Walser v. United States
37 Cont. Cas. Fed. 76,154, 1991 U.S. Claims LEXIS 363, 23 Cl. Ct. 591 (1991)
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Rule of Law:
A government contractor seeking an equitable adjustment for differing site conditions must prove that the physical conditions encountered were unknown, unusual, not reasonably anticipatable from site inspection or general experience, and materially differed from those ordinarily encountered in similar work, and does not include normal environmental fluctuations, compliance with applicable laws, or foreseeable conditions.
Facts:
- On September 30, 1986, Jack Walser d/b/a Jack Walser Construction Company ("Walser") entered into a $120,432 contract with the Soil Conservation Service ("SCS") of the United States Department of Agriculture to remove debris from a section of the Cheat River in West Virginia, to be completed within 64 days.
- Walser began work on the contract site on October 15, 1986.
- Between the day the site was shown for bidding purposes and the first day of work, the river's water level fell, allegedly revealing considerably more debris to be cleared than was visible at the job showing.
- During performance, a West Virginia state ban on burning tires was enforced, preventing Walser from using tires to keep debris piles burning, which it claimed made disposal more difficult.
- During November and December 1986, excessive rainfall allegedly caused the Cheat River to rise approximately nine feet, washing additional debris into the construction area.
- Beavers, indigenous to the area, cut down trees, leaving additional debris which Walser cleared.
- Unauthorized people entered the job site, which adjoined a roadway, cut down trees for firewood, and left additional debris which Walser cleared.
- Walser completed the work in 65 days (one day over the original 64-day schedule after a one-day extension), and the SCS accepted the results on December 18, 1986.
Procedural Posture:
- Walser filed a claim with the contracting officer on January 5, 1987, seeking an equitable adjustment to the contract price.
- The contracting officer denied Walser's claim on January 15, 1987.
- Walser filed suit in the United States Claims Court, but that suit was dismissed without prejudice for failure to submit a properly certified claim to the contracting officer.
- On September 5, 1989, Walser resubmitted a certified claim to the contracting officer.
- The contracting officer denied the resubmitted claim on September 19, 1989.
- The defendant (United States) filed a motion for summary judgment in the United States Claims Court.
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Issue:
Does a government contractor qualify for an equitable adjustment to a contract price under a Type II differing site conditions clause when it encounters (1) normal fluctuations in river water levels, (2) a state ban on burning tires, (3) normal rainfall, (4) debris from indigenous beavers, or (5) debris from unauthorized people cutting trees?
Opinions:
Majority - Margolis, Judge
No, a government contractor is not entitled to an equitable adjustment for differing site conditions when the conditions encountered are not unknown and unusual, but rather represent normal environmental fluctuations, compliance with state law, or foreseeable events based on general experience and contractual duties. The court determined that Walser's claims fell under a Type II differing site conditions clause, which applies to "unknown physical conditions at the site, of an unusual nature, which differ materially from those ordinarily encountered." The court emphasized that Walser bore a heavy burden to prove the conditions were unknown, unusual, unanticipated from inspection or general experience, and varied from the norm (citing Charles T. Parker Construction Co. v. United States and Lathan Company, Inc. v. United States). Regarding the water level, the contract (FAR 52.236-3) explicitly made Walser responsible for ascertaining "uncertainties of weather, river stages, tides, or similar physical conditions." Since government evidence, unrefuted by Walser, showed that river flow conditions during the period were within a normal range, Walser had a duty to anticipate usual reductions in water level and resulting debris as part of its bid. The tire burning ban was rejected because it was not a changed physical condition as required by the differing site conditions clause (citing Erickson-Shaver Contracting Corp. v. United States). Furthermore, the contract (FAR 52.236-7) specifically obligated Walser to comply with all federal, state, and municipal laws, including those concerning pollution. Walser's rainfall argument was similarly dismissed. The court reiterated Walser's contractual duty to account for weather and river stages. Case law indicates that weather conditions are generally considered acts of God, not covered by differing site conditions clauses, and are intertwined with river flow (citing Turnkey Enterprises, Inc. v. United States). For beavers, the court noted that beavers are indigenous to West Virginia rivers and are known to cut trees. Thus, this condition was not unusual and should have been anticipated from general experience as "inhering in work of the character provided for in the contract" (citing Central Florida Construction Co.). Additionally, Walser was informed it was not responsible for beaver-damage debris. Finally, the presence of unauthorized people cutting trees was deemed not unusual and should have been anticipated, especially given the job site's adjacency to a roadway, as part of Walser's duty to investigate and satisfy itself regarding local conditions that could affect the work or its costs (Contract ¶ H-1(a)). Because none of the alleged conditions met the criteria for a Type II differing site condition, the court granted the government's motion for summary judgment.
Analysis:
This case significantly clarifies the stringent requirements for contractors seeking equitable adjustments under Type II differing site conditions clauses in government contracts. It establishes that such clauses are not intended to indemnify contractors against foreseeable risks, normal environmental variations, or compliance with legal obligations. The ruling reinforces the contractor's heavy burden to demonstrate that encountered physical conditions were genuinely unknown and unusual, thereby limiting the government's exposure to additional costs for risks that should have been reasonably anticipated or accounted for in the initial bid. This decision serves as a reminder for contractors to conduct thorough site investigations and factor in all foreseeable conditions, including local fauna and human activity, when formulating their proposals.
