Erickson-Shaver Contracting Corp. v. United States

33 Cont. Cas. Fed. 74,191, 9 Cl. Ct. 302, 1985 U.S. Claims LEXIS 866
CourtUnited States Court of Claims
DecidedDecember 30, 1985
DocketNo. 214-82C
StatusPublished
Cited by8 cases

This text of 33 Cont. Cas. Fed. 74,191 (Erickson-Shaver Contracting Corp. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Erickson-Shaver Contracting Corp. v. United States, 33 Cont. Cas. Fed. 74,191, 9 Cl. Ct. 302, 1985 U.S. Claims LEXIS 866 (cc 1985).

Opinion

OPINION

SETO, Judge.

This action arises from a contract to raise a dike embankment adjacent to the San Luis Canal in Fresno County, California. Plaintiff asserts that during the course of performance, it encountered a “differing site condition” because its earth-moving equipment became mired in excessively wet material not indicated in the contract documents. As a result, it seeks an equitable adjustment for the increased cost of performance allegedly occasioned by this condition. Plaintiff also claims that it is entitled to additional compensation for 22,023 cubic yards of borrow material excavated and placed on the embankment beyond the neatline but within the allowed tolerances.

BACKGROUND

On November 4,1980, plaintiff, Erickson-Shaver Contracting Corporation, entered into a fixed-price construction contract (No. 1-07-20-C0111) with the U.S. Department of the Interior (Water and Power Resources Service) to raise 2.6 miles of dike embankments adjacent to the west bank of the San Luis Canal in Fresno County, California. Plaintiff commenced performance on December 3, 1980 and completed all onsite work by January 17,1981, well within the 90-day construction period'required by the contract. On January 9, 1981, however, plaintiff notified the government that it had encountered what it considered a differing site condition consisting of isolated subsurface mud between stations 4533 and 4561 of the borrow area.1 Plaintiff claimed that the subsurface conditions encountered at the site differed materially from those indicated in the contract and increased its cost of performance by reducing equipment productivity. Additionally, plaintiff advised the government, subsequent to completion of the onsite work, that it intended to claim payment for the additional quantity of material excavated from the borrow and placed on the embankment beyond the neatline but within construction tolerances allowed during performance.

On February 26, 1981, plaintiff submitted the two claims, totalling $25,972.07, to the contracting officer by exception on its release of claims. In particular, plaintiff sought $7,913.21 under the differing site conditions clause and $18,058.86 for the additional material placed on the embankment. In his decision of June 16, 1981, the contracting officer found that plaintiff was not entitled to any additional compensation and denied both claims. On April 29, 1982, plaintiff instituted a “direct access” action in our predecessor court under the Contracts Dispute Act of 1978, 41 U.S.C. § 601 et seq. This matter is before the court for decision following a seven-day trial.

DISCUSSION

A. Differing Site Condition Claim

The Differing Site Conditions clause of the contract at issue provides that contractors may seek adjustments in the con[304]*304tract price in two general situations. In the first situation (Type I), the subsurface or latent physical conditions encountered at the site must differ materially from the conditions indicated in the contract before an equitable adjustment will be granted. Therefore, a Type I claim requires a delineation of those physical conditions that could be expected from an examination of the contract. See Foster Construction Co. v. United States, 193 Ct.Cl. 587, 435 F.2d 873 (1970). In essence, the underlying issue in a Type I claim is whether the contractor could reasonably have anticipated the conditions encountered from a knowledgeable interpretation of the contract documents, his inspection of the site, and his general experience as a contractor. See Perini Corp. v. United States, 180 Ct.Cl. 768, 780, 381 F.2d 403, 410 (1967); Kaiser Industries Corp. v. United States, 169 Ct.Cl. 310, 340 F.2d 322 (1965).

In the second situation (Type II), an equitable adjustment will be granted where the contractor encounters unusual physical conditions differing materially from those ordinarily encountered and generally recognized as inhering in the work of the character provided for in the contract. Thus, for a Type II claim, the contractor need only demonstrate that the actual conditions differed materially from those normally expected. See United Contractors v. United States, 177 Ct.Cl. 151, 368 F.2d 585 (1966).

The Differing Site Conditions clause therefore permits the contractor to submit a bid secure in the knowledge that an equitable adjustment in the contract price will be granted where the conditions encountered differ materially from those reasonably anticipated. See Woodcrest Construction Co. v. United States, 187 Ct.Cl. 249, 408 F.2d 406 (1969), cert. denied, 398 U.S. 958, 90 S.Ct. 2164, 28 L.Ed.2d 542 (1970). By protecting the contractor from suffering the burden of dealing with unforeseen circumstances, the clause eliminates the speculation often present in subsurface operations and thereby works to reduce inflated bidding. Kaiser Industries, 169 Ct.Cl. at 323, 340 F.2d at 329 (1965). Therefore, to the extent the conditions described in the contract materialize, the contractor bears the risk, while the government assumes the risks for conditions the contract documents fail to disclose.

In the instant case, plaintiff states a Type I claim. In particular, plaintiff alleges that on January 7-9, 1981, it encountered muddy conditions below the top two feet of excavation in the borrow area between stations 4533 and 4561. (Plaintiff’s Exhibit [“PX”] 3.) Plaintiff asserts that it was not reasonable to anticipate such conditions because the contract contained no indication of subsurface mud. Defendant rejoins that the contract documents, together with other information available to plaintiff, were sufficient to put plaintiff on notice that it was likely to encounter wet subsurface conditions during excavation of the borrow area. In support of its position, defendant adverts to the logs of five auger holes (“AH”) taken at the work site. Each of the five logs, which were included in the contract, notes the location of the auger hole and indicates both the type of material encountered at any particular depth and its percent moisture.

The threshold issue, therefore, is whether plaintiff, at the time it prepared its bid, reasonably could have anticipated the wet subsurface conditions encountered from an examination of the logs of auger holes AH-1 through AH-5. In other words, did the muddy conditions plaintiff experienced on January 7-9,1981 differ materially from the auger hole data? In determining what the auger hold data disclose about subsurface conditions at the site, however, the court recognizes that the issue is not what conditions a contractor should expect at any particular auger hole location, but rather what he should expect throughout the site from an examination of the data from all the boring locations. Therefore, the log of any particular auger hole is [305]

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Bluebook (online)
33 Cont. Cas. Fed. 74,191, 9 Cl. Ct. 302, 1985 U.S. Claims LEXIS 866, Counsel Stack Legal Research, https://law.counselstack.com/opinion/erickson-shaver-contracting-corp-v-united-states-cc-1985.