THE WELCH COMPANY
440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700
S U M M A R Y
DIARY: September 22, 1988 09:30 AM .......;
Progress meeting BPP with Sletten , Voith, Gracon.
2...Tape Recording Meetings, Sletten Requests No Record of Meeting
3...Gracon Access across Upstream Cofferdam
4...Sletten Demands Proof of Insurance as Condition of Performance
...Gracon Gives Notice of Willingness to Mitigate
5...Gracon Access Across Powerhouse
6...Proposal to Waive Rights
7...Voith Contract Start 881017
8...Sletten Reserves Rights re Acceleration Claim
9...Sletten Expects Difficulties Meeting Tolerances for Curb Ring
10...Duty to Disclose
11...Contractor Demonstrate Viability of CPM Schedule
12...Voith to be Notified it can Start Work on 881015
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0201 - O-0395 0201 Department of Natural 406 444 6699
020101 - Mr. Wayne Wetzel, Project Manager
020102 - Mr. Norman Barnard, Hydropower Engineer
0202 - O-0389 0101 Tudor Engineering Company 406 266 3728 800
020201 - Mr. Jeff Ghilardi, Resident Engineer
020202 - Mr. Rod Welch, Office Engineer
0203 - O-0392 0103 Sletten Construction 406 761 7920 406 761 0923 FAX
020301 - Mr. Bill Merriman, Vice President
020302 - Mr. Paul Robinson, Project Coordinator
020303 - Mr. Kieth Fergeson, Superintendent
020304 - Mr. Dave Marsh, Field Project Coordinator
0204 - O-0393 0301 Gracon Corporation 303 667 2203
020401 - Mr. Mike Ream, Vice President, Construction Department
020402 - Mr. Dale Harrington, Superintendent, =406 266 5747
020403 - Broadwater Power Project
0205 - O-0394 0301 Voith Hydro, Inc. 717 792 3511 717 792 3862 FAX
020501 - Mr. Kenneth L. Carlson, Field Representative, =406 266 3275
Weekly Schedule, & Progress Meeting
Notes & Understandings
Tape Recording Less Useful than SDS, No
Accurate Complete Notes Can be Prepared
Feedback Accuracy Listening SDS Metric
Feedback Metrics Meeting Notes Improve
1408 - ..
1409 - Summary/Objective
141003 - ..
141004 - Bill Merriman advised that Sletten did not have any corrections to
141005 - submit for the notes on the meeting last week, 880914. Bill asked to
141006 - point out matters in Tudor's Notes which Sletten feels require
141007 - clarification.
141009 - ..
141010 - Bill's clarifications are presented under the applicable headings
141011 - below.
141015 - ..
141016 - Tape Recording Meetings, Sletten Requests No Record of Meeting
141018 - Follow up ref SDS 5 0001.
141020 - Approximately 90 minutes into the meeting Bill Merriman asked if
141021 - Tudor would agree to turn the tape recorder off. He further requested
141022 - that Norm Barnard, representing the State, discontinue taking notes of
141023 - the discussion.
141025 - ..
141026 - The Engineer agreed to this, even though Sletten had earlier requested
141027 - on 880907 that meetings be tape recorded in order ensure accuracy of
141028 - understandings. ref SDS 4 3402
141030 - [On 880928 Sletten advises it is no longer taping recording the
141031 - meetings, ref SDS 6 9330
141033 - ..
141034 - [On 881003 DNRC counsel reported complaints by Sletten that notes
141035 - of this meeting today are inaccurate. Counsel also reported the
141036 - SDS record on past meetings which Sletten tape recorded, were
141037 - accurate. ref SDS 7 7007]
Coordination with Gracon Contract
190501 - ..
190502 - Gracon Access across Upstream Cofferdam
190504 - Rod Welch confirmed that the Engineer's Directive for Sletten to
190505 - permit Gracon access and remove its crane, ref 13, is in full force
190506 - and effect, and that damages are resulting from Sletten's failure to
190507 - perform the Directive in the estimated amount of approximately
190508 - $17,000 per day.
190510 - ..
190511 - Rod asked if Sletten had any objections to this Directive, and whether
190512 - it is causing Sletten any extra expense?
190514 - ..
190515 - Bill Merriman indicated that Sletten was not obligated to perform the
190516 - Directive, because it had requested proof of insurance coverage that
190517 - has not been furnished by the Engineer.
190519 - ..
190520 - Rod Welch asked if Sletten had obtained advice of counsel on this
190521 - matter?
190523 - ..
190524 - Timely Notice
190526 - Bill Merriman stated that Sletten did not receive the Directive
190527 - until 880921 1900, and so has been unable to obtain legal advice,
190528 - as of the meeting this morning.
190530 - Rod Welch noted in substance and effect that the Engineer notified
190531 - Sletten's Project Coordinator, Mr. Paul Robinson (present at the
190532 - meeting today) by telephone yesterday afternoon at approximately
190533 - 1430 of the Engineer's Directive. The Engineer finds that such
190534 - notice is sufficient under the Contract provisions regardless of
190535 - when other off-site Sletten staff may have seen the confirming
190536 - document.
190538 - ..
190539 - [That Sletten was properly notified is supported by the ensuing
190540 - conduct shortly after the Engineer's call to Paul Robinson, in that
190541 - Sletten hand delivered a letter (ref 19) within minutes of the
190542 - call, objecting to the Directive, stating:
190544 - "...you continue to ignore these concerns and have allowed Gracon
190545 - to proceed [with their work requiring access across the coffer-
190546 - dam]... This cannot and will not continue.
190548 - ..
190549 - Today, Gracon attempted unsuccessfully to place concrete via a
190550 - slickline routed across the Cofferdam. After that attempt failed,
190551 - we were advised that tomorrow they were going to reset their
190552 - pumper truck at the base of the stairs...
190554 - ..
190555 - Whatever action is necessary to see that your actions cease will
190556 - be taken by Sletten Construction."
190558 - ..
190559 - Within minutes of receipt of this letter, Sletten moved its crane to
190560 - block Gracon's access to the dam and thereby bar implementation of
190561 - the Directive. The crane was unmanned and performed no purpose
190562 - except to prevent Gracon from using the Cofferdam access route in
190563 - the manner Directed, as promised in Sletten's letter.]
190565 - ..
190566 - The Engineer advised that Sletten's "concerns" have been fully
190567 - considered and found not sufficient under the Contract to deny Gracon
190568 - reasonable access across the Cofferdam (see Section 1560 para 3.11
190569 - H4), as embodied in the Directive. The Engineer advised that the
190570 - damages resulting from Sletten's failure to perform the Directive are
190571 - therefore chargeable to Sletten beginning yesterday afternoon when the
190572 - crane was moved to block implementation of the Directive.
190575 - ..
190577 - ..
190578 - Sletten Demands Proof of Insurance as Condition of Performance
190580 - Bill Merriman requested a copy of Gracon's insurance coverage. He
190581 - maintained that the Engineer had a duty to provide this as a
190582 - condition precedent to Sletten complying with the Directive.
190584 - Rod Welch advised that Gracon has no relationship with Sletten.
190586 - ..
190587 - What is at issue now is whether Sletten intends to perform its
190588 - contract requirement to comply with an Engineer's Directive (see
190589 - Article 6.29, 9.11). The Engineer has issued a Directive upon which
190590 - Sletten may rely, such that, if Sletten incurs extra expense as a
190591 - result of the Engineer's Directive, it may pursue recovery in the
190592 - manner provided by the contract (see Article 7.1). Further, Sletten
190593 - has met its burden to mitigate by notifying the Engineer of its good
190594 - faith belief that certain risks arise from the Engineer's
190595 - Determination. Therefore Gracon's insurance coverage is relevant to
190596 - the Engineer in formulating the Directive but is not material to
190597 - Sletten's decision to comply.
190599 - ..
190600 - The Engineer submitted a copy of Gracon's insurance certificate to
190601 - Sletten for information without agreeing that it was a necessary
190602 - condition for Sletten's performance of the Directive.
190604 - ..
190605 - Rod Welch asked if Sletten is prepared to move its crane so Gracon
190606 - can continue its work.
190608 - ..
190609 - Bill Merriman said Sletten wants to "...think about it."
190612 - ..
190613 - Gracon Gives Notice of Willingness to Mitigate
190615 - Rod Welch asked Mike Ream, representing Gracon Construction, whether
190616 - Sletten's delay in disclosing its decision to remove the crane,
190617 - would cause Gracon continuing extra expense. Mike said that it
190618 - would because, among other reasons, the pump truck cannot standby on
190619 - a continuing basis due to contract commitments for other jobs. If
190620 - he knows now that Sletten will remove the crane today, for example,
190621 - Gracon will suffer reduced damage by giving sufficient notice to
190622 - retain the Concrete Pumping truck.
190624 - ..
190625 - Wayne Wetzel, representing the State, suggested that we adjourn for
190626 - a period while Sletten consults, so a timely decision can be given
190627 - that enables Gracon to plan its work in a way that reduces the
190628 - damages.
190630 - ..
190631 - Bill Merriman rejected this proposal. He said Sletten does not want
190632 - to consider this matter more carefully nor consult with anyone.
190634 - ..
190635 - Rod Welch explained that this position increases damage for which
190636 - Sletten may be responsible, because simply by informing Gracon when
190637 - it can expect to commence work, further damage can be avoided.
190638 - Otherwise they must continue to standby.
190640 - ..
190641 - Mr. Merriman advised there are a number of other matters Sletten
190642 - wants to discuss and since this is the weekly Progress meeting,
190643 - Sletten wants to complete that agenda first.
190645 - ..
190646 - Accordingly, the meeting was continued without resolving the matter.
190647 - Gracon was left on standby until Sletten renders its decision to
190648 - move its crane.
190651 - ..
190652 - Gracon Access Across Powerhouse
190654 - Bill Merriman asked what access Gracon will need on 881010 when it
190655 - will be entitled to access across the powerhouse. Sletten's Schedule
190656 - currently shows its work will not be sufficiently complete to permit
190657 - such access until sometime after the contract date. He said that
190658 - Sletten would like to work out a reasonable alternative in order to
190659 - accommodate Gracon, and asked for a suggestion.
190661 - ..
190662 - Mike Ream explained that on an interim basis, access along the
190663 - Cofferdam road that is now blocked by Sletten's crane, would be fine.
220501 - ..
220502 - Proposal to Waive Rights
220504 - Bill asked about the State's interest in entering into an agreement
220505 - that if Sletten met the Voith Contract interface dates, as generally
220506 - reflected in Sletten's Updated Schedule, ref 10, then the parties
220507 - would relinquish mutual claims related thereto.
220510 - ..
220511 - Voith Contract Start 881017
220513 - Rod Welch advised that the State is open to such proposal provided
220514 - Sletten can demonstrate it can meet the Schedule objectives.
220516 - Specifically, how is Sletten going to perform a scope of work which it
220517 - has estimated will take 10 days (the Curb Ring), that is now a week
220518 - behind schedule, within the Schedule objective for Voith to start on
220519 - 881017, and still accomplish work it has contended requires an
220520 - additional 8 days to perofrm?
220522 - ..
220523 - Bill said he didn't see any problem.
220527 - ..
220528 - Sletten Reserves Rights re Acceleration Claim
220530 - Bill explained that Sletten does not intend to waive its right to seek
220531 - extra compensation for acceleration expense it believes was caused by
220532 - others. Sletten wants the State to waive its right to recover damages
220533 - it may have incurred due to Sletten's failure to meet completion
220534 - requirements, if Sletten meets certain Voith contract interface dates
220535 - (see Voith Contract Coordination below).
220537 - ..
220538 - The Engineer will draft a letter explaining what the State is willing
220539 - to do along these lines.
Curb Ring, Difficulty
CPM Contractors Avoid Accountability
280901 - ..
280902 - Sletten Expects Difficulties Meeting Tolerances for Curb Ring
280904 - Bill Merriman advised that the "difficulty" Sletten will have in
280905 - setting the Curb Ring is in meeting the tolerances for alignment of
280906 - the unit centerline of the pier to within .010" called for in the
280907 - Engineer's Determination, ref 11. Bill feels this is an important
280908 - point that was not mentioned in the Notes of the meeting for last
280909 - week. ref SDS 5 0026
280911 - ..
280912 - Bill also pointed out that Sletten did not encounter delay due to
280913 - unavailability of Ironworkers, and did make the concrete pour
280914 - discussed at ref 9 line 190909, on 880910. This fact is shown on
280915 - line 190920.
280916 - ..
280917 - Bill's point was accepted.
280919 - [The purpose of this is to show that nothing that occurred prior to
280920 - 880910 can cause delay in meeting the 881015 objective for starting
280921 - the Voith Contract work, since Sletten's schedule was intended to
280922 - consider all known constraints.]
280925 - ..
280926 - Duty to Disclose
280927 - Contractor Demonstrate Viability of CPM Schedule
280929 - Bill asked why the Engineer is so insistent on obtaining information
280930 - from Sletten about possible delays in completing the work. He cited
280931 - specifically ref 9 line 190922, inquiring about the reliability of
280932 - Sletten's Schedule, transmitted via ref 10.
280934 - ..
280935 - Rod explained that the Engineer has a number of other contracts to
280936 - manage which depend upon completion of Sletten's work The other
280937 - Contractors require advance notice in order to prepare to start on the
280938 - date Sletten completes controlling activities. This situation
280939 - together with a variety of other obligations the State has could
280940 - result in severe damage to the State, if Sletten fails to meet
280941 - projected completion dates. Therefore, the Engineer must take great
280942 - care to investigate the reliability of schedule projections based upon
280943 - good faith disclosure by the Contractor of potential adverse impacts.
280945 - [An example is the "difficulty" Sletten expects to have in setting
280946 - the Curb Ring. ref SDS 0 5940 Sletten's disclosure enables the
280947 - Engineer to weigh the advantage to both Sletten and the State of
280948 - having someone who will have less "difficulty," perform the work in
280949 - order to reduce the damage caused by unnecessary delay due to
280950 - Sletten's projected difficulties.]
310601 - ..
310602 - Voith to be Notified it can Start Work on 881015
310604 - Jeff indicated that based upon Bill Merriman's representations (line
310605 - 160701 - 160714) and the Engineering judgement that the work to be
310606 - performed could be completed by a reasonable contractor within the
310607 - Schedule objectives, he believes there are sufficient grounds to
310608 - officially notify Voith of its contract start date.
310610 - ..
310611 - Jeff advised that based upon this information the Engineer has
310612 - notified Voith that it can begin work according to the Schedule
310613 - presented last week (ref 9 line 251001), as recommended by Sletten,
310614 - ref 8 line 270701.
310615 - ..
310616 - Mobilize week of 881010
310618 - Voith will receive materials and equipment during this week.
310620 - Voith will mobilize a 150 ton crane.
310622 - A laydown area will be needed adjacent to the Powerhouse, approxi-
310623 - mately in front of the Engineer's office. Sletten will make this
310624 - location available beginning the week of 881010. The exact size
310625 - will be such as to not unreasonably impede Sletten's work, as
310626 - determined by the Engineer.
310628 - ..
310629 - Voith will be working in the Powerhouse to install storage shelving
310630 - ..
310631 - and stocking materials and equipment in support of its work. Such
310632 - work shall be performed so as not to impede Sletten's performance.
310633 - ..
310634 - Staging Area Plan ----------------- Voith will prepare a site
310635 - drawing for its staging needs which Sletten can review and offer
310636 - suggestions for reasonable adjustments to insure that its operations
310637 - are not delayed or hindered unneces- sarily.
310639 - ..
310640 - This plan should be provided by 880930. Voith will endeavor to
310641 - have a draft available for the next Progress meeting next
310642 - Wednesday, 880928, for discussion.
310644 - ..
310645 - Contract work will commence 881017
310646 - ..
310647 - Voith Deliveries
310649 - Kieth Ferguson asked what procedures should be used to manage
310650 - deliveries Sletten is getting for Voith. He explained that Voith
310651 - deliveries are addressed to Sletten instead of Voith.
310653 - Ken said he will arrange to correct this problem.
310655 - ..
310656 - Sletten has been cooperating in assisting Voith unload such
310657 - deliveries. Compensation for this support should be arranged
310658 - between Voith and Sletten. If Voith fails to compensate Sletten
310659 - for its services, Sletten may present a claim to the Engineer for
310660 - approval. The Engineer would intend to make an equitable adjust-
310661 - ment to both contracts. It is expected that this step will not be
310662 - necessary in that usually enough occasions arise where reciprocal
310663 - aid of the kind involved here precludes the need for payments.
310664 - ..
310665 - Jeff emphasized it is important that deliveries be unloaded
310666 - under the supervision of Ken where possible so Voith can maintain an
310667 - accurate inventory of what has been delivered and where it is
310668 - located. Bill Merriman asked about compensation for Sletten's time
310669 - in attempting to locate Ken. The Engineer recognizes this is a
310670 - compensable expense which should be worked out between Voith and
310671 - Sletten.
310673 - ..
310674 - Voith should promulgate and distribute to the Engineer and to
310675 - Sletten instructions for handling deliveries in the event Ken is
310676 - not on site when a delivery occurs.
310678 - ..
310679 - Such instructions should be available for review at the next
310680 - Progress meeting, 880928.
3307 - ..
330701 - Rod Welch suggested that since Sletten management will be in Helena
330702 - this afternoon for a meeting, they might stop in and discuss with the
330703 - approving Agency the status of the silt barrier submittal.
330705 - ..
330706 - Sletten is attempting to expedite work that requires approval of this
330707 - submittal. It was suggested that the projected 30 day approval period
330708 - might be greatly reduced by such a meeting in which ideas can be
330709 - advanced on the spot for overcoming concerns of the State.
Pay Item #24
3406 - ..
340601 - Bill Merriman asked that the Engineer submit a letter setting out his
340602 - interpretation of payment terms for concrete backfill to supplement
340603 - prior discussions.
340605 - ..
340606 - Jeff said he is working on this.
Distribution. . . . See "CONTACTS"