CONTACTS 
0201 - Tudor Engineering Company                    510 419 6100 fax 419 5355
020101 - Mr. Clyde Earnest

SUBJECTS
Clyde's comments on
Welch performance

0604 -    ..
0605 - Summary/Objective
0606 -
060601 - Follow up ref SDS 6 0000, ref SDS 4 GY9H.
060602 -
060603 - Clyde called about several documents prepared for DNRC over the past
060604 - few days at the request of the client, the State of Montana, DNRC.
060605 - Correspondence from the consultant (Welch) to Tudor (Clyde) and to the
060606 - State (e.g., Sarah Bond, Norm Bernard and Wayne Wetzel) to be on Tudor
060607 - letterhead, as relates to the BPP.
060608 -
060609 - Clyde is worried about the consultant/client relationship.  He feels
060610 - comments by the consultant to the State, who is Tudor's client, on
060611 - giving timely notice of claims, as occurred on 880928, ref SDS 4 GY9H,
060612 - is incorrect and improper.
060613 -
060614 - Clyde cited a discusison yesterday with Bill Cahill following
060615 - teleconference between Welch/Bond/Cahill. ref SDS 5 0836
060616 -
060617 -
060618 -
060619 -
060620 -  ..
060621 - Owner Claim Procedures
060622 -
060623 - Tudor's policy is to avoid giving notice in order to maintain good
060624 - relations with the contractor.  Tudor's general policy is that the
060625 - Engineer and the Contractor are a team to provide service to the
060626 - owner.  Notices of claims by the owner to the contractor, even if
060627 - correct under the contract, disrupt cooperation between the Engineer
060628 - and the Contractor necessary for a successful project.
060629 -
060630 - On 880921 Clyde related similar ideas on contract management.
060631 - ref SDS 2 4896
060632 -
060633 -      [On 911123 "feel good" management common throughout government
060634 -      and industry. ref SDS 7 1331
060635 -
060636 -      [On 961105 USACE exercised similar procedure of suppressing
060637 -      notice of the contractor to follow the contract. ref SDS 8 8843
060638 -
060639 -  ..
060640 - We reviewed harm that occurs to the Contractor and to the State when
060641 - timely notice is not made to the Contractor about the cost of failure
060642 - to perform.  Damages from failure of notice is often greater than the
060643 - loss of good relations, leaving aside whether in this case good
060644 - relations actually exist to be maintained.  The contractor has a right
060645 - to know what its risks are relative to State claims, so it can decide
060646 - to accept or avoid the injury.  In the absence of such notice the
060647 - Contractor may be able to successfully contend that, if it had known
060648 - the cost that the Owner expected would incur by remedying the
060649 - contractor's failure to perform, then it would have performed the work
060650 - itself at less expense.
060651 -
060652 -  ..
060653 - Additinally, it could be argued that failure to give notice is
060654 - evidence that the Contractor's position was accepted.  Absent a
060655 - reasoned, consistent application of contract provisions, it will be
060656 - difficult to show the contractor did not perform its agreement.
060657 -
060658 -  ..
060659 - Clyde questioned the correctness of permitting a contractor to avoid
060660 - certain work because it is cheaper for the Owner to perform it, rather
060661 - than the contractor.  He indicated that this procedure would result in
060662 - financial loss to the Owner.  [This is the same argument Bill Merriman
060663 - made, i.e. the Contractor can reduce its cost of performance by
060664 - avoiding performance, see ref 10 line 3833.]
060665 -
060666 -  ..
060667 - I explained that the contract permits the Engneer to deduct such
060668 - amounts from payments to the Contractor through the Change Order
060669 - process (this is shown the dewatering notice, discussed below, see
060670 - also ref 8).  Recommended that the Engineer should not be seen to
060671 - ignore its own provisions.  To the extent that it does, the adequacy
060672 - of such provisions are undermined as a basis for determining the
060673 - agreement terms.
060674 -
060675 -  ..
060676 - Clyde advised that he has asked Jeff to prepare a list of matters
060677 - that come up which the contractor should be doing but fails to
060678 - perform, with the intent of presenting it at the end of the job to
060679 - balance Contractor claims.  He mentioned failure to provide adequate
060680 - office space matter and drinking water.
060681 -
060682 -
0607 -

SUBJECTS
Clyde's comments on
State Claims
Welding Prequalification
Voith corrections, DTL

0907 -
090701 -  ..
090702 - Welding Prequalifiation for DTL
090703 - Notice to Contractor on Providing Power for Dewatering
090704 -
090705 - I asked about the welding prequalification matter, DTL corrections by
090706 - Voith which may run $50,000, and the dewatering issue estimated at
090707 - $20,000.  I also pointed out that giving of notice on such matters is
090708 - a way to encourage the Contractor to perform based on the incentive of
090709 - saving money by avoiding extra cost.
090710 -
090711 - Clyde feels the dewatering cost may not be needed at all, if the flood
090712 - gates are installed prior to the start of Voith's work  and so it is
090713 - not a good idea to give notice on this.
090714 -
090715 -
090716 -
090717 -
0908 -
0909 -

SUBJECTS
Correspondence Log
Pending responses owed Contractor

1105 -
110501 -  ..
110502 - Document Log Requires Support to Maintain Current Status
110503 -
110504 - Clyde said he is concerned about the status of the log.  He is
110505 - coming up next week in part to evaluate this matter.
110506 -
110507 - I advised that I have not prepared a particular analyis comparing
110508 - incoming and outgoing documents to prepare an exception list.
110509 - Explained I have recommended that Tudor begin logging when incoming
110510 - documents are answered (Joanne is entering the number of the
110511 - answering document), and to file them by document date.
110512 -
110513 - Also explained that Sletten has advised that it doesn't have any
110514 - outstanding correspondence, except for change order decisions, ref 2
110515 - line 12.
110516 -
110517 -
110518 -
110519 -
110520 -
110521 -
110522 -
110523 -
1106 -
1107 -