Following the construction industry and related legal topics in the United States.

Tuesday, May 13, 2008

Digging Up Bones: New Provisions in the AIA A201 Impose New Obligations on Contractors

Recently, neighbors of mine decided to sell the family farm that has been in their family for almost 200 years. We know that the property has been in the family for this long based on the family cemetery plot located on the last bit of acreage that has not been subsumed by the surrounding neighborhoods that have swallowed what was originally about 100 acres of farmland.

As part of my neighbor's quest to sell their family property, they know that they will be responsible to pay the costs to move the family cemetery to a nearby memorial gardens. As the owner of the property, my neighbor's obligation to move this well marked family plot seems clear. Curiously, however, in the recent revisions to the AIA Contract Documents, and in particular, the AIA A201-2007, the drafters of the new 2007 edition of the AIA Contract Documents don't take as clear a position with respect to the responsibility for remains found on an owner's property during the course of construction.

In the revised A201-2007 General Conditions of the Contract for Construction, the drafters added a new Section 3.7.5 which reads in pertinent part, "[i]f, in the course of the Work, the Contractor encounters human remains or recognizes the existence of burial markers, archeological sites or wetlands not indicated in the Contract Documents, the Contractor shall immediately suspend any operations that would affect them and shall notify the Owner and Architect." [Emphasis added]. This seems to make some sense; if a contractor discovers remains, it will stop work and allow the owner to have the remains removed in accordance with applicable law.

What isn't as clear in the new language is: 1) the extent to which the contractor must stop the Work, and 2) whether the contractor will be given an extension of the Contract Time or additional costs that it might incur (e.g., extended general conditions, etc.) during such a stoppage of the Work. This uncertainty stems from the last two sentences of the new provision which read: "[t]he Contractor shall continue to suspend such operations until otherwise instructed by the Owner but shall continue with all other operations that do not affect those remains or features. Requests for adjustments in the Contract Sum and Contract Time arising from the existence of such remains or features may be made as provided in Article 15."

Thus, under the new Section 3.7.5, the burden is shifted to the Contractor to determine what operations "do not affect those remains or features". One can imagine that disputes will invariably result in the event of any miscommunication between an owner and contractor with respect to the precise scope of operations that the contractor is to undertake while such remediation efforts are under way. Disputes are also likely to result from the Contractor's inefficiency claims resulting from delays to the Contract Time caused by the contractor working around the owner's removal or abatement contractor.

In addition, instead of indicating that both the Contract Time and Contract Sum shall be extended due to such unforeseen conditions, the drafters instead placed the burden on the contractor to make a claim for such additional costs. While such claims may be perfunctory in most cases, one can imagine that disputes will likely result from contractors' claims arising out of such unforeseen site conditions. As a result, as parties begin to use the new A201, they should use caution in simply adopting the new Section 3.7.5 without modification and should instead examine this new provision in light of the facts and circumstances of the project in question. (This entry published by Culley Carson, a member of Womble Carlyle's construction law practice group.)


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