Payne Hackenbracht & Sullivan
Differing Site Conditions - Contract Indications
In essence, the underlying issue in a Type I claim is whether the contractor could reasonably have anticipated the conditions encountered from a knowledgeable interpretation of the contract documents, its inspection of the site, and its general experience as a contractor. See Foster Construction, C.A. v. United States, 193 Ct.Cl. 587, 435 F.2d 873 (1970); Perini Corp. v. United States, 180 Ct.Cl. 768, 381 F.2d 403 (1967); Kaiser Industries Corp. v. United States, 169 Ct.Cl. 310, 340 F.2d 322 (1965). As the Court explained in Mojave Enterprises v. United States, 3 Cl.Ct. 353, 357 (1983), a compensable Type I condition is one that is "reasonably unforeseeable on the basis of all the information available to the contractor at the time of bidding." See also T.F. Scholes, Inc. v. United States, 174 Ct.Cl. 1215, 357 F.2d 963, 969 (1966).
Moreover, express representations regarding the nature of conditions to be encountered during performance are not essential to establishing entitlement to an equitable adjustment. See Pacific Alaska Contractors, Inc. v. United States, 193 Ct.Cl. 850, 436 F.2d 461, 469 (1971). Rather, all that is required is that there be enough information from which physical conditions can be inferred. See Woodcrest Construction Co. v. United States, 187 Ct.Cl. 249, 408 F.2d 406 (1969), cert. denied, 398 U.S. 958 (1976). Indeed, a contract indication may be proven by inferences or implications, see Foster, 435 F.2d at 881, and need only be "enough to impress or lull a reasonable bidder." Stock & Grove, Inc. v. United States, 204 Ct.Cl. 103, 493 F.2d 629, 645 (1974). Thus, a contractor may recover where it concludes on the basis of the available information that latent conditions will be more favorable than those ultimately encountered. Pacific Alaska, 436 F.2d at 469.
It is well-settled that "a contractor may rely exclusively on the indications of subsurface conditions contained in the contract and is not required to make additional investigations of his own" to verify the accuracy of the boring information. Western Contracting Corporation, Eng BCA 3835 et al., 82-1 BCA 15,486 at p.76,806 (1982); Foster Construction, 193 Ct.Cl. 587; Mann Construction Co., Inc., AGBCA 76-109, 80-2 BCA 14,674 (1980). Therefore, a contractor is not required to hire its own geologist or make extensive engineering or scientific investigations prior to bidding. Minnis & Wright & Garn L. Moody, AGBCA 332, 74-2 BCA 10,685 (1974); Slattery Associates, Inc., Eng BCA 3922, 80-2 BCA 14,489 (1980); L.J. Casey Co., AGBCA 75-148, 76-2 BCA 12,196 (1976). To do so would place an onerous burden on the small contractor which the procurement regulations do not envision. John Murphy Construction Co., AGBCA 418, 79-1 BCA 13,836 (1979). Moreover, it is well-settled that the reasonable bidder is not required to anticipate the worst possible conditions in evaluating the contract documents. See Redman Service, Inc., ASBCA 8853, 1963 BCA 3897 (1963).
It is also well-settled that a contractor is entitled to rely on the contract indications regarding subsurface conditions and is not obligated to make a "scientifically educated and skeptical analysis of the contract." Stock and Grove, Inc. v. United States, 204 Ct.Cl. 103, 493 F.2d 629 (1974); Southern Paving Corporation, AGBCA 74-103, 77-2 BCA 12,813 (1977).
The court in Roscoe-Ajax Construction Co. v. United States, 198 Ct.Cl. 133, 458 F.2d 55 (1972), has noted that a contractor may establish the "material difference" required by the differing site conditions clause through evidence that it employed methods to accomplish the contract work different from those it anticipated. See also Dunbar & Sullivan Dredging Company, Eng BCA 3165 et al., 73-2 BCA 10,285 (1973); Maitland Brothers Company, ASBCA 24032, 84-2 BCA 17,463 (1984) (use of different, more powerful equipment); Roger J. Au & Son, Inc., IBCA 1303-9-79, 84-1 BCA 17,094 (1984).
The Court of Claims has recognized that contract indications of subsurface or latent physical conditions may be implied from the specification requirements and project design. See Foster Construction v. United States, 435 F.2d 873, 881, 889-90 (Ct.Cl. 1970); Stock & Grove, Inc., supra, 493 F.2d at 645; Woodcrest Construction, supra, 408 F.2d 406. For example, in a case where the measures required to remove rock exceeded the methods indicated as necessary in the specifications, a differing site condition was found to exist. Bick-Com Corporation, VACAB No. 1320, 80-1 BCA 14,285 (1980). See also S&M - Traylor Brothers, Eng BCA 3878, 82-1 BCA 15,484 (1982) (contract specifying use of heavy equipment implied that soil was sufficiently stable to support the weight of the equipment). As the Board noted in Titan Atlantic Construction Corp., ASBCA 23588, 82-2 BCA 15,808 (1982), a contractor is entitled to use "a simple logical process" in evaluating all of the information in the contract documents to evaluate subsurface conditions.
(See Example of Implied Representations)
(See Reliance on Accuracy of Government Estimate of Quantities)