Undercut of Unidentified Organic Silt: Pricing and Differing Site Condition
The earthwork schedule for a building pad is a unit-price item: 12,000 CY of structural fill measured in compacted place at $18/CY. The geotechnical report showed stiff residual clay from the surface. Excavation exposes a 2 ft layer of saturated organic silt across the full 300 ft × 120 ft pad that the report did not identify. The engineer directs the contractor to undercut the entire area 2 ft and replace it with imported granular fill compacted back to the same subgrade elevation. The contractor's costs are excavate and load $9/CY, haul and dispose $14/CY, borrow delivered $26/CY bank, and place and compact $13/CY. The borrow has 15 percent shrinkage from bank to compacted. The contractor has already placed 6,000 CY of contract fill elsewhere on the pad.
1. Compute the correct quantity and cost of the directed undercut and replacement.
Read the worked answer
Undercut volume (bank): 300 × 120 × 2 = 72,000 cf ÷ 27 = 2,667 CY
Disposal: 2,667 × ($9 + $14) = 2,667 × $23 = $61,341
Replacement fill: 2,667 CY is required in compacted place. Because the borrow shrinks 15% from bank to compacted:
- Borrow (bank) = 2,667 / (1 − 0.15) = 3,137 CY
- Place and compact all 2,667 CY compacted; borrow and haul 3,137 CY bank
- 3,137 × ($26 + $13) = 3,137 × $39 = $122,343
Total ≈ $183,700 (round to $184,000).
Note what this total does not include: the original 12,000 CY structural fill item is unchanged, because the replacement restores the pad to the same subgrade elevation the contract fill was always going to start from. There is no quantity increase on the $18/CY item for this work.
2. Is this a differing site condition? What must the contractor do, and what is lost by proceeding without notice?
Read the worked answer
Yes - a Type I differing site condition. The contract documents indicated stiff residual clay from the surface; the actual condition is a saturated organic silt. The difference is material, reasonably unforeseeable from the documents and a site visit, and it changes cost and method. The contractor is entitled to an equitable adjustment in both price and, if it can show critical-path impact, time.
Required actions:
- Written notice before the condition is disturbed - typically 15 days under federal-style clauses, shorter under many private contracts. Read the clause; do not assume.
- Document with survey cross-sections, elevations of the top and bottom of the silt, photographs, and daily reports showing the water content and the material type.
- Continue work under protest and request direction rather than self-helping a design.
What is at risk without notice: waiver or reduction of the claim, and loss of the contemporaneous records needed to prove quantity. The photos taken after backfill are worth nothing.
3. The owner's engineer proposes to pay the entire undercut and replacement at the existing $18/CY structural fill price. Why is that wrong?
Read the worked answer
Because the $18/CY item prices only one thing: furnishing and placing select structural fill, measured in final compacted position.
What the $18 price does not contain:
- Excavation, loading, hauling, and disposal of unsuitable material - the contractor pays $23/CY just to get rid of it.
- Borrow cost. With 15% shrinkage, roughly 1.18 bank CY is bought for every 1.0 CY placed; at $26/CY delivered, borrow alone exceeds $30 per compacted CY.
- The risk premium for handling saturated organic material (mucking, unstable subgrade, possible stabilization).
The arithmetic: paying $18 for a CY that costs $23 to dispose of plus $39 to replace and place returns a loss of about $44/CY on 2,667 CY, roughly $117,000 out of pocket.
Correct treatment: price the work as new items - undercut excavation and disposal, and borrow/place - from actual cost plus the contract's markup, or negotiate a lump sum. The existing unit price applies only if the contract has a clause expressly ordering extra work at existing rates and the work is truly the same character.