CONTACTS 

SUBJECTS
Voith; State Claims
Contract Review
Contract v. Warranty, 9111112
Failures to Perform Submittals
Legal outside counsel
Submittals, complete review, 911118
Case Study Broadwater
Submittal Requirements on Voith Work Waived by Tudor

0910 -    ..
0911 - Summary/Objective
0912 -
091201 - Encountered more facts today in contract review that appear to
091202 - support recovery for DNRC under theories developed in the Preliminary
091203 - Claim Analysis, ref OF 2, and shed more light on the speed increaser
091204 - situation.
091205 -
091206 -
091207 -
0913 -
0914 -
0915 - Progress
0916 -
091601 -  ..
091602 - Tudor Issued Improper CO Waiving Submittals, Start-Up Engineer
091603 -
091604 - It appears Tudor acceeded to Voith post-bid requests to waive
091605 - submittal procedures (without change order), and then approved
091606 - elimination of an "independent" start-up Engineer (through change
091607 - order) whose duty was to stop plant operations due to equipment
091608 - difficulties until corrected.
091609 -
091610 - I believe these are related matters.
091611 -
091612 -         [On 911116 confirmed Voith did not perform shop drawing
091613 -         requirement, and Tudor failed to perform its engineering
091614 -         management duties. ref SDS 5 4912]
091615 -
091616 -         [On 920118 full record of Voith failures. ref SDS 6 2829
091617 -
091618 -      ..
091619 -     What else is Wrong?
091620 -
091621 -     A question that flows from this record is what other liberties
091622 -     Voith took with the specifications that portend future equipment
091623 -     failures?  It appears that none of Voith's equipment has been
091624 -     reviewed and approved for compliance with the contract, so it is
091625 -     an open question as to what they constructed at Broadwater.
091626 -
091627 -     This makes the engineering review recommended on 911009 critical
091628 -     to ensure DNRC receives adequate contract services from Voith,
091629 -     before Voith's contract is accepted. ref SDS 1 3333
091630 -
091631 -         [On 920210 DNRC staff overwhelmed by effort to fix mistakes by
091632 -         Voith and Tudor. ref SDS 7 8400]
091633 -
091634 -
091635 -
0917 -
0918 -
0919 - Supplemental Legal Review
0920 -
092001 - It might be helpful for DNRC to consult outside counsel who specialize
092002 - in public works contract law for an opinion on its best course.  May-
092003 - be Peter Lamb is adequate, but a written opinion should be obtained,
092004 - not just conversation.
092005 -
092006 - I suggest the following names for consideration:
092007 -
092008 -      Dave Buoncristiani, Esq.              Ms. Anne M. Bevington, Esquire
092009 -      Thelen, Marrin, Johnson & Bridges     Knecht, Haley, Lawrence & Smith
092010 -      2 Embarcaderro Center                 525 Market Street, 36th Floor
092011 -      San Francisco, CA  94111              San Francisco, CA  94105
092012 -      415 392 6320                          415 896 6930 fax 0818
092013 -
092014 -      Mr.  William H. McInerney, Esq.
092015 -      McInerney & Dillon, Law Offices
092016 -      1 Kaiser Plaza
092017 -      Oakland, CA 94612
092018 -      415 465 7100
092019 -
092020 - Thelen, Marrin, Johnson & Bridges specializes in construction contract
092021 - law.  I have no knowledge of their experience with hydro projects, but
092022 - I know Dave Buoncristiani to be a very competent and diligent attorney
092023 - for owner's and to have a good understanding of contract law.
092024 -
092025 - I have done appellate work with Ann Bevington on the type of contract
092026 - issues that appear to be involved in DNRC's case.  The KHL&S firm
092027 - specializes in public works construction litigation.
092028 -
092029 - I have seen Bill McInerney represent client's in construction
092030 - arbitrations and reviewed his work product as an arbitrator, and know
092031 - of his reputation to be very competent in these types of cases.
092032 -
092033 -
0921 -
0922 -
0923 - Post-Award Meeting Minutes Nov 4, 1987
0924 -
092401 - We need the supplementary meeting notes cited by Voith as approving
092402 - the use of a spur gear in lieu of a helical gear.  This was a
092403 - post-award meeting that is not part of contract document record, as
092404 - are the pre-award meeting minutes.
092405 -
092406 -     Walt furnished a binder with some good stuff, but it does not
092407 -     contain the notes of the Nov 4, 1987, meeting, which Voith
092408 -     submitted on July 14, 1988, to explain Tudor's contention that the
092409 -     speed increaser was an unauthorized substitution.
092410 -
092411 -          [actually, it turned out on Nov 15, 1991, I found the Nov 4,
092412 -          1987 meeting notes at the back of the binder - they will be
092413 -          incorporated into the Broadwater document record]
092414 -
092415 -     The binder contains pre-bid and post-bid correspondence on bid
092416 -     scope and what I would characterize as inappropriate changes to
092417 -     contract requirements.
092418 -
092419 - These Nov 4, 1987 meeting notes further indicate that Voith and Tudor
092420 - recognized the speed increaser shop drawings required Tudor's review.
092421 -
092422 -
092423 -
0925 -
0926 -

SUBJECTS
Voith; State Claims
Contract Review
As built drawings
Bid Documents, Plans & Specs
Contract Review

1208 -
120801 - The Agreement section in the conformed Voith contract document has
120802 - para 7 which cites bid drawings that are not part of the conformed
120803 - specification (at least the one I have).
120804 -
120805 -     Need the original bid submitted by Voith, and the plans and
120806 -     specifications relating to it.  Possibly Voith was required to
120807 -     submit a full set of these as its bid, and so it is available
120808 -     intact somewhere within DNRC.
120809 -
120810 -     Walt supplied a non-conformed bid set, but it has handwritten
120811 -     entries that suggest someone may have been contemplating changes.
120812 -
120813 -          Several pages of the speed increaser specification are
120814 -          missing.
120815 -
120816 -          Other pages throughout the document are also missing.
120817 -
120818 -
120819 -     We need to know the basis of Voith's bid.  This means we need a
120820 -     set of exactly what they had when their bid was submitted.
120821 -
120822 -
120823 - Need Project Record Set of Documents
120824 -
120825 - DNRC should create a record set of Voith contract documents.  One will
120826 - be the original bid and the other will be the as-built set.
120827 -
120828 - It would help to have such sets available for the other contracts on
120829 - Broadwater as well.
120830 -
120831 -     All such documents should be maintained in a secure place where as
120832 -     a matter of policy and practice they cannot be disturbed, but can
120833 -     be reviewed when necessary.  Walt has indicated DNRC can do this,
120834 -     and should be done as soon as possible.
120835 -
120836 -
120837 - Sarah suggested today that I draft a letter for Wayne to send
120838 - requesting Tudor provide these records.
120839 -
120840 -
120841 -  ..
1209 -
1210 -
1211 - 1710 Discussion with Walt
1212 -
121201 - Missing As-builts
121202 -
121203 - Walt came by and advised he has determined that DNRC does not have the
121204 - as-builts for the Sletten contract.  He has written to Tudor on this
121205 - and they have indicated these documents will be provided.
121206 -
121207 - This needs to be followed up.
121208 -
121209 -
121210 -
121211 -
1213 -

SUBJECTS
Voith; State Claims
Contract Review
Disclose alternate design for speed increaser
Special Startup Test Engineer

1507 - Objective
1508 -
150801 - Contract Review Findings
150802 -
150803 - Walt asked about the progress of my contract review.
150804 -
150805 - I explained the indications in the documents that Tudor added the
150806 - "Alternate" speed increaser option in response to an inquiry from one
150807 - bidder who contended its design would be "...equivalent to the double
150808 - helical type" specified.  There is nothing in the record indicating
150809 - Tudor added this provision to save DNRC money to accept a speed
150810 - increaser of lessor capability than that in the original
150811 - specification.
150812 -
150813 - There is also nothing in the record that indicates Voith was or should
150814 - be excused from the provisions of GC 6.7.2 and 6.7.3.
150815 -
150816 - It further appears that Tudor and Voith mutually "deferred and
150817 - deleted" submittal requirements and that Tudor improperly permitted a
150818 - change order to eliminate the independent startup engineer, and then
150819 - failed to exercise the level of diligence in startup oversight
150820 - appropriate to a non-independent startup engineer.
150821 -
150822 -
150823 -
1509 -

SUBJECTS
Voith; State Claims
Terminate Voith, 911119

1605 -
160501 - Walt said he is writing a letter to Voith to force them to perform
160502 - their work, including submit the shop drawings for the original speed
160503 - increaser.  He asked my view about terminating Voith.
160504 -
160505 - Initially, I emphasized that DNRC should have Tudor direct Voith to
160506 - perform, or if Tudor is terminated, the new Engineer should do this.
160507 -
160508 - Walt indicated he feels DNRC cannot wait for the administrative
160509 - period required to get an Engineer.
160510 -
160511 - I suggested that DNRC consider sending a notice along the following
160512 - lines:
160513 -
160514 -     DNRC believes the speed increaser is an unauthorized substitution
160515 -     under GC 6.7.2 and 6.7.3, as represented by Tudor's resident
160516 -     engineer.  Voith's failure to submit requested shop drawings
160517 -     supports DNRC's understanding that the speed increaser does not
160518 -     meet the contract requirement.  DNRC is prepared to work with
160519 -     Voith to avoid undue expense to both sides, but will require
160520 -     timely action by Voith.
160521 -
160522 -     Voith should therefore submit within 10 days its schedule for
160523 -     design, engineering review, manufacturer and installation to
160524 -     either exchange the speed increaser for one that meets the
160525 -     specifications or to demonstrate that what Voith has installed can
160526 -     be fixed to meet the objectives of the contract for this much of
160527 -     the work.  If Voith wishes to offer extended warranty this might
160528 -     be a means to mitigate damages.
160529 -
160530 -
160531 - If Voith fails to perform this request, DNRC should then send an
160532 - additional notice that if Voith does not perform as requested within 7
160533 - days it will be terminated and charged any extra expense required to
160534 - correct its defective work and failure to perform.  A copy of this
160535 - notice should go to Voith's bonding company.
160536 -
160537 -       Of course the downside to this is that there is much more to fix
160538 -       than just the speed increaser.  Getting someone else to correct
160539 -       all of the punch list items and to review the work Voith
160540 -       installed for conformance with the contract will be very
160541 -       expensive.  I suppose one prayer in the arbitration will be to
160542 -       direct Voith to submit the shop drawings on the entire project
160543 -       it has not submitted, so a review can be made.
160544 -
160545 - Walt indicated he will circulate his draft for comments before
160546 - sending it.
160547 -
160548 -
160549 -
1606 -