CONTACTS 
0201 - O-0394 0201 Voith Hydro, Inc.
020101 - Mr. Greg Snyder, Project Manager, Projects, Western Region

SUBJECTS
Draft Tube; Prepare findings
Prelim Claim Analysis

0704 -
0704 -    ..
0705 - Summary/Objective
0706 -
070601 - Follow up ref SDS 3 0000.
070602 -
070604 -  ..
070605 - Voith Makes False Representations to Engineer, Need Greater Scrutiny
070606 -
070607 - Received from Jeff this afternoon, the letter from Greg Snyder for
070608 - Voith which was to have been submitted on 880909. ref SDS 2
070610 -  ..
070611 - Voith's letter is incorrect on representations Voith made to the
070612 - Engineer (e.g., tolerances, see below. ref SDS 0 7650).  Voith's
070613 - letter is internally conflicting throughout and presents a warning
070614 - about the integrity, communications, and/or competence of Voith, which
070615 - requires correction in order to avoid harm to Tudor and the State.
070617 -  ..
070618 - This requires increased scrutiny of Voith's work, e.g., shop drawings,
070619 - schedules and progress at off-site facilities.
070620 -
070621 -      [On 880916 recommend Tudor take action to improve communication
070622 -      with Voith and that Voith comply with contract. ref SDS 4 1135]
070623 -
070624 -      [On 880917 discussed with Jeff. ref SDS 5 8482]
070626 -       ..
070627 -      [On 880919 Jeff concurs with recommendations. ref SDS 6 3280]
070629 -       ..
070630 -      [On 880921 reviewed with Tudor's senior executive for project,
070631 -      Clyde Earnest. ref SDS 7 8526]
070633 -       ..
070634 -      [On 880925 clarified Welch assignment. ref SDS 8 2475]
070636 -  ..
070637 - Voith not only fails to offer rational, technical support for its
070638 - Field Representative's instructions, but actually disclaims the
070639 - necessity for same.
070641 -  ..
070642 - Voith management at best recalls differently material understandings
070643 - reached with Tudor.  It pervasively misapplies and misstates the
070644 - record.
070646 -  ..
070647 - The letter fails to show the following factors that are important to
070648 - the issue...
070649 -
070650 -     1.  The tolerances in the 880803 Directive are reasonable and
070651 -         necessary to the success of the project.
070652 -
070653 -     2.  Such tolerances could be achieved by following Voith's field
070654 -         instructions.
070656 -          ..
070657 -     3.  Voith's field instructions would not materially increase the
070658 -         cost of performance relative to what was incurred (in other
070659 -         words, it cost the same to do it right as to do it according
070660 -         to Sletten's "standard procedures."  This is important because
070661 -         it removes the relevance of the failure to disclose a
070662 -         particular tolerance.
070664 -          ..
070665 -     4.  Need a few examples where Voith has successfully coordinated
070666 -         assembly and installation of similar work on other projects
070667 -         under comparable contract terms.
070668 -
070670 -  ..
0707 -
0708 -
0709 - Detailed Analysis
0710 -
071001 - Initially Greg cites "NEMA bulletin 'Hydraulic Turbine and governor
071002 - Field Erection Information', the manufacturer's field representative
071003 - should not have to instruct the contractor's personnel in their
071004 - crafts, ..."
071006 -    ..
071007 -   Comment
071008 -
071009 -   The objective of this passage is unclear.  It sounds like Voith is
071010 -   disclaiming responsibility for giving instructions to Sletten, as if
071011 -   the underlying concept of the Sletten contract provisions are either
071012 -   incorrect, or irrelevant.  One could draw from this language support
071013 -   for Sletten's position that the contractor is entitled to rely on
071014 -   its own craftsmen to install according to written instructions.
071015 -   Since Sletten did not receive written instructions until after it
071016 -   made the errors, it might not be liable for such errors.
071018 -    ..
071019 -   Of course this particular industry reference was not cited in the
071020 -   Sletten contract.  Instead the contract specifies the manufacturer's
071021 -   field representative will be consulted.  Obviously, the Owner is
071022 -   entitled to purchase the level of support it wishes.
071024 -    ..
071025 -   Further, why didn't Voith recommend this view when it was consulted
071026 -   for specification language during the preparation of the Sletten
071027 -   contract bidding documents (if in fact it was consulted)?
071029 -    ..
071030 -   Why is this language in the letter, particularly in light of
071031 -   subsequent passages that indicate the importance of following
071032 -   manufacturer's instructions (see page 2 item #2, para 2)?
071033 -
071035 -  ..
071036 - Tolerances
071037 -
071038 - Voith contends "On August 15, 1988 we reviewed in a conference call
071039 - with Jeff Ghilardi his fax of August 8, 1988 and arrived at a
071040 - tolerance to be used for erection and installation.  It was agreed
071041 - that the column entitled 'August 3, 1988 Determination' in his fax was
071042 - to be used, except that Voith agreed to accept draft tube flange
071043 - flatness/plumb and roundness of [+ or -] 0.030"..."
071044 -
071045 -       [On 880917 Voith's field superintendent, Ken Carlson, advised
071046 -       Tudor that Voith's letter is wrong. ref SDS 5 8482]
071048 -        ..
071049 -       [On 880919 Ken Carlson provided diary notes showing Voith's
071050 -       letter on 880912 is incorrect. ref SDS 6 8476]
071051 -
071053 -    ..
071054 -   Comment
071055 -
071056 -   Jeff's Diary conflicts with the above position.  It is dated 880816
071057 -   rather than 880815, though this may reflect the fact that it was
071058 -   dictated one day and transcribed another.  What is critical is that
071059 -   it states:  "With regard to flange flatness the flange must be flat
071060 -   to within plus or minus ten-thousands."
071062 -    ..
071063 -   This is a material difference.
071065 -    ..
071066 -   The net impression results that Voith conveyed tolerances to Tudor
071067 -   at the job site that were desirable rather than necessary.
071069 -    ..
071070 -   Such impression arises from the entire body of Voith communications
071071 -   beginning in May 1988, all of which lack specific tolerance
071072 -   valuations, yet stridently insist that tolerances are necessary, as
071073 -   presented in Voith communications beginning in May 1988.
071075 -    ..
071076 -   The difficulty is that Tudor has consistently maintained that such
071077 -   tolerances are necessary when apparently they are not.  Voith is
071078 -   saying in effect that it did not give Tudor reasonable grounds to
071079 -   believe such tolerances are necessary.
071080 -
071082 -  ..
071083 - Assembly Defects
071084 -
071085 - Voith maintains it recognized assembly deficiencies in May but that
071086 - "... this situation did not exist when Voith's Fred Gross left the
071087 - site on May 25, 1988, ..."  "The only record [of as built tolerances]
071088 - in this case appears to be F, Gross's internal report, a copy of which
071089 - is attached."
071091 -    ..
071092 -   Comment
071093 -
071094 -   The F. Gross report attached to the Voith letter does not indicate
071095 -   that a "... situation did not exist ..." and contains no information
071096 -   about tolerances.
071097 -
071098 -   What appears important about the record is that Voith did not take
071099 -   any field measurements during assembly to determine tolerance.  It
071100 -   seems that if the unit does not meet required tolerances after
071101 -   assembly, then it could not be expected to do so after being placed
071102 -   in the Powerhouse.  This conduct might be construed as an admission
071103 -   that tolerance requirements are less significant than was later
071104 -   imposed on the contractor.
071106 -    ..
071107 -   For Voith to maintain its position, it must establish that the
071108 -   tolerances it requires are an ordinary result of following its
071109 -   assembly instructions, and that the failure to do so would be
071110 -   expected to cause the deviations encountered.  It must further show
071111 -   that the failure to disclose such instructions is accepted practice,
071112 -   in that a reasonable contractor would expect to encounter
071113 -   difficulties without having such instructions, and thereby would be
071114 -   alerted not to proceed without same.
071116 -    ..
071117 -   The question is whether it is enough merely to say that the work is
071118 -   to be performed in the presence of the Field Representative, without
071119 -   giving some warning that certain critical assembly information will
071120 -   be provided that is not otherwise available.
071121 -
071122 -
071124 -  ..
071125 - Voith complains of "Misinterpretation"
071126 -
071127 - Voith states
071128 -
071129 -      "... there has been a surprising amount of basic
071130 -      misinterpretation of dimensions on Voith drawings, most of which
071131 -      are unrelated to installation tolerances."
071132 -
071134 -    ..
071135 -   Comment
071136 -
071137 -   The record shows that Voith provided the only interpretations of
071138 -   Voith drawings, as seen from Tudor's 880803 directive which shows
071139 -   tolerances based on "VOITH FIELD INSTRUCTIONS."
071140 -
071141 -   Voith's charge is telling because it is completely unsupported,
071142 -   (i.e. what "...dimensions on Voith drawings..." have been misin-
071143 -   trepreted, in what manner, and by whom?) and thereby indicates a
071144 -   willingness by Voith management to disclaim performance by its Field
071145 -   representatives.  Alternatively, it may only show a lack of
071146 -   communication between the Field and the York office.
071148 -    ..
071149 -   This has implications not only for the current matter but also
071150 -   the Voith contract work.
071152 -    ..
071153 -   It is obvious Tudor did not determine on its own the valuations
071154 -   in the 880803 Determination.  It has no interest in setting
071155 -   tolerances to any particular valuation.  Voith does have an
071156 -   interest in tolerances.  Second, Tudor did not misconstrue a
071157 -   chance remark to determine tolerances, but rather engaged Voith
071158 -   in protracted discussions over a number of days  ref 2 line
071159 -   060801.
071160 -
071161 -
071163 -  ..
071164 - Reasons for Out of Tolerance Condition
071165 -
071166 -
071167 -   Voith contends "The first contributing factor is that the liner was
071168 -   assembled without prior notification to Voith so that a Field
071169 -   Representative could be sent to site to assist."
071171 -      ..
071172 -     Comment
071173 -
071174 -     This appears to conflict with Voith's position on page 1
071175 -     paragraph 1, as noted above line 071201.
071176 -
071177 -
071178 -   Voith admits "It is not unusual that such a liner could be
071179 -   successfully assembled without Voith's assistance."
071181 -      ..
071182 -     Comment
071183 -
071184 -     This directly conflicts with the underlying premise of the
071185 -     specifications prepared to Voith's instructions, and the position
071186 -     Voith has taken throughout the controversy.  If the tolerances are
071187 -     not disclosed, as here, how would the contractor know what
071188 -     standard to apply.  If Voith is attempting to contend the
071189 -     information in its drawings conveys the tolerances in the 80803
071190 -     Determination, then where is it presented therein, or by what line
071191 -     of reasoning can it be discerned.
071193 -      ..
071194 -     If tolerances are not discernable, and supplemental information is
071195 -     not needed from the manufacturer, then why cannot the contractor
071196 -     reasonably assume that using its "standard procedures" will be
071197 -     adequate?
071198 -
071200 -    ..
071201 -   Voith contends "... basic normal procedures were not being followed
071202 -   - e.g. the liner was being assembled lying on the ground, rust-
071203 -   preventive compounds had not been cleaned from the flange splits
071204 -   prior to assembly, and the drilled and bolted clips installed at
071205 -   shop assembly to locate the liner sections on re-assembly had not
071206 -   been used for their intended purpose.
071208 -      ..
071209 -     Comments
071210 -
071211 -     What source establishes any of the above procedures as "basic"
071212 -     and/or "normal?"  Since these are not set-out in the specifica-
071213 -     tion, how would the contractor or the Engineer know about them?
071214 -
071215 -     What about using "spiders" and not rolling the unit.  Are these
071216 -     not also "basic normal" procedures?
071217 -
071218 -
071220 -    ..
071221 -   Voith says with respect to the contribution of its Field
071222 -   Representative Fred Gross, "... the flange had been put into as good
071223 -   as condition as possible without cutting out all previous welds,
071224 -   which Voith was told not to be done to save time." [sic]
071226 -      ..
071227 -     Comment
071228 -
071229 -     This is considerably different from the characterization describ-
071230 -     ed on page one which gives the impression that a correction was
071231 -     in fact made (i.e. "...this [defective] situation did not exist
071232 -     when Voith's Fred Gross left the site on May 25...".
071234 -      ..
071235 -     Now it is merely as good "as possible."
071237 -      ..
071238 -     The underlying question though is whether knowing the condition
071239 -     of the DTL was not in fact fully corrected, Voith had reason to
071240 -     believe it would be difficult to achieve desired tolerances  and
071241 -     thereon accepted some measure of deviation.
071243 -      ..
071244 -     The implied contention that Sletten told Voith that to save time
071245 -     it was unwilling to cut the previous welds, is not supported by
071246 -     Gross' field report.  To be sure, it is a likely response from
071247 -     Sletten based on the record.  Yet, it is significant because, if
071248 -     Voith recognized that the time saved was more important than the
071249 -     tolerance value, as appears equally likely, then it could be said
071250 -     that Voith accepted the installed tolerance conditions that would
071251 -     reasonably flow from the (mis)assembly condition that was
071252 -     initially accepted in order to save time.
071253 -
071255 -  ..
071256 - Where is the notice to Voith of Sletten's expected start date.  Or is
071257 - there no such notice because it was intended to do it closer to the
071258 - date when Sletten was expected to begin the work?
071259 -
071260 -
071261 -
0713 -
0714 -