I have a feeling they are trying to push to avoid paying the late completion penalty of $250 a week
As Obi One said "your feelings serve you well!".
This is indeed the way they wriggle out of paying Liquidated Damages.
Under the contract (well in NSW) anyway, you must supply them in writing with a list of items that are outstanding to refuse Practical Completion.
This puts the onus on M to either reject this in writing or do the work. If they reject, then the next step is dispute resolution which per the contract is a site meeting. If it comes to that, I would get the building inspector involved at that point and then tell M that the fee for the inspector to come out and check the remedial work will be deducted from the final payment. That way they and you get the report and then you still get the benefit of liquidated damages.
Otherwise I agree with the other comments, do not agree to private building inspection until all work is done and you are ready. As pointed out the report is for you not them.
Stand your ground and don't pay any final invoice until you're happy to.
For example. M have issued me Lockup and Fixing invoices and I have refused to pay because things are still outstanding from Slab and Frame which were pointed out in the inspectors report.
Best of luck with it.
Cheers Nom
Newhaven 36 by M
Blog - North Shore Newhaven (http://nsnewhaven.blogspot.com.au)
Build Thread - http://forum.homeone.com.au/viewtopic.php?f=31&t=85092