[Code of Federal Regulations]
[Title 23, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 23CFR635.109]

[Page 162-164]
 
                           TITLE 23--HIGHWAYS
 
 CHAPTER I--FEDERAL HIGHWAY ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
 
PART 635_CONSTRUCTION AND MAINTENANCE--Table of Contents
 
                      Subpart A_Contract Procedures
 
Sec. 635.109  Standardized changed condition clauses.

    (a) Except as provided in paragraph (b) of this section, the 
following changed conditions contract clauses shall be made part of, and 
incorporated in, each highway construction project approved under 23 
U.S.C. 106:
    (1) Differing site conditions. (i) During the progress of the work, 
if subsurface or latent physical conditions are encountered at the site 
differing materially from those indicated in the contract or if unknown 
physical conditions of an unusual nature, differing

[[Page 163]]

materially from those ordinarily encountered and generally recognized as 
inherent in the work provided for in the contract, are encountered at 
the site, the party discovering such conditions shall promptly notify 
the other party in writing of the specific differing conditions before 
the site is disturbed and before the affected work is performed.
    (ii) Upon written notification, the engineer will investigate the 
conditions, and if it is determined that the conditions materially 
differ and cause an increase or decrease in the cost or time required 
for the performance of any work under the contract, an adjustment, 
excluding anticipated profits, will be made and the contract modified in 
writing accordingly. The engineer will notify the contractor of the 
determination whether or not an adjustment of the contract is warranted.
    (iii) No contract adjustment which results in a benefit to the 
contractor will be allowed unless the contractor has provided the 
required written notice.
    (iv) No contract adjustment will be allowed under this clause for 
any effects caused on unchanged work. (This provision may be omitted by 
the STD's at their option.)
    (2) Suspensions of work ordered by the engineer. (i) If the 
performance of all or any portion of the work is suspended or delayed by 
the engineer in writing for an unreasonable period of time (not 
originally anticipated, customary, or inherent to the construction 
industry) and the contractor believes that additional compensation and/
or contract time is due as a result of such suspension or delay, the 
contractor shall submit to the engineer in writing a request for 
adjustment within 7 calendar days of receipt of the notice to resume 
work. The request shall set forth the reasons and support for such 
adjustment.
    (ii) Upon receipt, the engineer will evaluate the contractor's 
request. If the engineer agrees that the cost and/or time required for 
the performance of the contract has increased as a result of such 
suspension and the suspension was caused by conditions beyond the 
control of and not the fault of the contractor, its suppliers, or 
subcontractors at any approved tier, and not caused by weather, the 
engineer will make an adjustment (excluding profit) and modify the 
contract in writing accordingly. The contractor will be notified of the 
engineer's determination whether or not an adjustment of the contract is 
warranted.
    (iii) No contract adjustment will be allowed unless the contractor 
has submitted the request for adjustment within the time prescribed.
    (iv) No contract adjustment will be allowed under this clause to the 
extent that performance would have been suspended or delayed by any 
other cause, or for which an adjustment is provided or excluded under 
any other term or condition of this contract.
    (3) Significant changes in the character of work. (i) The engineer 
reserves the right to make, in writing, at any time during the work, 
such changes in quantities and such alterations in the work as are 
necessary to satisfactorily complete the project. Such changes in 
quantities and alterations shall not invalidate the contract nor release 
the surety, and the contractor agrees to perform the work as altered.
    (ii) If the alterations or changes in quantities significantly 
change the character of the work under the contract, whether such 
alterations or changes are in themselves significant changes to the 
character of the work or by affecting other work cause such other work 
to become significantly different in character, an adjustment, excluding 
anticipated profit, will be made to the contract. The basis for the 
adjustment shall be agreed upon prior to the performance of the work. If 
a basis cannot be agreed upon, then an adjustment will be made either 
for or against the contractor in such amount as the engineer may 
determine to be fair and equitable.
    (iii) If the alterations or changes in quantities do not 
significantly change the character of the work to be performed under the 
contract, the altered work will be paid for as provided elsewhere in the 
contract.
    (iv) The term ``significant change'' shall be construed to apply 
only to the following circumstances:
    (A) When the character of the work as altered differs materially in 
kind or

[[Page 164]]

nature from that involved or included in the original proposed 
construction; or
    (B) When a major item of work, as defined elsewhere in the contract, 
is increased in excess of 125 percent or decreased below 75 percent of 
the original contract quantity. Any allowance for an increase in 
quantity shall apply only to that portion in excess of 125 percent of 
original contract item quantity, or in case of a decrease below 75 
percent, to the actual amount of work performed.
    (b) The provisions of this section shall be governed by the 
following:
    (1) Where State statute does not permit one or more of the contract 
clauses included in paragraph (a) of this section, the State statute 
shall prevail and such clause or clauses need not be made applicable to 
Federal-aid highway contracts.
    (2) Where the State transportation department has developed and 
implemented one or more of the contract clauses included in paragraph 
(a) of this section, such clause or clauses, as developed by the State 
transportation department may be included in Federal-aid highway 
contracts in lieu of the corresponding clause or clauses in paragraph 
(a) of this section. The State's action must be pursuant to a specific 
State statute requiring differing contract conditions clauses. Such 
State developed clause or clauses, however, must be in conformance with 
23 U.S.C., 23 CFR and other applicable Federal statutes and regulations 
as appropriate and shall be subject to the Division Administrator's 
approval as part of the PS&E.
    (c) In the case of a design-build project, STDs are strongly 
encouraged to use ``suspensions of work ordered by the engineer'' 
clauses, and may consider ``differing site condition'' clauses and 
``significant changes in the character of work'' clauses which are 
appropriate for the risk and responsibilities that are shared with the 
design-builder.

[56 FR 37004, Aug. 2, 1991; 57 FR 10062, Mar. 23, 1992, as amended at 67 
FR 75925, Dec. 10, 2002]