CONTACTS 

SUBJECTS
Claims by State Against Voith
Support Tudor Contract, Fast Track
Closeout Letter of 891005, Close out of contract
Contract Price, Final Determination
Claims by Owner against Tudor, Punch List, Noise/Vibration
Determine State Claims, Change Orders & Claims

1108 -    ..
1109 - Summary/Objective
1110 -
111001 - This is to analyse Tudor's letter, ref DRP 1, which gives the Project
111002 - Engineer's recommendations on closing out the contract.  Discusses
111003 - DNRC's request, ref DIT 1, that Tudor support it's position in ref DRP
111004 - 1.
111005 -
111006 - It also discussed Norm Barnard's letter, ref DIP 1, which requests
111007 - Tudor to advise DNRC on payments to Voith, and to approve Voith
111008 - corrective work.
111009 -
111010 -
111011 -
1111 -
1112 - Received DRT 1
1113 -
111301 - Initially I received today Tudor's letter of March 14, 1990, which is
111302 - an overview of job status.
111303 -
111304 -
111305 -  ..
111306 - Tudor to Recommend Corrections
111307 - for Speed Increaser
111308 - ------------------------------
111309 - Tudor notes the noise problem is continuing and that it will submit
111310 - recommendations after Voith submits its recommendations.
111311 -
111312 - In the analysis below, this letter is used to show Tudor's position on
111313 - contract cost status. ref SDS 0 4345
111314 -
111315 -      [On 911010 discussed scope of impact. ref SDS 8 0388]
111316 -
111317 -      [On 911015 reviewed collateral damage issues. ref SDS 9 0499]
111318 -
111319 -      [On 911022 Voith tried a new design that was defective.
111320 -      ref SDS 10 3088]
111321 -
111322 -      [On 911026 bolting was defective on SI. ref SDS 11 0001]
111323 -
111324 -      [On 911027 no design for bolting. ref SDS 12 0001]
111325 -
111326 -      [On 911114 discovered Tudor waived submittal requirements on
111327 -      Voith work, including Speed Increaser. ref SDS 13 3843]
111328 -
111329 -      [On 911116 confirmed Voith failed to perform engineering review
111330 -      requirements and Tudor failed to hold Voith accountable.
111331 -      ref SDS 14 4912]
111332 -
111333 -      [On 921023 Voith record failure to perform. ref SDS 15 2829]
111334 -
111335 -
111336 -
111337 -
1114 -
1115 -
1116 - Analysis
1117 -
111701 - This letter responds to DNRC letter of 890921.  It contains an
111702 - enclosure with figures which appear to be derived from Change Order
111703 - Log for the Sletten contract, ref OF 1, summarized by ref OF 2.
111704 -
111705 -
111706 - History of CO Log
111707 -
111708 - Ref OF 3 is a computer spreadsheet that was initially completed on
111709 - 890316.  It summarizes Sletten's claims and the Engineer's
111710 - determinations on each claim.
111711 -
111712 - A printed version was submitted on 890316 to Tudor and DNRC during a
111713 - meeting to prepare for a settlement meeting with Sletten. ref SDS 1
111714 - There was an error in the document which was corrected together with
111715 - adding a format improvement early in the morning of 890317, after I
111716 - returned from the meeting in Helena, ref SDS 2 0493.  A corrected
111717 - version of the ASCII text file was printed and faxed to DNRC for a
111718 - settlement meeting with Sletten on 890317, per ref SDS 4
111719 -
111720 -
111721 -  ..
111722 - Voith Contract Closeout Price
111723 -
111724 - Norm Barnard wrote to Tudor on Sep 19, 1989, ref DIP 1, and requested
111725 - that Tudor advise DNRC on closing out the Voith contract re claims
111726 - and damages.
111727 -
111728 - Norm notes DNRC is holding payments #16 and #17 plus escrow securities
111729 - for retention.  DNRC estimated presumed damages at $732K and
111730 - backcharges from the Seltten contract of about $1.3M.
111731 -
111732 -
111733 -    Tudor Failure to Perform
111734 -
111735 -    Norm indicates that Tudor did not submit, as promised by Roberto
111736 -    Iniguez, Tudor's determinations of change orders and claims
111737 -    summary.
111738 -
111739 -
111740 -    Voith performing Unauthorized Changes
111741 -
111742 -    Norm cites a report that Voith intended to have a crew on site to
111743 -    weld pit pier I beams to reduce the speed increaser noise problem.
111744 -    Voith had not submitted any plans nor obtained approval of Tudor.
111745 -
111746 -
111747 -
111748 - Application of CO Log
111749 -
111750 - Tudor responded to DNRC with Clyde's 891005 letter, ref DRP 1.
111751 -
111752 - Clyde refers in his analysis to the "...Settlement Negotiations
111753 - 3/16/89," indicating he used the Change Order Log submitted at the
111754 - meeting on 890316, rather than the corrected version faxed to DNRC the
111755 - following morning, ref SDS 3 line 25. Since the revisions to the
111756 - Change Order Log involved only unit price adjustments in Sletten
111757 - payment, they appear not to have any impact on the Voith contract at
111758 - issue now.
111759 -
111760 -
111761 - Column A, DNRC Claims
111762 -
111763 - Clyde says in a footnote of his analysis that column A is taken from
111764 - an 890921 DNRC letter which apparently sets out DNRC's claim.
111765 -
111766 - It appears that DNRC made claim against Voith for some of the items
111767 - Sletten had claimed against DNRC, as shown in the CO Log, ref OF 2
111768 - line 43.  It is not clear how DNRC determined which of Sletten's
111769 - claims are chargeable to Voith.  Presumably this would be a
111770 - determination by the Engineer which is the purpose of Tudor's 890921
111771 - letter.  Such determinations are not set out in the CO Log, ref OF 1
111772 - line 15, or at best there is only slight indication of same.
111773 -
111774 -
111775 -     Additionally, since Sletten never offered substantiation of its
111776 -     claims, what basis would DNRC have to maintain Voith had
111777 -     liability. Does DNRC have records that Sletten did certain work
111778 -     chargeable to Voith and that the fair and reasonable cost of such
111779 -     work was "X?"
111780 -
111781 - DNRC's 890921 letter does not support the development of its claims
111782 - in that it merely cites a total amount of approx. $1.3M, ref DIP 1.
111783 -
111784 -
111785 - Column B, Engineer Determination
111786 -
111787 - Clyde has used the Engineer's evaluation of each Sletten claim, as an
111788 - appropriate amount to charge Voith, and preliminarily this seems
111789 - correct for the following reason.
111790 -
111791 - Since Sletten and DNRC settled on a lump basis, it is not immediately
111792 - clear how DNRC can seek to recover the full amount alleged by Sletten
111793 - on individual claim items, since no analysis was ever done to
111794 - reconcile the difference between specific claimed amounts and a
111795 - portion of the final settlement offer.  One might pro-rate the
111796 - difference between each settlement amount, but who is to say that the
111797 - settlement was not actually struck on items that had nothing to do
111798 - with Voith's work, like the cofferdam, differing rock, etc.  Of course
111799 - if that were true, it would seem the amounts chargeable to Voith would
111800 - be more likely to remain at the higher end.  On the other hand, the
111801 - settlement may have been that Sletten's claims against Voith were in
111802 - fact without merit, and so the Engineer's amounts are correct.
111803 -
111804 - I think at this juncture no detailed analysis has been done on these
111805 - amounts, except for the cursory analysis shown in ref OF 1, which for
111806 - the most part reflect only Tudor's (in this case Jeff Ghilardi's)
111807 - asserted position.
111808 -
111809 -
111810 - No Substantiation
111811 -
111812 - Tudor's figures in column B have very little if any substantiation. So
111813 - the record shows oppossing positions neither of which are backed up by
111814 - anything, and the parties then settled, essentially after barking at
111815 - each other.
111816 -
111817 - On the other hand, it may turn out that researching the record will
111818 - show some backup for Tudor's position.  Right now I don't think such
111819 - exists, because I recall the intent of the CO log was to set out in
111820 - summary form the evidence presented.  If that turns out to be incor-
111821 - rect and there is substantiation for Tudor's position, then DNRC is in
111822 - a little better shape, because it has something it can submit that
111823 - requires Voith to refute.
111824 -
111825 - If the CO log does reflect the available evidence, then this record
111826 - appears to make it difficult to seek recovery from Voith on the
111827 - Sletten claim and change order items.
111828 -
111829 - If DNRC did not want to pay Tudor to make an analysis, then it would
111830 - seem the amounts at issue are not significant enough to warrant action
111831 - to obtain recovery from Voith.  In other words, even though DNRC may
111832 - disagree with Tudor's position as shown in column B, there appears to
111833 - be no basis to challenge it.
111834 -
111835 - Then the question becomes can evidence be assembled fairly readily,
111836 - apart from what Tudor has done, to support DNRC's claims.  With
111837 - respect to those claims derived from the Sletten contract, it appears
111838 - DNRC would have to request from Sletten the support that was never
111839 - offered in the first place, only now the expense for assembling it and
111840 - presenting it at a hearing, may have to be borne by DNRC, instead of
111841 - Sletten.
111842 -
111843 -
111844 -
111845 - Tudor Position Not Substantiated
111846 - Column C, Voith Not Responsible  Due to "Fast Track" Design
111847 -
111848 - Colunmn C shows amounts from Column B which Tudor contends should not
111849 - be charged to Voith.  Tudor states on page 1 beginning at para 3:
111850 -
111851 -   The rationale ...lies in part on the concept of equity in dealing
111852 -   with revisions to the Sletten contract required to accomodate the
111853 -   Voith equipment.  Many of these revisions are not seen as a Voith
111854 -   contractual responsibility, but were caused by the "fast track"
111855 -   design and construct mode we adopted once the decision was made to
111856 -   proceed with the project.
111857 -
111858 -   ... Voith must be allowed to incorporate details as their design
111859 -   progresses. ... the civil contract did not detail the machine
111860 -   interfaces exactly.  Unit prices were put in the civil bid sheet
111861 -   with estimated quantities for this specific reason so that the
111862 -   revised "Issued for Construction" drawings could be largely
111863 -   incorporated by unit price quantity adjustments at prices set by
111864 -   competitive bid.
111865 -
111866 -   Using this concept, it is recommended that a total of $102,114 be
111867 -   held for backcharges against Voith as detailed on the enclosed
111868 -   spread sheet in column D.
111869 -
111870 - Tudor offers no explanation to support inclusion or exclusion of any
111871 - of the items in column C, under the above criteria.
111872 -
111873 -
111874 - Pit Pier
111875 -
111876 - While this defect pervades the analysis, it is particularly glaring on
111877 - the item titled "Pit Pier-One Piece."  The Engineer found Sletten was
111878 - entitled to $65,778, but that Voith was liable for only $29,650 of
111879 - that amount.  There is no explanation in the Tudor document or in ref
111880 - OF 1, that reconciles these amounts.  Since this is the only item
111881 - where the Engineer made such an adjustment, one would expect an
111882 - explanation to have been included in the letter, particularly for such
111883 - a large adjustment.
111884 -
111885 -    Actually, line 789 in ref OF 1, shows the amount approved by Tudor
111886 -    of $29,650 is for "handling increased weight of pit pier."
111887 -
111888 - The remainder of the approved extra expense is for CAD welding and
111889 - time extension.  Why isn't this portion also recoverable from Voith?
111890 -
111891 - Tudor should indicate why the increased handling should be recoverable
111892 - from Voith.  It is not enough simply to say so.
111893 -
111894 -    DNRC requested support information from Tudor in its letter of Nov
111895 -    29, 1990, ref DIT 1.  Evidently Tudor has not responded.
111896 -
111897 -    Jeff's Opinion
111898 -
111899 -    Jeff feels the cad welding and time extension expense that was
111900 -    approved for payment to Sletten under the Pit Pier change order, is
111901 -    attributable to Voith in the same manner as the handling costs that
111902 -    Tudor has approved.
111903 -
111904 -
111905 - Review Tudor files for Substantiation
111906 - =====================================
111907 - In order to make a claim on specific items, I guess we need to check
111908 - Tudor's Change Order and Claim files to look for explanations of
111909 - amounts shown in the CO log.
111910 -
111911 -
111912 -
1120 -

SUBJECTS
Claims by State Against Voith
Close out of contract
Contract Price, Final Determination
Punch List
Speed Increaser Defects, Claims
Notice of Defects/Failure
Contract closeouts, Turbine/Generator

1510 -
151001 - Tudor writes on March 14, 1990, to Wayne Wetzel of DNRC on status of
151002 - punch list and project closeout.  DNRC responds requesting Tudor
151003 - support its position on Nov 29, 1990, ref DIT 1.
151004 -
151005 - Letter includes an explanation of all aspects of the Voith contract
151006 - price relating original price to changes and claims by both sides.
151007 -
151008 - Tudor indicates at this time it will provide DNRC its recommendations
151009 - on corrective actions.
151010 -
151011 -     What was Tudor's recommendations on corrections to speed increasr?
151012 -
151013 -
151014 -
1511 -