{"id":904167,"date":"2025-04-02T15:27:14","date_gmt":"2025-04-02T21:27:14","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=904167"},"modified":"2025-04-02T15:27:16","modified_gmt":"2025-04-02T21:27:16","slug":"differing-site-condition-provisions-brief-introduction-shifting-the-risk","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/differing-site-condition-provisions-brief-introduction-shifting-the-risk\/","title":{"rendered":"Shifting the Risk of Shifting Sands: A Brief Introduction to Differing Site Condition Provisions"},"content":{"rendered":"\n<p>Jon Hollis | <a href=\"https:\/\/www.sandsanderson.com\/insights\/thought\/shifting-the-risk-of-shifting-sands-a-brief-introduction-to-differing-site-condition-provisions\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Sands Anderson<\/a><\/p>\n\n\n\n<p>When a contractor breaks ground on a construction project, unexpected conditions beneath the surface can be an expensive surprise. Unanticipated water, rock, or differing soil types can throw budgets and timelines into disarray. <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/differing-site-conditions-produce-differing-challenges\/\">Differing Site Condition<\/a> (DSC) provisions in construction contracts generally place the risk of these unforeseen conditions on the project owner rather than the contractor. Owners and contractors who understand DSC provisions are better poised to manage risk and avoid the costly financial burden in these unforeseen site conditions.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong>DSC Provisions: A Response to Inflated Bids<\/strong><\/h5>\n\n\n\n<p>DSC provisions were not a common feature of construction contracts until the 1930s.&nbsp; Prior to that time, contractors often bore the risk of differing site conditions.&nbsp; Given the significant financial risks involved in, for example, hitting bedrock on a project at three feet instead of the expected five feet, contractors quite rationally adopted the view that the cost of such risks had to be \u201cpriced in\u201d as part of the bidding process.&nbsp; Inflated bids that accounted for such risks became the norm, with contractors collecting a windfall if no costly and unexpected site condition ever materialized.&nbsp;<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong>A Government Solution<\/strong><\/h5>\n\n\n\n<p>Beginning in the 1930s, the U.S. Government began incorporating DSC provisions into public construction contracts as a way of countering that bid price inflation.&nbsp; The Government told contractors, in effect, \u201cif you find something unexpected down there, the Government will cover the change in costs.\u201d&nbsp; This innovation in contracting had the dual beneficial effects of (A) reducing bid prices and (B) reducing the incidence of litigation resulting when differing site conditions occurred.<\/p>\n\n\n\n<p>Almost a century later, DSC provisions are considered standard features of construction contracts, including government contracts and form contracts promulgated by the American Institute of Architects (AIA).&nbsp;<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong>Type 1 and Type 2 Conditions in DSC Provisions<\/strong><\/h5>\n\n\n\n<p>Although they may differ in wording, DSC provisions typically share some commons features.&nbsp; These common features are the distinction between \u201cType 1\u201d and \u201cType 2\u201d conditions and notice requirements.&nbsp;<\/p>\n\n\n\n<p>Type 1 conditions can be described as those that differ from the conditions described in the terms of the contract.&nbsp; In practical terms, Type 1 conditions are often those that differ materially from the geotechnical report or data accompanying and incorporated into the contract.&nbsp;<\/p>\n\n\n\n<p>Type 2 conditions are more unusual than Type 1.&nbsp; Type 2 conditions are those that \u201cdiffer materially from those ordinarily encountered or generally recognized\u201d for the site.&nbsp;<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong>Notice Requirements<\/strong><\/h5>\n\n\n\n<p>Regardless of the type of condition encountered, notice provisions will apply.&nbsp; Notice periods may differ from contract to contract, but it is standard practice for a contractor (in order to preserve its rights and protections under the DSC provision) who encounters an unexpected condition to stop work and notify the owner.&nbsp; Failure to strictly comply with the notice requirements may give the owner a defense to the contractor\u2019s claim for excess costs resulting from the differing site condition. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>DSC provisions have shifted risk in a way that benefits both owners and contractors. By addressing unforeseen site conditions upfront, these provisions help prevent inflated bids, reduce costly disputes, and ensure that projects stay on track. Owners and contractors who understand these provisions can better manage risk, control costs, and navigate unexpected conditions with confidence.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jon Hollis | Sands Anderson When a contractor breaks ground on a construction project, unexpected conditions beneath the surface can be an expensive surprise. Unanticipated water, rock, or differing soil types can throw budgets and timelines into disarray. Differing Site Condition (DSC) provisions in construction contracts generally place the risk of these unforeseen conditions on&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/differing-site-condition-provisions-brief-introduction-shifting-the-risk\/\">Continue reading <span class=\"screen-reader-text\">Shifting the Risk of Shifting Sands: A Brief Introduction to Differing Site Condition Provisions<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,224,10404],"class_list":["post-904167","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-construction-contract","tag-differing-site-condition","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Shifting the Risk of Shifting Sands: A Brief Introduction to Differing Site Condition Provisions - Advise &amp; 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