Differing site conditions: Type I and Type II

Type I and Type II

The federal clause, FAR 52.236-2 as shown on acquisition.gov on 7 Nov 2026, describes two kinds, and many private and public contracts use the same split:

• Type I: subsurface or hidden physical conditions that differ materially from those indicated in the contract. The contractor points to what the documents said, such as boring logs, soils report data the contract makes part of the documents, or existing-condition drawings, and shows the site was materially different.
• Type II: unknown physical conditions of an unusual nature, differing materially from those ordinarily found in work of the kind the contract calls for. Here the documents say nothing. The contractor must show the condition is unusual for that kind of work in that area, which is usually harder to prove.

Notice comes first

Under the federal clause, in our words: the contractor must give written notice promptly, and before the conditions are disturbed, so the owner can investigate. The contracting officer investigates, and if the conditions do materially differ and change the cost or time, an equitable adjustment is made and the contract is modified in writing. A request can be refused if the written notice was not given, though the officer may extend the time for notice, and no request is allowed after final payment.

Private contracts and state public contracts carry their own versions, often with a set number of days for notice. The working habit is the same everywhere:

1. Stop work in the affected area if it is safe to do so.
2. Notify the owner and design team in writing right away.
3. Photograph, measure and record the condition before anything is moved.
4. Keep separate cost records for the extra work.
5. Follow the contract's process for a change order or claim. See change orders.

What can defeat a claim

• Late notice, especially after the condition has been dug out or covered.
• A site visit clause. Many contracts say the bidder inspected the site. A condition a reasonable site visit would have shown is hard to claim.
• Disclaimers. Some contracts say subsurface data is for information only. How far courts honor these differs by jurisdiction.
• Not material. A small difference that does not really change cost or time is not enough.

A worked example with invented numbers

The contract includes boring logs showing sandy clay to 12 feet. While digging for a footing at 8 feet, the excavation hits rock that needs a breaker. The contractor gives written notice the same day, before removing it, and the engineer confirms the rock. The contract's change pricing allows cost plus 10% overhead and 5% profit on the total.

• Rock removal, measured: 140 cubic yards at a cost of $95 per cubic yard: 140 x 95 = $13,300
• Extra hauling and disposal: $2,100
• Direct cost: 13,300 + 2,100 = $15,400
• Overhead at 10%: 15,400 x 0.10 = $1,540
• Subtotal: 15,400 + 1,540 = $16,940
• Profit at 5%: 16,940 x 0.05 = $847
• Total change: 16,940 + 847 = $17,787

Check: 15,400 x 1.10 x 1.05 = 15,400 x 1.155 = 17,787.

The breaker work also adds 3 working days on the critical path, so the contractor asks for 3 days of contract time in the same change. Without that extension, those days could later be charged as liquidated damages.

Conditions can also be better than shown. If the soil is easier to dig than the documents say, the federal clause allows a decrease too.

Common mix-ups

• Calling bad weather a differing site condition. Weather is not a physical condition of the site. Contracts handle it in their delay terms.
• Digging it out first, telling the owner later. Notice comes before disturbing the condition.
• Mixing up the two types. Type I compares with the documents; Type II compares with what is normal.
• Assuming the federal clause applies. Private and state contracts set their own terms.

On the NASCLA exam

The bulletin lists subject areas, not topics. We place contract clauses under Procurement and Contracting Requirements, 31 of the 115 scored questions, with the dirt side of it under Site Construction, 15 questions. Pipe and Excavation Contracting fits the site side by its title; the NASCLA Contractors Guide to Business, Law and Project Management fits the contract side.

Practice it

Price the change again with a different markup in markup vs margin, and see how the three days move the finish in notice to proceed and contract time.

Take the free 10-question check

Start the free 10-question check. It is weighted to the twelve NASCLA subject areas, needs no signup and explains every answer, so you see which area to study first.

The NASCLA Commercial course has a lesson for each of the 12 subject areas that shows which listed reference to open and how to apply it, original practice questions with every answer worked, and four timed practice exams of 115 questions on a 330-minute clock. Your scores come back by subject area, so you know where the next study hour goes. See the course.

Not affiliated with or endorsed by NASCLA or PSI. NASCLA and PSI are named only to identify the exam and its test vendor.

Sources

Show the list

• FAR 52.236-2, Differing Site Conditions, acquisition.gov. Retrieved 7 Nov 2026.
• PSI Candidate Information Bulletin 1458, content outline and reference list, updated 7 Jul 2026. Retrieved 5 Nov 2026.
• All examples use invented numbers. Private and state contract terms are described in general.