On October 12, 2018, the Court of Federal Claims rejected a contractor’s differing site condition claim totaling $4.5M. The contract called for the widening and rehabilitation of the Urban Presidio Levee in Texas. It was awarded by the U.S. International Boundary and Water Commission. The contractor alleged that the contract documents misrepresented the site’s subsurface conditions.
Material for rehabilitating the levee’s embankment had to pass specific testing requirements. The contractor assumed that the existing subsurface materials could be excavated and reused to rehabilitate the levee’s embankment. The contractor pointed to the Government’s geotechnical report that was made part of the solicitation and argued that “it was not possible for CKY to see underground prior to bidding . . . [t]herefore, CKY – and all other contractors – had to rely entirely on the contents of the Government – issued solicitation package.” The Court rejected this position. In doing so, the Court referred to the following disclaimer clause in the solicitation:
The Contractor may request a copy of the geotechnical report . . . [t]he data and report are not intended as a representation or warranty of continuity of conditions between soil borings nor groundwater levels at dates and times other than the date and time when measured. The [Commission] will not be responsible for interpretations or conclusions drawn there by the Contractor. Additional test borings and other exploratory operations may be made by Contractor subsequent to award of the Contract at no additional cost to the [Commission].
The Court also noted that the contract stated that the results in the geotechnical report “are an indication of the subsurface condition at the location of the boring and tests. Variations in subsurface condition may exist between boring and test locations.”
Given these contract disclaimers, the Court found that “A reasonable contractor would not expect soil removed immediately adjacent to subgrade to meet levee embankment requirements.”
The Court also held that the Contractor failed to provide timely notice of the differing site condition to the Government. The Court found that the Government was harmed by this notice because it “likely would have imposed a suspension of construction to evaluate reasonable alternatives before approving more than $4,500,000 of additional costs.” Yet, the Court did not cite to any evidence in the record that this was actually the case.
This is tough decision on the contractor who provided the Government the best pricing only to be hit with the cost of unsuitable soils it had no way of discovering before contract award. This decision is also at odds with long standing precedence that “a contractor need not conduct its own surveys or borings, nor hire its own geologist and geotechnical engineer.” Weeks Dredging & Contr. v. United States, 13 Cl. Ct. 193, 238 (Cl. Ct. 1987); Farnsworth & Chambers Co. v. United States, 171 Ct. Cl. 30, 35 (1965) [pre-award inspection provision did not “obligate bidders to discover, at their peril, subsurface conditions hidden by the river’s water and thus unavailable to any reasonable pre-award inspection.”]
CKY Inc. v. United States of America, Court of Federal Claims, Docket No. 16-948C (October 12, 2018)
