NASCLA Accredited Commercial General ContractorGeneral RequirementsMedium
A commercial general contractor is managing a project under a lump-sum contract. During excavation, an unexpected underground water main, not indicated in the contract documents, is discovered. Repairing and rerouting this main will cause significant delays and additional costs. Under standard construction contracts, what is the MOST appropriate initial action the contractor should take?
- AAssume responsibility for the discovery and absorb the additional costs as part of the lump-sum contract.
- BImmediately stop work in the affected area and notify the owner and architect in writing.
- CProceed with the work and submit a change order for the additional costs and time at the end of the project.
- DTemporarily reroute the main to avoid delays and then inform the owner.
Show answer & explanationAnswer & explanation
Correct answer: B. Immediately stop work in the affected area and notify the owner and architect in writing.
Upon discovering differing site conditions, the contractor should immediately stop work in the affected area and promptly notify the owner and architect in writing. This allows for investigation and negotiation of a change order for time and cost adjustments.
Why the other options are wrong
- A. Differing site conditions clauses generally protect the contractor from absorbing such unexpected costs in a lump-sum contract.
- C. Delaying notification and change order submission can jeopardize recovery of costs and time.
- D. Proceeding without formal notification and approval could complicate cost recovery and liability.
Differing Site Conditions Clause
A contract provision that allows for an equitable adjustment in contract price or time if unforeseen physical conditions are encountered at the site.
- Applies to conditions materially different from those indicated in contract documents.
- Requires prompt written notification by the contractor.
- Prevents contractors from including large contingencies for unknown conditions.
Memory trick: When the site differs, stop, document, and report it fast!