Opinion ID: 2382536
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Heading: The Government Contract Defense in Pennsylvania Law

Text: Pennsylvania recognizes an affirmative defense to actions for damages caused by a private contractor's performance of a government contract where a contractor performs his work in accordance with the plans and specifications and is guilty of neither a negligent or willful tort. Ference v. Booth & Flinn Co., 370 Pa. 400, 403, 88 A.2d 413, 414 (1952). Our Supreme Court explained two policy justifications for the government contract defense in upholding the Ference rule four years later. Valley Forge Gardens, Inc. v. James D. Morrisey, Inc., 385 Pa. 477, 123 A.2d 888 (1956). First, the contractor should be shielded from liability when undertaking work for which the government itself would be privileged by sovereign immunity, so long as the contractor does not commit a negligent or willful tort in its performance. This shield primarily serves to protect the government, for, if the contractor were not immune when it carefully complied, costs of possible damages from the engineering or planning decisions of the government itself would be spread back to the government, defeating the government's sovereign immunity. Second, the assurance of protection from suit for the damages consequential to the government's intended plan encourages lower costs to the government on competitive bids. Both Ference and Valley Gardens involved claims in nuisance or trespass for property damage resulting from road contract work performance by private contractors to government specification. Ference treated a public nuisance claim by a bus company which suffered a loss of revenue when highway construction closed a nearby road which was essential to the bus line. In Valley Forge Gardens, run-off erosion from the highway construction embankment silted up the plaintiff's ponds. Neither case was premised on a theory of negligence in performing the government contract. The damages resulted from the engineering decisions made by the government, not from the manner of the execution of the contract. Thus, the government contract defense served to protect the contractor from traditional tort liability for damages caused by the government's engineering decisions. However, our Commonwealth's Supreme Court has refused to apply the government contract defense when the plaintiff's damages are caused by the abnormally dangerous activities of the defendant contractor, such as by blasting. Lobozzo v. Eidemiller, Inc., 437 Pa. 360, 263 A.2d 432 (1970). The Court refused to extend the protection from suit which would have been available to the government had it performed the blasting itself because of the inherent nature of the cause of action. If blasting, even though carefully performed, causes damage, it by that fact becomes `tortious' and actionable, and one whose property is injured may have recovery. Lobozzo, 437 Pa. at 365, 263 A.2d at 435. Liability for damages to others must be expected occasionally by all who choose to engage in abnormally dangerous activities. It is an absolute liability tort, for which liability without fault is imposed. Id. The reasons for the Court's refusal to extend the defense to claims arising from abnormally dangerous activities mirror the reasons for the recognition of absolute liability for abnormally dangerous activities. Blasting occasionally results in unpredictable and uncontrollable damage regardless of the care exercised. Hence, one who chooses to employ unusual abnormally dangerous activities is expected to bear the resulting costs, and the government planning such work expects that blasting victims will be compensated by the contractor. In contrast, damages from trespass ( Valley Forge Gardens ) and nuisance ( Ference ) are more controllable through careful, non-negligent performance. Such damages are an unfortunate result of the government's discretionary decision to undertake the contracted work; and, when the contractor is blameless, the consequences must be borne, uncompensated, by the innocent victim. That the state itself may have proceeded wrongfully in not foreseeing the consequential damage to plaintiff's property and making provision for its compensation supports not at all the conclusion that either the highway commissioner or the defendant [contractor] has committed wrong in proceeding with the work in the only way it could be done. Having committed no wrong, defendant should not be subjected to liability. It is not saved by the state's immunity from suit, but by its own innocence of wrongful acts resulting in liability for tort. Valley Forge Gardens, 385 Pa. at 890-891, 123 A.2d at 891 (citation omitted).