CONTACTS 
0201 - O-0387 0101 Tudor Engineering Company  415 543 9820 fax   415 543 5538
020101 - Mr. Clyde Earnest,
0202 - O-0387 0201 Tudor Engineering Company  415 543 9820 fax   415 543 5538
020201 - Mr. Kurt Scholz, Project Engineer, =Telephone
0203 - O-0395 0202 Department of Natural      406 444 6699 fax   406 444 6721
020301 - Mr. Wayne Wetzel, Project Manager, =406 444 6791
0204 - O-0395 0201 Department of Natural      406 444 6699 fax   406 444 6721
020401 - Mr. Norman Barnard,
0205 - O-0393 0101 Gracon Corporation         303 667 2203
020501 - Mr. Gerald R. Ashbach, President
0206 - O-0393 0301 Gracon Corporation         303 667 2203
020601 - Mr. Dale Harrington, Superintendent, =406 266 5747
020602 - Broadwater Power Project
0207 - O-0393 0401 Gracon Corporation         303 667 2203
020701 - Mr. Mike Ream, Vice President, =Telephone, Construction Department
0208 - O-0393 0303 Gracon Corporation         303 667 2203
020801 - Mr. Michael S. `Bo' Brown, Project Manager
020802 - Broadwater Power Project

SUBJECTS
Gracon, Claim Denied
Mobilization & Access Upstream Cofferdan
Access Across Powerhouse
Access Across Cofferdam
Updated Schedule Submittal
Discharge across Rubber Dam
Time Extensions, Contract Completion

1009 -    ..
1010 - Summary/Objectives
1011 -
101101 - Gracon showed a series of calendar charts marked with dates of claim-
101102 - ed delay.  Color codes distinguish dates claimed by Malcolm in these
101103 - charts.  Gracon represented that its submission today covers all of
101104 - its claim notices, ref DRP 1 - 10, and other claims known to Gracon at
101105 - this time. ref SDS 0 2137  Gracon's claim submissions are erroneous
101106 - and conflicting, and do not substantiate entitlement to extra payment
101107 - and time extensions.  Gracon plans to submit additional information to
101108 - justify approval of its claims.  Gracon cited ripple effects of
101109 - compound factors caused loss of 6 months slack time that now makes the
101110 - spillway contract critical to completion of the Broadwater Dam
101111 - project.  Gracon will schedule to complete its work by 880410. ref SDS
101112 - 0 3233  Engineer directed Gracon to perform contract requirements to
101113 - submit updated schedules.
101114 -
101115 -
101116 -
1012 -
1013 -
1014 - Discussion
1015 -
101501 - Claims Continuing Delay Until Access Across Powerhouse Provided
101502 - Gracon Increases Claim for Extra Time and Payment, Raises New Issues
101503 -
101504 - In this meeting Gracon disclosed it is seeking considerably more days
101505 - than presented in its previous claim letters, ref DRP 1 - 3, and an
101506 - increase in the number of days it will require to complete the
101507 - contract.
101508 -
101509 - Bo advised that Gracon has not received the level of access it needs
101510 - and is granted under the contract, and so its claim will continue to
101511 - increase until such access is made available.
101512 -
101513 - During the second meeting at the site, about 1700, Gracon indicated it
101514 - could complete the project by 890421 under existing access conditions
101515 - which is restricted by the performance of other contractors working in
101516 - and around the Powerhouse. ref SDS 0 3233
101517 -
101518 - Under the claim for denied access to the stairway, Gracon now seeks 8
101519 - days, instead of the 7 days set out in its letter, ref DRP 3.
101520 -
101521 - Gracon seeks a total of 79 days for denied access across the
101522 - Powerhouse, and a variety of other issues some of which have been
101523 - previously noticed, but not quantified (see ref DRP 4  6 & 10)  and
101524 - others that have not been previously presented (see the "Summary"
101525 - below. ref SDS 0 1103).
101526 -
101527 - The Engineer had understood Gracon's claim for denied access across
101528 - the Powerhouse, ref DRP 2, was comprehensive because, according to
101529 - Gracon, it permeates every aspect of the work.  The additional claims
101530 - presented today, raise questions of concurrency, not resolved by
101531 - Gracon's presentation. ref SDS 0 1822
101532 -
101533 - Gracon's letter of 881221, states: "Time extensions will be necessary
101534 - at the rate of 1.4 calendar days per week of denied access," ref DRP
101535 - 2.  This letter contends a total of 16 weeks is subject to claim, as
101536 - of 890131, which then results in 12.4 calendar days of claimed delay
101537 - to period ending 890131.  The 1.4 calendar days correlates to the 20%
101538 - factor Gracon seeks as compensation on all labor and equipment during
101539 - the claim period under its "total cost" theory of recovery.
101540 -
101541 -
101542 -
101543 - Possible 130% Error in Time Extension Calculation
101544 -
101545 - Gracon's claim letter of 881221, ref DRP 2, also shows a request for
101546 - 29 calendar days extension on the cost "Summary" sheet  which appears
101547 - to conflict with the analog cited on page one of its claim statement
101548 - seeking 1.4 calendar days per week.  As seen, the 1.4 factor results
101549 - in 12.4 calendar days.
101550 -
101551 -
101552 - ..
101553 - Gracon Claim Summary Seeks 87 Day Time Extension
101554 - 
101555 - Summary, Gracon separate claims offered during this meeting:
101556 -
101557 -                                               Claimed
101558 -                                                 Delay    Notice
101559 -                                              Cal Days    (DRP #)
101560 -                                              =========   =======
101561 -   Cofferdam road, diminished access                8         3
101562 -   Cofferdam road, blocked by Sletten            see #1    see #1
101563 -   Malcolm - different conditions                   9       None
101564 -   Powerhouse access, denied                       40         2
101565 -   Quantity overrun (Malcolm)                       9       None
101566 -   Weather                                         14        10
101567 -   SCUL electrical panel                            7         7
101568 -                                                -------
101569 -      Total....................................... 87
101570 -
101571 -
101572 -
101573 -   Notes:
101574 -
101575 -     The "Notice" column correlates to Gracon's documents shown in the
101576 -     reference section, above.
101577 -
101578 -     This does not appear to be a current claim.  Under Gracon's the-
101579 -     ory, ref DRP 2, its entitlement to time extension continues to
101580 -     accrue at 1.4 calendar days for each week it is denied the level
101581 -     of access across the Powerhouse it interprets the contract to
101582 -     permit, and as seen below, that has not occurred, and will not
101583 -     likely occur prior to completion.
101584 -
101585 -     Claim #3 (Malcolm) is for extra time to perform as a result of
101586 -     encountering reinforcing steel drilling through the original
101587 -     structure, and the consequent option Gracon was offered to drill
101588 -     diagonally in order to avoid the condition.
101589 -
101590 -     Claim #7 (SCUL) relates to late delivery of equipment and modifi-
101591 -     cations to conduit layout between the Powerhouse and the Dam.
101592 -
101593 -
101594 - ..
101595 - Concurrent Delay Has Not Been Evaluated in Gracon's Claims
101596 - 
101597 - Clyde asked whether any of Gracon's claims contain concurrent delay?
101598 -
101599 - Bo Brown indicated a rigorous analysis has not been done on this
101600 - particular point.
101601 - ..
101602 - Rod asked if Gracon has any other pending or potential claims
101603 - against DNRC that are not included in the new claims Gracon submits
101604 - today?
101605 -
101606 - Bo said that Gracon's objective today is to get all potential claims
101607 - on the table.
101608 -
101609 - Clyde noted that Gracon will have to establish its entitlement, and
101610 - suggested an as-built CPM would be an acceptable method.
101611 -
101612 - Bo noted that Gracon plans to submit an as-built CPM to substantiate
101613 - its claim of delay and entitlement to extra time and payment.
101614 -
101615 - Kurt feels that the SCUL panel delivery delay is not a "critical"
101616 - activity.
101617 -
101618 - Bo indicated this matter will be apparent from Gracon's as-built CPM.
101619 -
101620 -
101621 -
101622 - Total Cost Method to Calculate Damages is Unsubstantiated
101623 -
101624 - Rod asked how Gracon's "total cost" method for computing damages
101625 - distinguishes between tasks dependent upon access, such as delivering
101626 - materials, and the actual work itself?
101627 -
101628 - Dale feels the inability to provide materials and equipment on a
101629 - timely basis also affected the productivity of the work operation.
101630 -
101631 - Rod noted an apparent conflict between this position and Gracon's
101632 - representation that it delivered materials by barge as contemplated
101633 - by the parties in entering the agreement, and there is nothing in the
101634 - record showing the barge was unable to handle materials in the
101635 - quantity needed to maintain continuous operations.  Accordingly
101636 - failure to do so would seem to reflect poor coordination and planning
101637 - by Gracon which is a duty of the contractor and therefore  not
101638 - actionable.
101639 -
101640 -
101641 -
101642 - Gracon Claims Denied Use of Cofferdam Road Caused Delay
101643 - Original Schedule Does Not Support Delay Claim
101644 -
101645 - Rod asked if Gracon's original schedule showed an anticipated
101646 - improvement in productivity between the period prior to 881010 when
101647 - Gracon claims it was obligated to use barge access only, and later
101648 - when it holds productivity would have dramatically increased by access
101649 - across the Powerhouse using the cofferdam road constructed by Sletten?
101650 -
101651 - Gerry said this difference is not reflected in Gracon's original
101652 - schedule issued to the Engineer, but that the information can be
101653 - developed from the bid estimate records and the as-built CPM.
101654 -
101655 -
101656 -
101657 - Gracon Failed to Perform Contract Schedule Requirements
101658 -
101659 - Rod asked if Gracon has submitted monthly schedules so the Engineer
101660 - can evaluate its schedule contentions presented today?
101661 -
101662 - Bo Brown said that Gracon has not done this.
101663 -
101664 - Clyde indicated this makes the as-built CPM all the more important.
101665 -
101666 -
101667 -
101668 - Gracon's Schedule Did Not Allow for Coordination of Other Contracts
101669 -
101670 - Rod asked if Gracon recognized the coordination required under General
101671 - Conditions Article 7.1, with the work of other contractors in its
101672 - application of section 01110?
101673 -
101674 - Gerry indicated this was not included in Gracon's cost and schedule
101675 - estimates, because Gracon relied on the provision that it would have
101676 - "unrestricted access" in section 01110  and that it was not clear to
101677 - Gracon in bidding the project and negotiating the contract that other
101678 - contractors would be working on the project after 881010 which
101679 - requires application of Article 7.1.
101680 -
101681 -
101682 -
101683 - Engineer Directs Gracon to Submit Schedules Required by Contract
101684 -
101685 - Clyde said that apart from the outcome of this matter, Gracon's
101686 - failure to perform the schedule requirement is serious lack of notice
101687 - to DNRC about Gracon's progress and planning, which denies the State
101688 - the opportunity to coordinate the work of others impacted by Gracon's
101689 - work.  Clyde said Gracon must correct this (see General Conditions
101690 - Article 14.2).  He asked that Gracon submit its updated schedule
101691 - showing what it will be working on and when it expects to finish the
101692 - various major components of the work.
101693 -
101694 - Gerry said Gracon needs input from the Engineer on the completion
101695 - objectives it should pursue.  He indicated Gracon can use this
101696 - information to determine whether it must accelerate its progress.
101697 -
101698 - Clyde explained that the Engineer has provided information to Gracon,
101699 - and will continue to make timely disclosure and response to Gracon's
101700 - requests for information.  Clyde said that Gracon's request this
101701 - evening for "input from the Engineer on completion objectives" is
101702 - incorrect.  Gracon must schedule to complete the work according to
101703 - contract completion dates, as adjusted by change orders. Clyde pointed
101704 - out that the Owner needs input from Gracon in order to coordinate the
101705 - other contracts and expects to receive scheduling data predicated on
101706 - the contractor's perception of its obligations within the meaning of
101707 - the contract.  After the Contractor performs this requirement  the
101708 - Owner can assess the benefit and need for discussions on acceleration.
101709 -
101710 -
101711 -
101712 - Entitlement Contract Authority Kurt's 881229 letter
101713 - Gracon Offers No Basis for Entitlement to Use Cofferdam Access Road
101714 -
101715 - Kurt asked for the contract provision from which Gracon derives a
101716 - right to use the cofferdam road, as claimed in its letter of 881221,
101717 - ref DRP 3 (see also DRP 1 answered by DCP 2).
101718 -
101719 - Gracon offered no authority during the meeting for this proposition.
101720 -
101721 -
101722 -   Gracon Cites Coordination as Entitlement to Use Cofferdam Road
101723 -
101724 -   Rod met briefly with Mike Ream on 890301 at the site to inquire
101725 -   further on this point.
101726 -
101727 -   Mike indicated Gracon relies on GC Article 7.1 which provides for
101728 -   coordination of work between contractors, as vesting it with a right
101729 -   of such access.
101730 -
101731 -
101732 -   Coordination Theory Does Not Support Claim for Unrestricted Access
101733 -
101734 -   If GC Article 7.1 can be construed to require Owner to give Gracon
101735 -   use of the Cofferdam road constructed and maintained by others, as
101736 -   suggested by Mike (which is not established), then Gracon could not
101737 -   have reasonably expected to have "unrestricted" access across the
101738 -   Powerhouse (claim #4), since the Engineer would have had a duty to
101739 -   permit access of other contractor's under the same theory Gracon
101740 -   applies to the cofferdam road matter.  Therefore, even if Gracon is
101741 -   incorrect in its application of Article 7.1, it is not clear how
101742 -   Gracon could have relied on contract section 01110 to expect
101743 -   "unrestricted access" across the Powerhouse when it expected
101744 -   restrictions to flow under Article 7.1 for Gracon's benefit with
101745 -   respect to the cofferdam road.
101746 -
101747 -
101748 -  ..
101749 - Gracon's Damage Claim on Pumping Concrete 600' is Conflicting
101750 -
101751 - Dale said that an example of Gracon's damages caused by denied access
101752 - to the cofferdam road, was having to pump concrete approximately 600
101753 - feet instead of being able to move the truck next to the stairs or the
101754 - Powerhouse.
101755 -
101756 - Clyde recalled that Gracon indicated during original contract
101757 - discussions that it planned to pump concrete 600 feet. There is a
101758 - transcript of the original contract discussions.
101759 -
101760 - This understanding was not disputed during the meeting today.
101761 -
101762 -
101763 -  ..
101764 - Gracon's Actual and Justifiable Reliance Has Not Been Established
101765 -
101766 - Kurt asked what contract authority Gracon relies on in asserting a
101767 - right to access across the Powerhouse.
101768 -
101769 - Gerry cited section 01110 which was mentioned in the Engineer's 881229
101770 - letter drafted by Kurt, see ref DIP 3.  Careful reading indicates a
101771 - literal application of this section, without notice of any other
101772 - provision  could convey an impression that one contractor would have
101773 - unrestricted access across the Powerhouse, which would necessarily
101774 - deny any access to others, including DNRC.
101775 -
101776 - Rod asked if it is Gracon's practice to construe contract provisions
101777 - without regard to the totality of circumstances otherwise apparent to
101778 - a reasonable bidder?
101779 -
101780 - Gerry indicated such is not Gracon's practice, and observed that
101781 - Gracon contemplated performing all of the contract provisions in a
101782 - reasonable and prudent manner.
101783 -
101784 - Rod observed the record at this point does not seem to establish there
101785 - was actual and justifiable reliance in the manner claimed.
101786 -
101787 - Gerry said Gracon will furnish information on these points.
101788 -
101789 -
101790 -
101791 - Gracon Has Not Established Damage Due to Lack of Access
101792 -
101793 - Clyde questioned whether even if Gracon had been permitted
101794 - "unrestricted access across the Powerhouse," that its actual progress
101795 - would have been improved.  Norm pointed out that the use of this
101796 - access to transport materials and equipment would have been impeded by
101797 - Gracon's drilling operation.
101798 -
101799 - Dale explained that this problem could have been ameliorated to some
101800 - degree by using the crane Gracon is using on the Dam deck.
101801 -
101802 - Rod suggested Gracon's as-built CPM must establish actual delay.
101803 -
101804 -
101805 -
101806 - Gracon Planned on Barge Access, Not Use of Powerhouse Road
101807 -
101808 - Kurt asked about Gracon's representations at pre-award meetings
101809 - conerning access.  He recalled Gerry advising that Gracon intended to
101810 - use a barge on the upstream side of the Dam, rather than access across
101811 - the cofferdam road.  He further cited Gerry's acknowledgement that the
101812 - contract does not permit unlimited access across the Powerhouse, and
101813 - that the maximum vehicle size Gracon could expect to move across the
101814 - Powerhouse would be a "light pickup truck."
101815 -
101816 - Gerry acknowledged these understandings, but maintained that they only
101817 - applied to access prior to 881010, and that Gracon at all times relied
101818 - upon the contract language of section 01110, that on 881010 it would
101819 - be permitted "unrestricted access" across the Powerhouse.
101820 -
101821 -
101822 -
101823 - Gracon Has Been Provided Adequate Access to Perform the Work
101824 -
101825 - Kurt mentioned the understanding that Gracon would accept access
101826 - across the cofferdam road in lieu of access across the Powerhouse, and
101827 - that Gracon has enjoyed such access from 881010 until today when the
101828 - stair was removed, ref DIP 2 line 1010.  Since Gracon now has access
101829 - across the Powerhouse, there is no basis for any claim of delay.
101830 -
101831 -
101832 -
101833 - Gracon is 30 Days Behind Schedule Even if its Claim is Approved
101834 -
101835 - Norm pointed out that even if Gracon is granted its request for the
101836 - entire 87 days of time extension, it would still be subject to ap-
101837 - proximately 30 days of presumed damages.
101838 -
101839 - Gerry advised that Gracon views the supplemental contract language as
101840 - extending the date of substantial completion from 881231 to 890201.
101841 -
101842 - Kurt feels that position is incorrect in that the parties merely
101843 - intended to give Gracon a grace period of 30 days with respect to the
101844 - imposition of presumed damages, and did not intend by the supplemental
101845 - language to extend or in any way change the actual date of substantial
101846 - completion.
101847 -
101848 - The purpose of the supplemental contract language was to avoid Gracon
101849 - charging for anticipated presumed damages in the contract price which
101850 - it indicated at the time of entering the contract would be needed in
101851 - light of its estimate that the time required to perform the work
101852 - would likely exceed the date of substantial completion.
101853 -
101854 -
101855 -
101856 - Tie Down Change Requested to Expedite Work Actually Caused Delay
101857 -
101858 - Bo Brown explained this claim arises from the Engineer's determination
101859 - to revise the location and or angle of penetration for certain tie
101860 - down anchors in order to avoid drilling through rebar.
101861 -
101862 - Kurt noted that this change was made at Gracon's request to expedite
101863 - its work.
101864 -
101865 - Rod asked whether, in bidding the work, Gracon expected to encounter
101866 - reinforcing steel to drill the tie down anchor holes?
101867 -
101868 - Bo said the plans do not show reinforcing steel to be encountered, but
101869 - that Gracon is aware that dams are constructed with reinforcing steel
101870 - and so bid to meet that contingency.
101871 -
101872 - Rod asked if it takes longer to drill through concrete and steel than
101873 - to drill solely through concrete?
101874 -
101875 - Bo said drilling through reinforcing steel takes a lot longer, which
101876 - is why Gracon reqested changing the location of the tie down holes.
101877 -
101878 - Rod noted that normally granting the contractor an option to construct
101879 - by methods that reduce the time of performance, should not result in a
101880 - claim for extended performance time.
101881 -
101882 - Bo feels there were difficulties trying to drill at an angle which
101883 - were not contemplated in adopting the change, that extended the time
101884 - of completion.
101885 -
101886 - ..
101887 - Ripple of Related Factors Cascaded into Compound Delay
101888 - Six (6) Month Slack Time Lost by Oversight, Neglect
101889 - Change to Expedite Caused Delay Because of Complex Factors
101890 -
101891 - Kurt asked why the tie down and grouting work item is now critical,
101892 - and so is delaying completion of the Spillway contract?
101893 -
101894 - Bo said the time required to propose, design, review and approve the
101895 - change was longer than expected because of mail difficulties,
101896 - vacations and key people on various staffs were busy with other things
101897 - that seemed more important than this task which originally had 6
101898 - months slack time.
101899 -
101900 - Therefore, the start of the this operation was delayed by 4 months.
101901 -
101902 - Drilling on an angle added 4 weeks to the work operation, and
101903 - excessive rock fracture required another 4 - 6 weeks which pushed the
101904 - work into cold weather that greatly slowed the work and made it impact
101905 - the critical path.  He feels their current rate of progress means they
101906 - cannot finish for at least another 3 weeks.
101907 -
101908 - The men are cold, equipment is breaking down, so production is very
101909 - slow.
101910 - ..
101911 - The subcontractor wants to pull off the job until the weather
101912 - warms up in two months.
101913 -
101914 -    [See later discussion with DNRC management, ref SDS 3 4367.]
101915 -
101916 -
101917 -
101918 - Weather Impacts Impede Effective Planning to Complete Work
101919 -
101920 - Wayne asked about the impact on completion of continued temperatures
101921 - below 50 degrees.  An example is Malcom Drilling's consideration to
101922 - pull off the job until higher temperatures occur. ref SDS 0 2825
101923 -
101924 - Dale advised that he feels 32 degrees is a more critical temperature
101925 - that impacts installation of the rubber dams.  He cited a variety of
101926 - work tasks that impede progress when the temperature falls below 32
101927 - degrees.
101928 -
101929 - Wayne asked how Gracon could develop a reliable schedule to complete
101930 - the work when it is likely temperatures will not begin to consistently
101931 - exceed 32 degrees until much later in the year?
101932 -
101933 - Dale indicated there are steps that can be taken to deal with colder
101934 - temperatures; he cited ice removal with heating equipment as an
101935 - example  but the general problem was not dealt with seriously at the
101936 - meeting this evening.
101937 -
101938 -
101939 -
101940 - Gracon Arranging for Alternate Barge Support to Maintain Progress
101941 -
101942 - Rod asked what effect the Engineer's directive of January 27 (ref DCP
101943 - 4), for Gracon to abandon the barge landing, will have on Gracon's
101944 - progress, specifically the intent to complete by 890421?
101945 -
101946 - Dale said he has discussed with Voith the possibility of renting
101947 - their crane as needed to load Gracon's barge in lieu of using the
101948 - barge landing at the downstream cofferdam.  He is uncertain whether
101949 - this is feasible due to the location of the crane and the size of
101950 - the pick.  If it is, progress should not be adversely affected.
101951 -
101952 - Dale indicated he has also discussed with Bill Clark of Swan Con-
101953 - struction, its schedule to begin removal of the barge landing, and as
101954 - a result, understands Swan does not intend to begin this work immedi-
101955 - ately.  Gracon intends to continue using the barge landing until Swan
101956 - begins work and this period may be sufficient to perform the major
101957 - tasks that depend on the barge landing.  Dale's primary concern is
101958 - loading the rubber dam for bay #2.  He feels this can likely be
101959 - accomplished within the next three (3) weeks, and that other arrange-
101960 - ments can then be made to land the rubber dam for bay #1 from the
101961 - Powerhouse area.
101962 -
101963 -
101964 -
101965 - DNRC Needs Rubber Dams Installed OB 880421
101966 -
101967 - Wayne explained DNRC needs the rubber dams installed in order to test
101968 - the generator by approximately 880421 because that is the date Voith
101969 - is scheduled to be ready to test.
101970 -
101971 - Failure to meet that date could result in lost revenue to the State.
101972 -
101973 - Kurt explained that the impact of the tie down testing and possible
101974 - remedial work would not necessarily delay testing.  The latter can
101975 - proceed and the generator could be placed on line, while corrections,
101976 - if any, are performed on the tie down system.
101977 -
101978 -
101979 - ..
101980 - Gracon Will Substantially Complete the Work by 880421
101981 - 
101982 - Clyde explained that DNRC is concerned about meeting completion
101983 - objectives and so asked for an adjournment for Gracon to develop a
101984 - cursory analysis based upon Dale's knowledge of the work and report
101985 - back on when Gracon feels it can achieve substantial completion.
101986 -
101987 - Following adjournment, a second meeting was convened at approximately
101988 - 1700. Gerry said Gracon feels they can realistically achieve substan-
101989 - tial completion to meet the objectives Wayne outlined, by 880421.  He
101990 - said Gracon will develop a formal schedule as requested by Clyde to
101991 - show the activities and resources Gracon will apply to meet this
101992 - objective, and Gracon will define the remaining activities to fully
101993 - complete the contract following "substantial completion."
101994 -
101995 -
1020 -
1021 -