Differing site conditions, commonly referred to as unforeseen site conditions, is a term used in construction contracts to describe a previously unknown condition that, once discovered, will affect a project’s schedule and costs. For this reason, it is important for site managers to understand and be aware of the differing site conditions clause and the associated reporting obligation.
The Differing Site Conditions clause addresses the following two situations:
Type I – Conditions that materially differ from the conditions described in the contract
Type II – Conditions that materially differ from what one would expect to be encountered
As you can imagine, in older military installations, the first can be quite common due to the fact that much of the original plans and drawings may be over fifty years old and it is likely that many changes were not documented. Several years ago, I had a construction project to rebuild an intramural sports field that was shut down for safety concerns associated with tripping hazards and poor drainage. This was a straightforward project to bring the field to a usable condition and I did not expect any issues, but when the contractor was laying the sprinkler system, a giant boulder was discovered just underground in the middle of the field. It turns out, the ‘boulder’ was likely the footer from a large building previously located at the site. When the building was demoed, instead of removing the substructure, the footer was simply covered up with soil; however, the installation’s drawings were never updated.
The second condition is not quite as common, but can be exemplified in a project laying new water lines at a military installation dating back to the early 1940s. The issue arose when the contractor was digging a new trench and uncovered a 10-inch mortar ammunition. Now this would not have constituted an unforeseen site condition if the project was at an old bombing range were unexpended shells would be expected in the course of the project; however, in this case, the project was alongside a busy road next to a runway. It is safe to say that this was not the type of issue expected when bidding the project. It turns out, the small ammunition was an old training aid from the early days of the installation that somehow became lost and covered up over time. Of course this was a more extreme example, but an interesting one. A more commonplace example for this scenario occurs when a contractor is excavating a site expecting it to be comprised of sandy soil, only to discover several layers of bedrock that require removal at additional cost and with schedule impacts.
In both examples, the contractors promptly notified the contracting officer and suspension of work directions issued to allow the government time to assess. In the first scenario, the contractor was provided direction via contract modification with an equitable adjustment for the additional effort of cutting into the rock to allow the sprinkler system to cross. In the second scenario, the Government self-performed a survey of the area to determine if there were any other hazards beneath the surface. After determining the area safe from any additional ammunition, the suspension of work was lifted. To ensure this process plays out as required, it is important that prompt notification to the contracting officer be provided since failure to do so could result in denial of a request for equitable adjust.
Which brings me to the final example that occurred on a sewer lift station project. In this case the contractor was authorized to work weekends and one Saturday found that the underground piping was not located in the areas identified in the specification. However, instead of immediately notifying the contracting officer, the contractor proceeded to dig throughout the site to find the correct tie-ins. The following week the contractor submitted a claim for an equitable adjustment, but, as you might have guessed, the majority of the claim was denied. The additional digging to find the tie-ins was not needed and had the contractor provided the proper notification, the government could have corrected the issue without any action or expenses on the contractor’s part.
Differing site conditions can come in many forms as I have discussed here. For that reason, if there is any concern as to what has been discovered, it is best for the site manager to reach out to the contracting officer and discuss the issue at hand. The first two examples I provided show how this notification was done right and the third, not so well. Communication is vital in any project and ensuring your site manager is well aware of this clause will help protect your company from costly mistakes and delays.
For instant access to over 200 articles like this one (as well as the two new ones we add every week), join the Skyway Community.
Visit http://skywaymember.com for details.