May 15, 2012 Hugh Anderson Legal Counsel to the Engineers Joint Contract Documents Committee
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1 Shop Drawings: Contractual and Legal Issues May 15, 2012 Hugh Anderson Legal Counsel to the Engineers Joint Contract Documents Committee Shop Drawings Defined CSI definition: Drawings that illustrate a portion of the work. Often show how specialized work fits into project. Common to treat samples in similar fashion Note broad range of possible submittals: action, informational, close-out, maintenance Are drawings of temporary support, or illustrating proposed means, methods, and techniques of construction, Shop Drawings? EJCDC Definition EJCDC:Develops, drafts, revises standard contract documents for engineering and construction Shop Drawings All drawings, diagrams, illustrations, schedules, and other data or informationthatare specifically prepared or assembled by or for Contractor and submitted by Contractor to illustrate some portion of the Work. Not Drawings and not Contract Documents Shop Drawing Benefits Practical allocation of resources, expertise Gives bidders flexibility, resulting in better prices Puts project on faster track Construction team must embrace design intent Bridges the gap between design and construction Promotes coordination Forces progress Exposes design omissions, errors, inconsistencies Next-to-Last-Chance 1
2 Are Approved Shop Drawings Contract Documents? AIA, CSI: No. ConsensusDOCS: 2007 Yes; 2011 No EJCDC: No. However, approved Shop Drawing may supplement the Contract Documents. Primary reason for not granting Contract Document status: Avoiding unintended design changes Appeal of Elter S.A. (2001) U.S. Navy base on Crete Exterior lighting poles in parking lot Specs required that anchor bolts in pole foundations be galvanized, 1-inch diameter Bolts were undersized and not galvanized. Nonconformance not called out in SDs. Foundations needed to be removed and replaced to accommodate the specified anchor bolts Navy prevailed despite its approval of the lighting pole shop drawing Trataros Construction v. General Services Administration (2001) Government designed support and attachment of exterior fiberglass panels Contractor s shop drawings identified design error in attachments, and provided a re-design Contractor sought costs associated with design fix Government countered that costs were part of shop drawing process Review board awarded costs to contractor Enforcement of Shop Drawings Some contractual gray area here because the standard contracts rely on Contract Documents as the objective reference point for Contractor performance Owner s enforcement of approved Shop Drawings under warranty, correction clauses ( all Work will be in accordance with the Contract Documents ) EJCDC Standard General Conditions: requirements of the Contract Documents may be supplemented by approval of a Shop Drawing 2
3 Shop Drawing Approvals Shop Drawing Approvals more Contracts generally call for A/E approval Standard contracts do not require a stamp Risk managers, insurers, attorneys often recommend d weasel words Contract terms generally more important than wording on stamp, transmittal Contractors must take care in relying on approvals Conformance with design concept and information given in contract Express, transparent process for item that does not conform to Contract Documents Approval of item is not approval of assembly McClain v. Arlington County (1995) Bridge construction contract Post-tensioning of concrete required; insufficient access for jacks on ends of bridge Contractor submitted shop drawing proposing a cut- out method of post-tensioning i Owner accepted shop drawing, noting limits of acceptance; inconsistent with contract limitations on approval of erroneous details, dimensions Cut-out method failed Owner absolved Waggoner v. W.W. Steel Co.(1982) Multi-story hospital project Shop drawings for structural steel did not address temporary connections needed during construction While steel work was in progress, windstorm knocked k over steel resulting in a death and dinjuries i Lawsuit against architect for failing to insist on adequate temporary connections to protect workers Oklahoma Supreme Court held that temporary connections were means, methods of construction, outside architect s scope of shop drawing review 3
4 July 17, 1981 As designed As submitted and constructed The original structural drawings contained several serious errors. Connections truly designed or not? The steel fabrication shop drawings identified a problem how to attach a nut on the rod at the 4 th floor connection and offered a fix: double rods This was clearly a design change and should have been processed as such 4
5 No engineering review or analysis of proposed double rod system. Shop drawings approved. The responsibility for the structural integrity and safety of the walkway connections was the design engineer s. No delegation to nonengineers of the duty to professionally design the walkway connections. Delegating Design EJCDC C-700 Standard General Conditions of the Construction Contract, Paragraph 6.21; and AIA A-201, General Conditions of the Contract for Construction, Section Clear requirement of delegation Owner (engineer) specifies performance and design criteria Contractor may rely on specified performance and design criteria Licensed design professional to provide services Owner & engineer mayrely on professional services Limited review by engineer Disastrous Compliance with Shop Drawings Tropicana: OSHA Decision (2006) Industry practice requires that steel reinforcement be placed in accordance with shop drawings that have been approved by the structural engineer At Tropicana, concrete contractor s sub prepared the reinforcing steel shop drawings Contractor and engineer approved the shop drawings What is contractor s duty in the field? 5
6 Tropicana: OSHA Decision (continued) Industry practice requires a contractor to consult the structural engineer when that contractor knows or has reason to know that the drawings are or may be in error While the contractor t may lack the engineering i expertise to overrule or ignore the shop drawings, to hold that he must slavishly follow them ignores the fact that the contractor has practical experience in the field and is in a position to know when the shop drawings are contrary to generally accepted practice Tropicana: OSHA Decision (continued) The shop drawings may be unclear and confusing, or the detailer who prepared them may have made a mistake Under such circumstances, to conclude that industry practice requires the contractor to follow the shop drawings without first contacting the structural engineer is an invitation to disaster and clearly contrary to the intent of the general duty clause Subs, Suppliers, Consultants Actual shop drawing preparation typically originates at lower tiers Contractor review and approval May include drawings regarding means, methods Should not be rubber stamp or pass through A/E review/approval may be by consultants Frequent source of delays Administrative costs and risk of proceeding without approval Administrative Procedures Design team specifies shop drawings GCs; General Requirements (Div 01); Specifications (Part 1) Progress, Submittals schedules Preparation of SDs by contractor or at lower tiers 6
7 Contractor Shop Drawing Duties (EJCDC GCs) Contractor review responsibility Coordinate with Work, other SDs Verify field dimensions Determine suitability of materials, equipment Confirm the SD meshes with means, methods Note variations APPROVE by stamp or written certification Perform the Work consistent with Engineerapproved SDs (new in pending 2012 EJCDC GCs) Engineer s Review Does SD conform to the information in Contract Documents? Proposed installation compatible with Design Concept? Timely review Turner Construction (2005) No review of means, methods No approvals of substantive design changes, or Contract Time or Price changes in SD process Shop Drawing Approval: Impact on Contract Documents Effect on Contract Documents Amending and Supplementing Contract Documents B. The requirements of the Contract Documents may be supplemented, and minor variations and deviations in the Work may be authorized, by one or more of the following ways: 2. Engineer s approval of a Shop Drawing or Sample Or-Equals Or-Equals Contract Price should have been based on named items of material, equipment No change in price if or-equal is approved, or denied. No appeal. Criteria: Is proposed item equal in quality, durability, appearance, strength, function, performance? Proven track record? Or-equal request often follows Shop Drawing procedures, and may be granted as an approved Shop Drawing 7
8 Substitutions Contractor may request that a substitute material or equipment item be allowed Could result in cost savings, upgrade, reduced O/M costs, or other benefits to owner Could result in Contract Price or Times changes, Change Order Contractor certifies perform adequately, similar in substance and suited to same use Contractor pays review costs Rejection at Engineer s discretion, not appealable No relation to Shop Drawings Closing Thoughts Shop Drawing process meant to be cooperative,not adversarial Reality is that SD struggles are common Can avoid many problems with: Good procedures Is submittal required? Verify Contractor approval Maintain accurate records (logs) Don t use shop drawings to make changes Process and return SDspromptly To Receive Credit Each participant should use this link to take the quiz. Once you have passed the quiz with 70% or better, you will be given a link to download your certificate. (Please note that you need the latest version of Adobe Reader to have the certificate display properly.) Give Us Your Feedback Please go to /S /WEB2 2EYX4X3DNU and take our short survey. Your feedback will help us develop future programs. 8
9 NOTICE Check out NSPE on Twitter and Facebook /19Rf The NSPE Online Seminar series is presented and copyrighted by the National Society of Professional Engineers. All rights are reserved. Any transmission, retransmission or republishing of the audio or written portions of this program without permission of the National Society of Professional Engineers is prohibited. THANK YOU! 9
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