The shop drawing submittal process raises issues regarding the legal relationships up and down the contracting chain. Submittals must be approved by the project owner, or more likely, by the owner’s design consultant. Most submittals are generated by trade contractors – subs to the prime contractor. These subcontractors have no contractual relationship with the owner. It is the prime contractor that has a contract with the project owner.

This arrangement renders the prime contractor as essentially a conduit in the submittal process. The contractor passes the trade subs’ drawings, samples and literature through to the owner’s representative. The subcontractors’ ability to perform and perform on schedule is frequently dependent on the timely approval of those submittals. This gives rise to an interesting question. What is the prime contractor’s obligation to its subcontractor during the submittal process?

In a recent federal appellate case, a subcontractor sued a prime contractor for breach of contract – breach of the implied covenant of good faith – because the prime was not sufficiently helpful in obtaining owner approval of the sub’s shop drawing submittal. The subcontractor contended the prime contractor should have arranged a face-to-face meeting with owner decision makers and should have advocated on the sub’s behalf.

Other cases this week involved an alleged organizational conflict of interest during the procurement process and the application of change order releases to cumulative impact costs. The alleged conflict of interest was based on nothing more that appearance and innuendo. It was not established with hard facts. And, there were questions as to whether the change order settlement language was intended to apply to the cumulative impact of multiple changes.