HI - help on clarifying this would be greatly appreciated.
AIA A201 3.7.4 Concealed or Unknown Conditions says that a contractor is entitled for additional compensation if he notifies Architect & Owner within 21 days of observing an unexpected subsurface condition.
I was not happy with the question below from Ballast...
A developer from New York owns a large piece of property along the James River in Virginia and plan to construct a retirement community and golf course. This is an area where there are many pockets of unstable shrink/swell soil, so the architect advises the owner to hire a geotechnical engineer to conduct testing and prepare a soils report for the property. The developer bids construction of the club house and provides a copy of the soils report to each of the bidders along with the contract documents. The low bidder and the developer reach an agreement based upon AIA Document A201. Three weeks into the site excavation, the contractor finds areas of shrink/swell soil in locations not indicated in the soils report. Who is responsible for the cost of additional excavation and/or foundation design and reinforcement?
The answer is 'the contractor' - justification is that the contractor established that he/she is familiar with the site in the contract and owns that risk yet may be compensated later if he/she makes a claim.
Then Kaplan has a similar problem...
For the construction of a new office building, the owner has a budget of $1,000,000. The project is bid, and a contract is signed for $979,000. After the start of construction, unforeseen subsurface conditions are discovered, requiring a change order for an addition to the contract of $25,000. Which of the following statements is TRUE?
A. The owner will be required to pay $21,000 of the $25,000 and the architect the difference because the construction cost exceeds the budget by that amount.
B. The contract sum is increased by $25,000.
C. The owner should not agree to the change order, because the contractor bears the risk of unforeseen conditions on projects with a stipulated sum contract.
D. The architect must issue a change order to reduce the cost of some other aspect of the project by at least $25,000.
The answer is B. Explanation....
The contract sum must be increased by the total sum of all change orders. Unforeseen subsurface conditions that increase the contractor's cost generally result in an increase in the contract sum.
SO in conclusion Ballast does not assume that the contractor will be compensated and while Kaplan assumes the contractor will.
What is the correct way to think about who is liable for the cost of unforeseen subsurface conditions when you run into a question like this that tries to trick you?