Equitable Adjustments: Danville Division allows despite disclaimer, but limits recoverable costs

09/09/2011

Haymes Bros., Inc. v. RTI International Metals, Inc., Case No. 4:10cv00005, USDC, EDVA, Danville Div. (Judge Kiser) offers a new analysis of differing conditions clauses and resulting adjustments. The issue in that case was whether the contractor encountered differing underground site conditions during its excavation. There was an express equitable adjustment clause, but it was limited to adjustments for “soils and rock of a type(s) different than those known to the CONTRACTOR are encountered.”

Judge Kiser concluded that the work “type” was ambiguous and subject to interpretation, and accepted the contractor’s interpretation that it included the extent of anticipated rock. He rejected the claim that the furnished geotechnical information was sufficient to have put the contractor on notice, and also rejected application of the contract’s disclaimer by reason of the contractor’s failure to investigate pre-contract.

From an adjustment standpoint, this case is also interesting in that Judge Kiser limited adjustment to the date of the contractor’s equitable adjustment request and rejected any award of profit markup. It’s an interesting case with interesting analysis applicable to many similar adjustment claims overall, and specifically on how to value any adjustments due.

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