Free Statement of Facts - District Court of Federal Claims - federal

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1 2 3 4 5 6 7 vs.

IN THE UNITED STATES CLALMS COURT

ROCKWELL INTERNATIONAL CORPORATION, Plaintiff; ) ) Case No. ) 91-1362C ) Pages 1 - 114 )

8 THE UNITED STATES, 9 10 11 I2 I3 14 I5 16 17 I8 19 20 21 22 23 Reported by: ROBERTA L. THIBODEAU 24 CAC.S.R. No. 8263 25 NVC.S.R. No. 358 DEPOSITION OF: Defendant.

ROBERTM. NELSON, JR. MONDAY,NOVEMBER 1992 9, 10:25 A.M.

1 Nelson-Cl

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1 on howyou define the ~vord "involvement with," whenI 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 wasthe assistant manager operations, starting in for 1982,I started sitting on those boards. But I wasin more a leadership role as being the -- flae of contracting officer from 1985on. Q. In your operations position, did you submit inpot to the boards? A. Yes. Q. In the contracts in Nevada in which you have played somepart in an awardfee, what official wasthe fee determiningofficial? A. The manager of the office is almost always the fee determiningofficial. Q, A. Q. The managerof the Nevadaoffice? Uh-huh. I believe you stated, Mr. Nelson,that

you first becameinvolved with the RockyFlats plant at the end of January1990; is that right? A. That's correct. Q. Whenwere you first informed that you

wouldbe assigned to the RockyFlats plant? A. The precise date -- let me give you an about date. I wouldsay it wasabout the 25th or so of January of 1990I received a telephone call from the deputyassistant secretary for military 22 Nelson-C! Ct Depo Page 22

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application in Washingtonwhich asked me to cometo Washington -- and meet with people, at that point and undefined, for a reason he could not tell meon the phone. Oneof those very, scary phonecalls. Q. Whowas the deputy secretary? A. That was Admiral Mike Barr. I- of course, whenyou get a call like that, unless for, you know,oven-iding reason, I said, "Of course." I went on a plane the next day. Andagain, I can't be exactly precise, but it wasthat week.I -- I went

I 1 the next day. I met with the -- I met with Admiral 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BAIT.I met with the under secretary of energy, John Tuck, and then ultimately with the secretary of energy, Admiral Watkins. Andat that point Adiniral Watkinsasked meto cometo Rocky,, Flats for about six months.So it was and hmvfast could I get there, and I told them the next month.So whatever the monthis, around the 28th or 29th of January, of 1990 wasthe first day I had ever set foot on the place. So I had about a day's - couple days' opportunity to pack bags and that kind of stuff. Q. Howlong did you meet with the various people in Washington? A. Well, it was -- it was a one-day affair. I wouldsay I probably spent a couple hours with 23 Nelson-C! Ct Depo Page 23

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1 secretary. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Q. Youhad never met Mr, Tuck before; is that right? A. Q. A. No. Had you ever met Mr. Watkins before? No. Never even seen him before, I mean,

except in pictures. Q. And what did Mr. Watkins discuss with you? A. He -- really the only thing that I remember of that is his -- a couple interesting out things to me. Hewas interested in the fact-- he lmew,probably from AdmiralBarr, that I was a priest and had a parish here in Las Vegas. Heasked meif I could workto continue that, and I told him I probably could. Andhe said he thought it wouldonly be six months,that it wouldprobablyat that point take us three months fix tbe corrections at Rocky to Flats xvith maybe three monthsof get things back into normal operations. Andthat was about it. Again, I think he wasreally trying to

22 take mymeasure to see if I was whohe wanted to put 23 up tbere. 24 Q. What were the problems that you were

25 supposed to fix? 27 Nelson-Cl Ct Depo Page 27

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EXHIBIT 37

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of Energy

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Mr. Domlnlck J. Sanchlni Vice President, Major Programs Rockwell International Corporation Department 00l, Mail Code 0-37 2250 East Imperial Highway El Segundo, CA 90245 Dear Mr. Sanchlnl: In accordance with Appendix 0 of Contract OE-ACO4-75DP03533, the Department of Energy (DOE) hereby determines that Rockwei,l International Corporation (Rockwell) has earned an award fee of $1,241,604 for Plant and $336,035 for PRMPIPROVE, for a total of $1,579,659. The enclosed Performance Evaluation Report for the period April I, I989 throGgh September 30, 1989, provides the basis for the DOE award fee determination. The award fee approved by the DOE for payment to Rockwell is pursuant to an award feb plan previously developed to cover the period April 1, 198~ to September 30, 1989. Thrs was prior to the Instltutlofl by the DOE of stronger and tougher award fe~ plans I~ reward Improvements in environment, safety, and health {ES&H) and substantially Increase the proportion of the fee attributable to ES&H performance, Under the contract provlslon$, however, the(~)E was constrained as to the weight that might be given to ES&H performance In setting the feb for the six month period covered. In the old award fee plan, which Includes thls period, up to 20% of the total amount Of fe~ paid could be attributable to performance in the ES&H area. By reducing the award fee rating for ES&H to ',Unsatlsfactory~"the DOE is Indicating ~o Rockwell that Its ES&H performpnce was unacceptable. In addition, by reducing the award fee rating ~" general management to "Marginal," the DOE Is Indicating to RocEwell that Its general m~nagement performance was deficient. As specified In the Contract, you may, within flve working days after receipt of thls letter, request an oppor~runll~/~o present to the DOE an analysis of your performance under the Contract. Otherwise, after this period we will provide you the award fee amount, plus ¯ base fee of $432,BSO,~f,ora total fee of $2,012,48g.

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If you wlsh to meet wlth us, please contact thls office In order to coordlnete those arrangements for you.

Robert M. Nelson, Manager

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PERFORMANCE EVALUATION REPORT ROCKWELL INTERNATIONAL CORPORATION CONTRACT NO. DE-AC0~-~t~13P03533 FOR THE PERIOD APRIL 1 - SEPTEMBER 30, 1989 The overall performance of Rockwell International Corporation (Rockwell) was maintained at least at the level of "Satisfactory" during the period April I through September 1989. 30, The following are separate evaluations of the performance of Rockwell relative to the management operation of the RockyFlats Plant and the performance for the Plutonium and Recovery Modification Project (PRM.P)/'PlutoniumRecovery Option Verification Exemise (PROVE), the selected Functional PerformanceAreas (FPA's). "['he first section covers in Plant operations while the second section covers PRMP/PROVE. The General Management was evaluated considering performance for both areas. FPA The selected FPA's have been evaluated in accordance with the contract AwardFee Plan, and the following summary of each FPAand resulting award fee earned reflects an inte~ated assessmentof all factors. PLANT ~EN~RAL MANAGEMENT: There was considerable evidence of Rockwell management's inability to effectively manage this facility, and this was seen by DOE be a m serious, major deficiency. This deficiency was manifested in lack of progress in integrating safety responsibility and accountability at all working levels and also by deficient lines of responsibility, procedures, discipline/work ethic, training, on-floor supervision, and problem investigation/resolution. Numerous incidents provide evidence of the above deficiencies. A continuing lack of priority attention to safety and health, as evidenced by the open status of manyof the safety concerns documented during the period, was.a'clear indication of poor management.Additionally, despite an increase in nitrate concentrations on the 750 Pad, little action wastaken to contain saltcrete after precipitation events. The preparation for the annual DOE inventory of Special Nuclear Material at Rocky Flats was unsatisfactory. ENVIRONMENT. SAFETY HEALTH: & Long term understaffing in the Health, Safety and Environmentorganization resulted in less than adequate attention applied to several essential projects and safety functions. Rockwellwas unsuccessful in reaching their Plant Performance Goal for recordable injuries and in reducing the total numberof workplace comami~aationincidents, Rockwellcontinued to have problems in the construction safety area. Rockwell failed to exercise an acceptable level of program managementin the development of official recommendations for restart of the Building 37,4 evaporator. A criticality safety assessment performed in August 1989, noted many aspects of the criticality safety program which needed improvement. Rockwell failed to exercise an acceptable level of program management in dealing with poodcrete and sahcrete. Rockwell's oversight of the environmental subcontractors performing routine environmental monitoring was deficient. As identified in the DOE-HQ assessment team report, deficiencies in the RFPeffluent air monitoring program mayadversely affect determination cf radioactive materials released to the atmosphere. Waste shipments to Idaho and Nevada were marked by errors in manifests and contamination on waste packages, whichjeopardized the future of offsite disposal plans.

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OUALITY: The plant-wide implementation of~Ql'-'; non-weapons qualky assurance requirements not progress at the accelerated rate'~'xp'ecied. did The Rockwell Final Product Acceptance grbup performed effectively after only one year of having the responsibility for most product acceptance. Lot rejects and Final Product Acceptance observations decreased during the second half of FY89. COSTMANAGEMENT: Rockwell provided excellent support to both the Environmental Restoration and Waste ManagementFive-Year Plan and to the Modernization Study. Rockwelldid an extraordinary job of collecting information, categorizing and documenting the large number of new funding requirements created by the FBI~PA investigation, the DOET!ger teams, and the DOE/CDH Agreement. All validated construction line item projects were included in the Department's1991 budget request. PRODUCTION OPERATIONS: processing of procured finished machined products The was consolidated within Building ~-60 to reduce overall process times and decrease costs. Rockwell was effective in reducing halogenated solvent usage, and cominue(5 to make progress with its new scheduling philosophy which was designed to minimize work-inprocess inventories by managingbottlenecks. The self-appraisal pro~am instituted in all Production Operations buildings, in adaptati'on of the. Building 771 Restart Criteria, did not receive suffi.cient management attention or "own4rship" and was ineffective. CHEMICAL OPERAT'(QN$; Plutonium Recovery Operations and Production Operations worked in conjunction to develop the Nuclear Facility Operation Manual, which was to establish the standard of excellence for operations of Rocky Flats facilities. As a result of the deliverables that Rockwell had to complete before Building 771 restart approval was grant~d, a number of procedures were changed or developed and implemented. This implementation was successful, and the building management team continued to develop and irriplement improvements those procedures. to Rockwell's managementcontrols and directives in areas such as recovery operations planning, work breakdownstructure and scheduling systems, and cost control systems result in implememationAnstallation/operation delays and other problems. There continued to be a failure to establish performancegoals for process operations and to measureprocess performance; therefore, operations were not .baselined to provide for improved performance. PRMP/PROVE PROJECT MANAGEMENT: Rockwell took an active role in establishing Los Alamos National Laboratory technical personnel as a part of the PRMP structure. Provisional agreement was reached by the Senior ManagementReview Board on the baseline PRMP process technolo~es. Rockw611 not provide an adequate system to produce timely and accurate project control did information, integration of an essential, computerized, three-dimensional Plant Configuration Modelinto r~e overall PRMP design strategy has been slow.

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COST MANAGEMENT; Rc~kwetl took positive action to reduce the cost of A-E services, including reducing overhead, requk,-ing A-E tp_ _meetcommitments, upgrading the and con~'ol measures over ~ scope of A-E work. The Cost and Schedule Reduction Precursor activity incurred over S I00,000 cost without any visible or deliverable product, whichindicates an unacceptable lack of cost comrols. SCHEDULE PERFORMANCE: PROVE The test schedule was prepared as an integT-ated effort between Plutonium Operations and PROVE engineering. Detailed schedules were developed for activities preliminary to PRMP construction to provide a base for " performance measurement. Schedule reports were not provided in a form which ensured timely reporting and accuracy to the overall project schedul~. $.I.JBCONTRACTMANAGEMENT: Rockwell took positive action to develop an A-E Statement of Workwhich provided for their required services at an appropriate level of detail. Inadequate Quality Assurance/Quality Control oversight of the glovebox subcontractor resulted in exa'a costs and delivery delays to the Government, DESIGNOUALITY:PRMPTechnical qualit~ and behind schedule. Baseline documentation was of unacceptable

"~CHNICAL PRODUCT OUALITY:Rockwell did not require periodic, independent audit of NQA-Icompliance and Non-Conformance Report actions to ensure that quality actiofis were completed without prejudice. A QAplan for PRMP, required prior to start the fu}l design effor~ and Tide I activities, wasnot c~mpleted.

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EXHIBIT3 8

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(2~3) 647-5~27

June 13, 1989 TheHonorable James O. Watkins Secretary Energy of Department Energy of 1000 Independence Avenue,S. ~. Washington, C. 20585 D. Dear Secretary Watkins: The government's initiation last week of a broad:scale ~ investigation possible of environmental violations the Rocky at Flats Plant,which we manageunder contract for the UnitedStates Department Energy,is of seriouspersonal of concernto me, as well as to our Board of Directors and management. We are cooperating that investigation. believewe have in We managedthe Rocky Flats Plant responsibly and effectively the in past and continueto do so today. In our judgmentthe Plant has been run safelyand in compliance with applicable laws and regulations. As with all Rockwelloperations, take great pride in our we commitment excellence to and ethicalconduct.I am convinced that the dedicated performance Rockwell of management and our more than 5,000 peopleat Rocky Flats will be confirmed the as currentinvestigation concluded. assureyou that immediate is I and vigorousactionwill be taken to deal with any conduct incompatible with our stringent management principles and the laws and regulations applying the RockyF]ats facility. to Our co~itmentto excellence throughout RockwellInternational extendsin .everyway to the welfareand safetyof our RockyFlats employees and the surrounding communities. You have my personal assurance that the interestof the peopleof Colorado are of utmostconcernto all of us at Rockwell. We will welcomean opportunity discusspersonally to any questions you may have regarding our management the Rocky of FlatsPlant. Sincerely,

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UNITED STATES COURT OF 2 3 4 5 6 Plaintiff, 7 CASENO. 91-1362 8 UNITED STATES OF AMEI~CA, ) 9 10 11 I2 13 DEPOSITION OF DONALD BEALL R. 14 MONDAY, JULY 18, 1994 15 I6 17 18 19 20 2I SIMS, SCHNEIDER& ASSOCIATES CERTIFIED SHORTHANDREPORTERS 22 REPORTED BY: JEANNETTEK. JESSUP I49 PALOS VERDES BOULEV~ SUITE C 23 C.S.R. #8573 REDONDO BEACH, CALIFORNIA 90277 24 (310) 791-'4466 25 ) ROCKWELL ~TERNATtONAL CORPORATION ) FEDERAL CLAIMS

)
Defendant. )

)

Beall, Donald 7/18/1994(Claim) R

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specifics were known that time or what. at Q. Did you give any directions to the person who called you in that phone call that you remember now? A. Not that I recall. But if I had, it would only have been to be as cooperative as wecan and let's get to the bottomof this, understandthe facts and take appropriate action. MR.KOLAR: like to have this document marked I'd as I'm goingto call it Defendant'sExhibit 100, whichI think is beyondthe range of exhibits that wehad previously marked. MR. NEY: Yes. (Exhibit Number100 was marked for identification by the reporter and is attached hereto.) THE WITNESS: Okay. BY MR. KOLAR: Q. Have you had a chance to look at Defendant's Exhibit 100, Mr. Beall? A. Q. A. Q. A. Yes. Do you recognaize that document? Yes. What it? is It's a letter frommyselfdated June 13th,

1989 to Secretary Watkins, Secretary of Energy, commenting Beall, Donald R 7/18/1994 (Claim) Page 8

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on this so-called raid. That's not whatit says in the letter, but -- and indicating that Rockwell taken a had great deal of pride in our commitment to excellence and and ethical conduct; that wewouldinvestigate these -any allegations here; that we wouldtake vigorous action if there were any issues discovered, and et cetera. Q. Bet~veenthe time of the search warrant on June 6th, 1989and this letter June I4th, 1989, did you have any discussions with anyone from the Departmentof Energyabout the search warrant-A. Q. A. Q. No. -- to your recollection now? I don't recall any. I don't think I hadany. So, to yourrecollection, at this time this

is the first contact that washad bet~veenyourself and the Departmentof Energy about that matter. Wouldthat be a fair statement? A. Yes. Q. In the letter you stated that the government's initiation of the investigation of possible environmentalviolations at RockyFlats is of serious personal concernto me, as well as to our board of directors and management.This mayseem like an obvious question to you, but I need to ask it anyway.Why was that the case? Beall, Donald R 7/18/1994 (Claim) Page 9

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A. Anyallegation of x~n'ongdoingof any significaoce related to any part of Rocl~vell wouldbe of serious personal concern to me, our board and our management. Q. Did you, as a result of the FBI raid, change the level of oversight that you personally exercised with regard to the Rocl~FIats plant? MR.NEY:"You"is Mr. Beall as an individual? MR. KOLAR:Yes. THEWITNESS: Imow, I'm ultimately You accountable

for everytbing in Roclc~veI1.So becauseof the raid, I was putting increasing personal focus on understanding what occurred. Andsubsequently, we further eohanced our management process to involve -- to assure that wehad available to our RockyFlats management every resource in this company,whichthey could always call on in any event. But wetook extraordinary steps to be sure that we had adequatecorporate oversight to the activities and to help work our way tbrougb these allegations and understand them. BY MR. KOLAR: Q. I'm stating in the last paragraphof this letter, whichis Defendant'sExhibit I00, "Wewill welcome an opportunitb, to discuss personally any questions you," and that's tbe Secretary of Energy, Admiral Watkins, "may Beall, Donald R 7/18/1994 (Claim) Page 10

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have regarding the management the RockyFlats plant." of A. Right. Q. Did you subsequently have conversations with Admiral Watkins about this matter? A. Yes. Yes. Q. And howdid that comeabout, to your recollection'? A. I don't rememberexactly. I knowthat we went back, several of us, and met with the admiral and his deputy, Henson Moore,sbortly after this letter to discuss the wholequestion of Rock, veil's commitment support the to DOE wesaw appropriate in getting to the bottom of this as and to support the secretary's announced priorities to have-- to be sure that health, safety, environmental concerns were at the top of the list of management focus in runningthat plant. Q. Now,was that meeting in Washington, D.C., at the Departmentof Energy? A. Yes. Q. Andyou mentioned that you and several others, I think is the wayyou characterized it. Who were the others from Rock, veil whoattended that meeting with you? A. Sam Iacobellis was with me. Charlie Harff was with me. AndDora Sanchini, whoran RockyFlats, was Beall, Donald R 7/18/1994 (Claim) Page 11

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significant changesin emphasis, including changes in organization and staffing and people. I recall that coming up. Andhe -- one of the things that was discussed at that time washis attitude that weshare with himin that-- in that belief and take similar steps, with whichI disagreed. Rockwell,we felt, had ve12~ adequate -- and, you know,we wouldcertainly bolster and had resources, but I felt the top management our of activity wasexcellent. Q. Just so I'm clear on what you're saying, AdmiralWatkinsfelt that Roclc~vell's management -A. He was not specific in that meeting, but he was -- he was strongly urging ns to make-- without being specific, he was makingstrong suggestions that there be a significant change in management. Q. A. Q. A. Q. Onthe part of Rocl~vell? Right. Right. RockyFlats? Right. Right. Andhe also indicated, you're telling me,

that there were to be or had been changesin organization and staffing by DOE RockyFlats? at A. them. Beall, Donald R 7/18/1994 (Claim) Page 14 They hadn't been made. He saw the need for

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Q. Anddid he indicate that he intended to make those changes? A. He implied that, as I recall. Q. Do you know whether they did that? "They" being DOE. A. They made some changes, yes. Q. Did anyone from Rockwell in that meeting or at any other time for that matter express disagreementor objection to the Departmentof Energymakingchanges in its management? A. Q. A. Q. I'm sure wedid not. Or in its organization at Rocl~Flats? I don'trecall. Wasanything else discussed in the meeting

that you can nowrecall? A. No. Q. Wasthere any discussion in that meeting of Roclc~velI's awardfees for operating Rocl~Flats? A. Not that I recall, tf there was, it would havebeen an assertion on nay part that the -- that we believed we were receiving the highest awardfees and were very proud of it. AndI wouldhave brought that up only in the context of Rock,veil's view that our performance under our contract had been exemplary. Q. Doyou recall that that actually occurred, or Beall, Donald R 7/18/1994 (Claim) Page 15

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Beall, that it's myunderstandingthe meetingtook place 2 on June 23rd. I think that was a Friday. Exhibit 304, 3 Plaintiff's 304, is, as I said, dated June I7th, 1989. 4 Anddirect your attention to the first paragraph and third 5 paragraph on the first page. Have you had a chance to

6 Iookat those paragraphs? 7 8 A. Yeah, I have. Q. They report that the Departmentof Energy, HensonMoore, the Deputy Energy Secretary,

9 specifically

10 said that the Department of Energy was suspending bonus 11 payments for good performance by Rockxvell International 12 Corporation at RockyFlats. Do you recall the occurrence 13 of that press conference? 14 A. I do nowthat I see this. But I didn't

I5 recall that. 16 Q. So Exhibit 304 refreshes your recollection

17 about that conference? You were aware of that18 A. I don't really recall the conference,

19 honestly. I recall having been aware of this nowthat you 20 bring this op. 21 Q. Do you recall in this time frame the

22 Departmentof Energy stating that it was suspending bonus 23 payments to Roclc~vell? 24 A. I hadn't recalled that until you raised it

25 and I see in this. Beall, Donald R 7/18/1994 (Claim) Page 17

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Q. I guess what rm trying to get at, Mr. BealI, do you have your ownrecollection of that nowthat you've seen Exhibit 304? Or are you simply looking at 304 and telling methat you believe this occurred? A. No. I recall it. I believe that occurred. Q. Did you have any discussions with anyone at Rocl~velI about that? Andby "that" I meanthe suspension of bonus paymentsby the Departmentof Energyin tbis time frame. A. I don't recall specific discussions. So I'd be speculating. Q. A. Q. A. That's fine. I'msure I did, but I don't recall. That's fine. Thankyou. AndI should point out, I realize awardfees

are part of a major issue in this undertaking. Myfocus at that time, this wouldnot have been a major issue in nay mind. It wouldbe, "Let's get to the bottomof these allegations. Let's find out what tbe facts are and take appropriate action in serving our customer." Q. You'vetestified to one meeting you had with

Admiral Watkins and Henson Mooreregarding the RockyFlat situation in this relative time frame. Did you have any other meetings besides that one? MR. NEY: With wbom? Beall, Donald R 7/18/1994 (Claim) Page 18

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time, September18th, I989? MR.NEY: contrast to what he might have said at In this meeting? BY MR. KOLAR: Q. Mr. BeaI1, I'm asking you nowyour position as opposedto the specific wordssaid. A. Well, wewere certainly -- I certainly wasn't expressing the idea that Rockwellwantedto get out of this contract. Whatwewere talking about is the impedimentsthat Rockwell saw to performance because of the issues that ultimately were stated in the lawsuit. AndI also recall the discussion related to the quality of Rockavell's people performingthe workat RockyI=lats, particularly the top management. Q. A. Q. That's the issue you referred to earlier -Right. It is. -- in whichyou disagreed with the Admiral;

is that correct? A. That's correct. Andthis, in all fairness, wehad a difference of opinion. Q. A. Q. So that's correct as far as you can recall? Right. I'd like you to look at the third paragq'aph

on page 2. "Beall responded that he a~eed with the Admiral's views and was committedto bringing that new Beall, Donald R 7/18/1994 (Claim) Page 28

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culture to Rocky Fiats. His policy was to stay on the job 2 and" quote, "do it right," unquote. Do you have an 3 understanding of what's meant there by "new culture?" I 4 realize you didn't write that. 5 A. No. But I recall the environment. The

6 Admiralfelt that there had been -- well, first, running 7 these flats is a complicated national endeavor, as any 8 major undertaking of this sort would be. Andhe felt that 9 there was undue priority on production versus the 10 environment and safety and wanted to have added 11 emphasis -- he wanted to have greater emphasis, he wanted 12 the culture of the institution of everybodyinvolved to be 13 focused more on environmental and safety concerns and then 14 production. 15 Andhe felt that there wasn't that balance.

16 And I was happy to see us accommodate our customer, if 17 that's the direction he wantedto go. I had no feeling -18 I should say clearly -- that anything Rockwellhad done 19 had less than complete focus on safety. 20 Youlmow,we built a space shuttle. Webuilt

21 the B-I Bomber.Webuilt Apollo. Roclc~vell felt it was 22 bringing a very competent program, management disciplines 23 and sldlls and people to this undertaking at RockyFlats. 24 AndI had no problem if he wants to relatively change 25 priorities. Beall, Donald R 7/18/1994 (Claim) Page 29

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I also knew that if they did they'd have to put a lot moremoney into it, because there were areas wherenot this -- they weresafety issues, whereI had been told that the DOE would have to spend a lot more moneyin areas where we had recommended they do to deal with someof these issues. So any~vay, those are -- I mean,I had that general sense at that time. Q. So I take it from your testimony that this memoranduln attributing the view -- or attributing the statement to you that you were committedto bringing the newculture to Rocky Flats is basically accurate? A. I'd say that's basically accurate. I think the rest of this paragn'aph basically accurate, too. I is wasexpressing a strong feeling of support for the professionalism and quality and experience of the top management people that Rock, veil had there. Andif the Admiraldidn't feel that those people wouldget the job done, maybehe ought to get somebody else. Q. Did there come a time when Rockavell told DOE that it wouldsuspend operations at Rocl~Flats? A. Yes. Prior to this. Q. Prior to this. Andwhat do you recall about that morespecifically? A. Well, for the same reasons that ultimately Beall, Donald R 7/18/1994 (Claim) Page 30

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from myself to Secretary Watkins dealing with a management plan for RockyFlats plant operation improvements that was submitted to our customer. Q. Wasthis essentially in response to Admiral Watkins' concerns that the management RockyFiats on at 6 7 8 9 10 ll 12 13 14 I5 I6 I7 I8 19 2O 21 22 23 24 25 Roclc~vell's part wasnot strong enough? A. I think it was submitted in concern that the combined DOE and Rock,yell management could use some areas of improvement. this was our part of it. And MR.KOLAR: like to mark this as Exhibit 106. I'd (Exhibit Number106 was marked for identification by the reporter and is attached hereto.) BY MR. KOLAR: Q. This is a letter to you from Admiral Watkins dated August25th, 1989. Doyou recall receiving this letter? A. I do now. In the paragraph that begins on page 1 and

Q.

extends over to page 2, Admiral Watkinsis informing you that he's reorganized the line management RockyFlats at to provide that the staff of the Rocky Flats area office will report to the assistant secretary for defense programsto ensure to more effectively oversee and support RockyFlats operations. Do you see that?

Beall, Donald 7/18/1994(Claim) R

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A. Uh-huh. 2 Q. After receiving this letter and being so

3 advised, did you object to this management change on DOE's 4 part? 5 A. Not really. They're our customer. They can

6 organize the staff as they see fit. 7 8 9 10 11 MR.KOLAR: This will be Defendant's 107. (Exhibit Number107 was marked for identification by the reporter and is attached hereto.) MR. NEY: Okay.

12 BY MR. KOLAR: 13 I4 Q. Mr. Beall, what is Defendant's 107? A. It is a letter to Admiral Watkins,

15 transmittal letter I guess you'd say, commenting the on 16 public disclosure of an affidavit that the government used 17 to obtain a search warrant for the RockyFlats plant 18 so-called raid. Andit's commenting that Rocl~veI1 had 19 completedits investigation of the more sensational 20 allegations and had found them to be unfounded. Andit 2l was asking the Justice Department to makepublic the 22 information whichit claims supported those allegations in 23 the first place. Andif the governmenthas information, 24 you lcnmv, that there is somehealth and safety risk that 25 it hadn't disclosed, that wefelt that they should Beall, Donald R 7/18/1994 (Claim) Page 36