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A. Design Issues 1. Differing Site Conditions

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A differing site condition occurs when the contractor discovers subsurface or concealed conditions that differ materially from those indicated in the contract documents (Type 1 Differing Site Condition) or materially different from conditions ordinarily encountered in work in the location of the project (Type 2 Differing Site Condition), and this differing condition will cause an increase in the contractor's cost and/or time to perform the work. Standard contracts typically require the contractor to allow the owner the opportunity to decide on whether to authorize a change order to cover resultant impacts. If the contractor does not agree with the owner, it can initiate dispute resolution. The examples below review specific pre-claim requirements.

 AIA A201 – Section 3.7.4: The contractor shall provide notice to the owner/architect before conditions are disturbed and no later than 14 days after the first observance of the conditions. The architect shall promptly review the condition and if it agrees with the contractor it will recommend an equitable adjustment in the contract sum or contract time, or both. If the contractor or the owner disputes the architect's position, that party may initiate the Article 15 claims process.

 ConsensusDocs 200 – Section 3.16.2 and Section 8.2.1: Per Section 3.16.2, if the contractor identifies a condition at the site that is materially different than indicated in the contract documents or materially different from conditions ordinarily encountered in work in the contract documents, the contractor shall stop the affected work and give prompt written notice of the condition to the owner and the design professional. The owner shall investigate the matter and issue an interim directive that specifies the extent to which the owner agrees that a concealed or unknown condition exists and shall direct the contractor on how to proceed. Per Section 8.2.1, the owner's interim directive may direct the contractor to perform the work before agreeing on an adjustment in the contract price or contract time, or direct the contractor to perform work that the owner believes is not a change. If the owner's interim directive notes the owner's disagreement that a change exists, the contractor can move on to the dispute mitigation and resolution procedures found in Article 12. The contractor can also move on to Article 12 if it disagrees with the owner on the proposed adjustment in the contract price or contract time.

 EJCDC C-700 – Section 5.04: If the contractor identifies a subsurface or physical condition that differs materially from that shown or indicated in the contract documents or differs materially from conditions ordinarily encountered and generally recognized as inherent in work of the character provided for in the contract documents, the contractor shall promptly halt the affected work and notify the owner and the engineer in writing about such condition. The engineer is to then promptly review the situation and make a recommendation to the owner. The owner is to then issue a written statement to the contractor that indicates whether any adjustment will be made to the contract. Upon receipt of the owner's statement, the contractor may submit a change proposal to the owner for any adjustment in the contract price or contract time no later than 30 days after the owner's issuance of the statement. If the contractor disagrees with the owner's statement, it can initiate the dispute resolution process per Article 12.

Fundamentals of Construction Claims

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