By Bruce Jervis
It’s a common scenario. The contract documents include a geotechnical report which makes a clear representation. Test borings indicate the material to be excavated does not involve hard rock. But there are disclaimers. The report says it is for the exclusive use of the project owner and cannot be used for purposes of bid preparation. The construction contract says bidders must familiarize themselves with physical conditions at the site. The owner does not warrant the accuracy of any site condition information in the contract.
What is a bidder to do? Ignore the geotechnical report, carry a large contingency for rock excavation, and quite possibly submit an uncompetitive bid? Or, trust the report is accurate, hone the bid price accordingly, and hope there will be some remedy if rock is encountered?
Aren’t project owners trying to have it both ways? They provide information regarding latent conditions at the site – conditions which cannot be observed during a reasonable site inspection. The intention is to reduce contingencies and encourage tight, competitive bidding. But they then disclaim responsibility for the accuracy of that information, indicating there will be no remedy if actual conditions differ from the representations.
What is your opinion, and how do you handle this situation? I welcome your comments.
Featured in Next Week’s Construction Claims Advisor:
- Arbitration Clause Applied to Subsequent Settlement Agreement
- Site Preparation Work Was Improvement to Property
- Claim Sufficient Based on Totality of the Documents