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Changed Conditions

Changed Conditions

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“Changed conditions” are defined as “subsurface, latent, or physical conditions at the site materially different from those indicated in the contract OR unknown physical conditions at the site of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the contract.”  [1]

The two basic types of changed conditions are generally referred to as “type I” and “type II” changed conditions.  Type I changed conditions involve situations where the actual site conditions and those conditions represented in the contract vary greatly.  An example of type I conditions existed in Travelers Cas. And Sur. Co. of America v. U.S., 75 Fed. Cl. 696 (2007), in which the government’s test pit data was specifically and clearly intended to be incorporated into a contract for the dredging of harbor.  The court in that case found that the broad exculpatory language of the site investigation clause did not relieve government from responsibility for site condition indications contained the data after the actual site condition varied greatly from the data provided.  In order to establish a Type I claim, the plaintiff must establish that: (1) the contract documents affirmatively indicated the existing conditions, (2) the plaintiff acted as a reasonably prudent contractor in interpreting the contract documents, (3) the plaintiff reasonably relied on the indications of existing conditions in the contract, (4) the actual condition differed from the actual conditions, (5) the actual conditions must have been reasonably unforeseeable, and (6) the plaintiff’s claimed damages  must be attributed to the extra work and delays allegedly incurred as a result of the differing conditions.  [2]  Type II claims consist of (1) the contractor not knowing about the condition, (2) the contractor not being able to anticipate the condition from inspection or general experience, and (3) the condition varying from the average in similar operations.  [3]

Another type of changed condition is a “behavioral changed condition”, in which case the ground behaves differently than was expected under the terms of the contract.  A contractor may be able to recover for this type of changed condition.  In one case a government contractor was entitled to recover on differing site conditions claim, after he contracted to build a tunnel to carry water from an inland reservoir to coastal California.  Once the work began, as result of encountering a running ground condition which differed from the way the ground was expected to behave, the contractor incurred higher construction costs and additional work time to accommodate the changed conditions.  [4]

Regardless of what type of changed condition exists, a contractor may only recover if the condition was materially different from what was anticipated, was unforeseeable, and materially affected the cost of the work and/or time needed to complete the work.  Such changed conditions may even include consequences of weather conditions, but must affect some important part of the project such as cost or added time required for completion.

[1] Federal Acquisition Regulations, 48 C.F.R. §52.236-2

[2] Travelers Cas. And Sur. Co. of America v. U.S., 75 Fed. Cl. 696 (2007),

[3] Reliance Ins. Co. v. County of Monroe, 198 A.D.2d 871, 604 N.Y.S.2d 439(4th Dept. 1993)

[4] Shank-Artukovich v. U.S., 13 Cl. Ct. 346, 34 Cont. Cas. Fed. (CCH) P 75372 (1987), judgment aff’d, 848 F.2d 1245 (Fed. Cir. 1988)

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