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Owner Disclosure Of Superior Site Condition Knowledge

Friday, September 03, 2004 02:44 pm

Owner Disclosure Of Superior Site Condition Knowledge

The disclosure and depiction of physical site conditions always poses a dilemma for project owners. Detailed information will encourage tight bidding and facilitate a smooth project. Owners fear, however, that this information may be used against them in claims for additional compensation. Contractual disclaimers are common.

Sometimes owners, through intent or neglect, fail to disclose significant information regarding physical conditions at the site. The withholding of "superior" knowledge - that is, information available to the owner but not the contractor - may subject the project owner to liability.

Not All Information Is "Superior"

Information which is omitted from the contract documents is not necessarily unavailable to the contractor. The best example is knowledge which can be gleaned from a pre-bid site inspection. The basic rule is that contractors are charged with knowledge of conditions which could have been observed during a reasonable site investigation. Contractors are not expected to perform invasive or destructive testing and are not required to seek independent technical analysis. Only reasonable powers of observation and the interpretive skills of an experienced contractor are expected.

This article does not include a detailed discussion of pre-bid site inspections. Reference is made to "The Scope of a Reasonable Site Investigation," CCM October 2002, p. 1. It should be noted, however, that if a project owner limits access to the site or otherwise restricts the pre-bid inspection, the owner increases the likelihood of withholding superior knowledge.

Another type of knowledge which is not considered "superior" is information which is not contained in the contract documents but is available elsewhere. This may be a matter of public record. For instance, when contract documents did not include certain soil test boring logs, there was no withholding of superior knowledge by the project owner because the information was on file at a government office and available to the public. McCormick Construction Co., Inc. v. United States, 18 Cl.Ct. 259 (1989); CCM January 1990, p. 3.

Bidders should review anything referenced in the contract documents. One contract stated that additional test data were available at a regional government office. The successful bidder failed to examine this information. After contract award, the contractor complained that it had n [...]

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