Lessons
Learned for Contractors
Prior to bidding on a project, the contractor should:
1.
Carefully review the
contract and understand how it assigns the risk of differing site
conditions. Carefully read the
contract and know what limitations will be applied to the ability to make
differing site conditions claims or any other requests for change orders. Either have prior experience performing the
particular type of work and contract – or hire managers that have requisite
prior experience. Be prepared for Courts
to enforce the contract as written and not to reform the contract to be fair or
reasonable.
2.
Search the contract for
onerous exculpatory clauses or contract language disclaiming the accuracy of
site information reflected in the bid documents.
3.
Perform a reasonable site
inspection and make a written and photographic record of your site investigation. Notice the physical characteristics of the
surrounding property.
4.
If a differing site condition is
encountered, follow carefully the contract notice requirements and wait for
instructions from the owner before disturbing the site conditions.
5.
Keep careful and separate cost records
of your additional costs flowing from differing site conditions.
6. Understand that the law varies greatly, from state to state,
with respect to the allocation of site conditions risk. Before bidding work in
an unfamiliar jurisdiction, check with your construction lawyer.
7. When a bidding document identifies other subsurface
conditions reports and/or soil borings are “available upon request”, request
and review all such information and incorporate the knowledge gained into your
bid.
8. When reviewing bidding documents, do not assume that the
owner is required to provide all possible information available. Be prepared to perform and document some
independent investigation of conditions potentially impacting the project. If
other information is discovered, make certain that the bid cost reflects this
independently discovered information.
9. If the bidding documents are silent on an issue (for
example, groundwater) this is no guarantee that the condition does not
exist. The contractor must perform his
independent Investigation from other sources and do test borings if this is
warranted. The contractor must perform a
reasonable amount of independent investigation concerning subsurface conditions
especially where the bidding information is silent on matters that, logically,
should be present on or near the site.
When the contract information makes no specific representations as to
conditions to be encountered, contractors may not be successful in claiming
that the condition encountered “differed materially ” from the conditions
anticipated
10. If site conditions change subsequent to contract award, do
not rely upon the Differing Site Conditions clause for an equitable adjustment
to the cost or time of the contract.
Look to other equitable adjustment clause such as the Delay or the
Changes clauses instead.
11. When bidders are faced with a requirement to perform their
own independent, post award geotechnical investigation, they may not be able to
rely exclusively on the owner furnished subsurface information.
12. Contractors may have to retain the services of a local geotechnical
consultant to review the owner furnished information and provide advice on how
to interpret the data and prepare this portion of the bid. If this is done, it will need to be
documented in the event of a later differing site condition claim.
13. If the information provided by the owner in the contract
documents is included as a “guide” then the contractor may be at risk for
relying totally on this information. The
contractor must perform his own investigation of the conditions and cannot
later claim differing site conditions.
14. When other available information is noted in the bidding
documents bidders must take the time and make the effort to review this
information. Such a review may prove
helpful in bidding and planning the project.
Further, such a review will help preserve the contractor’s right to file
a differing site condition on the basis of a material difference between
available information and actual conditions encountered.
15. Bidders must read the new contract anew. The contractors cannot assume that conditions
from previous contracts are the same as the conditions in the new contract
currently out for bid.
Lessons Learned for Owners
To avoid liability for unknown or unforeseen site conditions, the
owner should:
1.
Disclose all known
conditions prior to the submission of bids.
2.
If you include a
differing site conditions clause in the contract, impose strict notice
requirements and consider limiting the reimbursable costs to only direct job
site costs incurred by the contractor.
3.
Exculpatory clauses may
not avoid liability when the contract documents make positive representations
about the site or subsurface conditions.
Avoid such representations within the contract documents or otherwise.
4.
If there is a desire to
disclaim geotechnical information provided to bidders, be sure the contract
clearly states that the geotechnical reports are not part of the contract
documents.
5.
Prior to letting a
project, be certain that you understand how the contract allocates the risk of
unknown or differing site conditions.
6. To potentially avoid claims such as this, owners may want
to consider use of a Geotechnical Design Summary Report or a Geotechnical
Baseline Report where the geotechnical consultant “interprets” soil, rock and
water conditions between borings.
7. Make certain that the design professionals and
geotechnical consultants identify, search out and capture all subsurface
conditions reports and boring logs previously done on or near the site and
incorporate an appropriate notice of the availability of such additional
information in the bidding documents.
Metropolitan Engineering, Consulting & Forensics
(MECF)
Providing
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Services
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