Clarify in advance

Contractor’s failure to ask questions up front turns into costly mistake

Article May 20, 2004
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A Hawaiian excavation subcontractor learned late last year that it is a good idea to ask questions in advance if the contract documents are unclear. In Foundation International, Inc. v. E.T. Ige Construction, Inc., the Supreme Court of Hawaii held that estimated pile lengths shown on the plans controlled over a 4-ft minimum embedment criterion. Foundation submitted a successful bid to general contractor Ige for a Hawaii Department of Transportation concrete bridge project. The project required 71 concrete drilled shafts with an estimated length of 15.5 ft. Payment for the work was by unit prices for unclassified shaft excavation and cast-in-place piles in drilled holes. On Sheet S-1 of the project plans was the statement: “Drilled shafts for abutments and wing walls shall be embedded at least 4 feet into basalt.” On Sheet S-25, the bottom footing elevation is listed at 474.5 ft and the “approximate drilled shaft tip elevation” is listed at 459 ft. The difference between these two figures provides the estimated drilled shaft length of 15.5 ft.

Problems with Foundation

On Aug. 6, 1992, HDOT and Ige entered into the contract. Once work started, Foundation reached the basalt layer at abutment one, only a few feet below the bottom footing elevation. Foundation drilled the shaft 4 ft into the basalt and announced its intention to drill no further. HDOT insisted the shaft be excavated to the approximate tip elevation shown on the plans. HDOT argued Foundation must drill at least 15 ft, and only if at that point 4 ft of basalt had been excavated could Foundation stop drilling. Foundation completed the work and protested to Ige, which in turn protested to HDOT that the plans did not depict a minimum pile length.

On March 15, 1993, Ige notified HDOT in writing of its intention to claim additional compensation for additional excavation. In response, HDOT’s outside engineer determined that a minimum pile length of 12 ft and a minimum embedment requirement of 4 ft was required.

Foundation filed a claim and ultimately a lawsuit arguing that any excavation beyond the 4-ft embedment was extra work or a Type I differing site condition. The trial court rejected Foundation’s claims and granted HDOT’s and Ige’s motions for summary judgment.

Foundation appealed arguing either the proj-ect plans unambiguously provided that the 4-ft embedment criterion controlled over the estimated pile length or, alternatively, the contract was ambiguous and its interpretation was reasonable. The Hawaii Supreme Court disagreed, finding the contract did not limit excavation to 4 ft of embedment.

Some readers might be surprised by this result. But the court found the contract contained clear language indicating that the actual length of the pile was to be determined by the HDOT engineer, and must include “at least” 4-ft embedment.

The court also rejected Foundation’s ambiguity argument. The court found there was no ambiguity because the two requirements complemented each other. Alternatively, even if the language was ambiguous, the court held Foundation had an obligation to clarify a “patent ambiguity” before entering into a contract. In other words, Foundation should have submitted a pre-bid question if it was concerned about an apparent conflict between minimum embedment length and minimum pile length.

Foundation also claimed it was entitled to extra compensation because the shaft excavation included a greater percentage of basalt. The court rejected Foundation’s claim because the pay item for unclassified shaft excavation included rock excavation. Encountering a greater amount of rock was not a “material difference” within the meaning of the differing site conditions clause. Basically, Foundation assumed the risk of having to drill through more rock than it had planned.

Contractors who discover ambiguities or conflicts in project plans and specifications should seriously consider submitting pre-bid questions to the state DOT to avoid this type of loss. Suppose Foundation had raised the question prior to bid and HDOT answered: “Bid it as you see it.” What would the court have done?

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