Construction Law

Contractor Uses Measured Mile Method to Calculate Loss of Efficiency Cause by Differing Site Conditions

By John P. Ahlers

The Army Corps of Engineers ordered a dredging contract to Bay West, Inc. to remove and transport 170,000 CY dredged materials from the Mississippi River.  The specifications provided that although the contractor was responsible for determining the character of the existing material "for its own purposes," the materials relocated could be assumed to consist of "predominantly previously dredged sand from the River channel."  The soil boring logs indicated that the soil classification was "silty organic clay, very soft and soft."

During dredging operations, the contractor encountered man-made debris in an area in which the boring logs indicated previously dredged sand.  The debris constituted burlap sand bags and clear plastic.  The materials snagged on the cutter teeth of the hydraulic dredge hindering the contractor's operations.  The contractor was forced to shut down the dredge for various periods to clean out (by hand) the sand bag and plastics that were clogging the pump.  In addition to the unforeseen man-made materials, the contractor encountered stiff clay in an area where the boring logs represented the clay would be "soft", causing the cutter head to completely halt rotation.  The contractor argued that these two conditions, the stiff clay and debris caused it to experience lower than anticipated production levels.

The contractor made a differing site conditions (DSC) claim for the down time caused by the unanticipated debris and dredging impact.  The Corps denied the claims arguing that the contractor should have anticipated the characteristics of the native soil and had the contractor done a site inspection before bid, it should have expected the higher density soils.  On appeal, the Armed Services Board of Contract Appeals (ASBCA) went through a detailed examination of the legal standards a contractor must meet to recover for a DSC claim involving soil that differs materially from that represented in the Contract Documents.  The ASBCA determined that the rocks, sand bags and plastic encountered were much more than listed in the Contract Documents, and that the contractor's reliance on the soil information was reasonable.  ASBCA also rejected the Corps' arguments that the contractor should have anticipated the stiff clay.  Finally, the Board endorsed the contractor's method of quantify its lost productivity.  The contractor used a "measured mile" approach, examining a period of time when the contractor's operations were unaffected by the differing site condition, with its productivity when it was affected.

Appeal of Bay West, Inc., 07-1 ASBCA ¶33569, ASBCA No. 54166 (2007)

Full post as published by Construction Law Blog on March 03, 2008 (boomark / email).