Katherine E. Kohm | The Dispute Resolver | March 23, 2018
Under this federal contract, a Type I DSC claim arises when the subsurface or latent physical conditions at the site differ materially from those indicated in the contract documents. The Appeals Court recounted that typically whether “a contract contained indications of a particular site condition is a matter of contract interpretation.” Id. As part of its burden of proof, the contractor needed to show it acted as “a reasonable contractor [when] reading the contract documents as a whole [and] interpret[ing] them as making a representation as to the site conditions.” Besides reliance on the contract and proof of damages, the contractor also needed to prove that “the actual site conditions were not reasonably foreseeable to the contractor with the information available to the particular contractor outside the contract documents” as well. Id. The Appeals Court agreed with trial court’s conclusion that the saturated soil conditions were reasonably foreseeable from the contract documents. In particular, the contract stated that the worksite was located on a floodplain and the descriptions of the incorporated boring logs expressly stated that “variations may exist in the subsurface between boring locations.” The court also emphasized that “actual conditions at the site indicated such [saturated] conditions” and the contractor was charged with knowing information that could be gleaned from a pre-bid site visit. The court found important that there was no testimony from the contractor otherwise regarding the actual conditions.
For the contractor’s part, it argued that the contract had identified the areas of the project as “hard unyielding material.” But the Appeals Court was unpersuaded in the face of disclaimer contract provisions noting “unstable material” and boring logs that were determined to indicate otherwise. The contractor also balked that trial court found that an “independent soils investigation” was something a reasonable contractor would have performed. Again the Appeals Court disagreed concluding that the underlying decision actually did “not impose an improper requirement for investigation.” Lastly, the Appeals Court disposed of the contractor’s argument that the agreed-to modifications to the contract served as admissions by the government that a Type I DSC existed because “a contractor is not entitled to the benefit of any presumption arising from the [CO]’s decision.” Id.
Although the contractor did not prevail on the DSC claim, the Appeals Court did breathe new life into the delay claim for having to work in inclement weather. The trial court had dismissed this claim as well on account of an “accord and satisfaction” as a result of contract modifications. However, the Appeals Court disagreed noting that the contract modification did not represent a meeting of the minds to dispose of these inclement weather delay claims especially in light of the government’s actions post-modification – requests for estimates, draft modifications with these claims included, offer to review further documentation. Accordingly this delay claim was remanded for further hearings.