AEC definitions
A differing site condition is a physical condition at the site that was not visible and that differs materially from what the contract documents indicated, or from what a contractor would ordinarily expect. Federal practice calls these Type I and Type II. The remedy exists only if the contract includes the clause and the contractor gives prompt notice.
Definition
Type I is a material difference from conditions indicated in the documents, such as rock where the borings showed soil. Type II is an unknown physical condition of an unusual nature, which a reasonably prudent contractor would not have expected, even though the documents were silent. The geotechnical report, what it disclaims, and what the bid documents told bidders to rely on decide Type I claims. A contractor who priced without reading the borings will struggle. Notice before disturbing the condition is a common requirement, because the owner must be able to inspect. This clause is not a warranty that the site is easy. It is a narrow remedy for concealment and misindication.
In depth
The claim compares the condition encountered with a specific indication: a boring log, a note, a drawing of existing foundations. A general disclaimer does not always wipe out a specific boring, and a specific warning can defeat a claim. Read both.
The difference has to be material to cost or time. A small variance inside what the report described is not a Type I condition.
The condition was unknown, physical, and unusual for the work. 'We found the soil harder than we like' is not enough if the region commonly has that soil and the documents did not say otherwise.
Type II does not require a false indication. It requires surprise of an unusual kind. Courts and boards construe it narrowly.
The clause typically requires written notice before the condition is further disturbed, so the owner can investigate. Covering the evidence and claiming later is how valid conditions are denied.
The notice should describe what was found, where, and how it differs from the indicated condition. Photos and a survey help.
A contractor is expected to review the documents and to inspect the site as the instructions require. Patent conditions, visible on a site walk, are not concealed. A bid that ignored a report the invitation included is a bidding choice.
Pre-bid RFIs that would have revealed the issue, and were obvious to ask, can matter. So can an owner who withheld a report they had.
The adjustment is the extra cost and time caused by the condition, under the change clause. It is not a chance to reprice work that matched the documents.
Contractors who excluded the clause in a proposal may have accepted the risk. Owners who deleted the clause on purpose have placed that risk in the bid. Either choice should be explicit.
Examples
Borings show sand. Excavation hits a buried concrete foundation the drawings did not indicate. The contractor stops and gives written notice. That is a Type I path.
A visible slope the site walk showed is not a differing site condition. It was there to see.
The contractor notifies, the owner inspects, and a change order pays the extra rock removal the report did not indicate.
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