Contractors preparing to bid on contracts are frequently forced to rely on the site condition information provided by project owners. There is neither time nor money for an independent evaluation of conditions that cannot be readily observed during a pre-bid site inspection. Bidders are entitled to reasonably rely on affirmative representations in the contract documents. But when is a representation sufficiently affirmative and when is reliance reasonable?
In a recent case, a project owner provided soil test boring logs indicating the presence of hydrostatic groundwater. The contract documents, however, prohibited the contractor from “interpretations of or conclusions drawn” from objective technical data. A contractor calculated anticipated groundwater flow rates using a well-recognized formula. When the contractor later asserted a differing site condition claim, there were problems with both an affirmative representation by the owner and reasonable reliance by the contractor.
There is no question that project owners and contractors alike overreach when it comes to site condition information. Owners provide data in order to encourage tight bidding then disclaim responsibility for the accuracy of that information or restrict its use. Contractors have been known to make some rather sweeping conclusions based on limited amounts of site data. What is your opinion? I welcome your comments.
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