CONTACTS 

SUBJECTS
Voith Contract Closeout
Scope Statement
Engineering Management, 911011
Interview Engineers

0406 -    ..
0407 - Summary
0408 -
040801 - Rick will set up an interview for HKM on Thursday, Dec 19.  We will
040802 - also try to interview Percy Dawson the same day, per ref SDS
040803 -
040804 - I will confirm that Percy is set up to come up Thursday.
040805 -
040806 - Recieved information from Sarah on William Larson and a colleague who
040807 - might be good expert witnesses.
040808 -
040809 - Commented on Sarah's point about the importance of evaluating the
040810 - resonance issue on the speed increaser, and how written legal analysis
040811 - plays into the equation.
040812 -
040813 -
0409 -
0410 -
0411 - Discussion
0412 -
041201 - Rick asked if there would be enough time to interview both Percy
041202 - Dawson and HKM on Thursday.  I explained these interviews would be
041203 - supplemental and recommended that DNRC do the interviews the same day
041204 - in order to expedite the process of hiring a replacement engineer for
041205 - Tudor.
041206 -
041207 - We discussed the merrits of hiring a large firm with in-house hydro
041208 - power experience, or to hire a smaller firm with good project
041209 - management experience and let them associate with someone like Percy
041210 - Dawson or David Raffel who have good hydro power credentials.
041211 -
041212 -
041213 - Method to Evaluate Engineers
041214 -
041215 - I encouraged DNRC to request from Power Engineering a draft agreement
041216 - they would be willing to enter.  Rick feels this may not conform with
041217 - the statute governing hiring of engineers which he feels requires the
041218 - State to select a single firm with whom to negotiate an ageement.  I
041219 - suggested that the statute may permit expedited measures in emergen-
041220 - cies which appears to be the current situation.
041221 -
041222 - DNRC should be obtaining the terms from each of its interviewees to
041223 - see who will offer the best terms relative to their credentials.  It
041224 - is not clear why "negotiate" should not refer to the activity that
041225 - takes place after DNRC receives all of the information needed to make
041226 - an evaluation.  This could include the Engineer's proposed work
041227 - statement, terms of agreement, samples of work product, resumes,
041228 - project cost and schedule.  All of these are legitimate matters of
041229 - inquiry, which once submitted enable the Owner to commence negotia-
041230 - tions.
041231 -
041232 -
0413 -
0414 -
0415 - 1045 Discussion re Bechtel
0416 -
041601 - Rick came by my office later and advised of a call he just received
041602 - from Bechtel's Chuck Campbell and _______ Cassidy.  They apparently
041603 - indicated to Rick that I had requested they offer some names of
041604 - possible engineers who can work with DNRC to solve its problem created
041605 - by Tudor.
041606 -
041607 - Rick noted Bechtel's reason for not competing for this assignment is
041608 - that they feel the antagonisms between Bechtel and Tudor arising from
041609 - prior work would impede Bechtel's ability to provide adequate service
041610 - to DNRC.  I take this to mean Bechtel feels it may be subject to a
041611 - criticism of bias against Tudor growing out of its prior work with
041612 - Tudor that led to litigation.
041613 -
041614 - We should try to talk to people at Bechtel on Tudor's performance to
041615 - see if any continuing patterns of conduct might emerge that would be
041616 - helpful in DNRC pursuing its recovery.
041617 -
041618 -
0417 -
0418 -
0419 - William Larsen
0420 -
042001 - Sarah dropped off some remarks dated Dec 17, 1991 from a telecon with
042002 - this person.  Bill's resume is attached to the telecon remarks, and
042003 - there is another resume for Chuck Robbins, who evidently has
042004 - electrical engineering expertise.
042005 -
042006 - Bill Larsen, who is formerly with Harza, seems to have good creden-
042007 - tials, similar to David Raffel, also a Harza alumnus.  He wants DNRC
042008 - to fly him over for $600, $300 less than Percy Dawson is paying for
042009 - himself.
042010 -
042011 - Sarah indicates that Bill Larsen and Chuck Robbins could associate
042012 - with a "generalist" I guess like HKM or Power Engineering to do the
042013 - job.
042014 -
042015 -
042016 - Litigation Specialist
042017 -
042018 - Bill seems to indicate in his transmittal letter of Dec 10, 1991 that
042019 - he is mainly interested in litigation support.  I think it would be
042020 - worthwhile flying him over to interview to get his overview on some of
042021 - the litigation issues he has testified on and to explore some of our
042022 - ideas.  This might give us some clues about methods and issues to keep
042023 - on top of and to help cast the record.
042024 -
042025 - I recommend we try to talk to him, either go there or bring him to us
042026 - as a research project.
042027 -
042028 -
0421 -

SUBJECTS
Voith Contract Closeout
Noise/Vibration
Resonance, avoid design conflict
DNRC Legal - general views (meetings)
Opinion Contract Requirements,
Industry Standards, 911005
Diary record to increase understanding
Notepad, replace, 910425
Discovery, Advantages and Restraints
on saving the Record

1113 - Analysis of Problem
1114 -
111401 - In Sarah's note today of 911217 on Bill Larsen, she sets out following
111402 - query (possibly resulting from her discussion with Bill).
111403 -
111404 -    Query
111405 -
111406 -    Are we getting too carried away with the high tech resonance stuff?
111407 -
111408 -    So what if there is a resonance problem in the gear box, does that
111409 -    just make it loud or does it impair the structural integrity of
111410 -    the unit?
111411 -
111412 -         Comment
111413 -
111414 -         The owner does not know the answer to this question based on
111415 -         the evidence at this time.  Experts have indicated a potential
111416 -         resonance problem exists and the contractor has admitted its
111417 -         design was defective and the unit was improperly manufactured.
111418 -         The noise exceeds contract specifications and according to
111419 -         Owner representatives has gotten steadily worse.
111420 -
111421 -         Because of this record, the Owner is now attempting to develop
111422 -         evidence and obtain an opinion on whether the structural
111423 -         integrity of the unit is impaired.  So far the contractor has
111424 -         resisted supplying information on this point.  Since the
111425 -         contractor seems not to have complied with the submittal
111426 -         requirements in the first instance, it would seem a prudent
111427 -         engineering inquiry to seek resolution of this issue.
111428 -
111429 -
111430 -    That is, we shouldn't be spending too much money on tests and
111431 -    analyses that are not standard in the industry, or focusing on
111432 -    defects that are not material.  Such money spent will probably not
111433 -    be recoverable.  I know we discussed this at length before we hired
111434 -    Machos, but we need to remember to revisit the issue from time to
111435 -    time,.
111436 -
111437 -         Comment
111438 -
111439 -         Few would endorse spending "too much money" on anything or
111440 -         focusing on defects that are not material.  The law permits
111441 -         recovery of reasonable and necessary expense in connection
111442 -         with correcting material defects.
111443 -
111444 -         Therefore, it may be fruitful for DNRC to develop a legal
111445 -         opinion on the standards that should be applied to determine
111446 -         when too much money has been spent, what are the standard
111447 -         industry procedures for investigating problems like those
111448 -         evinced at Broadwater (would it seem for example that DNRC
111449 -         used the minimum procedures necessary to enable the contractor
111450 -         and owner to discover defective Work in need of repair, since
111451 -         neither the contractor nor the engineer were able to discover
111452 -         this fact without owner's assistance?), and therefore under
111453 -         such circumstances would not the law permit recovery of the
111454 -         reasonable and necessary expenses incurred to assist the
111455 -         contractor and engineer in this important discovery.  Might GC
111456 -         13.11 be applied in some manner to these facts?
111457 -
111458 -
111459 -         Roughest First Draft
111460 -
111461 -         I would expect a legal opinion would meander along something
111462 -         like -- where good cause for alarm exists, as here, with
111463 -         respect to the performance, safety and durability of expensive
111464 -         equipment, then the only prudent course is to investigate it.
111465 -         Should the investigation show the unit is indeed defective in
111466 -         ways other than as already admitted by the contractor, then
111467 -         where the contractor refused to admit to such defect the Owner
111468 -         would be entitled to recover its reasonable and necessary
111469 -         expense for the investigation.  Additionally, where the con-
111470 -         tractor withheld information from the Owner, as admitted in
111471 -         this case, and if such withheld information would have shown
111472 -         the alleged defect (resonance) did not exist, then the con-
111473 -         tractor may still be liable for the cost of the owner's
111474 -         investigation, since the owner had good cause to incur the
111475 -         expense and it would have been easily avoided by release of
111476 -         information known and reasonably available only to the con-
111477 -         tractor.
111478 -
111479 -
111480 -
111481 - I would further expect there are a good many cases that treat these
111482 - issues.
111483 -
111484 - DNRC does "need to remember..." and this can be done by writing down
111485 - what is said and what is thought about what is said on or about the
111486 - time it is said.  Then from time to time as new information comes
111487 - along we can build on what was thought before, rather than trying to
111488 - reconstruct the entire line of reasoning over and over again through
111489 - discussion.  This is known as "investing intellectual capital."
111490 -
111491 - The above remarks are readily available elsewhere in the record.  They
111492 - do not require trying to remember what was discussed from time to
111493 - time.  Once they are worked out as a cohensive, clear line of legal
111494 - reasoning, they can be used over and over again without ever wearing
111495 - out, like referring to a road map to check our bearings to keep on
111496 - course.
111497 -
111498 -
111499 -
1115 -
1116 -