Construction Shop Drawing Review and Approval – Who Owns the Risk?

Shop drawings play a vital role in construction projects. Comprehensive construction contracts may define shop drawings to include diagrams, illustrations, schedules, and other data or information that are prepared or assembled by or for the contractor to illustrate some portion of a parties’ scope of work. Construction contracts may also include language as to the timing of shop drawing submission, as well as the parties’ rights and obligations for the submission of shop drawings.

Whether the shop drawings are considered part of the parties’ contract, great care must be given to specify their preparation, submission, and review. When that does not happen, projects go awry, and litigation may ensue.

What Are Shop Drawings and How Are They Handled in the Parties’ Contract?

Shop drawings are drawings or a set of drawings, produced by a contractor, supplier, manufacturer, subcontractor, or consultant, showing that party’s version of information shown in the construction plans. Shop drawings typically provide more detail than the construction documents/plans and may include dimensions, locations and materials to be used by a party. Their purpose is to explain how that party intends to construct its scope of work. A good set of shop drawings should provide the requisite information for an architect or engineer to compare what the contractor proposes to construct versus what is in the specifications and drawings.

Of course, when there are deviations in the shop drawings, compared to what the plans provide, the construction project can have significant problems. Such was the case in United States v. ABBA.

United States v. ABBA

In ABBA, the contractor (ABBA) sued its subcontractor (East Coast) when East Coast submitted shop drawings that deviated from the contract documents. ABBA argued that East Coast’s scope of work required East Coast to prepare accurate shop drawings, upon which ABBA and others could rely in constructing the project. There was no debate that East Coast’s shop drawings were inconsistent with the project’s specifications. Nevertheless, East Coast argued that ABBA and others should have caught that error before the work began and failed to do so. The parties also acknowledged that East Coast never informed ABBA of the deviations before the project began.

The operative subcontract in ABBA contained language as to East Coast’s submissions that included the following:

• Should inconsistencies or omissions appear in the Contract Documents, it shall be the duty of the subcontractor to timely notify ABBA in writing. Upon receipt of said notice, ABBA shall instruct subcontractor as to the measures to be taken, and subcontractor shall comply with ABBA’s instructions.
• Submissions shall be in strict accordance with the Contract Documents, provided however, if subcontractor wishes to propose a deviation from the Contract Documents, such deviation shall be clearly identified on the submission and accompanied by a letter describing such deviation in detail and the effect, if any, on subcontractor’s work and time of performance. Requested deviations will be allowed only when specific written approval referencing the deviation is given to subcontractor. No general approval granted by ABBA or the Owner shall relieve subcontractor from complying with the Contract Documents.

Ultimately, the court in ABBA entered summary judgment in favor of ABBA, finding that by entering into the subcontract, East Coast agreed to submit shop drawings that would be relied on by ABBA and others and failed to do so, causing damages to ABBA.

Key Takeaways from ABBA

A construction contract should contain specific provisions for shop drawings that:

• articulate whether shop drawings form part of the contract documents;
• articulate the rights and obligations for parties who submit shop drawings;
• articulate what review and approval of those shop drawings mean;
• articulate that simply reviewing those documents does not relieve the submitting party from the requirements of the contract documents; and
• articulate a parties’ obligation to call out and specify deviations from the plans and specifications in the shop drawing and obtain written approval from the reviewing party as to any deviations.

In addition, an owner’s contract with design professionals should define what the architect’s or engineer’s role will be in reviewing shop drawings. Will that role be limited to simply a review for general conformance with the design concept of the project or a more detailed review? By clearly defining these obligations, parties to a construction project will reduce finger pointing, potential problems during construction of the project, and the chance of litigation.