When construction companies across all trades enter into a contract, they bank on knowing that their agreed-upon scopes of work will be the extent of their obligations. To that end, the bidding process is an exercise in due diligence with estimators and others on the project team running through the specifications over and over and gleaning any other necessary information from meetings with the owners' representatives and visits to the site.
But no matter how conscientious contractors may be, there is still a chance that something below the radar, also known as unforeseen site conditions, will reveal itself after the work starts. And if contractors aren't careful in how they handle these surprises, they could find themselves footing the bill for some very expensive extras.
“Scope of work issues,” said John-Patrick Curran, a partner at Sive Paget & Riesel in New York, “are invariably the single largest sources of conflict between owners and contractors.”
The word "site" makes many think that this situation typically occurs during excavation or is somehow otherwise exclusive to the ground underneath or around a structure, but that is not always true. Contractors can also encounter unforeseen conditions once construction is underway. For example, during a renovation, there could be rotted structural members previously hidden from view or asbestos- or lead-containing materials that must be remediated.
And, of course in the field, Curran said, construction crews could unexpectedly encounter underground storage tanks, bedrock at a much shallower depth than geotechnical reports indicated or contamination that has the potential to expose workers to dangerous chemicals, as is sometimes the case when crews are excavating sites that were used as storage for petroleum tanks or were home to paint-related or industrial manufacturing operations.
“About 75% of the time,” said Steve Summers, executive vice president of Gray Construction in Lexington, Kentucky, “there is some level of unanticipated or unforeseen conditions encountered on a construction jobsite.” More often than not, he said, these scenarios involve soils or organics that require removal, replacement or some type of treatment.
Many contractors might believe they are not responsible for work they did not include in their proposal, but this is not always true if the contractor did not take care to perform some pre-bid investigation of the project.
For example, American Institute of Architects Form A201- General Conditions of the Contract of Construction states in Section 3.2: Review of Contract Documents and Field Conditions by Contractor, that “Execution of the contract by the contractor is a representation that the contractor has visited the site, become generally familiar with local conditions under which the work is to be performed, and correlated personal observations with requirements of the contract documents.”
So what does this mean? In a nutshell, the contractor is responsible for confirming that they’ve done their homework on the site and have identified any anomalies.
