CONTACTS 

SUBJECTS
Voith Contract Closeout
Engineering Management
Claims by Owner against
Tudor

0506 -    ..
0507 - Summary/Objective
0508 -
050801 - Walt expressed frustration in working with Tudor, including a
050802 - call today in which he felt the Tudor representative was not helpful.
050803 - He asked my opinion about terminating Tudor, and whether DNRC needs an
050804 - Engineer to close out the contract.
050805 -
050806 - I indicated DNRC should try to keep Tudor and develop a scope of work
050807 - and personnel assigned by Tudor who are experienced in contract
050808 - closeout of power plants, consistent with current situation of running
050809 - the plant.
050810 -
050811 -
050812 -
050813 -
050814 -
0509 -
0510 -
0511 - DNRC forced to be "Engineer"
0512 -   ..
051201 - It appears DNRC has been drawn into the role of quasi-Engineer
051202 - by Tudor's determination that the work was substantially complete, and
051203 - consequent moving away from the site where it was difficult to manage
051204 - problems that resulted from defects in the speed increaser.   Tudor
051205 - may have been led to make this determination by Voith's failure to
051206 - follow the contract provisions for the speed increaser approval.
051207 -
051208 -
051209 -  ..
051210 - Substantial Completion Issued under False Understanding
051211 -
051212 - Analysis on 911023 showing Voith admits its design and manufacture was
051213 - defective, establishes that the speed increaser is fundamentally
051214 - flawed. ref SDS 3 EL7F
051215 -
051216 - This new evidence places DNRC and Tudor on notice of an error which
051217 - may obviate the original determination that the plant was
051218 - substantially complete in that it was made under inaccurate and
051219 - incomplete information (deceit ?? - see again analysis on 911023,
051220 - ref SDS 3 EL9F), similar to the misinformation regarding tolerances to
051221 - install Voith equipment by Sletten (see ref SDS 1 0000
051222 - throughout but
051223 - especially line 070807 and 071232).  Whether or not Tudor would
051224 - support this position upon review of the record, it is clear a major
051225 - design and construct operation is needed.  This requires a bigger role
051226 - for an Engineer than merely standing on the sidelines commenting from
051227 - time to time on warranty matters that arise during operation of the
051228 - plant.
051229 -
0513 -
0514 -
0515 - Engineering Management
0516 - Contract Closeout Major Effort
0517 -
051701 - It further appears therefore that the speed increaser is not a war-
051702 - ranty matter under operations of the plant.  Rather it is a design and
051703 - construct matter which has never been performed by Voith according to
051704 - contract provisions.  This condition in conjunction with other major
051705 - closeout tasks requires engineering management of high caliber.
051706 -
051707 - This means figuring out the steps (schedule activities) needed to get
051708 - from here to there as was begun in the meeting on Oct 23, but which
051709 - has not been finished because DNRC staff do have time to do it and
051710 - possibly are not positioned to do it.
051711 -
051712 - The Engineer must direct the contractor to perform or recommend some-
051713 - one else who can and will.
051714 -
051715 - The Engineer should develop and advise DNRC on alternative solutions
051716 - and the cost and risk of same.
051717 -
051718 -
0518 -
0519 -
0520 - DNRC as "Engineer"
0521 -
052101 - DNRC does not have anyone on board with experience closing out power
052102 - plant projects.  Voith is very experienced dealing with agencies like
052103 - DNRC.  DNRC would be well served to have an experienced Engineer like
052104 - Tudor to manage the contract closeout, including approve Voith's work
052105 - and make the determinations called out in the contract.
052106 -
052107 - Use of an Engineer avoids claims by Voith that the delays in closing
052108 - out the contract resulted from the confusion and inexperience of DNRC
052109 - assuming the role of Engineer.  Up to now, this might be excused by
052110 - Voith's original "deceit."  Now that the answer is clear, the duty to
052111 - mitigate augurs toward re-involving the Engineer to do the job cor-
052112 - rectly.
052113 -
052114 -     Legal Considerations
052115 -
052116 -     DNRC should thoroughly research the legal implications for
052117 -     termination relative to responsibility for approving the work
052118 -     under the contract, before such step is taken.
052119 -
052120 -     There may be some legal constraints that prevent DNRC from acting
052121 -     as the "Engineer."
052122 -
052123 -
0522 -
0523 -
0524 - Termination of Tudor
0525 -
052501 - I indicated the advantages of keeping Tudor, if an adequate working
052502 - relationship can be developed.  If Tudor is not performing, DNRC
052503 - should endeavor to find out why and what can be done to improve the
052504 - situation, as presently contemplated.
052505 -
052506 - Suggested Walt hold off on any action until after the meeting with
052507 - Tudor in SF next week, and the following meeting the following week.
052508 -
052509 -    DNRC should seek to have Tudor assign someone it has with
052510 -    experience dealing with major power plant closeout problems and
052511 -    hopefully speed increaser difficulties.
052512 -
052513 -
052514 -