DEPARTMENT OF THE ARMY

San Francisco District, Corps of Engineers

333 Market Street

San Francisco, CA  94105-1905



Contracting Division


November 22, 1996                                       03 00070 96112201



Robert Johnston
President
Dutra Dredging Company
1000 Point San Pedro Road
San Rafael, California 94901

Subject:  Contract No. DACW07-95-C-0003
                 Letter No. 0107

Dear Mr. Johnston:


This letter is in reference to COE Serial Letter No. 0105 and
your Serial Letter No. 0189, wherein you state your intention to
demobilize the Liberty Unloader and leave the site.




In our letter no. 0105, you have been directed to provide your
schedule and plan to complete the work under Bid Item No. 0006 of
your contract.




Your contract plan, "Pipeline Installation Plan - San Leandro
Bay Option Galbraith Disposal Site", states in paragraph No. 1 that
"The Unloading Platform will remain in this location and
configuration for the duration of Galbraith operations, including
the six month delay period between dredging phases". Therefore,
demobilizing the Liberty Unloader is inconsistent with this
contract plan, which has been approved by the Corps of Engineers
and the Regional Water Quality Control Board. This is a key piece
of equipment required to complete Bid Item No. 0006, and
demobilization of this equipment is inconsistent with the approved
plan and violates the terms of your contract.




The shutdown of discharge from the Galbraith site by the
Regional Water Quality Control Board (RWQCB) is not an indication
of the existence of hazardous or toxic materials in the Inner
Harbor turning basin wings and is not a satisfactory justification
for suspending all operations at Galbraith indefinitely. The
contract specification clearly identified the possibility of
occassional shutdowns of the site by the RWQCB; allowing for up to
20 days during each of the defined disposal 'stages' without any
adjustment to the contract completion time.




A Cure Notice will be issued to you in the event you do not
perform the work in reference to Bid Item No. 0006, as approved in
your "Pipeline Installation Plan".




Sincerely,




Thomas Benero

Chief, Contracting Division