Who pays when a part is scrapped because of a customer drawing error?

Example: the released hole is too small for the assembly

Assume 20 steel mounting brackets were made to an approved drawing with 0.250-inch holes. The customer's engineer now confirms the assembly needs 0.281-inch holes. Before the change, each part had $18 material, $30 machining and $10 outside finish, plus $120 of batch setup. Incurred batch cost is 20 × ($18 + $30 + $10) + $120 = $1,280. These are assumed shop costs, not a selling-price entitlement.

A proposed rework route uses $60 of batch setup, four minutes per part at a burdened $90 per hour, and one hour of final inspection at $60 per hour. Incremental rework cost is $60 + 20 × 4 / 60 × $90 + $60 = $240. This route assumes the customer explicitly accepts the resulting finish condition around the enlarged holes. If stripped or restored coating is required, obtain that supplier price and add it before seeking approval.

Separate three different causes

If the shop drilled a different size from the controlling drawing, start with a nonconformance and the shop's correction process. Do not describe your own programming error as a customer engineering change. If conforming parts need a new design, prepare a change quotation. If the original documents conflicted or the shop proceeded after noticing an unresolved error, preserve the correspondence and review responsibility before proposing a cost split.

No universal drawing-error rule resolves those facts. For example, Washington's commercial statute on express warranties says a goods description that becomes part of the bargain can create a warranty of conformity. That illustrates why the accepted description matters; it does not decide liability in another state or allocate every design risk. Get contract-specific legal advice when a material dispute remains.

Build a disposition package that someone can approve

Save the quote, accepted PO, drawing and model revisions, change messages, traveler, first-article results and affected lot identifiers. Record how many parts are untouched, partially machined, finished and already shipped. Quarantine affected pieces while the customer decides; do not blend them back into good stock or dispose of evidence needed for the investigation.

Show sunk cost separately from future spending. A replacement quote should identify recoverable material, salvage credit, canceled outside-service commitments and any original invoice adjustment. The example's $2,560 represents two batches of cost under a simplifying equal-cost assumption, not permission to bill the customer twice. Cost, proposed selling charge and contractual recovery are three different figures.

Agree on money, revision and release together

Example request: ‘Lot B-20 conforms to drawing revision C at the inspected hole size. Your proposed revision D requires larger holes. We estimate $240 additional rework cost under the attached routing, excluding coating restoration. Please approve the technical disposition and finish condition, and issue commercial authorization for the agreed rework price before we restart. Otherwise we will hold the identified lot pending instructions.’ Add the actual selling charge and schedule once your cost and markup are confirmed.

For future orders, propose a process requiring written approval of changes, disposition of existing work and adjustment of price and delivery before changed work starts. Have the accepted terms reviewed rather than relying on a broad sentence that the customer pays for every drawing error. The immediate next action is to document conformity and submit the least-wasteful technically acceptable option for approval.

• Resolve drawing errors before cutting
• Clarify conflicting files
• Handle customer-owned stock