Changing Trend in Risk Allocation - Differing Site Conditions

Why Should You Attend:

This webinar provides a thorough discussion of the Differing Site Conditions clause and how the typical understanding of this 90 year old clause is being eroded by Court and Board decisions. The differing site conditions clause was created by the U.S. Federal government in 1926, in regards to construction contracts. Over the years, the Courts and Boards of Contract Appeals have been slowing changing the interpretation of risk allocation under the clause. A series of Court and Board cases have increased the contractor’s risk concerning differing site conditions.

The training explores a number of Court and Board of Contract Appeal decisions which appear to be slowly eroding the traditional risk allocation commonly accepted under the Differing Site Conditions clause, along with lessons learned from each case.

Finally, this research perspective provides a list of practical recommendations for both owners and contractors dealing with the risks of differing.

Areas Covered in the Webinar:

• Definition of a differing site condition and why there is a need for a Differing Site Conditions clause in a construction contract.
• History and purpose of the clause and the modern Differing Site Conditions clauses.
• A discussion of the terms “indications” and “material difference”
• Impact of contract disclaimers related to differing site conditions
• Conditions not covered by the clause and conditions included within the scope of the clause.
• Six part test for a successful differing site condition claims and five additional contractual requirements contractors must comply with in order to prevail.
• contractor’s duty to continue work
• Reverse differing site condition claim – an owner claim that may be asserted against the contractor seeking recovery of funds from the contractor when they encounter conditions materially better than anticipated.

Learning objectives:

• Learn about the Differing Site Conditions clause and how it operates.
• Learn what conditions are and are not covered by the Differing Site Conditions clause.
• Understand what must be proven to prevail on a differing site condition claim and what contractual requirements must be complied with in full.
• Become familiar with a number of Court and Board of Contract Appeal decisions which are changing the traditional risk allocation under the Differing Site Conditions clause.

Who Will Benefit:

• Attorneys dealing with site condition claims.
• Owners and owner representatives managing capital improvement projects.
• Contractor executives, project managers, project sponsors and project control personnel.
• Construction managers and design professionals performing services during construction.

Instructor Profile:

James G. Zack, Jr., CCM, CFCC, FAACE, FFA, FRICS, PMP, is executive director of Navigant Construction Forum™. He was formerly executive director of Corporate Claims Management, Fluor Corporation; vice president, PinnacleOne; and senior construction claims consultant, CH2M HILL, Inc. With more than 40 years’ experience he is a recognized expert in mitigation, analysis and resolution or defense of construction claims. A fellow of AACE and RICS, Mr. Zack is a certified forensic claims consultant, a certified construction manager and a project management professional as well as a nationally known author and speaker on construction claims.

Topic Background:

The differing site conditions clause is one of the oldest clauses used in construction contracts, having been created by the U.S. Federal government in 1926. It is generally accepted that the object of the clause is to transfer the risk of latent site conditions to the owner, thus enticing contractors to reduce their contingency cost at the time of bid. The promise of the clause is that if the contractor encounters a materially different condition during the execution of the work, the owner will compensate the contractor for the resulting cost and/or time. For nearly 90 years this standard clause has been used widely in both public and private contracts and over the years, the Courts and Boards of Contract Appeals have been slowing changing the interpretation of risk allocation under the clause. A series of Court and Board cases have increased the contractor’s risk concerning differing site conditions.

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