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Volume 7 - Number 49 | December 14, 2009

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Recent Issues

  EDITOR'S NOTES | Issue 7-49
A project owner's approval of a shop drawing, material sample or other submittal may provide false confidence to the contractor. One might assume that performance in accordance with an approved submittal would establish compliance with the contract. Not necessarily. Construction contracts usually contain language to the effect that approval does not waive or alter the contract requirements. Approval may be revoked prior to final acceptance of the project.

The illusory nature of shop drawing approval was demonstrated in a recent case. The contractor submitted a series of shop drawings. These were approved by government personnel, but only after requests for more information and initial rejections in some cases. The contractor proceeded in accordance with the approved submittals. But prior to final acceptance, the government said the work did not conform to the contract and had to be corrected. This was upheld. The contractor never notified the government that the submittals contained deviations from the contract requirements.

Other cases reported this week address the appointment of an arbitrator and the distinction between maintenance and repair of public works. An owner discovered that when it agreed to the rules of a particular arbitration association, it lost any control over the appointment of the arbitrator. And, although the distinction between maintenance and repair may seem trivial, it can have a big impact in public contracting.
  SHOP DRAWING APPROVALS AND INTERIM INSPECTIONS DID NOT WAIVE SPECIFICATIONSSHOP DRAWING APPROVALS AND INTERIM INSPECTIONS DID NOT WAIVE SPECIFICATIONS
Neither shop drawing approvals nor interim inspections prior to progress payments waived the government’s right to insist on strict conformance with the specifications prior to final acceptance. The contractor’s demand for a change order for corrective work justified the government’s termination of the contract for default.
  OWNER BOUND BY ASSOCIATION’S SELECTION OF ARBITRATOR
When an owner agreed to the rules and procedures of a particular arbitration association, the owner was bound to accept the arbitrator appointed by the association in accordance with those rules.
  COURT DISTINGUISHES REPAIR WORK FROM MAINTENANCE
Work that did not alter the size or extent of existing facilities was maintenance work, not repair of public works, and therefore not subject to the state prevailing wage statute.