No matter how thorough and complete the drawings and specifications, there will be manufacturing and installation details that are left to the contractor. These details are often shown on shop drawings. They can include hanger details, conduit routing, details for devices and a broad range of other fabrication and erection measurements and choices. This information will appear in your shop drawings, submitted to the project architect for approval. But what legal significance is there to the approval? The simplest questions are the hardest to answer.
It may come as a surprise that there is no generally recognized definition of the purpose of an architect’s shop drawing review, or even what “approval” means.
This article aims to give some guidance to the electrical contractor as to what it can expect the approval to accomplish and further steps it can take to protect itself. The main problem areas are as follows:
1. The shop drawing is stamped “approved,” but after installation, it is found that the shop drawing did not fully comply with the specifications of the contract.
2. The designer uses the shop drawing review procedure to require changes in the work.
3. The contractor’s shop drawing evidences its change to the specification but does not highlight the change.
4. The designer is late in granting approvals or engages in serial rejections for minor corrections.
The submittal is approved, but it does not meet spec
The reality of the shop drawing review process is that, no matter how important it is, it is not an entertaining task. As a result, designers will often assign the duty to a less-experienced member of their team. If that happens, it is more likely that mistakes can be missed.
In order to account for a potential lack of thoroughness in the review, the contract will typically contain generic language to protect the architect’s oversights.
You may be familiar with provisions that state that approval is for “general conformance to the contract design” and that “approval does not relieve the contractor of its obligations to comply with the specifications.” This language has significance.
Where the designer catches the oversight before the affected construction work is compete, most authorities agree that the owner can hold the contractor responsible. The correction must be done regardless of cost, and the owner has the right to complete adherence to the specifications.
There are cases, however, dealing with federal government contracts, where a different result occurs when the oversight is caught after construction. So long as the system or construction is functional and the contractor’s error does not diminish the use of the project, the courts will consider whether the fix involves “economic waste.” In gross terms, will it cost $100 to get a 10-cent improvement?
It is not advisable to rely on an economic waste argument because the courts will prefer holding the contractor to the requirements of the specifications.
The architect demands a change before approval is given
During shop drawing review, the designer may realize that the design documents were insufficient or possibly ambiguous. In this event, the shop drawing may be acceptable under the contractor’s interpretation of the plans, but it may not be what the designer wants.
An example is a case where the drawings noted that cable tray should be installed in a tunnel from point A to point B. The shop drawing showed a straightforward detail of uninterrupted tray. The designer later realized that this installation would cross a bisecting tunnel, and he noted on the drawing the need for bends in the cable tray (and in the cable) to give clearance at the tunnels’ intersection.
You should treat these types of comments on the shop drawings as a request for change proposal. A typical response from the designer may be a reference to your mandate to install a completed project, accounting for field conditions. You then have a dispute, but you have preserved your rights to pursue a claim for a change order.
The contractor’s submittal contains an implicit change
Buried contractor changes in a shop drawing can be innocent or intentional. The “change” may be a result of your interpretation of an ambiguous or unclear portion of the specifications, or a contractor may see an opportunity for modifying some design concept for a cost savings.
In one lawsuit, the contractor’s modification was actually an improved design at no extra cost—the contractor had the paint baked on by the factory, rather than itself painting a prime coat plus two coats as specified.
As a starting point, the owner, through its designer, has a right to what is specified, even if the contractor’s idea is quicker, cheaper, longer lasting, etc. The factory-applied paint may have been more durable, but the owner can insist that the painting be done as specified.
If there is ambiguity that the contractor is resolving through its submittal, it should note that decision on the shop drawing. If an unhighlighted change is discovered later, you will not be able to argue that the architect’s approval was a knowing one. The approval will not be deemed an acceptance of the change.
Late approvals and serial rejections
The variety of circumstances where the approval cycle creates job delays and disruptions are boundless. For example, the designer may hold back its review on individual drawings, claiming that it needs to see all related submittals at the same time. Alternatively, the architect may say it needs more time because you submitted so many shop drawings at the same time.
As disruptive as these annoyances may be, it is extremely difficult to establish that they are a breach of contract or active interference with the work. It is best to address these problems in job meetings and reach agreement with the architect.
Late approvals are another story. Most commentators, and many courts, hold that there is an implied duty not to interfere between contracting parties and, further, that there is an implied duty to cooperate. Where such an implied duty exists, it covers only the extreme cases.
It is often a good idea to make a note on the submittals that action by the architect is needed by a certain date. Although there is a risk that the architect may reject the shop drawing in order to give itself more time to do the review, this approach is still worth pursuing. At a minimum, the “need by” date will help you keep track of any schedule impacts caused by late approval.
Where it is possible during contract negotiations, you should consider adding to your agreement that the architect shall respond to submittals with a fixed time, for example, within 10 days. Then, if the 10 days are exceeded, you will have the basis for a delay notice.
Also, clarify whether you will be able to proceed with the unaffected work on “approved as noted” shop drawings. You need to know whether the architect will permit you to perform work while you are adding the requested details, or whether he expects that no work will be performed until full approval is given.
A note on recordkeeping
On any project requiring a substantial number of submittals, it is worthwhile to maintain a shop drawing log showing submittal number, date submitted, action by architect and date, and whether resubmittal is necessary.
As further backup to the shop-drawing log, keep copies of all of your submittals, whether accepted, rejected or approved as noted. In the event it is later necessary to support a time request or to defend against a claim of slow performance, you will have some information to explain the sequences of performance.