Opinion ID: 1040113
Heading Depth: 3
Heading Rank: 2

Heading: Dispute

Text: After the subcontractor began work on the project, its project manager made a note in his daily report about the dimpled pan deck surface and described the 1 North Pacific describes the metal pan deck as “the material on which concrete is poured to create the floors of each successive story of a building.” -3- 6818 cleaning process for the “indentations” and “prot[ru]sions” in the pan deck that “cost[] us considerable time.” The workers had to use toothbrushes to clean the bumpy surface, but the contractor’s daily report did not contain any time estimate for the additional cleaning efforts. The hearing officer found that “[t]his [initial] entry [was] the only entry . . . made in the daily reports relating to the embossed pan deck.” By contrast, the subcontractor repeatedly referred to other problems in the daily reports, including problems with air pressure and containment, foam that failed to expand, and issues with metal flashing. The subcontractor notified North Pacific about the pan deck problem, and North Pacific then transmitted the information to the Department, requesting additional compensation. The Department denied the initial request for additional compensation. North Pacific next filed a claim pursuant to the contract’s differing site conditions clause. The clause provided: The CONTRACTOR shall promptly, and before such conditions are disturbed (except in an emergency as permitted by paragraph 6.19), notify the Contracting Officer in writing of: (1) subsurface or latent physical conditions at the site differing materially from those indicated in the Contract, and which could not have been discovered by a careful examination of the site, or (2) unknown physical conditions at the site, of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Contract. The Contracting Officer shall promptly investigate the conditions, and if the Contracting Officer finds that such conditions do materially so differ and cause an increase or decrease in the CONTRACTOR’s cost of, or time required for, performance of this Contract, an equitable adjustment shall be made and the Contract modified in writing accordingly. -4- 6818 . . . In the event that the Contracting Officer and the CONTRACTOR are unable to reach an agreement concerning an alleged differing site condition, the CONTRACTOR will be required to keep an accurate and detailed record which will indicate the actual “cost of the work” done under the alleged differing site condition. Failure to keep such a record shall be a bar to any recovery by reason of such alleged differing site conditions. The Contracting Officer shall be given the opportunity to supervise and check the keeping of such records. The contract expressly required that the contractor keep an “accurate and detailed record” of the actual cost of work performed under the alleged differing site condition: If the CONTRACTOR believes additional compensation or time is warranted, then he must immediately begin keeping complete, accurate, and specific daily records concerning every detail of the potential claim including actual costs incurred. The CONTRACTOR shall provide the DEPARTMENT access to any such records and furnish the DEPARTMENT copies, if requested. Equipment costs must be based on the CONTRACTOR’s internal rates for ownership, depreciation, and operating expenses and not on published rental rates. In computing damages, or costs claimed for a change order, or for any other claim against the Department for additional time, compensation or both, the contractor must prove actual damages based on internal costs for equipment, labor or efficiencies. Total cost, modified total cost or jury verdict forms of presentation of damage claims are not permissible to show damages. (Emphasis added.) After considering numerous exhibits, including the contract, bid documents, and a construction report, the Department’s procurement officer found that North Pacific was not entitled to additional compensation under the differing site conditions clause. -5- 6818