Background: 12,500 s/f multi-purpose bldg, continuous ftg passed and in, block wall in to 4 coarses high, verts in and tied off to ftg steel (full length 20’), horizontal bars installed, lapped, (actually additional bar installed all around). Called for inspection day before, talked with inspector - next morning, we were to be 2nd inspection (9:30-10am), set up grout for noon. Inspector called at 10:45am, he was with the fire marshal and then had to go back to the city to cover the counter while guy went to lunch would be at best 1:30pm before at site. Called city and the cbo ended up coming out, not happy when he got here (lunch time). Found one horizontal not lapped properly, we fixed immediately, also wanted all block spalls from drilling for slab dowels removed from cells. 4 men began removing block pcs, by this time we had two trucks of grout sitting. He told the mason it was okay to proceed and have the special inspector verify block pcs removed and steel tied, he then went back to car and issued a do not grout, clean cells and tie steel as his two corrections. Since i had trucks here i had the special inspector verify these two items as he had mentioned previously. I sent the stamped engs letter to the inspector and he has told us the wall failed and must come out. My question: According to the national concrete masonry assoc. The horizontals splices are not required to be tied, is there something else that i can reference? The pieces of block being removed seemed illogical since we can use pieces of block to keep the rebar in place, is the removal per code, if so which? Previous to this incident we have passed all inspections and been told we are doing great work. (i.e. Required to pour 2,000 psi grout and we used 2,500 psi). Any help is appreciated.