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«Paper C-2 AN IN-DEPTH DISCUSSION ON GEOTECHNICAL BASELINE REPORTS AND LEGAL ISSUES John Parnass1, Kimberlie Staheli2, Steve Hunt3,John Fowler4, Mark ...»

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North American Society for Trenchless Technology (NASTT)

No-Dig Show 2011


Washington, D.C.

March 27-31, 2011

Paper C-2



John Parnass1, Kimberlie Staheli2, Steve Hunt3,John Fowler4, Mark Hutchinson5, and Leon Maday6

Davis Wright Tremaine, LLP, Seattle, Washington Staheli Trenchless Consultants, Bothell, Washington CH2M Hill, Henderson, Nevada James W. Fowler Co., Dallas, Oregon City of Portland BES, Portland, Oregon King County, Seattle, Washington ABSTRACT: This paper presents a legal and contractual perspective on four issues that are commonly addressed in Geotechnical Baseline Reports (GBRs) and how baseline statements may be viewed by the courts should a claim become elevated to litigation. Each of the four contributing authors (one design engineer, two owners, and one contractor) will present a GBR topic of particular interest to their career, citing examples of their experience with GBRs on that particular topic of interest. The legal perspective on these topics will be presented by John Parnass, an attorney who specializes in trenchless claims, presenting how the courts typically stand on baseline statements within the topic of interest and providing recommendations on how to write baselines that will “hold up” in court.

The four GBR topics will include: 1) establishing baselines for boulder obstructions, including rock strengths; 2) establishing baselines for dewatering; 3) determining the legal implication of baselines that are significantly more adverse than the Geotechnical Data Report and boring logs; and 4) whether the written approach to GBRs should trend toward the more descriptive or the more concise.

1. INTRODUCTION The stated objective of a Geotechnical Baseline Report (GBR) is to define and allocate the risks associated with subsurface excavation.1 In theory, the GBR works in tandem with the Differing Site Condition (DSC) Clause in the Contract Documents to provide a mechanism for the contracting parties to identify any truly unanticipated conditions that may be encountered and pay the contractor an equitable adjustment for costs incurred to complete the work.

While sound in theory, this objective can be thwarted by the Design Engineer’s use of language in the GBR that the courts will either disregard as unenforceable or interpret as vague or ambiguous. Because the GBR and similar documents2 are, fundamentally, Contract Documents (or are treated as such for purposes of determining as-bid subsurface conditions), the courts have developed a body of rules and principles applicable to the interpretation of geotechnical documents. Achieving the stated objective of the GBR thus depends not only on the technical See Randall J. Essex, P.E., Geotechnical Baseline Reports for Construction: Suggested Guidelines (American Society of Civil Engineers 2007).

While this paper focuses on the GBR, the courts in the United States in fact have not yet decided any DSC case arising from the project’s use of a GBR. More commonly, the courts have been asked to interpret an array of other geotechnical data reports, miscellaneous soils reports, geotechnical design summaries, specification language, boring logs and test pit data.

Paper C-2-1 expertise of the Design Engineer, but also on careful consideration of how the courts actually interpret the engineer’s work product. With knowledge of the courts’ approach to the interpretation of GBRs, the Design Engineer can create a document that achieves its central purpose. Without such knowledge, however, Owners and their engineers sometimes resort to terms and conditions in GBRs that they may believe are useful in clarifying the allocation of risk or shedding liability for a particular condition only to discover later in court – the hard way – that such terms and conditions don’t mean what the Design Engineers and Owners think they mean.

The purpose of this paper is provide a brief summary of four topics that are commonly addressed in GBRs and describe from a legal perspective how baseline statements may be viewed by the courts should a claim become elevated to litigation. An expanded discussion of each topic, including recommendations on how to write baselines statements pertaining to each of the four issues, will be presented at a Round Table Discussion held at the 2011 NoDig Show in Washington, DC. For a more detailed written analysis of similar topics, please see Parnass and Staheli (2010).3

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How should boulder obstructions be baselined? Should rock strengths be given for boulders and/or cobbles?

- Mark Hutchinson, Owner Boulders are a commonly baselined item that if incorporated properly into a GBR, can define a level of shared risk between the Owners and Contractors, ensuring Owners are protected against invalid claims while simultaneously ensuring that Contractors receive a fair price for their work. However, if done poorly, boulder baselines can be detrimental for all parties involved. The primary excavation risks associated with boulders depend on boulder size relative to the excavation diameter, the boulder and/or cobble quantities/frequency, and the unconfined compressive strengths of the boulders and/or cobbles. 4 Typically, a properly baselined item must be measurable in the field in order to adequately make a determination of responsibility, a factor which becomes even more important when boulders or boulder obstructions are listed as a pay item. This can lead to confusion when interpreting GBRs which use unclear or generalized language, including statements such as “It should be anticipated that up to 10 boulders, as large as three feet, could be encountered,”5 or more generally, “multiple boulders may be encountered.” It can be assumed that if a Contractor or Owner find multiple interpretations of a given baseline statement, the courts will too.

This variability in interpretation is rarely favorable to the Owner, and may not always be favorable to the Contractor.

In order to properly baseline boulders, a decision must be made by the Owner and/or Design Engineer regarding the size of the boulder that will be considered “out of contract.” It is important to note that, depending on the size of the boulder and the size of the machine, not all boulders may be obstructions. A boulder is only an obstruction if it stops the forward progress of the machine. If boulders of a particular size can be successfully excavated by a machine, it may not be necessary to baseline those boulders. However, if due to the restrictions on the machine size, boulders of a particular size cannot be excavated, these are the boulders that will obstruct the forward progress of the machine, and are extremely important to baseline as they markedly impact the bid price.

There are several indirect ways of determining quantity/frequency, including boulder volume ratio methods and probabilistic methods, but the selection of the method should include consideration of the quality and quantity of data available, as well as the size of the project.6 Both favorable and unfavorable determinations may have significant impacts to the project in terms of cost and risk.

Rock strength determination, which is typically based upon unconfined compressive strengths from geotechnical testing, is often more complex to baseline. It should be noted that setting a baseline number for unconfined compressive strength of cobbles or boulders on trenchless projects (other than large diameter conventional tunneling) is very rare. Setting rock strength baselines too low may lead to excessive back-end costs (i.e. change orders) for Owners. Setting baselines too high may lead to accusations regarding the constructability of projects.

See Parnass & Staheli, The Legal Impact of Geotechnical Baseline Reports (North American Society for Trenchless Technology 2010).

See S.W. Hunt & D.E. Del Nero, Two Decades of Advances Investigating, Baselining and Tunneling in Bouldery Ground (International Tunneling Association 2010).

See Randall J. Essex, P.E., Geotechnical Baseline Reports for Construction: Suggested Guidelines (American Society of Civil Engineers 2007).

See footnote 3 Paper C-2-2 Deciding not to include rock strengths is also an option, but may lead to variable interpretation by the courts to what may be considered reasonable for the anticipated conditions. Please note that the Contractor’s interpretation of the indications represented in the Contract Documents need not necessarily be the best interpretation or the only interpretation, but a reasonable interpretation.7

From a legal standpoint:

The need for a clear cobble and boulder baseline is illustrated by looking at what has occurred on projects without a baseline. Traditional geotechnical investigation by vertical boring can be a hit or miss enterprise simply because of the random distribution of rocks. As a result, it is common for a vertical bore rig or auger rig not to encounter rock during the subsurface investigation, particularly if only conventional methods are used.

The absence of encountered rock in this process has lead to unanticipated legal risk for Owners and their Design Engineers. The typical scenario goes like this: the Owner funds a finite set of borings, the boring logs don’t reveal any encountered rocks and the boring logs are included in the geotechnical data report (GDR) for bidders to review.

At the same time, the Contract Documents normally contain some version of the following common sense warning:

“the test borings should be considered applicable only to the test boring locations on the dates shown, and it should be assumed that these conditions may be different at other locations or at other times”8 This approach of presenting the borings subject to a general statement that the borings should not be extrapolated can result in owner liability because the courts sometimes set aside the general language and give greater deference to the borings themselves.9 As a result, while the Owner may think they have covered the issue with a general disclaimer, the net result of this approach has often been to find the Owner liable for rock conditions precisely because they were not encountered in the borings.10 Because the cases just discussed didn’t involve GBRs – and in fact there are virtually no court cases yet in the U.S.

interpreting true GBRs – it would be a mistake to assume that this same traditional deference to borings as the most accurate characterization of subsurface conditions will continue as GBRs are used more routinely. First, recent advances in boulder volume ratio, probabilistic or other equivalent correlation methods will tend to supplant the raw boring data as the primary contract indication. Second, and for present purposes more important, the GBR by its nature is intended to supersede individual boring or investigative data in order to present an assumed contractual baseline for bidding on a level playing field. This development is a promising one, because it has the potential for moving the industry beyond the traditional trap described above in which the Contract Documents contain mixed signals and ambiguous data subject to varying interpretations.

To take full advantage of this GBR potential, it is difficult to discuss how to baseline in the


because the tunnel diameter, soil type and specified machine and cutter head all play a role in the constructability of the project.

Therefore, we will discuss baselining options for four common parameters – boulder size, boulder quantity, boulder strength and boulder distribution– in the context of a hypothetical project having these guidelines: in Glacial Till, with an outside diameter of 48 inches, using a slurry shield MTBM with a combination cutter head (for actual cases, other parameters may need to be baselined including boulder shapes, cobble and boulder clusters-nests, rock mineralogy, Cerchar abrasivity, matrix shear strength and more).

Boulder Size: to be effective, the size baseline should clearly differentiate between two things: boulder sizes the Contractor is expected to be able to mine through without obstruction vs. boulder sizes that if encountered and measured will greatly impact the forward progress of the machine and may give rise to extra compensation.

Maffei Bldg. Wrecking Corp. v. United States, 732 F.2d 913, 917 (Fed. Cir. 1984).

Whiting-Turner/A.L. Johnson Joint Venture v. General Servs. Admin., GSBCA 15401 at 20 (Dec. 5, 2001).

Appeal of Bay West Inc. ASBCA No. 54166 (April 25, 2007) (“It has long been the rule that contract borings are the most significant indicator of subsurface conditions.”).

Alps Constr. Corp. ASBCA No. 16966 (1973) (“Bidder’s interpretation that project site would contain at most small pieces of various kinds of rock up to 5” was reasonable; rejecting Government’s argument that interpretation was unreasonable because bidder should have known that the small pieces were the largest size that could be extracted with the 6” drill tube -- (“Nowhere in the documents furnished bidders was the size of the tube mentioned...”) Paper C-2-3 Boulder Quantity: in baselining quantities, it is equally important to specify that any and all quantities – whether one, ten, one hundred, or one thousand – of boulders not exceeding the size limit described above are required to be excavated/mined through by the Contractor without extra time or compensation. While this may seem obvious, the failure to make this assumption explicit will lead to disputes. As for larger boulder sizes, it is important to note that the baseline will set the number of times an intervention is expected to allow forward progress of the machine which will have a large impact on the overall bid price. This is truly where the “risk sharing” part of the GBR comes into play.

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