By: Bradley Earl Sands, Associate, Jones Walker LLP
Introduction
Shop drawings can be thought of as the last mile for the delivery of a project’s design. An Owner will pay a Designer (architect and/or engineer) to chart a course for the project’s design from idea to concept to preliminary design to construction documents. But sometimes on some scopes of work the construction documents only get the design into the right zip code. The Contractor is then tasked with delivering the design to the proper doorstep. Design tasks such as selecting wall tile with “a standard bullnose cap”4, selecting louver panels meeting a certain air-leakage requirement5, or even providing a dry well with a wall thickness sufficient “for the depth of the burial”6 are often left to the Contractor. This last mile typically requires the Contractor to communicate with the Owner and Designer by submitting shop drawings to approve or confirm and sometimes finalize details of the design.
The issue then becomes the Contractor’s liability and obligations for the last mile of the design. This article describes a few of the Contractor’s liabilities and obligations associated with shop drawings including: the limited relief provided from Owner and Designer approvals, the duty to raise issues from omissions and inconsistencies, notice requirements for design changes, and risks when the design is delegated to the Contractor. This article only focuses on potential obligations and liabilities between Contractor and Owner related to shop drawings and does not address potential liability to third parties, especially for personal injury or property damage.
Shop drawings are drawings, diagrams, schedules, product sheets and other data specially prepared by the Contractor or the Contractor’s subcontractors and/or suppliers to illustrate how the Contractor, subcontractor or supplier intends to complete a portion of the work. While critical to delivering the work, unless stated otherwise in the contract, shop drawings are generally not part of the Contract Documents.7 The Contract Documents define the scope of work the Contractor agreed to complete for the Owner. Because shop drawings may not be part of the Contract Documents they should primarily be considered a valuable method of communicating the Contractor’s means for proceeding or the Contractor’s interpretation of the Contract Documents, and not an addition to the Contract Documents. This distinction clarifies the appropriate manner to approach shop drawings during a project’s execution. Additional issues not addressed in this article may arise if and when shop drawings are expressly referenced to be part of the Contract Documents.8
Contractor’s Obligations and Designer’s Liability
A Contractor is obligated to review both the shop drawings it generates and the shop drawings it receives from subcontractors and suppliers for compliance with the Contract Documents. The Contractor is assumed to have approved the shop drawings when submitting them to the Owner or Designer and is “responsible for the accuracy and conformity of its submittals.” ConsensusDocs 200, § 3.14.1 (2014 ed.). The Contractor shall examine and compare the drawings and specifications with the Contractor’s “relevant field measurements” and to “any visible conditions” at the project site that affect the work. ConsensusDocs 200, § 3.3.1 (2014 ed.). When the Contractor submits a shop drawing, the Contractor is representing to the Owner and Designer that it has verified materials, field measurements, and field construction criteria and confirmed that the shop drawing conforms to the Contract Documents.9
The Designer’s liability from shop drawing approvals is primarily determined from the Contract Documents, the contract between the Owner and Designer, or both. Contractors should not assume that approvals will alleviate the Contractor’s liability or provide a quality control check or safety check against the proposed work. Even when form documents like ConsensusDocs are used, a careful reading of the relevant sections is recommended. Generally, a Designer’s approval of a shop drawing will “not be deemed to authorize changes, deviations or substitutions from the requirements of the Contract Documents unless express written approval is obtained from the Owner . . . .” ConsensusDocs 200, § 3.14.1 (2014 ed.).
Designers will often stamp a drawing with “APPROVED,” “REJECTED,” or a statement similar to the one used by the consulting engineer in D.C. McClain, Inc. v. Arlington Cty:
Review of this document is for conformance with the design concept of the project only. Contractor is responsible for confirming field dimensions, for information that pertains solely to the fabrication processes or to techniques of construction, and for coordination of the work of all trades. This review does not relieve the contractor from complying with all requirements of the contract documents.
249 Va. 131, 137-38, 452 S.E.2d 659, 663 (1995). In the D.C. McClain case, the Contract Documents provided that shop drawing approvals would not permit any departure from the contract requirements or relieve the Contractor of the responsibility for any error in details or dimensions. In D.C. McClain, the Contractor provided defective shop drawings that led to delays because a bridge could not be post-tensioned as specified in the shop drawings. Unsurprisingly, the D.C. McClain court found that the plain language of the contract provided that the stamped approval by the county and the county’s consulting engineer did not relieve the Contractor from its contractual obligation to properly construct the bridge.
Omissions and Inconsistencies
Typically, if the Contractor “discover[s] any errors, omissions, or inconsistencies” in the Contract Documents it is required to “promptly report them to the Owner.” ConsensusDocs 200, § 3.3.2 (2014 ed.). Any identified issues or questions should be raised with the Owner or Designer according to the steps outlined in the Contract Documents. The Contract Documents may provide a process for requesting additional information or clarification from the Owner, commonly known as “requests for information” or “RFIs”. Often, the shop drawing process may be when omissions or inconsistences are discovered in the Contract Documents. In these instances, shop drawings may be used in conjunction with the RFI process. For example, the Contractor may annotate or “cloud” the requested clarification on a shop drawing and submit it to the Owner or Designer along with an RFI.12 Then, the Owner or Designer may provide an answer either in or adjacent to the cloud on the shop drawing and return it to the Contractor. However, the Contractor should not wait until generating shop drawings before submitting RFIs or other similar requests for clarification. Also, simply submitting a shop drawing about an omission or inconsistency is not enough.
The Contract Documents may impose extensive responsibilities on the Contractor to carefully study and compare all design-related documents, take field measurements and verify field conditions and compare them to the designs, and report to the Designer any questions, errors, inconsistencies, or omissions.13 However, if a process is not outlined in the Contract Documents, the Contractor should assume there is a duty to seek clarification whenever omissions or inconsistencies are identified by clearly raising the issue with the Owner and Designer.14 In particular, a Contractor has a duty to identify and then seek clarification for patent or obvious ambiguities in the Contract Documents; otherwise, the Contractor assumes the risk for any unanticipated costs incurred as a result.15 The Contractor should seek clarifications in writing per the process set in the Contract Documents or otherwise established on the project.
Other omissions, conflicts and inconsistencies in Contract Documents are not obvious or patent. Instead, these errors in the Contract Documents are latent defects or ambiguities, provided the Contractor is not aware that there is another reasonable interpretation, in which case then that is a patent ambiguity. A court will determine whether an ambiguity is patent or latent and if determined to be latent the court will adopt the Contractor’s reasonable interpretation against the drafter of the Contract Documents.16 A Contractor is not required to interpret the Contract Documents correctly (made more difficult when the plans are incorrect) but merely to interpret them reasonably.17 The shop drawings will provide supporting evidence to the Contractor’s reasonable interpretation of the Contract Documents. Hopefully, the Owner or Designer will clarify the intent of the Contract Documents from the shop drawing process, but this is not always certain. For example, if the Contract Documents provide a certain way to identify a non-standard component, and then the Designer uses a different, non-obvious method to call out the non-standard component, then the Contractor’s shop drawings will support the Contractor’s reasonable interpretation.18 But, Contractors should not rely on the Owner or Designer to “catch” anything and should raise any identified issues directly with them.
Design Change
Shop drawings may be used as part of a design change proposal. But, the Contractor should first and foremost follow the process for design changes as provided in the Contract Documents rather than strictly relying on shop drawings. When submitting a shop drawing with a change from the Contract Documents, the Contractor should specifically notify the Owner or Designer of any changes or deviations. Without a clear notice, the Contractor should not assume the Owner or Designer identified and approved of the change.
Even if the Owner or Designer approves the shop drawing, the approval will often “not be deemed to authorize changes, deviations or substitutions from the requirements of the Contract Documents unless express written approval is obtained from the Owner specifically authorizing this deviation, substitution or change prior to submitting” the shop drawings. ConsensusDocs 200, § 3.14.1 (2014 ed.). But, the approval will not relieve the Contractor from responsibility for defective work “resulting from errors or omissions on the approved shop drawings.” ConsensusDocs 200, § 3.14.3 (2014 ed.). Further, the Contractor must ensure that the party (Designer or an Owner’s agent) that approves a change has the necessary authority.19 At times, the Designer will have no authority to change or modify the plans or specifications during construction. Accordingly, the Contractor should pursue a change order or other change to the Contract Documents to provide adequate assurance the change has been accepted.
Design Delegation
Contract Documents may contain both design and performance specifications.20 Design specifications provide, in precise detail, the materials to be employed and the manner in which the work is to be performed, like a road map for the Contractor to follow. In contrast, performance specifications delegate design responsibility from the Designer to the Contractor for a portion of the work by providing an objective or standard to be achieved in the Contract Documents. Under performance specifications, the Contractor may exercise ingenuity in selecting the means of completing the design but will likely take on corresponding liability. An Owner or Designer approving shop drawings for work under performance specifications will generally not reduce or eliminate the Contractor’s risk for the design. The Contractor assumes the design risk for that portion of the work.
An example of the Contractor’s design risk from performance specifications occurred in Great Am. Ins. Co. v. N. Austin Mun. Util. Dist. No. 1, 902 S.W.2d 488, 494 (Tex. App. 1993), where the specifications for the refurbishment of a lift station dry well called for the thickness of the sides to be sufficient “for the depth of the burial.” In this case, the subcontractor submitted shop drawings through the Contractor to the engineer. The shop drawings outlined the manner the subcontractor proposed to refurbish the existing lift station. But, the shop drawings did not indicate if the work included thickening the sides of the dry well. The shop drawings were approved and the walls of the dry well were not thickened. After the dry well was refurbished, it wasn’t long until one of the sides of the shell began to collapse. The collapse was determined to be because the sides of the dry well were not of sufficient thickness for the depth of burial. The Contractor disclaimed liability because the engineer approved the shop drawings. However, the court decided against the Contractor because the general conditions in the Contract Documents expressly stated that the engineer’s review and approval of the shop drawings would not relieve the Contractor from responsibility. Similar to the D.C. McClain case described above, in this case the following statement was put on the reviewed shop drawing as part of the engineer’s review:
This review is for determining general conformity with the contract plans and specifications and shall not relieve the contractor of responsibility for deviations from drawings or specifications, or for errors of any sort in the shop drawings or schedules.
Conclusion
Shop drawings are a valuable and efficient method of communication between the Owner, Designer, Contractor, subcontractor and supplier. It is simply not economical for Designers to outline every minor (or sometimes major) detail of a project. Often, the best person to define the final and finite details of a design is the Contractor doing the work. However, Contractors must stay mindful to the liability and obligations associated with this last mile of the design.
1United States use of Lichter v. Henke Const. Co., 157 F.2d 13 (8th Cir. 1946).
2Lutz Eng’g Co. v. Indus. Louvers, 585 A.2d 631 (R.I. 1991).
3Great Am. Ins. Co. v. N. Austin Mun. Util. Dist. No. 1, 902 S.W.2d 488 (Tex. App. 1993).
4United States use of Lichter v. Henke Const. Co., 157 F.2d 13 (8th Cir. 1946).
5Lutz Eng’g Co. v. Indus. Louvers, 585 A.2d 631 (R.I. 1991).
6Great Am. Ins. Co. v. N. Austin Mun. Util. Dist. No. 1, 902 S.W.2d 488 (Tex. App. 1993).
7The Contract Documents consist of the agreement between the Owner and Contractor, “drawings, specifications, addenda issued and acknowledged . . ., information furnished by the Owner . . . and modifications issued in accordance with” the Contract Documents. ConsensusDocs 200, § 2.4.4 (2014 ed.).
8See Strong Constr., Inc. v. City of Torrington, 2011 WY 82, 255 P.3d 903 (Contractor breached the contract by failing to supply pumps according to the Contractor’s submitted and approved shop drawings where the Contract Documents expressly provided that approved shop drawings were to be incorporated into the Contract Documents).
9See AIA A201, § 3.12.6 (2007 ed.).
10Lutz Eng’g Co. v. Indus. Louvers, 585 A.2d 631 (R.I. 1991).
11Waggoner v. W & W Steel Co., 1982 OK 141, 657 P.2d 147.
12Sterling Millwrights, Inc. v. United States, 26 Cl. Ct. 49.
13Coghlin Elec. Contractors, Inc. v. Gilbane Bldg. Co.; Div. of Capital Asset Mgmt. & Maint., 472 Mass. 549, 36 N.E.3d 505 (2015).
14Goodrich Quality Theaters, Inc. v. Fostcorp Heating & Cooling, Inc., 16 N.E.3d 426 (Ind. Ct. App. 2014).
15Tecom, Inc. v. United States, 66 Fed. Cl. 736, 748 (2005) (“A patent ambiguity in [Contract Documents] is one that is, on its face, glaring and obvious.”).
16Id.
17Mega Constr. Co. v. United States, 29 Fed. Cl. 396 (1993).
18Goodrich Quality Theaters, Inc. v. Fostcorp Heating & Cooling, Inc., 16 N.E.3d 426 (Ind. Ct. App. 2014).
19Mega Constr. Co. v. United States, 29 Fed. Cl. 396 (1993).
20Aleutian Constructors v. United States, 24 Cl. Ct. 372.
The views expressed in this article are not necessarily those of ConsensusDocs. Readers should not take or refrain from taking any action based on any information without first seeking legal advice.