CONTACTS 
0201 - Dep Natrl Rscrs & Consvn           406 444 6699 fax 6721
020101 - Ms. Karen Barclay; Director
020102 - Mr. Wayne Wetzel
020103 - Mr. Norman Barnard; Hydro Power Engineer; Engineering Division
020104 - Ms. Sarah Ann Bond, Esquire
020105 - Department Counsel =406 444 6660; Legal Division
0202 - Tudor Engineering Company
020201 - Mr. Jeff Ghilardi
020202 - Resident Engineer =619 293 3340 fax 3347
0203 - Tudor Engineering Company
020301 - Mr. Clyde Earnest; Vice President =02 755 3111 or 4567

SUBJECTS
Sletten settlement
review for meeting

0504 -    ..
0505 - Summary/Objective
0506 -
050601 - Presented the Sletten contract CO and claim summary, ref OF 2 and 2.
050602 -
050603 - Developed settlement ideas and scheduled more work for tomorrow
050604 - morning before the meeting with Sletten.
050605 -
050606 - Need to make an adjustment in the spreadsheet.
050607 -
050608 -     [On 890322 DNRC agreed to pay $1.14M to settle all issues on
050609 -     recommendation by Tudor. ref SDS 4 8594]
050610 -
050611 -
0507 -
0508 -
0509 - Explained format of Change Order and Claim Summary
0510 -
051001 - The CO and Claim Summary has three parts:
051002 -
051003 -     1.  Summary of contract price and time status.
051004 -     2.  Summary of change orders 3 and 4.
051005 -     3.  Detail explanation of all change orders and pending claims.
051006 -
051007 - Part 2 reflects CO #3 and #4 were comprised of many distinct parts
051008 - that were submitted, reviewed and approved separately, comprising in
051009 - effect separate change orders.
051010 -
051011 -
051012 -  ..
051013 - Summary
051014 -
051015 - This is the first page only.  It shows the original contract amount
051016 - and summarizes adjustments for change orders and entitlement for
051017 - claims that have not yet been resolved by change orders.
051018 -
051019 - Unit price adjustments are summarized below the original contract
051020 - amount.  This accumulates the total for changes from the quantities of
051021 - pay items in the original bid, to the final quantities determined by
051022 - the Engineer that were required for the actual work.
051023 - ..
051024 - Delay damages charged to Sletten in the amount of $681K are
051025 - shown at the bottom of the Summary, and reflect the change in price
051026 - due to late completion based on the differenece between the actual
051027 - completion date and the orginal completion date adjusted for time
051028 - extensions for change orders and claims.
051029 -
051030 -        [On 880317 there was not enough time to review Sletten's CPM
051031 -        schedule presentation which claimed to show the contractor was
051032 -        delayed by DNRC. ref SDS 4 1656]
051033 -
051034 -      ..
051035 -     Final Contract Amount
051036 -
051037 -     The bottom of the Summary shows the following amounts...
051038 -
051039 -         Requested by the contractor.................... $9,340,875
051040 -
051041 -         Engineer believes is fair and reasonable
051042 -         price to pay the contractor for the work....... $6,112,407
051043 -
051044 -         Contractor could achieve through
051045 -         litigation if very successful.................. $6,529,825
051046 -
051047 -    [On 890322 Tudor recommended DNRC pay $7.25M and this was done...
051048 -    ref SDS 4 8594]
051049 -
051050 -
051051 -
051052 - Column Fields
051053 -
051054 - All three parts of the COCS use a common set of column fields to
051055 - organize the presentation of contract price adjustments for each
051056 - change order and claim:  Cost, Time and Date.
051057 -
051058 -
051059 - Cost Field
051060 -
051061 - Cost is the most significant field.  It incorporates the Time field at
051062 - the end of the calculation to determine the Final Contract Amount.
051063 -
051064 - The Cost field is comprised of three components, explained thus:
051065 -
051066 - Contractor Request
051067 -
051068 - Amount of contractor's claim.
051069 -
051070 -
051071 - RE Change Order
051072 -
051073 - This represents the Engineer's best judgement as to the time and price
051074 - adjustment that fairly reflects the reasonable outlay or reduction in
051075 - cost for each change in the scope of the work.
051076 -
051077 - The amounts shown may represent the actual amount of a change order,
051078 - the amount that has been approved for change order, but not yet
051079 - issued, or the amount expected by the Engineer to be approved after
051080 - submittal of data by the contractor.
051081 -
051082 - For claims, this column represents the Engineer's opinion of the
051083 - amount owed by the State based upon the contractor's claim report and
051084 - the Engineer's knowledge of the work.  The Engineer is prepared to
051085 - write a change order for such amounts upon acceptance by the
051086 - contractor and DNRC.
051087 -
051088 -
051089 - Owner Exposure
051090 -
051091 - This column shows the Engineer's estimate of change from the RE Change
051092 - Order column that could occur in the event the matter is litigated.
051093 - This takes into account the potential for additional evidence that
051094 - might be offered in litigation and differences in viewing the facts,
051095 - the contract and the law that can occur in formal dispute resolution.
051096 -
051097 -
0511 -
0512 -
0513 - Corrections
0514 -
051401 - In reviewing the document, Clyde and Jeff noticed some changes in the
051402 - spreadsheet.  Looks like the Unit Price adjustments were not included
051403 - in the summation for current contract amount.
051404 -
051405 - Need to make this change in format.
051406 -
051407 -
0515 -
0516 -
0517 - Settlement Position Devleopment
0518 -
051801 - The Director suggested we prepare an offer to settle specific disputed
051802 - change order matters.
051803 -
051804 - Sarah and I did this, and will have a summary to offer in the morning.
051805 - It results in an offer of approximately $60,000 for non-time oriented
051806 - matters.
051807 -
051808 -
051809 - Delay Damages
051810 -
051811 - The Director also requested an analysis of DNRC offer to settle
051812 - balance of all contract matters for a specific date.
051813 -
051814 - Clyde and Jeff evaluated this and will do more work tomorrow before
051815 - meeting with the contractor at 0930.  Clyde entered some valuations on
051816 - the bulletin board showing DNRC's actual delay damages approximate the
051817 - contract presumed damage provisions.
051818 -
051819 -
051820 - Settlement Offer
051821 -
051822 - Wayne proposed offering each contractor ~$225 000 to settle all
051823 - claims.  It was not clear what the baseline would be for such offer.
051824 -
051825 - I recommended that such offers should be in the context of contract
051826 - requirements.  If we feel certain of Sletten's claims have merit which
051827 - has not yet been established by Sletten, then considera- tion could be
051828 - given to payment of same absent substantiation in order to save both
051829 - sides expense.
051830 -
051831 -
0519 -
0520 -

SUBJECTS
Project completion Schedule

0604 - Received this today.
0605 -
060501 - Sarah indicated DNRC intends to present it tomorrow.  I recommended
060502 - against this because there will not be enough time for a detailed
060503 - analysis and the other parties are needed for an effective discussion.
060504 -
060505 - Sarah said DNRC feels Bob Sletten is not informed about the schedule.
060506 - I pointed out he is able to inform himself to the extent he finds it
060507 - necessary on scheduling matters.
060508 -
060509 - Actually upon consideration, it may be helpful to have a preliminary
060510 - review with Sletten on this tomorrow to permit consideration over the
060511 - weekend toward offering constructive ideas on Monday.
060512 -
060513 -
0606 -