Hindsight About Unforeseen Site Conditions
A Closer Look at
Type II Differing Site Conditions Claims
By: Doug Shevelow, P.E.
Reprinted from January 2006 ohioconstructionlaw.com
My last column discussed the indispensable elements of a Type I
differing site conditions claim — one where actual conditions in the field are different from what was
represented in the contract documents. This column’s topic is the other typical differing site conditions claim,
the Type II, which usually means a claim for a condition that is materially different from the known or
usual conditions for the type of work and geographic area involved.
The subjective nature of Type II claims makes them more difficult, hence more expensive, to prove — likely
requiring expert testimony on whether a certain subsurface condition was reasonably anticipatable. There is
not a clear reference point as with a Type I claim. An experienced construction attorney representing a
contractor with a differing site conditions claim will rush to the contract documents and look for boring
logs or other data that contradict actual conditions in hopes of framing a Type I claim instead of a Type II claim.
The best approach for overcoming their subjectivity might just be to look at other Type II claims
where contractors have successfully prosecuted their claims and try to draw an analogy between those facts and yours.
But successful Type II claims are rare — there is bound to be an owner on the other side of the table with a
greater number of cases where Type II claims have failed.
A good case to show how a contractor may prevail (at least partially) in a Type II claim is
Servidone Construction Corp. v. U.S. (1990), 19 Cl.Ct. 346. In Servidone, the contractor
was hired by the U.S. Army Corps of Engineers to construct a 4-mile-long earthen dam near Dallas to
create the Joe Pool Reservoir. The contract called for the embankment of 10,000,000 cubic yards of fill.
Servidone was awarded the contract for just under $26,000,000 after the low bidder was disqualified.
At the end of the job, Servidone’s differing site condition claim totaled nearly $42,000,000.
The gist of Servidone’s claim was that the clay soils it needed to excavate from government-specified borrow
areas and then transport and compact to construct the dam were much more difficult to deal with than was
anticipated — “extremely tough” in the words of the U.S. Claims Court. Servidone offered testimony from its trial
expert, a foreman, two civil engineers hired by its surety during the project, and another consulting
engineer Servidone hired during the project. The points made by Servidone’s witnesses and accepted by
the court included these:
The highly plastic clay soil became tough and sticky near optimum compaction moisture.
The soil was unusually difficult to plow and dry, requiring multiple passes and the weighting down of the disc harrows.
The soil was very difficult to load with a scraper, requiring two D-9 bulldozers to push/pull each scraper.
The soil was difficult to load, feeding into the scrapers in large curls, reducing the net volume of a given soil load.
The slickness of the soil greatly hindered all of the contractor’s operations on the soil.
The soil, once loaded in scrapers, was unusually difficult to unload at the fill site, requiring bulldozers to bump the scrapers to dislodge the material.
The court concluded that the soils’ most difficult engineering properties were not discernable from data furnished in the bid documents, such as grain size distribution, optimum moisture, plastic limits and liquid limits (the moisture contents at which the material begins to act like a plastic and liquid, respectively). Instead, the difficulty arose because the mineral structure of the clay soils was dominated by a type of clay that was made up of plates that were much smaller than most clays.
The court held even though a reasonable and prudent contractor would have anticipated difficulty in working with the site soils, no bidder, no matter how experienced, would have anticipated the conditions actually found. So the court validated the contractor’s Type II differing site conditions claim, but only to a point. The court recognized that the contractor did have some culpability because it should have recognized there would have been some difficulty with the site’s soils—its production estimates were too optimistic for what it should have gleaned from the bid information (the high liquid limits were a red flag) and from general knowledge of soils in the North Central Texas area (“generally difficult to work with”).
In a future column I will discuss the unique method used by the court to calculate the amount of damages it awarded the contractor based on its holding of comparative fault. (Hint: the contractor did not get $41 million dollars.)
