booz Allen Hamilton, which derives 98 percent of its $11 billion annual revenue from U.S. government contracts, has been forced to address the mandated budget reductions and announced that it has identified more than $1 billion in potential savings and is considering workforce adjustments to align with shifting client needs. Similarly, Deloitte recently announced plans to reduce its U.S. consulting workforce due to increased pressure from the federal government to lower project costs. The firm described the layoffs as “modest personnel actions” necessary to align with changing client demands.
Opportunities in Business Development
The shifting economic landscape may present unique opportunities, however, for construction and design firms if they are able to quickly pivot in the face of adversity. Some firms are reassessing and diversifying their portfolios to avoid relying on limited revenue streams. Shifting focus and staff to industries and projects less reliant on federal funding is one path forward. These areas include commercial real estate, health care, and technology. In particular, design professionals with experience in sustainable design for buildings, digital modeling, and health care architecture may find increased flexibility as the focus shifts toward efficient and cost-effective business development. For those not able to pivot away from federal contracts, flexible contracts may be preferred, such as indefinite delivery/indefinite quantity, or “as needed” contracts.
Potential solutions may include participating in or relying on professional networks, such as state and local AIA chapters, design symposiums, and construction conferences that may provide opportunities for firms to share resources, circulate new funding opportunities, and collaborate on larger-scale proposals. By participating in cooperative networks, firms can form strategic partnerships and cross-market their services to new clients. These organizations also are an effective means of coordinating advocacy efforts to advance the industry’s goals on a policy level in response to government action.
Lastly, construction and design firms are encouraged to audit their internal operations and project lists to avoid unnecessary risk exposure during this period of financial uncertainty and delayed projects. This entails reassessing operational costs, investing in project management initiatives to encourage efficiency, and mobilizing staff to serve multiple roles with the caveat to be mindful of staying within the parameters of the scope of services. In doing so, these entities can improve their margins without sacrificing the integrity of their services.
Summary
While it is clear that the recent federal budget cuts have had a profound impact on design professionals and construction projects nationwide, there is a path forward. Firms now have the opportunity to adapt and diversify to weather the storm and even carve out new business opportunities. While the current climate presents undeniable challenges, design and construction professionals who adopt effective strategies to streamline their operations and expand their reach within the market will position themselves to emerge stronger in a shifting landscape.
Bidders Beware! Design-Builders Are at Risk Not Only for Defective Design Documents, But Possibly for Defective Bidding Documents, Too
Historically, the Boards of Contract Appeals and Courts have reviewed design-builders’ reliance on government-provided conceptual drawings or bridging documents in support of constructive change claims under a reasonableness standard (see M. A. Mortensen Company, ASBCA No. 39978, 93-3 BCA ¶ 26,189). However, in two recent cases, the Spearin doctrine – under which the government warrants that government-provided “design specifications,” if followed, will produce a satisfactory result (see United States v. Spearin, 248 U.S. 132, 136 (1918)) – has been applied by the boards and courts to analyze constructive change claims. Specifically, the conceptual drawings or bridging documents were reviewed to determine if they constituted design specifications that the government would warrant were adequate under Spearin. As set forth below, this alternative approach has ended with mixed results and may inadvertently make recovery from the government more difficult.
Sheffield Korte Joint Venture
In Sheffield Korte Joint Venture, ASBCA No. 62972, 23-1 BCA ¶ 38,417, aff’d, 2025 WL 1466934 (Fed. Cir. May 22, 2025),Sheffield (the design-builder) was awarded a contract with the United States Army Corps of Engineers to design and construct a new Army Reserve Center located near Waldorf, Charles County, Maryland. As part of the design, Sheffield was required to design and construct a stormwater management system to support the new center. The bid documents included conceptual drawings that depicted a centralized stormwater management system (versus a decentralized system). A centralized system is defined as one that collects stormwater in a single feature like a pond, whereas a decentralized system uses multiple, small-scale features to control stormwater and is intended to replicate natural hydrology.
The bid documents also indicated that the depicted stormwater management system was only an approximation, and that the contractor was ultimately responsible for determining the actual size and location of the system. Sheffield based its bid price for this scope of work on the conceptual drawings, which depicted a centralized stormwater management system.
Once performance of the design commenced, it became apparent to Sheffield that a centralized stormwater management system was not feasible under applicable state and local permitting requirements. Instead, Sheffield was required to design and construct a substantially more expensive decentralized stormwater management system. Thereafter, Sheffield submitted a certified claim to the government for its increased costs, which was subsequently denied by the government on the grounds that the Permits and Responsibility Clause, FAR 52.236-7, precluded entitlement.
Rather than argue its reliance on the conceptual drawings depicting a centralized stormwater management system was reasonable for bidding purposes, Sheffield based its claim for recovery under the Spearin doctrine (i.e., the government was responsible for the additional costs of construction since the conceptual drawings depicted a system that would not work for the project). Ultimately, the Armed Services Board of Contract Appeals (ASBCA) (and the Federal Circuit on appeal) denied Sheffield’s claim on the basis that the conceptual drawings were not “design specifications” for the warranty of constructability to apply under Spearin. In denying recovery, both forums relied on Sheffield’s significant discretion to design and build the stormwater management system in accordance with local regulations pursuant to FAR 52.236-7 and the fact that the bidding documents did not mandate a centralized stormwater management system. Importantly, there was no discussion of the implied warranty of the adequacy of the conceptual drawings for providing information for purposes of bidding as determined in the Mortensen case.
Balfour Beatty Construction LLC
In Balfour Beatty Construction LLC, CBCA 6750, 2023 WL 428747 (March 31, 2023), aff’d, 2025 WL 798865 (Fed. Cir. Mar. 13, 2025),the Civilian Board of Contract Appeals (CBCA) similarly considered to what extent a 30% bridging document provided to bidders should be considered design or performance specifications under a Spearin analysis for a number of claims submitted by the design-builder. In this case, the CBCA expressly found that Mortenson was not controlling and distinguishable because, in the board’s view, the bridging documents did not contain any warranty of accuracy for bidding purposes.
One particularly noteworthy claim addressed by the CBCA related to the thickness required for a mat slab. The CBCA found that the bridging documents at issue did not constitute design specifications as to the thickness of the mat slab because the bridging documents merely provided a minimum thickness, and the CBCA felt that Balfour Beatty should have validated the actual thickness that would be required. That ruling by the CBCA was appealed and overturned by the Federal Circuit. According to the Federal Circuit, a statement in the bridging documents indicating that the contractor should “match existing building foundations” was sufficiently definite to constitute a design specification, and, therefore, an implied warranty with respect to the mat thickness applied, which entitled the contractor to recover for the deviation from the specified thickness. So, while the CBCA refused to find any warranty by the bridging documents, the Federal Circuit concluded an implied warranty existed under Spearin.
Key Takeaways
The Sheffield Korte and Balfour Beatty cases demonstrate the challenges to design-builders presented by the application of the Spearin doctrine to adjudicate constructive changes based on faulty conceptual drawings or bridging documents. More importantly, these cases indicate a potential shift in Board and Federal Circuit jurisprudence away from the reasonableness standard articulated in Mortenson (see also Metcalf Construction Company, Inc. v. United States, 742 F.3d 984, 996 (Fed. Cir. 2014)).
The Sheffield Korte and Balfour Beatty cases place a burden on bidders of design-build projects to analyze conceptual drawings or bridging documents provided by the government for accuracy, especially if those documents are relied upon for bidding. Indeed, design-builders may not be able to recover additional costs if those documents are found to be defective absent an additional finding that the documents constitute “design specifications.” Whether the document constitutes “design specifications” can be highly technical, time-consuming, and unreasonably expensive for the bidders at bid time.
These recent decisions may also inadvertently increase the costs of design-build projects to the government. Wary design-builders may include higher cost contingencies in their bid price to account for the possibility of constructive change claims being denied because conceptual drawings or bridging documents do not constitute “design specifications.” As a corollary, this recent shift to a Spearin analysis on conceptual drawings and bridging documents may increase the burden on the government to respond to Requests for Information during the bidding stage as bidders seek certainty on mandatory versus discretionary design requirements.
Going forward, design-builders pursuing claims under similar circumstances should consider focusing the government’s attention on the fact that there is a material difference between design-build and design-bid-build contracting regarding the assumption of design risk and the application of the Spearin doctrine. In a design-bid-build delivery system, the Spearin doctrine applies where the government warrants that the fully designed plans and specifications are adequate to meet the government’s needs. In the design-build context, the Spearin doctrine should only apply where the government provides a fully developed design specification that the design-builder must follow for the construction of the project. The Spearin doctrine should not apply to conceptual drawings or bridging documents where the primary purpose of those documents is to inform the bidders of the scope of the project and assist them in assembling the price of completing it.
In summary, for a design-build project, there is an implied warranty that the conceptual drawings and bridging documents are adequate for the purposes of submitting a proposal as concluded by the ASBCA in Mortensen. Design-builders should focus on this warranty when making claims for constructive changes. Design-builders should not rely upon the application of the Spearin doctrine for constructive change claims stemming from defective conceptual drawings or bridging documents. Rather, consistent with the ruling in Mortensen, the focus of the analysis should be on fundamental fairness and reasonableness standards when determining whether a design-builder reasonably relied upon conceptual drawings or bridging documents in order for the government to obtain the most competitive price. In that circumstance, the government should assume the risk of providing inaccurate bidding information to the design-builder.
It is not clear whether the decisions in Sheffield Korte or Balfour Beatty signal a shift away from Mortenson, but, as described above, such a shift could prove problematic for a number of reasons. Regardless, in the future, design-builders pursuing the government for defective conceptual drawing and bridging documents would be wise to consider reverting to the Mortensen analysis to support their claims and avoiding reliance on the Spearin doctrine.
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Landmark Supreme Court Decision Limits NEPA Review Scope: Agencies Granted ‘Substantial Deference’ in Environmental Assessments
In an 8-0 decision, the U.S. Supreme Court reversed a D.C. Circuit ruling that had blocked construction of a new 88-mile freight railroad line, clarifying the scope of impacts that federal agencies must consider under the National Environmental Policy Act (NEPA). The Court’s majority opinion in Seven County Infrastructure Coalition v. Eagle County, No. 23-975 (May 29, 2025) is a sharp rebuke to what the Court describes as the aggressive interference by certain federal lower courts with the exercise of agency discretion in determining the scope of a NEPA review, a practice the Court found contrary to the intent of NEPA as a “purely procedural statute” designed to assist in agency decision making.
Background
The Uinta Basin Railway is a proposed 88-mile freight rail line intended to connect Utah’s Uinta Basin oil production to the national rail network. In 2020, the Seven County Infrastructure Coalition applied to the U.S. Surface Transportation Board (STB) for construction approval under 49 U.S.C. § 10901.
Pursuant to NEPA, the STB prepared a comprehensive Environmental Impact Statement (EIS), analyzing thousands of pages of potential environmental effects tied to the railway’s construction and operation. The EIS noted, but did not fully assess, potential upstream effects from increased oil drilling in the Uinta Basin and downstream impacts from oil refining along the Gulf Coast. In December 2021, the STB approved construction of the line, citing its economic and transportation benefits.
Eagle County, Colorado and several environmental organizations challenged the approval. The U.S. Court of Appeals for the D.C. Circuit ultimately vacated the STB’s decision authorizing the line’s construction, as well as the associated EIS and biological opinion.1 The D.C. Circuit held that the STB violated NEPA by failing to analyze foreseeable indirect environmental effects of increased fossil fuel development tied to authorizing and operating the line.
The Supreme Court’s Decision
Justice Kavanaugh authored the majority opinion for the Court, joined by Justices Roberts, Alito, Thomas, and Barrett. Justice Sotomayor filed a concurring opinion, joined by Justices Kagan and Jackson. Justice Gorsuch did not take part in the case.
The Court held that the D.C. Circuit erred in two fundamental respects:
1.
Failing to grant proper judicial deference to the STB’s judgment regarding the scope of the EIS.2
2.
Misinterpreting NEPA’s scope by requiring the STB to assess indirect effects of third-party oil and gas development and refining not caused by the project at issue.3
In an introductory discussion, Justice Kavanaugh briefly recounted the history of NEPA’s interpretation by courts and noted that “some courts have assumed an aggressive role in policing agency compliance with NEPA,” while others take a more “restrained” approach.4 Offering a corrective to “continuing confusion and disagreement” among federal courts, the opinion comes down decidedly on the side of judicial restraint. It “reiterate[s] and clarif[ies] the fundamental principles” of NEPA judicial review, including that NEPA is a purely procedural statute that grants broad discretion to agencies, and courts should not interfere if agency decision making falls within “a broad zone of reasonableness.”
Justice Kavanaugh emphasized that NEPA “does not mandate particular results” and, unlike other federal environmental statutes, does not impose any “substantive constraints” on the agency’s decision about a project. Agencies must take a “hard look” at the environmental consequences of their actions in the context of projects under consideration, but they are not required to assess indirect effects of separate federal, state, or private projects, even if the action under review might facilitate those projects.5 Making this scoping determination about indirect effects is clearly within the discretion of the agency preparing the NEPA document, and courts should honor it if it is “reasonable” and “reasonably explained.”6 Further, and of importance to NEPA jurisprudence, the Court instructed that “the adequacy of an EIS is relevant only to the question of whether an agency’s final decision … was reasonably explained.”7
Focusing on the question at issue – whether impacts of potential separate projects upstream and downstream of the proposed railroad must be evaluated in the EIS – the Court criticized the D.C. Circuit’s legal conclusion requiring inclusion of such projects in the EIS analysis. The Court reasoned that the STB had no decision-making or regulatory authority over such projects, and concluded that a separate project “breaks the chain of proximate causation.”8 Crucially, the Court stated that an agency’s determination of project scope–including whether a particular impact is the result of the action itself or of a separate project–is entitled to substantial deference, provided the agency offers a reasoned explanation.9 But the decision goes further, concluding that NEPA’s requirement to consider reasonably foreseeable impacts does not, as a matter of law, require agencies to include the indirect impacts of separate projects for which the lead agency plays no role in an EIS.
Justice Sotomayor’s concurrence emphasized that the majority reasoning should not be used to sidestep meaningful environmental review.10 The concurring opinion agreed with the outcome but emphasized the need for vigilance in ensuring agencies do not avoid meaningful environmental review through overly narrow interpretations of project scope or causation.
GT Insights
The decision is a win for project sponsors–including developers of infrastructure, housing, renewable energy, and industrial facilities–because it narrows the circumstances under which federal agencies must evaluate indirect adverse impacts of a project undergoing NEPA review. The Court reaffirmed that NEPA imposes procedural obligations only; agencies must take a “hard look” at environmental effects, but they are not required to engage in speculative or limitless analysis of impacts from separate projects.11
Much of the decision is a general discussion – citing the Court’s precedents – about the broad discretion agencies enjoy under NEPA and the requirement of judicial deference to that discretion. While some of this language may be dicta, it nonetheless has importance to lower court judges, agencies, and project proponents because it signals that the Court believes that the time and effort spent by agencies in preparing comprehensive NEPA reviews has gone beyond the statute’s intent at the expense of new infrastructure projects. Particularly relevant is the Court’s observation that “intrusive (and unpredictable)” reviews by lower courts “have slowed down or blocked many projects and, in turn, caused litigation-averse agencies to take ever more time and to prepare ever longer EISs for future projects.” The decision at multiple points expresses disapproval of the use of NEPA to delay or block projects that “otherwise comply with all relevant substantive environmental laws,” leading to “fewer and more expensive railroads, airports, wind turbines, transmission lines, dams, housing developments, highways, bridges, subways, stadiums, arenas, data centers, and the like.”
The decision, however, also emphasizes that the substantial deference that courts should afford agency NEPA determinations in no way should be viewed as inconsistent with its recent decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which eliminated Chevron deference. The Court distinguished between Chevron deference to agency interpretations of statutory language with agencies’ exercise of discretion expressly granted to them by NEPA. The Court found that agency determinations as to the scope and detail of a NEPA review are not statutory interpretations, but rather fact-intensive endeavors to which courts must defer unless the decisions issued in connection with such review violate the Administrative Procedure Act’s “arbitrary and capricious” standard.
The Court explicitly noted that omissions in an EIS are not automatically fatal to an agency approval. So long as the agency provides a rational explanation for its ultimate decision, including decisions about what need not be considered in a NEPA review, courts may not substitute their judgment for that of the agency.12 Also, echoing arguments of some NEPA reform advocates, the Court introduced a new concept that EIS deficiencies need not always result in vacatur, “absent a reason to believe that the agency might disapprove the project if it added more to the EIS.”13
The Court pointed to a broader concern: NEPA litigation has increasingly been used to block or delay projects, resulting in more litigation and fewer projects. The decision may therefore provide needed guardrails for agencies and developers, reducing litigation risk stemming from speculative or tangential environmental claims.14
Seven County stands as a declaration by the U.S. Supreme Court that lower courts should not allow litigants to use the strictly procedural requirements of NEPA in a manner that unnecessarily delays or blocks infrastructure projects approved by federal agencies. It remains to be seen the extent to which the lower courts and federal agencies that grapple with future controversial projects will take that declaration to heart.
1 See Eagle County v. Surface Transp. Bd., 60 F.4th 828 (D.C. Cir. 2023)
2Slip op. at 9, 21.
3 Id. at 6-9, 19-21.
4 Id. at 8.
5 Id. at 20-21.
6 Id. at 9.
7 Id.
8 Id.at 16-17.
9 Id. at 21.
10 Id., Sotomayor, J., concurring at 1-2.
11 Id. at 6-7.
12 Id. at 9.
13 Id. at 14.14 Id. at 23.
Additional Authors: Courtney M. Shephard, Eric Waeckerlin, and Jenna Rackerby
Whose Terms Govern? An Introduction to the Battle of the Forms
For construction lawyers, the Battle of the Forms presents a familiar fact pattern. A material supplier/seller provides a potential buyer with a price quote along with its standard terms. The buyer, usually a contractor or subcontractor, responds with a form purchase order that includes its own standard terms, which differ from the seller’s terms. The seller then responds by shipping the goods, often with an invoice or confirmation that restates the seller’s terms. The parties’ respective forms align on certain terms like price and quantity, but other terms differ. Neither party ever signs the other party’s form. The parties nevertheless conduct business with each other as if they are in agreement — the seller sells, and the buyer buys. Later, a dispute arises, which turns on the following question: What are the terms of the contract? In other words, whose form wins the battle?
In the case of the sale of goods, the answer to this Battle of the Forms scenario is supposed to be found by applying Section 2-207 of the Uniform Commercial Code. That section, which has been enacted in some form in all 50 U.S. states, provides as follows:
§ 2-207. Additional Terms in Acceptance or Confirmation.
A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
the offer expressly limits acceptance to the terms of the offer;
they materially alter it; or
notification of objection to tem has already been given or is given within a reasonable time after notice of them is received.
Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.
As demonstrated by the Sixth Circuit opinion last week in BorgWarner v. Parker Hannifin, applying this analysis and arriving at an answer is not so simple. In that case, the Sixth Circuit was presented with a typical Battle of the Forms fact pattern where neither side ever expressly agreed to the other side’s terms. This included a price escalation clause in the seller’s quote, which became the focus of the dispute. After 18 pages of analysis, a majority of the three-judge panel concluded that a contract existed and that the terms are the parties’ writings, where they agree, plus any default terms supplied by Ohio’s version of the UCC. The Sixth Circuit did not rule what those terms were but remanded the case back to the trial court with perhaps as many questions as answers. On remand, the trial court will be faced with deciding the ultimate question: who wins the battle of the forms?
A copy of the court’s opinion is here.
Preliminary Injunction of Recent DoD + GSA Memo Means Federal Contractors Must Continue to Comply with Biden-Era Project Labor Agreement EO + FAR
Takeaways
The injunction vacates federal agencies’ memoranda exempting certain construction projects from mandatory PLA requirements.
Executive Order 14063 (EO) and related Federal Acquisition Regulations requiring PLAs on large-scale federal construction projects remain in effect.
Despite the injunction, the Trump Administration is likely to continue scaling back the use of PLAs on federally funded projects.
A D.C. federal judge granted the North America’s Building Trades Union and Construction Trades Council’s request to enjoin the recent memoranda exempting certain construction projects from Executive Order (EO) 14063. North America’s Building Trades Unions (NABTU) v. Department of Defense et al, No. 1:25-cv-01070 (DDC May 16, 2025).
Executive Order 14063 is a Biden-era rule requiring every federal contractor to enter into a Project Labor Agreement on federal construction projects over $35 million. The Federal Acquisition Regulatory Council implemented this rule in 2023 as a Federal Acquisition Regulation. In February 2025, the Department of Defense (DOD) and Federal General Services Administration (GSA) issued memoranda purportedly eliminating this requirement. The North America’s Building Trade Union’s filed suit seeking to enjoin the DOD and GSA memoranda.
The court held the two unions demonstrated a substantial likelihood of establishing that the memoranda are contrary to law and violate the Administrative Procedure Act in deviating from the EO requirements without “providing adequate justification or following the proper exception process.” The court further noted that agencies are bound by EOs until they are “rescinded or overridden through lawful procedures.” Accordingly, the DoD and GSA memoranda were vacated.
PLA Basics
A PLA is a pre-hire, collective bargaining agreement that contractors enter with one or more labor organizations establishing terms and conditions of employment for a specific construction project. The PLA can include dispute resolution procedures, wages, hours, working conditions and bans on work stoppages.
Under the EO, non-union contractors may bid for and work on covered federal PLA projects, but they must abide by the terms of the PLA (and the applicable terms of collective bargaining agreements referenced therein) for the duration of that project. For contractors already signatory to a union contract, the PLA is an additional layer to the existing union agreement. The non-union contractor need not sign on to union agreements for other work not covered by the PLA.
Executive Order 14063
Former President Joe Biden signed Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, on Feb. 4, 2022. That order provided that, with certain exceptions, government contractors and subcontractors working on federal construction projects that meet the threshold of $35 million must “become a party to a project labor agreement [PLA] with one or more appropriate labor organizations.”
The order explained that PLAs “avoid labor-related disruptions on projects by using dispute-resolution processes to resolve worksite disputes and by prohibiting work stoppages, including strikes and lockouts.”
On Dec. 22, 2023, the FAR Council, after issuing a proposed rule and receiving public comment, issued its final rule implementing the EO, with minimal changes to its proposed regulations.
Trump Administration Impact
The lawsuit highlights ongoing legal challenges over the Biden Administration’s mandatory PLA requirements. Recently, in MVL USA Inc. v. United States, several construction companies filed a lawsuit in the U.S. Court of Federal Claims challenging the legal authority of federal agencies to mandate PLAs under the EO. 174 Fed. Cl. 437 (Fed. Cl. 2025). The court found in favor of the construction companies, holding the PLA mandate, as applied in those cases, violated full and open competition under the Competition in Contracting Act because it excludes responsible offerors declining to enter PLAs, even when the data indicates an exception should be made. While the D.C. Circuit noted in NABTU v. DoD that the holding was limited to the specific procurements in that case, the case will likely serve as precedent when future bidding challenges arise.
Nonetheless, President Trump is expected to make efforts to revoke or scale back the mandate during his administration. On March 14, 2025, for example, he issued EO 14236 (Additional Rescissions of Harmful Executive Orders and Actions) which revoked Biden-era EO 14126 (Investing in America and Investing in American Workers) that encouraged federal agencies to prioritize projects involving PLAs, among other pro-labor agreements. EO 14236 does not impact the PLA mandate, but it does indicate the Trump Administration will, at the very least, minimize the use of PLAs going forward.
Although the district court decision is subject to appeal, the federal PLA mandate is still in effect. Construction employers should therefore anticipate that large-scale federal projects may require PLAs that comply with EO 14063’s requirements.
Tracking Lien Law Requirements: Alabama
This is the first in a series of blog posts discussing lien requirements in states where we most frequently litigate and states with unique lien requirements.
Alabama Lien Law Basics
Alabama’s statutory mechanic’s lien law can be found at Ala. Code §§ 35-11-210 et seq. These statutory lien requirements are strictly enforced. Some basic precepts of Alabama lien law include:
In Alabama, a mechanic’s lien claim can only arise out of a contract for performing work or furnishing materials for construction or repair of a building or improvement upon land. Clearing, grading, and excavation work, for example, constitute improvements to land. Additionally, architects or engineers who provide plans and supervise erection are also entitled to lien construction projects.
A general or original contractor has the right to lien the full amount of its contract with an owner (a full price lien).
Subcontractors, suppliers, and other materialmen not in privity with an owner typically are entitled to lien only on the unpaid balance due from the owner to the original contractor. But see § 35-11-210 (permitting full price lien rights for certain materialmen (not supplying labor or services) when notice provided to owner prior to furnishing materials)).
Upon request of an owner, an original contractor shall furnish a complete list of all materialmen, laborers, and employees who have furnished any material or are under contract to furnish material or labor for a project, along with the terms and prices thereof (Ala. Code § 35-11-219). If an original contractor fails to supply such information or fails to pay any materialman, subcontractor, or laborer, the contractor may forfeit its lien rights against the owner.
Notice of an intent to file an unpaid balance lien (Ala. Code § 35-11-218) must be given to the owner prior to filing or recording a lien. The notice must be in writing, state that a lien is claimed, set forth the amount due, set forth the work performed, and describe the entity or person who owes the money. Original contractors are not required to submit this notice.
A verified statement of lien must be filed with the probate court in the county or counties where the property for the project is situated (a) within six months after the last item of work has been performed or the last item of material has been furnished for original contractors, (b) within 30 days after the last item of work has been furnished for laborers, or (c) within four months for all other entities after the last item of work or material has been furnished. For (b) and (c), the verified statement of lien must follow the notice of intent required under Ala. Code § 35-11-218.
Following filing of a verified statement of lien, a party seeking to enforce its lien rights must file suit within six months after maturity of the entire indebtedness (usually the date when labor was last performed or materials were last furnished on a job).
To bond off a lien filed against your project, Alabama law requires the bond to cover the amount of the lien, plus interest on that amount at 8% for three years and $100 for court costs (Ala. Code § 35-11-233). If you are seeking to bond off a lien prior to an enforcement action being filed, a trip to the local probate court may be required.
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Court Affirms $1 Nominal Damage Award in Wind Farm Construction Dispute
Court Affirms $1 Nominal Damage Award in Wind Farm Construction Dispute
The general contractor on the 60-turbine wind farm project in Good Hope, Illinois, is entitled to collect a whopping $1 on its cost-to-complete claim against its terminated subcontractor. We previously reported on the court’s entry of summary judgment in favor of the general contractor, Black and Veatch Construction (BVCI), here and here. That order found that BVCI properly terminated its subcontractor, The Boldt Company, who was liable for damages in an amount to be determined by the jury. After the three-week jury trial, the jury awarded BVCI nominal damages in the amount of $1. Dissatisfied with the result, BVCI moved to set aside the verdict as against the weight of the evidence. U.S. District Judge Andrea Wood denied that motion in an opinion released last week. Her opinion provides insight into the jury’s decision to award nominal damages and offers valuable lessons for contractors seeking to recover cost-to-complete damages following termination of a subcontractor.
As a reminder, breach-of-contract damages generally seek to place an aggrieved party in the position they would have been in had the contract been performed. In cases where a subcontractor is terminated before completion due to defective performance, the general measure of damages is the difference between the reasonable cost to complete work and the subcontract price. Here, BVCI’s alleged cost to complete was $38.9 million compared to a subcontract price of just $15.4 million. With overhead and profit, BVCI’s total damage figure based on its costs to complete was $29.4 million.
The court’s recent opinion identifies a number of reasons why the jury could have reasonably concluded that BVCI failed to meet its burden of proving it was entitled to this amount. For example, BVCI’s alleged costs to complete totaling $39 million were based on two cost codes that were set up after Boldt’s termination. The jury heard evidence about numerous cost-coding errors that resulted in $17.7 million in project costs being transferred into a new cost code. The jury may also have questioned the reasonableness of BVCI’s costs to complete, which were over 2.5 times Boldt’s original subcontract price of $15.4 million. The biggest reason for that increase was BVCI’s decision to self-perform the turbine-erection work even though (1) it had never self-performed that kind of work before and (2) there were subcontractors available who could have done the work. The court reasoned that the jury could have reasonably refused to hold Boldt liable for BVCI’s costs of learning how to do the erection work “on the fly” instead of waiting for an experienced subcontractor to become available. The jury also heard evidence about BVCI’s inefficiencies in completing the work, including a retrospective “post-mortem” analysis by a BVCI employee that identified a number of issues with BVCI’s performance on the project.
The court summarized its view of the evidence and holding as follows:
In sum, BVCI went all in on a theory of damages that supported only a single number—approximately $38.9 million—as BVCI’s costs to complete Boldt’s scope of work. The jury was asked to calculate that figure by relying on numbers that BVCI assigned to Boldt based on subjective cost codes of questionable accuracy. As proof of the reasonableness of those costs, BVCI introduced the testimony of an expert who offered relatively threadbare opinions based on a process that he did not describe with any real specificity. Given the concerns surrounding both BVCI’s numbers and its expert’s review, it was rational for the jury to decide that either or both were untrustworthy. While absolute certainty of the amount of damages is not required, if the jury determined that it could not even reasonably approximate BVCI’s damages with the evidence provided, then it properly awarded nominal damages. Accordingly, the jury’s verdict that there was insufficient evidence for it to determine the fair and reasonable amount of BVCI’s damages was not against the manifest weight of the evidence.
The court went on to reject BVCI’s challenges to various evidentiary rulings and denied its motion for a new trial. A copy of the court’s opinion is located here.
Does “Indemnify” = “Hold Harmless”?
Does this sound familiar? Nearly every construction contract contains an indemnification provision with some variation of these terms. And if you have ever negotiated a construction contract, you know that indemnification provisions often feature in those discussions. But are the words “indemnify” and “hold harmless” an example of lawyers inserting a meaningless list of synonyms to ensure that all bases are covered? Or do “indemnify” and “hold harmless” mean different things? According to the Alabama Supreme Court in Adams v. Atkinson, No. SC-2024-0528, 2025 WL 1416851 (Ala. May 16, 2025), “indemnify” and “hold harmless” may be synonyms depending on the context.
As noted in one of our prior blog posts, “contractual indemnity is the right of one party (the indemnitee) to claim reimbursement for a loss from another party (the indemnitor).” But does “hold harmless” also give one party a right to indemnification when it appears by itself? This past week, the Alabama Supreme Court held that the answer might be “yes.”
In Adams, a beneficiary of a family trust sued other parties for reimbursement of attorneys’ fees under the terms of a prior settlement agreement. The beneficiary faced a demand for payment of attorneys’ fees from a trustee and sought reimbursement from the defendants under a hold harmless provision. The hold harmless provision did not include the word “indemnify” but required the defendants to “hold [the beneficiary] harmless against any demand… by any corporate trustee… for attorneys’ fees.” The defendants argued that “hold harmless” was a defensive term in that they agreed only to waive any claim against the beneficiary for attorneys’ fees. The beneficiary, however, argued that the hold harmless provision necessarily granted an offensive right to reimbursement, i.e., indemnification, for the attorneys’ fees because it contemplated claims against the beneficiary only.
The Alabama Supreme Court held that “hold harmless” and “indemnify” may be synonyms even when they “appear separately and perform the same function.” To be clear, the court emphasized its holding was “narrow.” In the context of the specific hold harmless provision at issue, holding the beneficiary harmless against demands by corporate trustees only made sense if “hold harmless” meant “indemnify.” The court concluded by (1) confirming that “indemnify” and “hold harmless” are synonyms when they appear as a doublet (i.e., beside each other in the same provision) and (2) reasoning that “hold harmless” can mean “indemnify” when it (a) appears separately and (b) performs the “same function” as an indemnification provision.
In ruling in favor of the beneficiary, the court determined the context of the specific agreement in Adams indicated that the parties intended the hold harmless provision to operate as a reimbursement mechanism rather than a mere waiver of rights. The court found the defendants’ argument illogical as they would have no claim for attorneys’ fees to be waived in an action by a trustee against the beneficiary in which none of the defendants were named.
So, what does Adams mean for your construction contracts?
It means that you should be careful when using the words “hold harmless” by itself because a court or arbitrator may conclude that it means something different than you intended. Regardless of whether you want “hold harmless” language to operate as a waiver or a right to indemnification, later interpretations of that provision may be fact-dependent and may vary depending on the specific language used.