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Rock at Four Feet and a Notice That Arrived on Day Twelve

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Rock at Four Feet and a Notice That Arrived on Day Twelve

Your company is the general contractor on a $6,800,000 school addition. The contract documents include a geotechnical report labeled "for information only" that shows weathered shale at 6 ft. The drawings put footing bottoms at 5 ft. On day 3 of excavation your crew hits unrippable rock at 4 ft across roughly 40% of the footing area. Your superintendent calls the owner's representative that morning and tells him. Hoe-ramming, extra excavation, and backfill add $86,000 and 9 working days. Your project engineer sends written notice on day 12. The contract requires written notice within 7 calendar days of the start of the condition, states that failure to give timely notice waives the claim, and contains a no-damages-for-delay clause. Your PM wants to submit the full $86,000 plus delay costs.

1. Assess the strength of the $86,000 claim. Where is the real problem, and what arguments survive?

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The problem is procedural, not technical. On the merits you have a strong case: rock at 4 ft where the drawings show footings at 5 ft is a condition the contractor could not reasonably have anticipated from the boring log.

  • Notice is the exposure. Written notice on day 12 is 5 days late against a 7-day condition precedent. The majority rule is that notice provisions of this kind are enforceable, and late notice waives the claim. Do not plan around winning that argument.
  • The verbal notice on day 3 is your best card. The owner's representative had actual, timely knowledge of the condition. Arguments that survive: the owner had actual notice through its authorized representative; the owner suffered no prejudice because it knew immediately and can still inspect the condition; and the purpose of the notice clause was satisfied. Whether that carries depends heavily on the contract language and the forum - this is a negotiating position, not a certainty.
  • The "for information only" label cuts against you but is not dispositive. Check whether the geotech is listed as a contract document and where it falls in the order of precedence. If it is incorporated, a Type I differing-site-condition clause may still apply. If the contract only has a Type II clause (unknown physical condition of an unusual nature), the rock may still qualify.
  • Do not lead with waiver or estoppel arguments against the owner. Lead with the merits and the owner's actual knowledge, submit a change order request, and preserve rights in writing immediately.

2. Can the contractor recover the 9 days of delay cost? What about a time extension?

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Separate the two - they are decided differently.

  • Time: if you can establish that the rock is a differing site condition and that it was on the critical path, you have a credible request for 9 calendar days. Time extensions are the part a court or board is most willing to grant even where notice was imperfect, because denying them converts an excusable delay into liquidated damages.
  • Money for the 9 days: the no-damages-for-delay clause will almost certainly bar extended general conditions and home-office overhead. These clauses are generally enforceable, with narrow exceptions (delays not contemplated by the parties at contracting, owner's active interference, bad faith). A 9-day rock encounter is a classic contemplated risk; the exception argument is weak.
  • Money for the extra work: the $86,000 of direct cost is a different animal from delay damages. The no-damages clause bars delay costs, not the cost of extra work. That is where you concentrate your effort.
  • Be candid with your PM: realistically he is claiming a direct-cost change order plus a time extension, with the delay-cost tail carried only as a negotiating chip.

3. What should be happening on site and in the paperwork right now?

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  • Do not stop work. Stopping over a disputed change is a walk-off risk and gives the owner a counterclaim. Proceed under written protest with a reservation of rights.
  • Notify again, immediately and in writing, and characterize it as a supplement to and clarification of the day-3 verbal notice - restate the day-3 call, the person you spoke with, and the time.
  • Segregate costs into a dedicated cost code: equipment hours, hoe-ram time, haul tickets, labor hours, backfill quantities. Jointly measure the rock area with the owner's rep before it is buried.
  • Document the physical condition with photos, elevations, and the actual rock line versus the boring log.
  • Submit the change order request with a line-item breakdown, not a lump sum, and tie it to the schedule impact with a short fragnet.
  • Calendar every deadline: the notice cure, the claim submission period, and any bond or insurance notice requirements. Check whether the contract requires a longer-form claim submission after the notice.