Differing Site Conditions, Contingency Shortfall, and Milestone Delays

Start with the clause, not the project manager's urgency. A differing site conditions clause typically covers a subsurface condition that differs materially from what the contract documents indicated. The geotechnical report did not show the tank, so the contractor likely has entitlement to an equitable adjustment for the tank remediation if it gave the required notice and the condition was not foreseeable from the site information. Entitlement to the condition does not mean entitlement to every dollar requested. Evaluate the $310,000 against the contractor's cost breakdown, subcontractor quotes, and actual quantities. The 14% overhead and profit must be tested against the contract's allowable markup and any agreed schedule of rates; if the contract caps or prescribes markup, the higher request is not payable. The 21 days of weather delay occurred before the discovery, so it is not caused by the differing condition and should be excluded unless another contract provision independently allows it. Document entitlement, causation, and cost reasonableness separately.

The project manager cannot approve the full $310,000 simply to save time if the remaining contingency is $280,000 and delegated authority is lower. Determine the approved change-order authority: the project manager may be able to approve a portion, but the balance likely requires a budget transfer, supplemental appropriation, or governing-body approval. Do not split the change order artificially to evade approval thresholds. Present the governing body or budget office with the entitlement analysis, the negotiated amount, the funding gap, and the schedule impact of waiting. Negotiate the allowable markup and exclude the non-compensable weather days before seeking the additional funds. If the county must authorize more contingency, tie it to a documented revised estimate and a change-order modification that reserves rights for further differing conditions. Keep the contractor working on non-disputed portions under a written direction while the funding approval is pursued, so the county does not convert a funding problem into a delay claim.

Treat the milestone misses separately from the differing site condition. First determine whether the misses were caused by the contractor, by county-caused delays, or by the tank discovery. If the contractor was already behind before the discovery, the county should preserve its schedule rights rather than waive them by approving a global change order. Review the contract's schedule and liquidated-damages provisions, any notice requirements, and the baseline schedule. Require a recovery schedule and a time-impact analysis. If the tank work entitles the contractor to time, grant only the time attributable to that condition and only to the extent it affected the critical path. Do not trade away schedule remedies informally in exchange for a lower change-order price unless the county documents the value and obtains the required approvals. The change order should state time and money separately and should not release claims that are not expressly settled.