CONTACTS 
0201 - Dep Natrl Rscrs & Consvn           406 444 6699 fax 6721
020101 - Mr. Wayne Wetzel
020102 - Mr. Walt Anderson; Hydro Power Section Supervisor =406 444 6659
020103 - Engineering Bureau  fax 406 444 0533
020104 - Ms. Sarah Ann Bond, Esquire
020105 - Department Counsel =406 444 6660; Legal Division

SUBJECTS
Voith Contract Closeout, Engineering Management, 911011
Submit Shop Drawings for approval, review
Welch Management Method
Case Study Broadwater

0806 -    ..
0807 - Summary/Objective
0808 -
080801 - This meeting considered options for getting Voith to complete submit-
080802 - tal of shop drawings in light of its refusal to do so, as set out in
080803 - Voith's letters, ref DRP 2 - 6.
080804 -
080805 - Decided to call Voith this morning and propose a meeting of technical
080806 - experts to expedite review and approval of speed increaser.
080807 -
080808 - Also discussed response to Tudor's Dec 11, 1991 letter, ref DRP 7,
080809 - and DNRC's proposed response, ref DIT 1.
080810 -
080811 -  ..
0809 -
0810 -
0811 - Discussion
0812 -
081201 - Consideration was given to the steps DNRC can take in response to
081202 - Voith's contentions that DNRC has delayed Voith by inadequate manage-
081203 - ment of Voith's submittals, as discussed at ref SDS 3 and 3.
081204 -
081205 - Walt feels DNRC has made good progress in obtaining information from
081206 - Voith.  He proposed that DNRC write to Geartech to request a written
081207 - opinion on any differences between what Voith has supplied or proposed
081208 - and what is required by the specification or industry practice.
081209 -
081210 -
081211 -     Progress is Improved but Not Adequate
081212 -
081213 -     The record was considered with respect to Voith's submission of
081214 -     information within the past month which it promised to submit
081215 -     within 60 days after the Sep 3, 1991 Agreement, and which it was
081216 -     required to submit prior to February, 1988.
081217 -
081218 -     Voith continues to withhold complete shop drawings for the speed
081219 -     increaser, and has only submitted information on narrow aspects of
081220 -     the speed increaser which in turn have been found by DNRC's
081221 -     consultants to be marginal at best.  This record does not provide
081222 -     confidence that Voith's progress will meet DNRC's objective to get
081223 -     a speed increaser that adequately performs its task.
081224 -
081225 -
081226 -     Expert on Speed Increaser
081227 -
081228 -     The idea was raised to call Geartech and ask if it will review the
081229 -     full set of Voith shop drawings for the speed increaser and give
081230 -     DNRC a written opinion on the acceptability of this system.  If
081231 -     Geartech says it will do this DNRC should ask Geartech to fax its
081232 -     credentials showing where it has done similar work and for whom,
081233 -     and submit samples of prior such opinions.
081234 -
081235 -     If Geartech declines to make a written opinion on the complete
081236 -     speed increaser, DNRC should seek to hire someone who can do this.
081237 -
081238 -
081239 -     Hiring an Expert (see ref SDS 7)
081240 -
081241 -     1.  Geartech can be asked for names of companies or individuals
081242 -         who might have this expertise.
081243 -
081244 -     2.  The American Gear Manufacturers Association can be called.
081245 -
081246 -     3.  Peter Lamb might be asked for suggestions.
081247 -
081248 -     4.  Philadelphia Gear could be called for names of former employes
081249 -         who might be retired or in private practice who are qualified
081250 -         to examine the shop drawings for overall acceptability.
081251 - ..
081252 - Walt feels Welch is asking DNRC to move too fast and is not
081253 - qualified to discuss engineering submittals because he is not an
081254 - engineer.
081255 -
081256 - On 880921 Tudor noticed that Welch was asking engineering management
081257 - to move too fast. ref SDS 1 3564  On 890324 Welch was terminated
081258 - because the methods were "overkill.", ref SDS 2 6894,
081259 -
081260 -         [On 920110 feelings were hurt. ref SDS 8 0884]
081261 -
081262 -     It was recommended that DNRC develop analysis or obtain an opinion
081263 -     from someone in whom DNRC has confidence with respect to contract
081264 -     requirements for speed increaser submittals.  This will assist the
081265 -     Department in deciding how quickly Voith should respond and guide
081266 -     DNRC's decisions on Voith's compliance.
081267 -
081268 -     DNRC's letter of Nov 21, 1991 to Voith expressed an interest in
081269 -     ensuring the speed increaser is adequately constructed.  It is not
081270 -     clear how the contract could be interpreted to mean that DNRC is
081271 -     not entitled to reasonable proof thereof.  The failures of the
081272 -     unit would seem to increase the need for a prudent owner to be
081273 -     vigilant and thorough in approving such a vital part of the work
081274 -     on which a portion of its revenue depends.  Voith has begun to
081275 -     respond to its burden of proof through recent letters and may
081276 -     respond fully, if pressed to do so.
081277 -
081278 -     DNRC therefore needs to position itself with a qualified expert to
081279 -     make the determination which DNRC has indicated it desires to
081280 -     make.
081281 -
081282 -
081283 - Walt was concerned that DNRC's expert engineers may not be prepared
081284 - for a meeting in January, 1992 with Voith's engineers.
081285 -
081286 -
081287 -     Proceed or Wait to Meet
081288 -
081289 -     Waiting until all preparation is complete, runs the risk that the
081290 -     proposed meeting may not be timely.  In such case, Voith's criti-
081291 -     cism of DNRC's project management might be given greater weight.
081292 -     Proceeding to schedule a meeting does not bar nor inhibit continu-
081293 -     ed preparation during the pendency of the proposed meeting.
081294 -
081295 -     Meet Where the Information is
081296 -
081297 -     Setting a meeting date places Voith on notice that both it and
081298 -     DNRC must act to prepare for same and that putting the meeting at
081299 -     the location of the information at issue, will render less
081300 -     credible arguments that mis-communications delayed Voith.
081301 -
081302 -     Forcing an end to the paper trail game may shake loose bottled up
081303 -     information DNRC has been seeking through normal channels, e.g.
081304 -     finite element analysis.
081305 -
081306 -
081307 - Walt feels the contract specification is not sufficiently detailed on
081308 - the speed increaser and that DNRC has nearly all of the submittals
081309 - required to show the speed increaser complies with the contract.
081310 -
081311 -     Consideration was given to DNRC positioning itself as an Owner who
081312 -     properly relied on the advice of expert consultants for interpret-
081313 -     ing highly technical contract specifications.   Under this stra-
081314 -     tegy, DNRC would endeavor to provide its consultants with the
081315 -     information they need to proffer a written opinion on the adequacy
081316 -     of the speed increaser and other pending work.  After the written
081317 -     opinions are submitted, DNRC can decide how to proceed on the
081318 -     basis of the record.
081319 -
081320 -
081321 - Walt proposed asking Voith what they want from DNRC as additional
081322 - inducement to perform their contract.
081323 -
081324 -     There was discussion of DNRC's previous grants of additional
081325 -     inducements to cause Voith to perform its contract.  The current
081326 -     status of the project indicates that such initiatives have not
081327 -     worked very well.  The flurry of activity from Voith, ref DRP 2 -
081328 -     6, within the past week indicates that DNRC's letter of Nov 21,
081329 -     1991, ref DIP 1, demanding that Voith perform its contract has
081330 -     induced greater action by Voith.  DNRC may be better positioned to
081331 -     maintain its demand that Voith perform within its existing con-
081332 -     tract rather than offer added inducements at this time.
081333 -
081334 -     Once the facts are developed in the technical meetings then DNRC
081335 -     can decide as a business matter what offers and/or demands to make
081336 -     to Voith with respect to replacing the speed increaser, seeking
081337 -     price adjustments or extending warranties to make up for any short
081338 -     fall in Voith's performance of speed increaser work.
081339 -
081340 -     As of now, it would not seem that DNRC is positioned to do this
081341 -     because the technical positions are not established.
081342 -
081343 -
081344 -
081345 - It was decided to have a conference call with Greg Snyder this
081346 - morning to suggest and/or demand a meeting on technical issues in
081347 - Germany at Renk's office or in York, per ref SDS 5 line 091428.
081348 -
081349 -
081350 -
0814 -

SUBJECTS
Tudor Agreement, Termination

0904 - Summary
0905 -
090501 - Consideration was given to responding to Tudor's letter of Dec 11,
090502 - 1991, ref DRP 7.  DNRC's proposed response, ref DIT 1, was reviewed in
090503 - light of ref SDS 4.
090504 -
090505 - Discussion on scope of response with respect to demanding Tudor
090506 - submit the actual documents it claims show Voith complied with the SI
090507 - contract requirements.
090508 -
090509 -
0906 -
0907 -