Geotechnical due diligence for a development site

Geotechnical due diligence is the work of testing the ground assumptions a development feasibility rests on: founding conditions, earthworks balance, fill, groundwater and slope stability. It runs from desktop review of mapped and historical records through to a scoped site investigation, and its purpose is to find out which assumptions are wrong while the price, the yield or the walk-away decision can still change.

This is a stage-by-stage checklist of what to establish and when, from first inspection to the earthworks and piling tender.

What the stages cover

Stage	Decision being made	Evidence used
Before the offer	Is the site worth a due diligence period	Desktop: geology, terrain, historical imagery, nearby bore logs, hazard mapping
During due diligence	What to price, what to test, what to walk from	Desktop findings plus a scoped investigation
Concept and yield	Lot layout, levels, basement extent, earthworks balance	Investigation results against the ground model
Tender	What contractors are being asked to price	Factual data, stated assumptions, residual risks

Stage 1: before the offer

All of this is desktop work and can be completed in an afternoon.

• Confirm the whole holding. Multiple lots, part lots, easements and road reserve change the developable area before ground conditions do.
• Identify the mapped geological units. One unit across the site is a different risk profile from three, and a mapped boundary predicts where conditions change.
• Read the terrain. Total fall, direction of fall and breaks of slope. Breaks often mark old gullies, fill edges or the top of a rock shelf.
• Review historical aerial imagery. Quarries, dams, gullies, stockpiles, batters and old building pads all indicate fill.
• Check nearby borehole logs. Depth to clay, depth to refusal, standing water levels, and how far adjacent logs disagree.
• Screen the hazard layers. Flood, landslip, acid sulfate soils, contamination and mine subsidence each carry an approval pathway and a cost line.

Stage 2: during the due diligence period

The task at this stage is to convert screening into priced risk and to decide which unknowns are worth closing before settlement.

• List the three ground assumptions the feasibility depends on. Usually founding depth, cut and fill balance, and whether the site supports the basement or parking design.
• Test each against the desktop evidence. Assumptions consistent with the mapped geology and nearby logs can be priced. Assumptions that conflict with them need field data before settlement.
• Scope the investigation to those questions. Andrews (2006) frames the scale of a geotechnical investigation as a decision about how much risk the developer retains, and notes that a small scope does not remove cost: a designer working with thin data designs conservatively, and the conservatism appears in the construction budget.
• Decide who carries latent conditions. Where an investigation is preliminary only, the consultant stands behind the factual data while the risk of changed strata and unexpected conditions stays with the developer. That allocation should be deliberate.
• Check the approval-stage geotechnical requirements. On sloping land, planning controls can require geotechnical assessment and staged verification before certificates are issued, which is a program item as well as a cost (Walker et al. 2007).

Stage 3: before the yield and concept are locked

• Reconcile the lot layout with the ground model. Lots over the deepest fill or the steepest fall are the ones likely to need engineered footings, and they should not be the lots priced as standard.
• Check the earthworks balance against the material. Rock excavation carries a different rate. Reactive clay is acceptable as fill only where it is placed and tested as controlled fill, and the site classification must still account for it.
• Consider what the platform does to the footings. Filling a lot to create a level pad can place every footing on fill and shift the cost into engineered slabs.
• Set floor levels against flood, drainage and retaining together. A 300 mm change at concept stage is a redraw; the same change after approval is a resubmission.

Stage 4: before the earthworks and piling tender

• Issue the ground model you hold. Collingwood (2003) identifies unforeseen ground conditions as the most common cause of delay on piling projects, and tenderers who cannot see the data price the uncertainty back as contingency.
• Separate measured, inferred and untested. A desktop model presented as fact invites a claim. Presented as a hypothesis with its evidence, it lets a contractor price the risk.
• State the residual risks. Seasonal groundwater variation, disagreement between logs, corestones in weathered rock, and fill of unknown origin.

How much to spend on investigation

Published Australian practice gives a range rather than a rule. A case study reviewed by the Australian Geomechanics Society (2000) records site investigation expenditure as low as a few tenths of one per cent of total project cost, against an international recommendation of about three per cent. Kelly et al. (2020) argue the other side: investigation spend is subject to diminishing returns, and scaling it to a large percentage of tender cost is not defensible on a major project.

The practical position sits between the two. Spend early on the questions that decide the transaction, and scope the field investigation to resolve the specific assumptions the feasibility cannot carry, rather than to a standard fee.

What desktop work cannot settle

A desktop assessment produces an evidence-based expectation of subsurface conditions and identifies where that expectation is most likely to be wrong. It does not produce founding levels, design parameters or a site classification, and it is not engineering advice for a specific project. Its function is to make the investigation that follows drill in the right places to the right depths. The boundary is set out in full in what a geotechnical desktop study covers.

Common questions

What is geotechnical due diligence?

The process of testing the ground-related assumptions behind a property or development decision before committing to it. It combines desktop review of mapped geology, terrain, historical imagery, bore records and hazard mapping with a site investigation scoped to the questions that carry commercial risk.

When should a geotechnical investigation happen in a development?

Desktop review belongs before the offer, so that the due diligence period starts with known questions. Field investigation belongs inside the due diligence period where the answer could change the price or the decision, and before detailed design in every case.

Who carries the risk of unforeseen ground conditions?

It depends on the contract and on the scope of investigation. With a preliminary investigation only, the developer generally retains the risk of changed strata and latent conditions. A larger investigation transfers less risk to construction, which is the trade-off Andrews (2006) describes.

To build the desktop evidence for a site before the due diligence clock starts, generate a desktop report for the address, or see a sample report to check what it resolves.

LayeredGeo compiles geology, soils, groundwater and site data into an automated geotechnical desktop report for any address in Queensland, New South Wales or Victoria.

Sources

• Australian Geomechanics Society (2000). Geotechnical risk and inadequate site investigations: A case study. Australian Geomechanics, Volume 35, Number 2 (Jun 2000). geomechanics.org.au
• R. B. Kelly, M. Drechsler and R. Goldsmith (2020). Connecting Geotechnical Investigations with Project Risk. Australian Geomechanics, Volume 55, Number 1 (Mar 2020). geomechanics.org.au
• Peter V. Andrews (2006). The hidden cost of geotechnical investigations. Australian Geomechanics, Volume 41, Number 4 (Dec 2006). geomechanics.org.au
• Bruce Walker, Warwick Davies and Grahame Wilson (2007). Practice Note guidelines for landslide risk management. Australian Geomechanics, Volume 42, Number 1 (Mar 2007). geomechanics.org.au
• Ben Collingwood (2003). Geotechnical Investigations For Piling Projects - The False Economy Of A Cheap Site Investigation. Australian Geomechanics, Volume 38, Number 1 (Mar 2003). geomechanics.org.au

About this article. Published by LayeredGeo and written from the published research cited in the Sources section above. It is general information about how property and ground conditions are assessed in Australia, not engineering, planning, legal or financial advice, and it is not specific to any property. Check anything that matters against the source dataset or a suitably qualified professional before you rely on it. If you spot something wrong, tell us at hello@layeredgeo.com.au and we will fix it.

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