Hard Hat Case Notes

• Author: By Hugh D. Brown and Lauren P. McLaughlin
• Pages: 75-80

Published in The Construction Lawyer Volume 43, Number 1, ©2024 by the American Bar Association. Reproduced with

permission. 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 the American Bar Association.

Forum on Construction Law The Construction Lawyer Volume 43, Number 1

75

By Hugh D. Brown and Lauren P. McLaughlin

Contractor Unable to Prove Differing Site Condition

The question of who bears the risk of differing site conditions (DSC) on a construction project is often

litigated. Most cases discussing DSC disputes center upon what formed the basis for the alleged DSC.

Moreover, most of the time there is some afrmative representation in the contract that led the contractor

to expect certain types of conditions, but when the contractor started construction work, it found

conditions that were materially different. The “ght” is typically whether (a) the contractor’s expectations

were justied based on a reasonable look at the contract documents or (b) a more robust prebid

investigation by the contractor would have revealed the conditions the contractor found.

There are some DSC cases, however, that discuss what happens when the contract documents are silent on

a particular condition. These cases create a challenge for contractors because contractors need to justify

how they arrived at their prebid expectations and why the owner should be responsible for the conditions

they actually found. The recent case of Slone Associates, Inc. v. United States highlights how difficult it is

for a contractor to prevail on these types of claims.

Slone Associates, Inc. (Slone), had a multiple-award construction contract with the U.S. Navy for work in

South Carolina and Georgia. In 2010, the Navy issued a $5.43 million task order to Slone that involved

repairs on a concrete dock located at the Naval Weapons Station in Charleston, South Carolina. The

repair work primarily involved the demolition of portions of the existing concrete pile-supported deck

and the installation of additional concrete piles and new concrete decking. Because Slone did not have

expertise with heavy marine construction work, the work at issue was performed by Precon Marine, Inc.

(Precon), a sub-subcontractor to Slone.

The project experienced numerous delays and DSC claims, many of which were recognized by the Navy

through contract modifications. However, one area of contention that was not resolved involved timber

stubs that were the remnants of an old wooden pier. During a post-construction inspection, the Navy

discovered that two of the new concrete piles that Precon installed were cracked. Slone and Precon

eventually asserted that the cracks were caused by the piles having contact with the timber piles. The

direct cost of removing and replacing the piles was approximately $450,000 and 169 days of delay were

attributed to this remedial effort.

Slone argued that the timber piles and their impact on the concrete piles constituted both a Type 1 and

Type 2 DSC. Slone included these assertions as part of an overall claim to the Navy. When the Navy’s

contracting officer failed to render a final decision on the claim, Slone filed a complaint with the U.S.

Court of Federal Claims. The court ultimately found that Slone did not prove that there was either a Type

1 or Type 2 DSC and denied the claim.

The court cited longstanding precedent stating that to prevail on a Type I DSC, a contractor must first

establish that “a reasonable contractor reading the contract documents as a whole would interpret them

as making a representation as to the site conditions” and that a contractor “is not eligible for an equitable

adjustment for a Type I [DSC] unless the contract indicated what that condition would be.” The DSC

remedy is not available if the contract documents “say nothing one way or the other about the unforeseen

conditions.” Citing other precedent, the court stated that if the contract is truly silent about the conditions,

there is nothing as a baseline to use to compare against the actual conditions and show how they are

HARD HAT CASE NOTES