10/17/2022

Editor's Notes

Contractors seeking additional compensation for differing site conditions sometimes suffer from selective reading. They latch onto a statement or representation that supports their alleged expectation and ignore other information that may be contradictory. This practice violates a fundamental principle of contract interpretation—a contract must be read as a whole. No provision should be read out of the contract or treated as “mere surplusage.” All provisions should be reconciled to the extent reasonably possible.

 

A contractor requested a price quotation from an excavation subcontractor. The email request described the job site as “schist” comprised of layered mud and clay. A geotechnical report sent 30 minutes later included test boring logs from the work area, which showed 13 of the 31 borings resulted in “auger refusal.” The subcontractor later claimed that the presence of hard, undrillable rock was a differing site condition.

 

The second case in this issue addresses what seems to be a legal fine point, but actually has significant implications for contractors performing federal work. Can the government’s use of a Federal Rule 68 settlement “offer of judgment” later impede a successful claimant’s recovery of attorney fees under the Equal Access to Justice statute?

 

The third case involves a unit-priced contract that expressly excluded certain work activities from the pay schedule. Could an orally directed constructive change transform an excluded activity into a pay item?

 

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