Consulting Engineers and Planners
Mission Street
San Francisco, Ca 94105
415 543 9820


September 21, 1988

Mr. Bill Merriman
Vice President
Sletten Construction Company
P.O. Box 2467
Great Falls, MT  59403

Subject:  Broadwater Power Project, Contract 1189-2
                CPM Schedule

  1. Sletten letter F 090888-1
  2. Tudor document 03 00053 8092002 Discussion Notes with Sletten staff
  3. Tudor document 03 00053 8083001 Notes Meeting August 24, 1988
  4. Tudor document 03 00053 8090602 Notes Meeting August 31, 1988
  5. Tudor document 03 00053 8090803 Notes Meeting September 7, 1988
  6. Tudor document 03 00053 8091801 Notes Meeting September 14, 1988

Dear Bill,

Sletten's field staff (e.g., Kieth Ferguson, Dave Marsh) are working hard to maintain progress of the work. Within the past few days Paul Robinson has been on site and appears to be working toward that goal as well.

I conclude, however, that additional effort is needed to improve communications and performance with respect to contract Schedule requirements, and am hereby directing that Sletten take the following steps pursuant to GC Article 10, for the reasons cited below:

  1. Sletten will provide a qualified expert in CPM Scheduling to develop and maintain within industry standards a CPM schedule until such time as the Engineer determines the services are no longer required.

  2. Such individual will work under Sletten's control and through Sletten to initially develop a current Updated Schedule and thereafter will maintain same on a daily basis; and will be regularly available to discuss and advise the Engineer with respect to Scheduling.

  3. The Scheduler will sign all Sletten documentation dealing with Scheduling, certifying same to be true and correct within his or her knowledge.

  4. Sletten will submit by September 30, 1988, the names and credentials of three consultants acceptable to Sletten, along with their projected monthly cost. The Engineer will investigate the bonafides and interview Sletten's candidates. Thereafter, the parties will agree on who to select for the position.

  5. Sletten will be compensated for its reasonable management expense in expediting the search and hiring of the Scheduler. Sletten will further be compensated for any additional cost incurred for providing this Schedule support that exceeds contract requirements.

If for any reason Sletten believes it is not required, is unable or unwilling to proceed with the Work as changed by this directive, please inform me immediately of any grounds for failing to proceed. In that case the Engineer proposes to hire an independent Scheduler with whom Sletten will be directed to cooperate, and if Sletten thereafter fails to cooperate as directed, such conduct would constitute grounds to terminate the contract for cause, and trigger the remedies available to each side provided in the contract, see Article 17.2.

The basis for this change is Sletten's persistent failure to comply with the contract provision to maintain a viable Schedule (see Article 14.2). This failure has led to unnecessary disputes with regard to unsupported time extensions, which concern Sletten, and to failed completion objectives which concern the State. The intent of the Schedule provision is to provide a means to meet both objectives, but since Sletten has not submitted a viable schedule, both sides are disappointed and the work suffers.

Sletten will have the opportunity to apply the Schedule information to further its claims for time extensions and anything else to which it is entitled. The State is merely interested in having a qualified Scheduling presence on site that can provide viable information so that it may effectively plan to meet its many responsibilities, one of which is to decide the merits of Sletten's time extension requests in a timely manner.

Based upon Sletten's record of performance there is no reason to believe that any other means exists to achieve these objectives other than through the present directive.

Specifically, I refer to your document F-090888-1, subject as noted (ref a), which states in pertinent part:

Per [Tudor's] request please find attached for your record and use our September 6, 1988, updated CPM Schedule for this project.

The generation of this update is not to imply that we are in agreement with the time extensions incorporated into it. We must reserve our right to continue negotiations or otherwise seek relief...

We feel the schedule as updated contains only minimal revisions from the April 4, 1988, CPM. A comparison of the two CPM's will show that many tasks still show the same planned completion dates. This has been accomplished solely through the efforts of Sletten Construction and in spite of numerous project delays that have occurred and that were beyond any contractor control.

The Engineer recognized this presentation as a valid reservation of rights to pursue disputed claims for time extensions, and intended to apply the Schedule to evaluate such claims immediately (as indeed we have). It was further concluded that the Schedule attempted to show, based on all of the information available to Sletten, the actual times when work activities could be expected to complete, provided unanticipated factors did not intervene.

This belief was based on the following factors:

  1. Contract provisions that require an Updated Schedule, the intent of the Engineer and industry standards for applying such provisions.

  2. Meetings and discussions leading to formulation of such Schedule (see for example Progress meetings on Aug 24, 1988,, and on Aug 31, 1988.

  3. The clear language of Sletten's letter (ref a) in which it represents information as an updated "CPM Schedule" and reserves the right to seek additional time, but which comports with unequivocal understandings between the Contractor and the Engineer.

  4. Sletten represented that it would complete critical work activities by Oct 15, 1988 so that Voith could commence work at the project site. See for example the following references:

    Meeting August 31, 1988

    Ken Carlson said that Voith needs notice of when it can begin its work on the structure, which Sletten is constructing?

    Bill Merriman advised that Sletten plans to have the work completed to a point that Voith can begin its contract on [October 3, 1988] instead of [October 1, 1988]

    Based upon careful analysis of Sletten's pour schedules and work sequences, it was agreed that [October 3, 1988] is a viable target date for beginning the Voith contract work.

    Meeting September 7, 1988

    Bill Merriman advised that in light of the delayed concrete pour, the [Oct 3, 1988] date set at the progress meeting last week on Aug 31, 1988, cannot be met. It now appears that [Oct 15, 1988] is a more likely date when Voith [can] begin...

    Meeting September 8, 1988 Jeff, Dave & Rod

    Dave feels Sletten's CPM schedule is very viable. It is based on 5 day weeks, and they intend to use 6 days weeks. This should provide 4 days which can be absorbed by any unanticipated events. He feels very confident there is no reason why the [Oct 15, 1988] planned start date for the Voith contract work cannot begin.

    Meeting September 14, 1988

    Bill Merriman said the [Oct 15, 1988] date has slipped by 3 days due to delays in completing alignment of DTL and installation of the "Spacer Beam Assembly"...

    Bill Merriman said the only things that can delay the work needed to be performed in order for Voith to begin [on Oct 15, 1988] is difficulty in setting the Curb Ring.

The Engineer is certainly disappointed when Schedule dates are missed, but recognizes this is part of the contracting business. However, this does not appear to be the case here. On Sep 19, 1988, Sletten staff held a series of meetings with the Engineer on a variety of matters. Generally they were productive and indicate Sletten is trying to pursue the work diligently.

These meetings revealed, however, that Sletten's Schedule is not reliable. Messrs. Marsh and Robinson separately and with equal clarity and conviction advised that the CPM schedule submitted under Sletten's Sep 8, 1988, letter, ref a...

  1. Is not a CPM Schedule.

  2. The Schedule cannot be used to evaluate Schedule matters, such as time extensions and delay impacts.

  3. It does not show how Sletten really plans to do the work.

  4. With respect to the Voith Contract interface, it does not in fact incorporate all of the constraints known to Sletten at the time the Schedule was submitted.

I find that paragraph one (1) just above is false though not mendacious, in that Sletten has in fact submitted a CPM schedule. I further find that paragraphs two through four conflict with the meaning and intent of the contract.

The Engineer holds that these understandings comport with the conduct of the Contractor throughout the contract, and thereon show an inability and/or unwillingness to perform the schedule requirement. It is not necessary to conclude that Sletten is intentionally mis-using the Schedule to withhold information and mislead the Engineer, in order to reasonably determine that the Contractor's performance is inadequate and there is no basis to believe that it is able to correct the situation.

Since the Schedule is a clear requirement, and is essential to both parties, the appropriate remedy is to place the task in the hands of an independent professional in order enable all parties to obtain the quality of service needed for the project to succeed. The Contractor's staff can concentrate on manageing the work, meeting the Schedule and advancing its legitimate claims.

If you have any questions, please call me.

Very truly yours,

Tudor Engineering Company

Jeffery S. Ghilardi
Resident Engineer

Copy to:

  1. Dave Marsh, Sletten's Field Office
  2. Wayne Wetzel, DNRC
  3. Norm Barnard, DNRC
  4. Clyde Earnest, VP Tudor Engineering