THE WELCH COMPANY
440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700
S U M M A R Y
DIARY: December 13, 1991 09:38 AM Friday;
Meeting with Wayne, Walt and Sarah on Voith contract; Tudor termination.
.....Progress is Improved but Not Adequate
.....Expert on Speed Increaser
.....Hiring an Expert (see ref SDS 7)
.....Proceed or Wait to Meet
.....Meet Where the Information is
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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
Voith Contract Closeout, Engineering Management, 911011
Submit Shop Drawings for approval, review
Welch Management Method
Case Study Broadwater
0806 - ..
0807 - Summary/Objective
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.
080805 - Decided to call Voith this morning and propose a meeting of technical
080806 - experts to expedite review and approval of speed increaser.
080808 - Also discussed response to Tudor's Dec 11, 1991 letter, ref DRP 7,
080809 - and DNRC's proposed response, ref DIT 1.
080811 - ..
0811 - Discussion
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.
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.
081211 - Progress is Improved but Not Adequate
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.
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.
081226 - Expert on Speed Increaser
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.
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.
081239 - Hiring an Expert (see ref SDS 7)
081241 - 1. Geartech can be asked for names of companies or individuals
081242 - who might have this expertise.
081244 - 2. The American Gear Manufacturers Association can be called.
081246 - 3. Peter Lamb might be asked for suggestions.
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.
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,
081260 - [On 920110 feelings were hurt. ref SDS 8 0884]
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.
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.
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.
081283 - Walt was concerned that DNRC's expert engineers may not be prepared
081284 - for a meeting in January, 1992 with Voith's engineers.
081287 - Proceed or Wait to Meet
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.
081295 - Meet Where the Information is
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.
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.
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.
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.
081321 - Walt proposed asking Voith what they want from DNRC as additional
081322 - inducement to perform their contract.
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.
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.
081340 - As of now, it would not seem that DNRC is positioned to do this
081341 - because the technical positions are not established.
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.
Tudor Agreement, Termination
0904 - Summary
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.
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.
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