going to make $225,000 extra instead of $250,0000. The purpose of this story is to attack the “or equal” problem by asking the designer what the “or equal” product is. They are now stuck, because usually there is no “or equal” product. This is an easy way to solve this type of a problem and make money. Another project, Subcontractor had to install an underground sewer pipe main line: • Specification—PVC pipe 13-foot-long ASTM F-794, Owner Army Corps of Engineers (ACE). • Eventual owner City of San Diego (SD). • Amendment #4 changed to ASTM F-679, still 13-foot-long, but a thicker wall PVC pipe. • 05/15/16—Subcontractor submitted ASTM F-794 pipe. • 05/20/16—ACE approved ASTM F-794 pipe. • 05/27/16—Installation starts. • 06/09/16—SD on site, informs subcontractor, it has installed the wrong pipe; subcontractor states see its approved submittal, inspector agrees the right pipe is being installed. SD states that it is installing the wrong pipe. Subcontractor asks who are you? We are SD. Why are you are here? Even though the COE is building this sewer line SD are the eventual owners, SD wants to make sure that the installation is correct. The GC throws SD off his project and asks the COE to get SD off his back. • 06/09/16—COE to GC Letter—ASTM F-794 sewer pipe installed is not acceptable and must be removed
immediately. m Subcontractor asked if it has a
good claim to pursue. I informed the subcontractor that it has a
T H E
C O N T R A C T O R ’ S
loser of a problem on its hand, because: p When a submittal is not in conformance with the specifications and even if approved, the subcontractor is in breach of contract because it did not furnish what the two parties contracted for. Therefore, it has to furnish and install the required product, even if it means that the subcontractor must tear up what it has already installed. First offer a credit to keep what is installed (cheapest option). The basic assumption in making a submittal is that you are in conformance with the specifications. The moment you make the wrong submittal even if approved it or not does not let you off the hook by submitting a product that was never part of the contract. If your submittal is not in conformance with the contract documents, what should you do? Submit a Substitution or an Approval for As-Equal Request. • 6/11/97 letter from SD to COE states new sewer main will be owned and maintained by SD upon completion and acceptance, subcontractor must follow what has been approved by SD. • 6/13/97 letter to the Corps states “we will remove the installed sewer pipe and install per ASTM F-679. We reserve the right to file a claim.” SDC note: You should reserve your rights to file a claim because sometimes the owner pays this type of claim due to lack of knowledge, sympathy, feels liable for approving the wrong product, but the moment the owner states that it is not going to pay for, take us to court, you have to drop
C O M P A S S
this claim like a hot potato.
• 06/20/97—Coordination meeting,
both GC and subcontractor are now gun shy and they both know now that SD is a player. SD looking at the same drawings they looked at many months prior to bid state that they did not realize that 96 percent of the pipe was to be installed below 20 feet. Therefore they need to change the type of pipe from ASTM F-679 to F-700 (Clay pipe which is 6 feet long with hand packed joints) because the ASTM F-679 will get crushed with
20-plus feet of soil backfill.
• Subcontractor got lucky getting
a huge change order, which included costs for pipe differential, unloading, distributing, bigger equipment, shoring, hand packed vs. glued joints, breakage of more brittle pipe, extended field and home office overhead, etc.
Lessons Learned
• Paste the amendments into the contract documents.
• Submittal approval does not change
the contract. Armed with this knowledge, subcontractors can go out there and better handle the submittal process that works, saves time, and makes more money! Anwar Hafeez is president of SDC & Associates, Inc., San Diego, a construction claims consulting firm that prepares and negotiates change orders/ claims with 99.999 percent success rate; CPM scheduling; and teaching seminars on project management and change orders/claims, www.sdcassociates.com. He can be reached at (800) 732-3996 or ah@sdcassociates.com.
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