A contractor was hired to remove DDT from contaminated soil at a Navy facility in
In order to prevail on such a site conditions claim, a contractor must establish four elements.
- The contractor must prove that a reasonable contractor reading the contract documents as a whole would interpret them as making a representation as to the site conditions - that the contract contained some identification of the conditions to be encountered at the site;
- The contractor must prove that the actual site conditions were not reasonably foreseeable to the contractor, i.e., that the contractor "reasonably relied" on the representations given all information available to the contractor when bidding;
- The contractor must prove that it in fact relied on the contractual representation; and
- The contractor must prove that the conditions differed materially from those represented and that the contractor suffered damages as a result.
The Court rejected the claim because it did not find the contractor proved that the specific contract documents actually represented site conditions, failing to satisfy the first requirement above. But moreover, the contractor failed to prove the second requirement because the Court determined that the contractor’s reliance on the soil information was not reasonable. Two bidding documents containing information on soil content were in “direct contradiction,” and the contractor could not claim a reasonable reliance on one but not the other.
With 20/20 Hindsight….
This claim was lost at the time the bid was submitted. Testimony emerged at the trial that the contractor itself questioned some of the data. The classic “should have been a warning” was used by the Court in describing what conflicting reports represented to a “reasonable contractor.”
Obviously, the contractor made a determination based on the data that turned out to be wrong. However, given the importance of the soil characteristics to the success of the treatment methodology employed, the contractor could have negotiated better contractual protections in its contract. The importance of the soil condition and the technical assumptions made should have been incorporated into the construction contract. At a minimum, the contractor should have identified the contradiction and explained its reliance on one document over the other in its bid. 20/20 hindsight is pretty easy.
The Construction Contract Clock:
Work Order to Court decision: 10 years








