Differing Site Conditions
Dear YouDig?
We are about to embark on a journey to replace several of our very old manufacturing facilities and build new ones in locations that we find more suitable to our current business model. We have no experience building in any of these localities and, frankly, fear major budget shortfalls as a result of the unexpected. Any guidance would be appreciated.
-Our First Rodeo
Dear Rodeo,
When something goes wrong in a massive undertaking like constructing a manufacturing facility, the guns of responsibility will be pointed BY EVERYONE and AT EVERYONE. Rodeo, don’t be ashamed about your lack of experience. We know you are very excited after years of antiquated facilities but you must EXPECT THE UNEXPECTED when you jump on the back of these types of projects. You are likely to assume construction risks that you are not capable of noticing, understanding or evaluating. In these scenarios the construction contract should include provisions that clearly set forth which entity is responsible for changes based on differing site conditions.
Reduce the risk of getting knocked off your horse by selecting a general contractor that has successfully completed similar projects in nearby or similar locations. For instance, if you are building on a flood plain, near a major river, or on a cliff for that matter, it should NOT be your GC’s first rodeo. Make sure you do some digging. Insist that the GC represents and warrants a familiarity with the site. Bargain hard to have the GC agree to accept responsibility for not lassoing the possible changing site conditions. Make no mistake, the shift of the risk will be built into the price, but that will pale in comparison to the delay and expense incurred while you fight over who pays. This is not the area for an owner to take an “aw shucks” attitude and get knocked off his high horse. YouDig?