For projects that involve excavation or foundation work, even the most diligent pre-bid site survey may not fully inform the contractor of what conditions to expect below the surface. The risks of encountering unforeseen subsurface conditions are so high that, rather than encouraging bidders to include large contingencies in their proposals, construction lawyers have drafted a special clause—the Differing Site Conditions clause. The purpose of the Differing Site Conditions clause is to allocate the risk for conflicting, inaccurate, or incomplete pre-bid information furnished by the project owner. While the Differing Site Conditions Clause should, in theory, be a pile driver’s closest ally, recent cases interpreting this clause highlight some of the challenges to prosecuting claims under this provision.

The test for differing site conditions has been articulated by various courts across the country, though the essential elements of proof are essentially the same in every jurisdiction. The Stuyvesant Test was developed as the uniform test at the federal level, and is informative of what issues are most important.[1]  To prevail on a claim under the Stuyvesant Test, the contractor has the burden of proving the following four elements: (1) that the conditions indicated in the contract differ materially from those encountered at the site; (2) that the conditions actually encountered were not reasonably foreseeable to the contractor based on information made available to it at the time of bidding; (3) that the contractor reasonably relied upon its interpretation of the documents incorporated into the contract and; (4) that the contractor was damaged as a result of the material variation between the expected conditions and encountered conditions.[2] As discussed below, certain repeat fact patterns have cropped up in litigation over the Differing Site Conditions clause. Good pile drivers will be wary of these pitfalls and take steps to mitigate the relevant risks.

What are the “Contract Documents”?

The “Contract Documents” are typically defined by the general terms and conditions of contract.  Standard practice is to define the Contract Documents as the project drawings, specifications, supplementary conditions of contract; however, some owners may actually incorporate additional documents within the scope of the contractor’s obligations, including preliminary investigation and soil boring reports, surveys, the Request for Proposal itself, written answers and questions posed during pre-bid meetings, preliminary construction schedules, the awardee’s bid proposal, or rules and regulations governing conduct at the work site. The owner may even incorporate by reference industry standards, geotechnical reports, or other documents not furnished directly to offerors during the bid stage.

In some cases, judges have found the contractor to be bound to information merely referenced in the request for proposal, even if the owner never bothered to provide the relevant documents to the bidders.[3] Thus, contractors should review the request for proposal with a fine tooth comb and request copies of any documents incorporated by reference if they are to have complete and accurate information about the “conditions indicated in the contract.”

How are conflicts among the Contract Documents resolved?

Contractors are always required evaluate and synthesize all the information that falls within the scope of the “Contract Documents,” as well as to promptly notify the owner and architect of any errors or inconsistencies in those documents. However, the “conditions indicated in the contract” may be unclear, or there may be a conflict between drawing sets or drawings and specifications. Most contracts include an “order of precedence” clause that is intended to resolve such conflicts. While such a clause can be helpful, the ideal resolution of conflicts, if caught early on, is to submit a request for information at the bid stage and seek written clarification of the conflict from the owner. Depending on the jurisdiction, bidder that could reasonably discern a conflict, but fails to raise it to the owner, may do so at its own peril.[4]

Do the Contract Documents make affirmative representations about the condition that gives rise to the claim?

In many cases, an experienced bidder may be able to infer or closely approximate soil conditions, utility locations, or excavation needs based on limited statements made in the contract documents. However, inferences and assumptions (even reasonable assumptions) are not enough—only an affirmative representation of underground conditions is sufficient to give rise to a subsequent claim under the Differing Site Conditions Clause. As explained by one court, “if a contract is silent as to the particular physical conditions at the project site, there can be no … differing site condition because no contract indications exist to compare actual conditions.”[5] In Manuel, the court rejected the contractor’s claim for delay and lost productivity because pre-bid, oral representation that soil conditions were “normal” were not an affirmative representation that could justify a claim.[6]

What is the significance of the requirement to conduct a pre-bid site visit?

Most solicitations include a mandatory requirement that offerors conduct a pre-bid site investigation and attend at least one pre-bid meeting with the designer. Whether or not they participate in pre-bid activities, contractors are generally deemed to be on notice of any conditions that a pre-bid site visit would have revealed if they had attended. In one case, the court denied a small business contractor’s claim for over $100,000 in extra sheet pile shoring costs spent while installing an oil/water separator tank. Even though the court found that the owner’s soil boring logs affirmatively represented the soil conditions, the court denied recovery because a “pre-bid site visit would have revealed geological features indicating a likelihood of highly variable subsurface conditions, such as the proximity of the construction site to the ocean and to the nearby streams.”[7] The lesson: always send a knowledgeable and experienced representative to any pre-bid site visit, preferably someone who is not afraid to ask questions and shift the burden to the owner to clarify inconsistencies in the contract documents.

Owner disclaimers of information in the Contract Documents

A great deal of litigation has stemmed from project owners and designers attempting to deflect responsibility at the pre-bid phase by, for example, couching drawings and specifications as “for information purposes only.” Such language would, intuitively, defeat the whole purpose of allowing the contractor to rely on the information provided by the owner. Yet in several cases, courts have denied claims under the Differing Site Conditions Clause on the grounds that a “reasonable contractor” would not rely on drawings that were clearly not intended to be a part of the “Contract Documents.”[8] Thus, contractors are well-advised to include clarifications in any bid based on Contract Documents that include disclaimer language, so as to preserve a potential claim down the road, in the event that there are material differences between what is represented by the owner and what actually lies beneath the surface.

[1] The Stuyvesant test comes from the 1987 decision of the U.S. Court of Appeals for the Federal Circuit in Stuyvesant Dredging Co. v. United States, 834 F.2d 1576 (Fed. Cir. 1987).

[2] Stuyvesant, 834 F.2d at 1581; see also Trafalgar House Constr., Inc. v. United States, 73 Fed. Cl. 675, 698 (2006); W.M Schultz Constr., Inc. v. Vt. Agency of Trans., ___ A.3d___, 2018 WL 6427252 (Vt. 2018).

[3] See Neal & Co. v. United States, 36 Fed. Cl. 600 (1996) (contractor was required to factor geotechnical information into its pricing where geotechnical reports were made available to it during bid phase).

[4] See id.; see also

[5]Manuel Bros. v. United States, 55 Fed. Cl. 8, 43 (2002).

[6] Id.

[7] H.B. Mac, Inc. v. United States, 153 F.3d 1338, 1346 (Fed. Cir. 1998); see Orlosky, Inc. v. United States, 64 Fed. Cl. 63 (2005) (electrical contractor was not permitted to recover costs of installing pole-mounted reclosers where contractor failed to attend pre-bid meeting or ask for clarification from Navy contracting officer).

[8] Old Veteran Constr., Inc. v. United States, 121 Fed. Cl. 346, 357 (2015) (plaintiff was not entitled to rely on report of geotechnical investigation that was provided “only for information” and which expressly noted seasonal changes to ground conditions outside of summer months); P.J. Maffei Bldg. Wrecking Corp. v. United States, 732 F.2d 913, 917 (Fed. Cir. 1984) (specifications stated that drawings were “for information only” and that their “quantity, quality, completeness, accuracy, and availability were not guaranteed.”); but see Foster Constr. C. A. & Williams Bros. Co. v. United States, 435 F.2d 873, 888 (Ct. Cl. 1970) (contractor could maintain claim based on representations in drill hole data logs, despite language purporting to disclaim responsibility by the owner).


This article was originally published in Issue 1, Volume 17 of PileDriver Magazine’s Spring 2020 edition. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of Seyfarth Shaw and PileDriver Magazine.