CONTACTS 
0201 - Dep Natrl Rscrs & Consvn           406 444 6699 fax 6721
020101 - Mr. Wayne Wetzel

SUBJECTS
Voith Contract Closeout, Engineering Management
Strategy on Evaluating all Claims, Executive Training
Management Assistance Broadwater Contract, Priority
Welch Management Method, Feel Good Management v. SDS
Command & Control of the Record
Case Study Broadwater

1508 -    ..
1509 - Summary/Objective
1510 -
151001 - This started out as a task to complete meeting notes from last
151002 - Thursday, but wound up analysing the direction of project management
151003 - that emerges from the record.
151004 -
151005 -
151006 - Engineering Management Status
151007 -
151008 - Power has shown good "project management" skills but is succumbing to
151009 - DNRC signals that result in Broadwater management drifting toward the
151010 - conditions that led to Tudor's dismissal and confusion in directing
151011 - the contractor.  This can be improved by placing a stronger emphasis
151012 - on Power performing the duties of the Engineer and posturing DNRC in
151013 - an oversight role, rather than as the Project Manager.
151014 -
151015 -     Trees Obstruct View of Forest
151016 -
151017 -     There appears to be a classic condition among existing Broadwater
151018 -     staff who have so much personal capital invested from having
151019 -     fought so hard on what may ultimately be peripheral issues, that
151020 -     the broader perspective is simply crowded out.
151021 -
151022 -
151023 -     Staffing
151024 -
151025 -     Perhaps a senior DNRC person not associated with the past diffi-
151026 -     culties may be the best person to place in charge of the project
151027 -     at this time.  Recognize that you have perhaps a $1 - $2M job here
151028 -     and it requires at least for awhile full time project management
151029 -     to coordinate DNRC, legal, engineering, admin and associated
151030 -     efforts, with those of the Engineer.
151031 -
151032 -
151033 -
151034 - Engineer is on the Sideline
151035 -
151036 - The project record indicates DNRC is performing engineering management
151037 - rather than the Engineer (see for example DNRC's proposed steps to
151038 - analyse options to correct the speed increaser, ref DIP 2; compare
151039 - with Power's published "Action Items" ref DRP 2; see also meeting
151040 - notes, ref SDS 12 line 100 where DNRC proposes to do EM).
151041 -
151042 -     See as well, DNRC's draft instructions to Geartech, ref DIT 1,
151043 -     which sets out information for deciding SI acceptability.
151044 -
151045 -     [On 920204 Wayne advised that Power feels Welch is against Power
151046 -     as the new Engineer. ref SDS 16 8512]
151047 -
151048 - This has stark legal implications with respect to Voith's right to
151049 - have the contract managed by a qualified professional engineer, and it
151050 - has practical implications of denying DNRC the benefits of relying on
151051 - the expertise needed to successfully complete the project.  DNRC is
151052 - doing tasks which need to be done by the Engineer in order for DNRC to
151053 - perform its duty to Voith under contract 1189.1, and in order for the
151054 - Engineer to perform its duty to DNRC.
151055 -
151056 -      Controlling the Record
151057 -
151058 -      At a minimum management tasks called out to be performed by the
151059 -      Engineer should be done in the name of the Engineer and the
151060 -      record should SHOW the Engineer took the action, rather than
151061 -      DNRC.  If the Engineer is unwilling to adopt DNRC's positions,
151062 -      then it alerts the Department to consider the matter further.  If
151063 -      the Engineer is not forced to do this, it can collect payment
151064 -      without causing any waves and without incurring any real
151065 -      responsibility.  This is classci "Feel Good" instead of "Project"
151066 -      management.
151067 -
151068 -      If DNRC does not control the record, it will be controlled by
151069 -      Voith and Power.  There is already a friendly notice from Voith
151070 -      requesting that Power be designated officially as the Engineer,
151071 -      ref DRP 3.  This should be done; and if it is not there will be
151072 -      an argument that Power had no official standing, DNRC failed...
151073 -      etc., etc., etc.
151074 -
151075 - Drift is Hard to Reverse
151076 -
151077 - DNRC has drifted over a period of years into the role of "project
151078 - manager" because of the vacuum caused by the former Engineer and the
151079 - Contractor in not performing their tasks.  This history has created a
151080 - social dynamic with strong interpersonal expectations and impera-
151081 - tives to continue with past practice.  Power seems nominally willing
151082 - and able to do the work, but naturally is taking its lead from the
151083 - daily signals coming from its primary DNRC contacts.
151084 -
151085 -     Mixed Signals
151086 -
151087 -     The job of the Engineer is to find out what the client wants and
151088 -     apply his professional skills to bring that about within the
151089 -     constraints of law, contract and ethics, cost and schedule.  DNRC
151090 -     wants a new speed increaser, perferably a double helical.  Some
151091 -     within DNRC have concluded (without any hard evidence or analysis)
151092 -     that this cannot be achieved, and so evince a predisposition to
151093 -     accept a retrofit of the existing unit.  This posture inhibits and
151094 -     excuses the Engineer from doing the work of developing the
151095 -     evidence and analysis upon which a reasoned decision can be made.
151096 -
151097 -
151098 - One way to approach instilling the requisite understanding in affected
151099 - staff, is to ask for (yes!) another memo(!) on defining the separation
151100 - of responsibility between owner's rep and the Engineer.  Again, the
151101 - Engineer can be asked to come forward with an analysis using outside
151102 - resources if necessary to avoid delaying current activities -- this is
151103 - a one or two day job.  Then call a meeting with Sarah, Walt and Rick,
151104 - and go down the list to see if a change order should be issued to
151105 - Voith reducing any of the Engineer's duties.  If the answer is no,
151106 - then ask where in the record does it show that the Engineer is carry-
151107 - ing out its duties?
151108 -
151109 -
151110 -
151111 - Let Engineer do Project Management
151112 -
151113 - DNRC cannot order itself to perform a contract and document survey to
151114 - determine your duties and rights and the status of the project; but
151115 - you can contract for an Engineer to do it.  DNRC cannot order itself
151116 - to build a hydro electric plant, but you can contract with a contract-
151117 - or to do it.  DNRC cannot order itself to assemble the staffing needed
151118 - to prepare a CPM, maintain document logs, give written notices, evalu-
151119 - ate contract options, keep daily diaries of problems and progress, but
151120 - you can hire an Engineer to do those things.
151121 -
151122 -
151123 -
151124 - DNRC Manage Engineer
151125 -
151126 - DNRC can and should be looking to see that its vendors are performing
151127 - their assigned tasks in a timely and professional manner.  This means
151128 - particularly in Power's case that it has qualified hydro electric
151129 - engineering support engaged to the extent necessary.  It also means
151130 - setting up some control criteria for deliverables (i.e. reports); it
151131 - means making sure the record shows DNRC is acting on the Engineer's
151132 - advice, rather than its own initiative even when the latter is the
151133 - case (i.e. we control the job by controlling the record).
151134 -
151135 -
151136 -
151137 - Maintain Accountability of Contractor and Engineer
151138 -
151139 - Voith and Tudor are attempting to avoid liability for their errors and
151140 - misfeasance by alleging DNRC mismanagement (see for example ref SDS 1
151141 - line 082401).  DNRC can overcome this challenge by merely insisting
151142 - its vendors perform their duties.
151143 -
151144 - So far, instead of relying on the Engineer who has the duty to see
151145 - that contract provisions at issue are carried out, DNRC is performing
151146 - the engineering management duties with Peter Lamb who is 3000 miles
151147 - away and does not have the project record at hand and probably has not
151148 - done a review of the Voith contract (it is not in the record), and
151149 - appears to be relying on verbal representations of ephemeral recollec-
151150 - tions by DNRC staff on matters that come up once in awhile.  This pro-
151151 - cess is denying DNRC of both the project management services of its
151152 - Engineer, and critical legal analysis DNRC needs.  So far there is
151153 - nothing in the record of what has been recommended, who has been told
151154 - what and why recommendations are sound management positions.
151155 -
151156 -
151157 -     Impact on Claims
151158 -
151159 -     The biggest claim DNRC has against Voith and Tudor is for delay
151160 -     and lost revenue damages.
151161 -
151162 -     The second claim area will be for extra expense in hiring an
151163 -     Engineer and others (e.g. Welch, Geartech) to complete the
151164 -     Broadwater project according to contract.
151165 -
151166 -     The third area will be DNRC's own direct costs for management and
151167 -     materials to fill the gaps in performance by its vendors.  The
151168 -     defense will be DNRC did not perform its duties.
151169 -
151170 -     Right now it appears a pitch can be fashioned to rebut this
151171 -     defense, but it must be supported by a record of performance from
151172 -     this point forward, that shows once DNRC was reasonably on notice
151173 -     of its true difficulties, it made an appropriate response.
151174 -
151175 -     We can argue that clearly a new Engineer requires evaluation and
151176 -     transition in assuming full duties.  But such explanation will
151177 -     only succeed where there is steady progress shown by the Engineer
151178 -     in performing the duties in the contract.  It is not clear that
151179 -     such progress is being made.
151180 -
151181 -
151182 - Transition Engineer
151183 -
151184 - As discussed above, it was anticipated that DNRC staff would find it
151185 - difficult to hand over to the Engineer tasks previously performed
151186 - internally (see for example ref SDS 1 line 082806).
151187 -
151188 - Here are some ideas on accomplishing this transition.
151189 -
151190 -
151191 - Management tasks Power should be doing:
151192 -
151193 -    1.  The things in the Voith contract called for the Engineer to
151194 -        perform to which Voith has a right for action by the Engineer.
151195 -
151196 -    2.  The things in the Voith contract called for the Engineer to
151197 -        perform to which DNRC has a right for action by the Engineer.
151198 -
151199 -    3.  Plan project closeout on a macro (CPM) and micro (daily work
151200 -        tasks) level on the steps needed to carry out steps 1 and 2.
151201 -
151202 -    4.  Direct Voith to perform its contract duties and give timely
151203 -        notice to Voith of its commitments and failure to perform.
151204 -
151205 -    5.  Recommend to DNRC the Engineer's opinion on DNRC's duties and
151206 -        rights under the contract.
151207 -
151208 -    6.  Submit to DNRC management information showing steps 1 - 4 are
151209 -        being carried out.
151210 -
151211 -           MI examples are lists of daily work tasks, daily diary of
151212 -           work progress, document log on issued and received and
151213 -           responses due to and from the Engineer.
151214 -
151215 -
151216 -    Fundamental to steps 1 and 2 is placing the responsibility on Power
151217 -    and permitting it to perform the function of information gathering
151218 -    needed to carry out its duties, with assistance of DNRC in the
151219 -    background to make sure things get done and guide the direction of
151220 -    the effort.  DNRC's letter to Geartech, ref DIT 1, is an example
151221 -    of the kind of letter Power should be writing.
151222 -
151223 -
151224 - DNRC Management Tasks:
151225 -
151226 -    1.  Inventory the Voith contract to see what the Engineer should do
151227 -        for Voith and for DNRC, and insist that the Engineer do those
151228 -        tasks, and that the record SHOWS DNRC did not impede the
151229 -        Engineer or the contractor from performing their tasks.
151230 -
151231 -    2.  Introduce Power to support engineers and insist that the
151232 -        Engineer's opinions are adequately supported by the project
151233 -        record and applicable written expert opinions.  This means hav-
151234 -        ing Power define the scope of reports it needs to make recom-
151235 -        mendations to DNRC, rather than DNRC issue letters like DIT 1.
151236 -
151237 -    3.  Demand Power submit the information DNRC needs to make
151238 -        important contract decisions.
151239 -
151240 -    4.  Monitor management information submitted by Power to see that
151241 -        the tasks called out in the contract for the Engineer to per-
151242 -        form are the minimum things the Engineer performs.
151243 -
151244 -    5.  Assist the Engineer in finding information in the record.
151245 -
151246 -
151247 -
1513 -

SUBJECTS
Voith Contract Closeout
Engineering Management
Power Interface with DNRC Consultants
Ideas, Methods, Evaluation
CPM showing expected progress and constraints

2108 - Bottom Line
2109 -
210901 - In sum, Power should plan the work, work the plan, and keep the
210902 - record, with DNRC guiding the direction of the effort and controlling
210903 - the content of the record.  Power can do these things but it requires
210904 - a clear signal from DNRC management on what is expected and vigilant
210905 - supervision.
210906 -
210907 - To carry this out may require a full time hand within DNRC who is
210908 - removed from the project but who is senior enough to conduct meetings
210909 - and give instructions to carry out this objective.
210910 -
210911 -
2110 -