Case #3: This matter involved a combination of a differing site condition and defective specification issues. This example contains a classic red flag which designers and contractors should be aware of when bidding a project. This project involved the construction of a flood control project across a river to prevent flooding of the backlands of this area, following USACE standards. Originally, the project was to incorporate cellular coffer dams created with flat sheet piles near the mouth of the river as it exited into the back bay. At some point, however, the project location moved 100 or more feet upriver, but the geologic investigation was not updated and there were no borings or cone penetrometer tests at the location of the relocated project. This change in location without additional analysis often results in project constructability issues. As mentioned above, the project required the installation of flat sheets in overlapping circular cellular coffer dams using a vibration method which were then to be backfilled with gravel. As required by the project specifications, the contractor retained the services of a geotechnical engineer to perform what is called a drivability study which evaluated the sheet piles and geotechnical conditions and recommended the size of the vibratory hammer as well as the impact driving hammer that was subsequently required to install the sheet piles. The original analyses concluded that the sheet piles could be installed primarily with the use of a vibratory hammer based on the bid time geotechnical borings. In cases where the vibratory hammer could install the sheet piles to the design depth, the analyses also included calculations for the use of the impact driving hammer. Project specifications also directed the contractor to stop driving if practical refusal was encountered. Practical refusal included that considerable damage occurred to the sheet pile head. At that point, the contractor was to cease pile driving.
In this changed location, however, when the contractor had difficulty installing the sheet piles, the owner directed the contractor to bring successively larger pile driving hammers. This resulted in several issues including damage to the pile heads and epoxy coating along the sheet pile joints catching on fire due to the extreme amount of energy which was transferred to the sheet piles particularly at their connecting joints. With all these facts as a backdrop, the claim approach on this project was threefold: First, it represented a classic differing site condition case type 1 where the geotechnical conditions encountered during construction were not as represented at bid time. One important side note is that this project was in California and California’s Public Contracting Code 7104 requires that the owner “promptly investigate” a site after the contractor gives notice of a potential differing site condition. In this case the owner waited about a year after receiving the DSC notice to conduct an investigation at the location of the relocated project site. The new investigation did in fact reveal that the geotechnical conditions were significantly different and significantly denser than that represented at bid time. Second, and related to the DSC claim, was that the specifications were defective. The project was not constructible given the requirements of the project that sheet piles be driven to the set depth at a site containing liquefaction. Third, and what often comes up in Spearin Doctrine cases, was the government’s interference, along with its preferential and selective enforcement of the project specifications. Here, the contractor was not allowed to stop pile driving when damage to the pile had occurred. Instead, the owner directed that the contractor keep driving with successively larger and larger pile driving hammers which created significant project inefficiency as well as related schedule extensions and increased project cost by using and switching multiple hammers. Ultimately, the owner issued several memos which updated its analysis and allowed the contractor to leave the sheet piles shorter than the design tip elevation. These memos, however, were issued well after the project had experienced the inefficiencies and delays. In the claim presentation, these memos were useful to show the owner tacitly acknowledging the sheet piles were unconstructible as designed and did in fact not need to go to the depth specified in the project plans.
Case #4: This more recent example is a slope movement case that occurred on a project that was designed and managed by a major transportation agency in the western US. That agency has extensive requirements for geotechnical investigations for bridges, embankments, and slopes. In this case, the state agency completely failed to evaluate the site geology and had they done that they would have realized that this project was being constructed over an ancient landslide complex. A very limited geotechnical investigation was conducted which consisted of a single boring at the location of the future bridge support. However, there was, in effect, no geologic stability analysis performed for the new widening and approach fill that was placed at the top of the newly constructed fill slope. As the project was widened and 30 feet of new fill was placed on top of the ancient landslide complex the work site began to move. Project construction data did include fairly detailed survey data that documented the movement which was causing the new approach fill to tear away from the new bridge abutment. I got involved in the project after the site had been moving for approximately 9 months during which time the owner was claiming that the movement was due to lack of compaction of the new fill. In this case, the owner itself performed the compaction quality control testing and approved and certified the fill was acceptable under the state transportation agency specifications. After engagement, I directed the drilling of several 2-foot diameter borings which included what is called down-hole geology where a geologist is lowered down the hole and maps the exposed geology in the field. This is a local technique used primarily in California and is not widely conducted elsewhere. The geologist who conducted this mapping found an ancient slide plane underneath the new fill and that slide plane corresponded very well with slope indicators and data from the slope indicators we installed as part of our investigation. At the end of the data collection, including the on-site geology and the analysis of the slope indicator data, I concluded that in fact the site was now a new landslide moving on top of an old landslide. The project agreement included a dispute resolution board to resolve claims that could not be resolved at the project level. At the DRB, the contractor presented our findings, and the owner again presented its claim that the observed movement was the new fill was “settling downhill” which to a degree is the definition of a landslide. The DRB ruled in the favor of and the contractor concluding the site was in fact a landslide and the contractor f was not held responsible for the site movement or the site remediation which included the construction of a tie-back wall. Like the three cases previously cited, this was a significant public works project designed and managed by an owner's engineering agency where the agency itself failed to follow its own published standard of care and standards of practice for engineering requirements. This resulted in a viable claim of defective specification due to the failure to follow its own requirements.
Lastly, I wanted to cite a legal case that I find interesting that includes both issues of differing site condition and defective specifications and government caused delays, a design build project Nova Group/Tutor-Saliba v. United States. The Project involved the demolition of the existing Pier B (“Old Pier”), a 60-foot wide and 1,175-foot long pier, and the design and construction of an 85-foot wide and 1,325-foot long replacement pier (“Pier B”) for the berthing of CVN-class aircraft carriers, supporting vessels, and submarines for repair operations In the case of Nova Group/Tutor-Saliba v. United States, COFC Nos. 15-885C, 16-925C, the Geotechnical report said to drive concrete displacement piles, which “would be difficult to penetrate a sufficient distance into very dense glacial soils” and would likely require stingers to help penetrate the denser soils. The contractor did have difficulty driving the required piles and filed a DSC claim.
- NTS filed a claim which included 4 Defective Spec claims – 1) hammer size design defect, 2) tolerance for pile verticality unattainable, 3) prohibitions on pre-drilling, 4) old Pier B piles caused new piles to reach. Those claims were denied by the court.
- Court of Federal Claims denied NTS Pier B differing site condition claim based on the design-build nature of the contract.
- The court also found that NTS Failed to Demonstrate a Type I Differing Site Condition, ruling that “it was NTS who determined these design depths, not the Government, and Plaintiff had not established that its pile driving difficulties were due to differing site conditions.” This is owing to the design-build nature of the contract. My reading of the case is that the primary reason for the court denying NTS’s claim for DSC had more to do with the fact the bidding documents had noted that the difficult driving should be expected, and less to do with the fact that this was a design build project.
- NTS also alleged that “the Government furnished defective specifications as to the site conditions that would be encountered and the method by which piles at Pier B should be designed and installed.” The Federal Court ruled that all 4 defective specification claims were “intertwined” with DSCC. And that although DSCC and defective spec claims are distinct in theory, they collapse into a single claim where the defective specifications and DSCC are intertwined. Therefore, the subsequent defect specification was treated as part and parcel with the DSC claim.
- The Government contended NTS failed timely written notice. NTS considered the Government’s demands a constructive change. Court rejected government argument and ruled that the Contracting officer had actual knowledge of the circumstances of NTS’ constructive change claim in a timely manner.
- The court also found that after approving the design, Government informed NTS that its design was out of conformance with the RFP, an unforeseeable act given the Government’s prior approval. The Court found that the Government’s letter expressing “concerns that the final approved design” after the Governments approval was an excusable delay.
A recent case that counters NTS claims denial on a design build project is Bonita Pipeline, Inc. v. Balfour Beatty Const. LLC (“Bonita Pipeline”), 2017 WL 2869721 (S.D. Cal. May 19, 2017. In this case the general contract, Balfour, argued that defective specification claims under Spearin did not apply to a design build project. The court ultimately rejected Balfour’s assertion that disclaimer language in the design build contract, that the design documents were incomplete, prevented Bonita from making a claim under Spearin. Interestingly, though, the court also found that the record on such cases was insufficient to determine whether Spearin applied to this case.
I also find he case of ECC International vs U.S. Army Corps of Engineers/ASCBC to cover many of the interesting topics of differing site conditions (unexpected collapsible soils), defective specifications/latent defects/superior knowledge (Corp knew required schedule could not be achieved).
In closing, I want to thank Ed Gentilcore of Thomson Reuter for encouraging and reviewing this article.