VIRGINIA COURT AWARDS ENGINEER ADDITIONAL COMPENSATION FOR DIFFERING SITE CONDITIONS

VIRGINIA COURT AWARDS ENGINEER ADDITIONAL COMPENSATION
FOR DIFFERING SITE CONDITIONS

AMEC Civil, LLC (“AMEC”), and the Virginia Department of Transportation (“VDOT”) entered into a contract pursuant to which AMEC was to design and construct a bridge across Kerr Lake, a dam-controlled reservoir managed by the United States Army Corps of Engineers. Commonwealth v. AMEC Civil, LLC, 677 S.E. 2d 633 (Va. 2009). The contract included a differing site conditions clause, which provided for additional compensation when unknown and unusual physical circumstances were encountered. The contract contemplated routine fluctuations in the water level of Kerr Lake.

AMEC’s engineers reviewed the historical records of the water levels maintained by the U.S. Army Corps of Engineers and estimated the possible fluctuations which may impact the construction schedule. AMEC’s contract amount was based on the risk of lost time due to elevated water levels.

During construction, the lake water level remained high for six months, an unusually long period according to AMEC and VDOT representatives. AMEC’s construction was delayed, which imposed additional expenses on AMEC. The VDOT declined to award AMEC additional compensation, arguing AMEC considered the risk of high water levels and included that risk in its bid.

The Court ordered the VDOT to remit additional compensation to AMEC for delayed construction costs due to differing site conditions. According to the Court, the sustained elevated water levels formed a differing site condition, as it was an unknown physical condition of an unusual nature, which differed from those ordinarily encountered. The risk of sustained high water in Kerr Lake was unusual, and not one that AMEC was charged with the responsibility of including in its bid.

Architects and engineers should ensure their contracts contain differing site conditions clauses. Failure to include differing site conditions clauses will result in lost compensation when adverse, unusual circumstances arise.