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Part 11

Scenario 1

The agreement between the Prime Contractor and Sub-Contractor was to follow the contract documents. Although the plans originally called for Grade 60 steel for the reinforcement of the building footings, the Special Provision says to use Grade 40. Since the Special Provision is an amendment to the original contract documents, regardless of what the plans say, the Sub-Contractor should abide by the contract documents, assuming the plans were not part of them. Assuming the Grade 40 steel was available, if the Sub-Contractor still chose to use Grade 60, they would either need to pay for the price difference in materials themselves or correct their mistake by replacing the Grade 60 steel with Grade 40 as the Special Provision called for. If the Grade 40 steel was not available, then the Sub-Contractor should have confirmed with the Prime Contractor that it was acceptable to use Grade 60 before doing so.

In this event that the Sub-Contractor refused to pay the $32,000 difference for using the incorrect grade of steel, we would have to revisit the contract documents to review which dispute resolution method was agreed upon if needed. However, to avoid the issue from becoming larger than needed and potentially going into litigation, the best method for dispute resolution would most likely be the involvement of a Disputes Review Board. Since the board had most likely been assembled early in the life of the construction project, this dispute can and should be resolved rather quickly. Assuming the decision/resolution the board comes up with is unanimous, both parties should agree to the proposed recommendations on how to proceed. If either party does not accept the recommendations, the dispute can be appealed to the board for another review, or other methods of dispute resolution may then be pursued if necessary.