The Federal Circuit’s decision in Hamp’s Construction LLC v. Secretary of the Army, in which the court affirmed an Armed Services Board of Contract Appeals denial of a Type I differing site condition claim, reveals some of the hidden pitfalls facing contractors and reinforces the ways in which a contractor must buttress a claim to keep it from collapsing.
Differing site condition claims are “bread and butter claims in government contracting and the law is correspondingly well-settled.” Hamp’s Constr. LLC, 2024-1 B.C.A. (CCH) ¶ 38,514, 187211 (citations omitted). Nevertheless, the Federal Circuit’s June 30, 2026, decision in Hamp’s Constr. LLC v. Sec’y of the Army, No. 2024-1528, 2026 LX 381733 (Fed. Cir. June 30, 2026) demonstrates that there are still tough lessons to be learned.
Hamp’s Construction reaffirms that a Type I differing site condition claim only succeeds when the contractor is able to prove that conditions encountered materially differed from those indicated in the contract documents, that those conditions were not reasonably foreseeable to the contractor based upon outside information, and that the contractor relied upon the representations in the contract documents. Where the contract is silent as to the conditions to be encountered at the site, that is not an identification or indication of the conditions which justifies the bidder’s expectation of latent conditions materially different from those encountered. For this reason, it behooves a potential bidder to carefully examine the site and the contract documents. If the contractor, despite careful pre-bid examination, does later encounter a differing site condition, it is critical to review all the contract documents for indications of the actual conditions at the earliest possible stage, but particularly before filing a request for equitable adjustment or claim. If the contractor fails to raise all possible arguments at the claim stage, it may inadvertently waive arguments that could tip the balance on appeal.
The solicitation at issue in this case, which was issued in 2012, concerned repairs to the banks of a drainage canal. The solicitation included ten boring logs taken in 2008, of which eight were taken from the east side of the canal, and two were taken from the west side of the canal. Although work initially started well, once it progressed to the southwest portion, the contractor was unable to continue operating loaded trucks from the bank and the contractor shifted to barge-based equipment, generating a $3,948,833 REA and a 237-calendar-day time-impact claim. The Armed Services Board of Contract Appeals denied the claim in February 2024. The Federal Circuit affirmed.
Pursuant to Renda Marine, Inc. v. United States, 509 F.3d 1372, 1376 (Fed. Cir. 2007), H.B. Mac, Inc. v. United States, 153 F.3d 1338, 1343 (Fed. Cir. 1998), and earlier cases, a Type I claimant must first establish that the contract documents contained affirmative representations about the conditions at issue. Although the court accepted that conditions on the southwest bank were notably different and far worse than those on the east side, the contractor’s own expert conceded that none of the boring logs provided with the contract documents was taken from the area where the contractor encountered difficulties. Hamp’s Constr. LLC v. Sec’y of the Army, No. 2024-1528, 2026 LX 381733 (Fed. Cir. June 30, 2026). Given that, the ASBCA concluded that the contractor literally had nothing in the contract documents on which it could have relied. The Federal Circuit agreed.
The contractor raised two additional arguments, which the court rejected for procedural reasons and which demonstrate a set of pitfalls common to many REAs and claims. First, at the Federal Circuit, the contractor raised the argument that certain contract drawings depicted construction-traffic arrows on which it could have relied as evidence that it was expected to operate from the bank. Since this argument was not raised before the Board – or in the initial REA or claim – the court ruled that it was forfeited on appeal. Even if it had been preserved, the court noted that these drawings were insufficient evidence of subsurface conditions. While the opinion is silent on this matter, it is worth considering how the contractor might have fared had it raised this argument early in the process – in conjunction with its other arguments. Second, the contractor argued that because the original solicitation had prohibited the use of barges in the canal, that this amounted to a contractual indication of the suitability of the banks for top of bank operations. The court found that this argument “collapse[d]” because this provision was removed from the solicitation prior to the contractor’s bid. Additionally, at the hearing, the contractor had also explicitly disclaimed its reliance on the original solicitation. Thus, the contractor surrendered a second argument which it might have used to buttress its claim. As a result, the court held “that a reasonable contractor, reading the contract documents as a whole, would not interpret them as providing indications as to the site conditions … where the unexpected conditions occurred.” Id. at 16.
Contractor takeaways:
Contractors bidding on projects where the contract documents are silent on important terms should proceed cautiously, but they do have options. First, they could conduct an independent investigation before bidding. Waiting to find out what the uncovered ground holds and then framing the result as a Type I claim, is a losing strategy. Second, they could treat that information gap as a Type II question (conditions materially different from those ordinarily encountered in the work of the character provided for in the contract).
Cases cited:
Hamp’s Constr. LLC, 2024-1 B.C.A. (CCH) ¶ 38,514, 187211.
Hamp’s Constr. LLC v. Sec’y of the Army, No. 2024-1528, 2026 LX 381733 (Fed. Cir. June 30, 2026).
Renda Marine, Inc. v. United States, 509 F.3d 1372, 1376 (Fed. Cir. 2007).
H.B. Mac, Inc. v. United States, 153 F.3d 1338, 1343 (Fed. Cir. 1998).