THE WELCH COMPANY
440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700
S U M M A R Y
DIARY: September 21, 1988 08:30 AM .......;
Worked at BPP on various matters.
2...Pending Documents Tudor Owes to Sletten
3...Develop Gracon Access, Sletten Haul Route
4...Gracon Cannot Pump Concrete from Location Sletten Suggests
5...Gracon's Notice of Claim Due to Lack of Access to the Work
6...Engineer Notifies Sletten Gracon Given Permissin to Use Access Road
7...Sletten Blocks Access Road
8...Gracon Gives Notice of additional delay
9...Sletten Objects to Engineer's Direction Granting Gracon Access
10...Engineer Gives Additional Notice to Sletten
11...Clyde Earnest Reviews DTL Findings, Plans Meeting with Voith
12...State Can Claim Recovery of Extra Expense from Contractors
13...Recommendations re CPM Distributed to Tudor, DNRC
14...Clyde Earnest Reviewed CPM Initiative
15...Requested State's Expenses for Claim Against Sletten on DTL
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0201 - O-0395 0201 Department of Natural 406 444 6699
020101 - Mr. Norman Barnard,
0202 - O-0392 0302 Sletten Construction 406 761 7920 406 761 0923 FAX
020201 - Mr. Dave Marsh, Project Coordinator
0203 - O-0392 0201 Sletten Construction 406 761 7920 406 761 0923 FAX
020301 - Mr. Paul Robinson, Project Coordinator
0403 - ..
0404 - Summary/Objective
040504 - ..
040505 - Pending Documents Tudor Owes to Sletten
040507 - Joane said Paul didn't deliver the list of documents and information
040508 - Sletten feels is outstanding.
040510 - I stopped by Sletten's trailer and talked to Paul in the morning. He
040511 - still hasn't gotten to this because he is working on a list of change
040512 - order issues Sletten wants the Engineer to address.
040514 - Paul said that as he is reviewing Sletten's files for pending change
040515 - order matters, he is also checking for any other matters. He will do
040516 - the list of correspondence after he finishes the change order
040517 - analysis.
040518 - ..
040519 - I explained that I would like to review the list with him as
040520 - soon as possible because the Engineer wants to review all pending
040521 - matters, including current change orders, in order to avoid delaying
040522 - Sletten and causing further change order problems.
040524 - He thinks it should be ready in a few days. He is almost through with
040525 - the Change Order list and hopes it can go out today.
060601 - ..
060602 - Develop Gracon Access, Sletten Haul Route
060604 - Jeff asked me to meet with Paul to obtain following additional
060605 - information regarding Sletten's resuming control of the present Gracon
060606 - river access.
060608 - Haul route
060609 - Acitivity durations & sequence
060610 - Which direction work will begin and progress
060611 - Extent of downstream rip rap.
060615 - ..
0608 - 1015
060901 - Met with Paul at Sletten's Office.
060903 - He provided durations and we worked out a sequence network. Paul
060904 - explained they are planning to start at the upstream end and work
060905 - downstream to the limits of rip rap placement shown on the plans.
060907 - I advised that Jeff needs to know when they have this area layed out
060908 - on the ground so he can evaluate how to coordinate work between the
060909 - Gracon and Sletten contracts.
060911 - Paul said Kieth will layout their work area this afternoon.
060916 - ..
0612 - 1530
061301 - I examined the proposed area to consider the feasibility of relocating
061302 - Gracon's access. It wasn't layed out at that time.
Gracon Upstream Access
0805 - 1400
080601 - ..
080602 - Gracon Cannot Pump Concrete from Location Sletten Suggests
080604 - Dale Harrington and another Gracon representative met with Jeff in
080605 - the office and explained that the concrete pump was unable to pump to
080606 - their work area on the dam. I had been on the dam earlier in the
080607 - morning to observe the conditions and felt that this would be
080608 - difficult, given the distance Sletten was requiring that the pump be
080609 - located away from the dam, and the size of the pump. There did not
080610 - appear to be any risk of harm that could arise from moving the pump
080611 - approxmiately 100 feet closer to the dam.
080614 - ..
080615 - Gracon's Notice of Claim Due to Lack of Access to the Work
080617 - Dale explained that the only way Gracon could feasibly perform their
080618 - work is to permit access to the area next to the stair leading up to
080619 - the dam. Jeff said he had investigated Gracon's efforts this morning
080620 - and felt they had made a reasonable effort to avoid moving the
080621 - concrete truck and pump along Sletten's cofferdam wall to the foot of
080622 - the stair.
080624 - Dale explained Gracon has incurred expense of the failed concrete
080625 - operation resulting from the Engineer's order denying access to the
080626 - area next to the stair. Dale said that if they can move the pump to
080627 - the stair this afternoon, and finish this pour they can avoid
080628 - additional expense of loosing the concrete that has been mixed.
080629 - ..
080630 - This will further enable Gracon to avoid loosing the opportunity
080631 - to use the Concrete Pumping truck, which has prior commitments. He
080632 - explained that if this happens, then Gracon's work will be delayed and
080633 - even greater extra costs will be incurred.
080635 - Dale advised that Gracon's cost of delay is approximately $10 000 per
080636 - day.
080638 - I asked that he submit a formal notice of these events and verify the
080639 - amount of damage Gracon will incur.
080643 - ..
0809 - 1430
081001 - ..
081002 - Engineer Notifies Sletten Gracon Given Permissin to Use Access Road
081004 - Jeff called Sletten's office and talked to Paul Robinson. He informed
081005 - Paul that he is directing Gracon to use Sletten's access road to the
081006 - stair leading to the dam in order that Gracon can perform the work.
081007 - He pointed out that Gracon has no other pracitcal means to accomplish
081008 - the work. He directed that Sletten cooperate with Gracon to permit
081009 - reasonable access.
081011 - Jeff advised that this directive is based on contract GC Article 7.1
081012 - and Section 1560 3.11 H4.
081013 - ..
081014 - He asked that Sletten inform the Engineer of any cost impact
081015 - this directive has on Sletten's contract.
081019 - ..
0813 - 1500
081401 - ..
081402 - Sletten Blocks Access Road
081404 - I saw Sletten's equipment operator move its small yard crane from the
081405 - area where it had been working in support of Sletten's work
081406 - operations, down to the dam access road in front of Gracon's Concrete
081407 - Pump truck. The crane boom was extended the full width of the road,
081408 - so it was impossible for Gracon's truck to pass. The operator turned
081409 - the crane off and returned to Sletten's staging area in front of the
081410 - Engineer's office.
081411 - ..
081412 - There was no work being performed, necessary nor intended, by
081413 - the movement of the crane. Its sole purpose appears to have been to
081414 - prevent Gracon from performing its work.
081417 - ..
0817 - 1513
081801 - ..
081802 - Gracon Gives Notice of additional delay
081804 - Dale Harrington came into Tudor's office and reported to Jeff, what
081805 - everyone could see, that Gracon was unable to perform its contract,
081806 - due to Sletten's action.
081808 - He affirmed Gracon's notice of damage.
081810 - Jeff said he will direct Sletten to move its crane. In the meantime
081811 - Gracon must standdown until further notice with respect to the
081812 - concrete pour. He further asked Dale to continue with work that is
081813 - not affected by the blocked access.
081814 - ..
081815 - Jeff directed Gracon to pursue its work that is not impeded by
081816 - the crane, and to maintain cost records and sumbit as soon as possible
081817 - the extra cost that actually results from this delay.
081821 - ..
0820 - 1548
082101 - ..
082102 - Sletten Objects to Engineer's Direction Granting Gracon Access
082104 - Received letter, delivered by Kieth Ferguson, stating that Sletten
082105 - objects to the Engineer's directive permitting Gracon use of Sletten's
082106 - access road to the dam. The notice gives no grounds for the failure
082107 - to perform the directive and does not disclose any extra expense or
082108 - other injury which Sletten would suffer.
082112 - ..
082113 - Engineer Gives Additional Notice to Sletten
082115 - Jeff consulted with the State's representatives, Norm Barnard and
082116 - Wayne Wetzel. There was a teleconference with DNRC staff.
082118 - Jeff prepared a written notice to Sletten that its failure to permit
082119 - Gracon access as directed in his earlier decision is causing added
082120 - expense and delay. He requests that Sletten notify the Engineer of
082121 - any legitimate business reason to deny Gracon access to the work, and
082122 - if not, to remove its crane so that work can continue.
Scheduling & Management
of Voith Contract
Interface with Sletten
Failure to Perform, General Notice to Voith
Work Coordination Plans
Support Tudor Contract Closeout Letter of 891005, 911004
Contract Disputes, Leadership & Change
Feel Good Management v. SDS
Case Study Broadwater
161201 - ..
161202 - Clyde Earnest Reviews DTL Findings, Plans Meeting with Voith
161204 - When Clyde called in the afternoon about the report on the DTL matter
161205 - (see below ref SDS 0 7800), he mentioned that Tudor is sending someone
161206 - to York to meet with Voith and work things out, per recommendation to
161207 - with Jeff yesterday. ref SDS 6 9301
161209 - I advised that Tudor needs to increase scrutiny of Voith's work in
161210 - light of Voith's failure to provide a schedule and misrepresentations
161211 - to the Engineer, reviewed on 880915, ref SDS 3 4829, set out in my
161212 - letter to Tudor, ref DIP 1 3060, issued on 880916. ref SDS 4 1135
161214 - Clyde said that he has seen my memo and discussed it with Jeff, per
161215 - meeting on 880919. ref SDS 5 3280
161216 - ..
161217 - I noted that Voith's manager at the site, Ken Carlson, maintains
161218 - that his boss, who is Voith's senior management on the project has
161219 - misrepresented the record on a material fact about performance of the
161220 - work, ref SDS 5 8476, that significantly impacts the interests of the
161221 - State, the Engineer and another contractor. The Engineer must take
161222 - corrective action to avoid damage to the State and Sletten.
161223 - ..
161224 - Clyde said that Voith's conduct is not unexpected, because many
161225 - contractors perform in this manner to limit their exposure.
161227 - I explained that the Engineer must ensure that all parties retain
161228 - "exposure" to perform requirements in order to accomplish the purpose
161229 - of the contract to pay for public improvements. If the contract is
161230 - not followed, then exposure to damages will be greatly increased.
161231 - Whether Voith is unaware or is choosing to ignore this fact, should
161232 - encouraage the Engineer to make timely notice, and if needed, to
161233 - replace Voith.
161235 - Clyde feels the Engineer needs to be flexible to give the contractor
161236 - leeway on boilerplate provisions that are typically not enforced, but
161237 - give the Engineer talking points in negotiations to settle claims.
161239 - [On 880925 wrote letter to Tudor clarifying Welch assignment
161240 - scope. ref SDS 8 2475]
161242 - [On 881006 Voith meeting unsuccessful. ref SDS 10 8953]
161244 - [On 890324 Welch assignment ended as "overkill." ref SDS 13 6399]
161246 - [On 911116 discovered that Voith failed to perform submittal
161247 - requirement and Tudor ignored this violation. ref SDS 14 4912]
161249 - [On 921120 reviewed "feel good" management in connection with
161250 - contractors failing to perform CPM schedule requirements under
161251 - the guise of "expediting". ref SDS 19 8482]
161253 - [On 920210 DNRC staff were overwhelmed by tasks to correct
161254 - defective work by Voith. ref SDS 18 8400]
161256 - [On 920210 DNRC staff "can't keep head above water" fixing Voith
161257 - and Tudor mistakes, ref SDS 18 8400, fear of accountability
161258 - diminishes vigilence. ref SDS 18 1194]
161260 - [On 961105 Engineer on Oakland Harbor project wanted to be
161261 - flexible. ref SDS 22 6121]
161262 - ..
161263 - I advised that Voith's record of misrepresentations to the
161264 - Engineer shows that, if it is important to the State for Voith's
161265 - contract to complete on time, then someone with knowledge of the
161266 - issues, and who can bring effective pressure, needs to visit with
161267 - Voith soon, develop a course of action to meet completion objectives,
161268 - and draft a written directive issued by the Engineer for Voith to
161269 - perform. Additionally, we need to find out now how Voith expects to
161270 - proceed and whether there are any obsticals so plans can be made to
161271 - deal with the way things are really going to turn out.
161273 - Clyde said he does not have time to go to Pennsylvania to visit Voith,
161274 - and that he is not that conversant with project details.
161276 - I explained that it would be helpful for me to make this visit, so
161277 - Voith can see first hand that past practices of selling the Engineer
161278 - with "happy talk" will not work any longer, and that its best chance
161279 - of making money on the project is to follow the contract. I need to
161280 - review their shop drawing effort and interview the people doing the
161281 - work, so that an assessment can be made whether Voith can perform, and
161282 - if not, DNRC can get someone else in time to mitigate damages.
161283 - ..
161284 - Clyde feels this is an extreme approach that moves too fast. He
161285 - said that Tudor's senior Engineers or Jeff can adequately represent
161286 - DNRC's interests, but without causing disruption. He said that if I
161287 - go it will cause hurt feelings within Tudor, DNRC and Voith.
161289 - [On 881006 Voith meeting unsuccessful. ref SDS 10 8953]
161291 - [On 911116 found Voith submittals never approved. ref SDS 14 4912]
161293 - [On 911213 Welch was moving too fast demanding Voith perform its
161294 - agreement to submit shop drawings. ref SDS 16 4536]
161296 - I explained the potential for there to be much greater hurt feelings
161297 - if this is not done correctly now, per discussion with Jeff on 880908.
161298 - ref SDS 2 5100 I related our discussion on 880815 when Clyde said he
161299 - wanted me for this assignment because I am effective. ref SDS 1 0770
161300 - ..
161301 - Clyde said that Tudor wants Welch to defend Tudor and the State
161302 - against contractor claims, not manage the work.
161304 - We reviewed briefly that effective defense is proactive management so
161305 - that small problems do not grow into crisis. SDS is designed to
161306 - enable proactive management.
161308 - [On 920118 DNRC staff objected to Welch directing the contractor.
161309 - ref SDS 17 3354]
161311 - [On 920210 DNRC staff were overwhelmed by task of fixing Voith's
161312 - mistakes. ref SDS 18 8400]
161314 - [On 941020 DNRC asked what went wrong? ref SDS 20 6007
161315 - ..
161316 - We discussed the incentive and damage concept Jeff and I
161317 - considered on 880908.
161319 - [On 880925 sent letter to Tudor confirming this point, and
161320 - clarifying scope of Welch assignment. ref SDS 8 4696]
161322 - Noted the difficulty that neither incentives nor exposure may be felt
161323 - within Voith in sufficient degree to influence performance, unless the
161324 - matter is properly presented. Explained the need to place greater
161325 - reliance on confirming understandings in writing.
161327 - Advised Jeff has requested a statement of issues for the meeting.
161329 - Clyde requested a copy of the issues.
Tudor - general views, policies & procedures
180701 - ..
180702 - State Can Claim Recovery of Extra Expense from Contractors
180704 - After I asked Norm for the expense record in the DTL dispute matter,
180705 - see below, ref SDS 0 7381, Norm asked me for an opinion about the
180706 - notices the State should be giving to the Engineer on its potential
180707 - claims.
180709 - I explained that Jeff has given notices of such claims re DTL, but
180710 - there is no record that the State has disclosed the estimated amount
180711 - of damage. If the State fails to notify the contractor of the
180712 - approximate amount of damages, then the contractor cannot make a
180713 - reasoned business decisions whether to mitigate. It makes a big
180714 - difference whether damages are $500. or $5M, so that is an important
180715 - fact that must be disclosed to the extent the information is
180716 - available.
180717 - ..
180718 - Norm expressed some concern about this.
180720 - He recalled discussing the matter of damages with Tudor and being
180721 - given the understanding that the State should not inform the
180722 - Contractor of the amount of damages it may be incurring as a result of
180723 - the State's poten- tial claims under the contract.
1810 - Clyde Earnest
181101 - Discussed this with Clyde when he called.
181103 - He was unaware off hand about this matter having been raised.
Voith Contract Start Date
Project Planning & Oversight
Case Study Broadwater
250901 - ..
250902 - Recommendations re CPM Distributed to Tudor, DNRC
250904 - Distributed the transmittal letter to Tudor, ref OF 3, prepared
250905 - earlier today at ref SDS 7 8391, and which recommends that the
250906 - Engineer direct Sletten and Voith to submit a CPM schedule. ref OF 3
250907 - 4650 A draft showing the form of this direction to Sletten is
250908 - included that explains a CPM schedule must confirm the practicality of
250909 - planning relative to DNRC requirements. ref OF 2 6669
250911 - Provided copies to Jeff and Norm, and to Wayne who was here today
250912 - about water quality matters.
250914 - Also distributed the Notes of my discussion with Sletten's project
250915 - engineer, Paul Robinson, ref OF 1, which supports the proposed
250916 - Directive, ref OF 1.
250917 - ..
250918 - Jeff was too busy to look at it.
250920 - Norm will advise of his thoughts tomorrow.
250923 - ..
250924 - Clyde Earnest Reviewed CPM Initiative
250926 - When Clyde called (below, ref SDS 0 7800) we discussed recommendations
250927 - developed this morning for directing Sletten to prepare an adequate
250928 - CPM schedule. ref SDS 7 8391
250930 - Clyde advised that this initiative would not be cost effective because
250931 - Contractor's usually don't use the Schedule as intended.
250933 - [On 880925 submitted letter to Tudor explaining advantages of
250934 - demanding that the contractor perform requirements for scheduling
250935 - the work. ref SDS 8 1664
250937 - Clyde cited examples of Contractor's on other projects who maintain
250938 - two schedules, one for the Engineer and another they use to manage the
250939 - work.
250941 - [On 880930 Clyde explained contract management practices for
250942 - getting along with the contractor rather than issue required
250943 - notification. ref SDS 9 OR7M
250945 - [On 890322 Tudor recommended $1M additional payment based in part
250946 - on CPM schedule presented by Sletten. ref SDS 12 1656]
250947 - ..
250948 - We reviewed the potential for any tool or system to be misused,
250949 - e.g., accounting, design, shop drawing procedures. Engineering
250950 - management is provided to ensure useful application despite
250951 - inclinations to misuse.
250953 - Clyde said that Tudor has not been successful managing past projects
250954 - by requiring effective planning using CPM scheduling. As a result, he
250955 - is skeptical that it can be accomplished on the Broadwater Dam
250956 - project.
250958 - We considered using professional review of Sletten's CPM schedule to
250959 - ensure that the process is cost effective.
250961 - Sletten and the other contractors have commented and complained that
250962 - failure to perform contract requirements on the project now is
250963 - routinely reported in the SDS record, rather than ignored and
250964 - forgotten.
250965 - ..
250966 - If the contractor fails to perform, then the owner can charge
250967 - the contractor for the cost of having others perform work which is not
250968 - accomplished adequately. This will impact earnings, there is a lot of
250969 - incentive for the contractor to perform, given appropriate
250970 - notification.
250972 - Therefore, Tudor's experience of not being able to use CPM schedules
250973 - for effective management should not be a basis to avoid proactive
250974 - management that protects DNRC on the Broadwater Dam project.
250975 - ..
250976 - We recalled Tudor's research and objective in hiring Welch on
250977 - 880815. ref SDS 1 0770
250979 - [On 880925 clarified Welch assignment. ref SDS 8 2475 and
250980 - explained advantages of demanding that the contractor perform
250981 - requirements for scheduling the work. ref SDS 8 1664
250983 - [On 890324 Welch assignment terminated as overkill. ref SDS 13
250984 - 6399
250986 - Clyde asked why a CPM schedule is needed?
250988 - The Engineer needs competent schedule information to coordinate the
250989 - work of multiple contractors, and to advise DNRC on key issues.
250990 - ..
250991 - Second, the contractor's work is haphazard and defective causing
250992 - delay and extra cost from continual rework, i.e., bumbling. Forcing
250993 - the contractor to prepare a schedule will force the contractor's staff
250994 - to discover and understand correlations, implications and nuance that
250995 - enable cost effective work. Reducing the burden of extra cost on the
250996 - contractor due to bad management by the contractor. reduces incentive
250997 - to file false claims to recover losses, which the State must then
250998 - defend.
250999 - ..
251000 - Directing the contractor to issue a schedule forces disclosure
251001 - of important facts on time extensions. This provides time to develop
251002 - analysis for decision making on claims.
251004 - [On 880925 submitted letter to Tudor explaining advantages of
251005 - demanding that the contractor perform requirements for scheduling
251006 - the work. ref SDS 8 1664
251008 - [On 881006 Clyde asked Welch to prepare as-built CPM, but no
251009 - effort was made to plan the remaining work. ref SDS 10 9051]
251011 - [On 890317 there was not enough time to review Sletten's CPM
251012 - presentation, State paid $1.14M. ref SDS 11 8594]
251014 - [On 911202 recommended CPM to DNRC. ref SDS 15 9471]
251016 - [On 921120 reviewed value of CPM planning. ref SDS 19 8482]
251018 - [On 920210 DNRC staff were overwhelmed fixing mistakes on
251019 - Broadwater. ref SDS 18 8400]
251020 - ..
251021 - The proposed contract amendment addresses these points...
251023 - a. Encouraging Sletten to cooperate in developing information
251024 - Sletten needs but does not realise it needs, and which the
251025 - State needs in order to perform its duty to coordinate the
251026 - other contractors.
251028 - b. Encouragement arises in the form of additional payment to
251029 - Sletten by performing the requirement on the one hand,or
251030 - charging Sletten if it fails to perform, showing Sletten how
251031 - it can benefit from better analysis derived from the plan-
251032 - ning process, and enabling Sletten to use the Schedule
251033 - information to support its delay claims, to the extent it
251034 - can do so.
251035 - ..
251036 - c. The likelyhood of the State realizing the intended
251037 - benefit of realistic schedule information, by hiring a
251038 - professional whose contract requires it to cooperate with the
251039 - State in preparing the schedule.
251041 - In simplest terms, the proposed draft, ref OF 2, enables disputing
251042 - parties to cooperate on accomplishing mutual and parochial
251043 - interests.
251045 - Clyde requested a copy for review.
251047 - Jeff sent the transmittal that explains the reasoning for this
251048 - proposal, ref OF 3, and it includes the draft directive.
2513 - ėRB42 Meeting with Paul/Bill
251401 - When I met with Paul in the morning about the Rip Rap matter also
251402 - asked about our meeting. He said Bill Merriman is supposed to
251403 - arrive this afternoon, but that if he can't make it we can meet
251404 - to work on the schedule.
2517 - 1300
2518 - Called Paul
251901 - He said Bill is supposed to be on his way. He thinks we can meet at
251902 - 1600.
2521 - 1600
2522 - Called for Paul, talked to Dave Marsh
2523 - ..
252301 - Dave said Bill can't make the meeting this afternoon afterall.
252302 - I asked if Paul and I are supposed to go ahead without him as
252303 - discussed this morning. Dave said that Paul feels we should not
252304 - proceed. We will discuss it tomorrow at the weekly progress meeting.
252306 - I asked him if he got the word about the time for the meeting for
252307 - tomorrow, since he said yesterday that Sletten wants to meet at
252308 - 0800. Dave said he understands the meeting will be at 0930.
Draft Tube Dispute
280601 - ..
280602 - Requested State's Expenses for Claim Against Sletten on DTL
280604 - I asked Norm for a copy of the expenses the State incurred to qualify
280605 - Sletten's welding procedure and its welders. Explained I couldn't
280606 - find any record where Sletten has been notified of these expenses.
280608 - Norm said that information is available, and he will obtain it for
280609 - inclusion in the DTL record.
280611 - He advised that the Contractor has not been notified of this potential
280612 - claim amount.
280616 - ..
2809 - 1439 Clyde Earnest Called
281001 - I advised that Jeff is on the site and I'll have him return the call.
281003 - Clyde asked about progress on Engineer's Decision for the Sletten's
281004 - claim on the DTL problem? ref OF 5
281006 - He said his copy shows that a Change Order is attached but he could
281007 - not find the attachment. I explained that somehow he was issued a
281008 - preliminary draft. The issued version indicated the Change Order
281009 - was to be issued.
281010 - ..
281011 - He asked about the level of exposure for the State.
281013 - I explained the Contractor's potential items of recovery and likely
281014 - burden of proof. Noted that based on the record, it is difficult to
281015 - see how the Contractor can meet its burden sufficient to recover a
281016 - substantial amount.
Distribution. . . . See "CONTACTS"