Better Roads Digital Magazine
Issue link: http://read.dmtmag.com/i/291564
22 April 2014 Better Roads InCourt by Brian Morrow, P.E., Esq. Attorney Brian Morrow is a partner in Newmeyer & Dillion LLP and a licensed civil engineer specializing in construction law, including road and heavy construction. firstname.lastname@example.org S ite conditions that differ from what the contrac- tor expects — including subsurface soil condi- tions — is one of the biggest risks for many con- tractors. Soils conditions that are more difficult than anticipated can result in increased costs and time, decreased productivity of existing crews and require ad- ditional construction work, new types of equipment and additional manpower. As a result, contractors often request an equitable adjustment to their contracts based on unan- ticipated site conditions. Construction contracts often include a differing site con- ditions clause. A "Type I" differing site condition is based on conditions at the site that differ materially from those "indicated in the contract documents." The term "contract documents" includes all design drawings and specifica- tions, including owner responses to questions at pre-bid meetings, geotechnical reports and information incorpo- rated into the drawings and specifications. In Appeal of CCI, Inc. (March 14, 2014), the Armed Services Board of Contract Appeals (Board) denied a con- tractor's appeal arising out of a pier and seawall project and claimed differing site conditions at Umm Qasr, Iraq. On April 25, 2008, the U.S. Army Corps of Engineers (Corps) issues a RFP for a negotiated design-build contract under the Foreign Military Sales program for the Iraqi Navy. The RFP sought seawall design and construction; a design to minimize dredging; and construction of piers, including a "L-shaped pier" (Pier 1) and an option for a "T-shaped floating pier" (Pier 2). The contractor was re- sponsible for project design. The RFP noted the site was on an estuarine outflow of the Tigris-Euphrates delta system. The RFP addressed sedi- mentation, noting continuous dredging at a commercial port immediately upstream and satellite photos and local reports of heavy sedimentation in the vicinity of the proj- ect. It was also known that a dredging contractor on site was spending millions of dollars dredging the naval port, and other local piers were clogged with siltation. Nonetheless, CCI's proposal eliminated a dredging item on the ground that, by pushing the pier further into the channel, the flow of water would keep sedimentation down. In addition, CCI planned to use "open-cell" con- struction from land, as opposed to a barge. CCI planned to use a 280-ton crane to perform the construction. CCI had very little experience in marine construction and had never been involved in an open-cell project, but it wanted to expand its government contracting work and thought it would be an opportunity to get its "foot in the door . . . in the Middle East." On or about June 23, 2008, CCI submit- ted its proposal. On Sept. 10 2008, the Corps awarded the contract to CCI for $38,462,386.58, including the exercise of its op- tion for Pier 2. The contract completion date was Sept. 27, 2009. During construction, CCI encountered significant difficulties with unstable soils in attempting to construct Pier 1 from land, as the soils underlying a 280-ton "crane pad" failed multiple times. As a result, the work was com- pleted from a barge instead of land. By June 2010, CCI completed the project. CCI submitted a certified claim dated Feb. 8, 2010 to the Corps for $35,125,036, including a Type I differing site conditions contention. By final decision of July 9, 2010, the Corps denied CCI's claim. On Aug. 6, 2010, CCI ap- pealed to the Board. On appeal, the Board noted require- ments for a Type I differing site condition included the conditions encountered were materially different from Unsteady Ground Corps of Engineers denies contractor's Type 1 differing site condition claim on Iraqi project.