Free Motion in Limine - District Court of Federal Claims - federal

Case 1:98-cv-00126-JFM

Document 815-3

Filed 06/01/2004

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Connecticut Yankee Atomic Power Company v. United States of America Maine Yankee Atomic Power Company V. United States of America Yankee Atomic Power Company v. United States of America

Summary of Opinion

Prepared. by

~iiaff
Mt.

' P.

February 18, 2004
N avigant Consulting, Inc.

000 Midlantic Drive Laurel , New Jersey 08054

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TABLE OF CONTENTS

Statement of Purpose
II.

Qualifications

III.
IV.

Documents
OUf Understanding

A. Connecticut Yankee

B. Maine Yankee
C. Yankee Atomic

Summary of Opinions
A. Connecticut Yankee
B. Maine Yankee

C. Yankee Atomic

Appendices
1. Curriculum Vitae

2. Documents Considered
3. Documents Not Yet Provided by the Plaintiffs

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I. Statement of Purpose
Navigant Consulting, Inc.

NO" was engaged by the Deparbnent of Justice to provide

independent assessment of schedule delays experienced by each of the Plaintiffs
(Connecticut Yankee Atomic Power

Company(II CY" Maine Yankee Atomic Power
YA"

(li
Company

MY"

and Yankee Atomic Power Company

during the design and

construction of the Independent Spent Fuel Storage Installation (" ISFSI" ). In preparing
its analysis, NCI utilized Critical Path Methodology to establish the as-built critical path,

to quantify progress achieved and delay incurred, and to determine the causes of critical

delays.

analysis addresses the time period and delays associated with the

completion of fuel transfer as identified by the Plaintiffs' Stipulations of Facts dated June
30, 1999, July 13, 1999 and March 28, 2003.

II. Qualifications
NCI is a specialized independent consulting firm providing litigation, financial,

restructuring, strategic and operational consulting services to government agencies,
legal counsel and large companies facing the challenges of uncertainty, risk, distress and
significant change. I, Kenneth W. Blair, P. E., am a Principal with NCI and have

developed and reviewed numerous claims for schedule delay and disruption on
construction-related contracts. The opinions expressed in this report are based upon my
education, training, knowledge, experience and expertise in assessing delay, as well as

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an analysis of the relevant information that has been made available to me and the professional staff working at my direction as of the date of this report. A copy of my

curriculum vitae is included in Appendix 1.

III. Documents
In forming my opinion, I examined contemporaneous project records and publicly
available information as well as reports, pre-trial submissions and transcripts generated

during the course of the discovery process. The documents relied upon in developing
the conclusions herein are contained in the Exhibit List submitted by the Deparbnent of

Justice. Additional information considered in developing the conclusions is included in

Appendix 2. I have also identified and requested information that I understand exists,
but has not yet been provided by the Plaintiffs. Such information is included in
Appendix 3. If this or other additional information becomes available to me, I reserve
the right to revise this report and the opinions stated herein, as necessary.

IV. Our Understanding
A. Connecticut Yankee
1. CY' s

Proposed Stipulation of Fact No. 136 dated July 13

1999 indicates that fuel

transfer to the ISFSI would be completed in February 2003.

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2. CY's Proposed

Stipulation of Fact No. 206 dated March 28, 2003

indicates that

fuel transfer to the ISFSI would be completed in December 2003.
3. Bechtel

Power Corporation (" Bechtel" ) entered into a firm fixed price contract

with CY on April 3, 1999 to provide deco:mmissioning services, including the
design and construction of the ISFSI. Work commenced shortly thereafter.
4. In accordance with the

contract, Bechtel issued a planned schedule on June 19,

1999 with a data date (or status date) of April 30, 1999. This planned schedule

indicates that fuel transfer to the ISFSI would be completed on February 5, 2003,
consistent with CY's Stipulation of Facts dated July 13, 1999. Bechtel issued
subsequent weekly and/or monthly updates to this schedule periodically

throughout its tenure on the project.
5. The

last project schedule update provided during the time period of the schedule

analysis has a data date of May 6, 2002. This schedule indicates that fuel transfer

to the ISFSI would be completed on December 28, 2003, consistent with CY'

Stipulation of Facts dated March 28, 2003.
6. The planned submittal
date of the Safety Analysis Report

(If

SARIf Storage

Amendment to the Nuclear Regulatory Commission

NRCIf was November 1,

1999.
7. The actual

submittal date of the SAR Storage Amendment to the NRC was May

19, 2000.

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8. The planned approval date

of the SAR Storage Amendment was December 21,

2000.
9. The

actual approval date of the SAR Storage Amendment was November 28,

2001.

10. The planned date for obtaining a Certificate of Compliance was September 5,
2001.
11. The actual, date for obtaining a Certificate of Compliance was May 29, 2002.

12. CY issued a written directive to Bechtel on December 14, 2000

postponing

construction work for the ISFSI facility and haul road until further notice.
13. CY withdrew its postponement to Bechtel' s mobilization for ISFSI civil work on

February 19, 2002.
14. Bechtel commenced construction efforts at the ISFSI on March 18, 2002.

15. On March 27, 2002, Bechtel submitted a " Proposal for Time Extensions and
Impact Costs - ISFSI" related to CY' s direction to postpone work at the ISFSI
from December 14

2000 through February 19, 2002. Bechtel requested

reimbursement from CY in the amount of $11, 654,884 as well as time extensions

of 383 days to Contract Milestones 21. , 21.26 and 21.27, and a time
461 days to Contract Milestone 21.23.

extension of

16. CY and Bechtel agreed to an " ISFSI Claim Settlement" in the amount of

510 000 for damages claimed by Bechtel and its subcontractors resulting from

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the delayed start of Bechtel' s work at the ISFSI. This settlement is set forth in

Agreed Change Order 02- 15, effective date September 3, 2002.
17. Shortly after Bechtel' s commencement of construction on March 18, 2002, the

ISFSI civil work was again postponed due to archeological and wetlands issues. .

18. A Letter to Proceed was issued on July 9, 2002 that allowed Bechtel's work at the
ISFSI haul road, pad and monitoring station to proceed.

B. Maine Yankee
(fl
. Stone & Webster Engineering Corporation

SWEC" entered into a firm fixed

price contract with MY effective August 31, 1998 to provide decommissioning
services, including the design and construction of the ISFSI. Work commenced

shortly thereafter.
2. The contract

provided for a schedule to complete fuel transfer and all other items

necessary to eliminate the operation of the spent fuel pool by August 20, 2002.

3.

(If
NAC International

NAC" entered into a firm fixed price subcontract with

SWEC effective November 30, 1998 to provide the engineering, licensing,

fabrication and supply of casks, canisters and ancillary equipment for the spent

fuel storage and transfer system.
4. In accordance with

its contract with MY, SWEC issued a planned schedule on

April 6, 1999 that indicated a

completion of fuel transfer by August 13, 2002.

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5. MY' s Proposed Stipulation of Fact No. 186 dated June 30,

1999 indicates that fuel

transfer to the ISFSI would be completed in August

2002.

6. On November 18, 1999, MY issued a formal notice of default to SWEC and

demanded that SWEC take immediate action to remedy the deficiencies in its

performance.
7. On May 4, 2000, MY issued a notice to SWEC stating that

it was terminating the

decommissioning contract based upon SWEC's insolvency and because SWEC

had not adequately performed under the contract.
8. Following

SWEC's termination, MY re-negotiated SWEC's subcontract with

NAC and subsequently issued a change order to NAC on January 11, 2001 which
added the fuel transfer to its scope of work.
9. The planned delivery

of the first canister was December 15, 2000.

10. The actual delivery of the first canister occurred on April 3, 2001.

11. The planned start of fuel transfer was April 13, 2001.
12. The actual start of fuel transfer was August 12, 2002.
13. MY terminated NAC's contract effective January 15, 2003.
14. MY' s Proposed Stipulation of Fact No. 186 dated March 28, 2003
indicates that

fuel transfer to the ISFSI would be completed in December 2003.

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C. Yankee Atomic

1. NAC entered into a Hardware Contract with YA effective May 29, 1996.
2. NACentered into a Fuel Transfer Contract with YA effective November 27, 2000.
3. The planned delivery

of the first canister was April 14, 1998.

4. The

actual delivery of the first canister occurred in the last week of December

2000.
5. The planned

start of fuel transfer was June 21, 2001.

6. The actual

start of fuel transfer was May 30, 2002.

7. The planned completion of

fuel transfer was March 9, 2002.

8. The actual

completion of fuel transfer was June 25, 2003.

V. Summary of Opinions
A. Connecticut Yankee
1. Bechtel' s

planned schedule with a data date of April 30, 1999 has been

represented as the as-planned schedule. The schedule indicates that Bechtel's
plan for the ISFSI was consistent with the milestones outlined in its contract with
CY.

2. Bechtel's schedule update with a data date of May 6, 2002 includes the as-built
and projected schedule information for the ISFSI for the time period consistent

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with CY' s Stipulation of Facts dated March 28, 2003. The schedule indicates that

the projected completion of fuel transfer is December 28, 2003.
3. The as-built

critical path has been established based, in part, on the information

contained in the May 6, 2002 schedule. The amount of critical delay incurred
between Bechtel's contract award on April 3, 1999 and May 6, 2002 has been

determined.
4. Overall delay

is measured by comparing the actual completion of critical path

activities with the corresponding planned dates for Such activities. There is an

ll-month delay to the planned completion of fuel transfer as of May 6, 2002

as

identified in Bechtel's project schedule. This delay is the result of CY' s direction

to postpone construction work at the ISFSI,

and is not related to the actions or

inactions of the Deparbnent of Energy (" DOE"
5. Agreed Change Order 02- 15

represents settlement of damages claimed by

Bechtel related to CY' s direction to postpone work at the ISFSI from December
14, 2000 through February 19. 2002, and is not related to the actions or inactions

of the DOE.

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B. Maine Yankee
1. SWEC's schedule of April 6, 1999 has been represented

as the as-planned

schedule. The schedule indicates that SWEC's plan was consistent with the

completion milestone outlined in its contract with MY.

2. MY provided a schedule with a data date of July 17, 2003 that reflected the asbuilt activities completed up until that time and projected the remaining fuel
transfer activities would complete on March 6, 2004, three (3) months later thaI\
the December 2003 projection in MY' s Stipulation of Facts dated March 28, 2003.
3. The as-built

critical path has been established based, in part, on the information

contained in the July 17, 2003 schedule. The amount of critical delay incurred
between SWEC's contract award on August 31 1998 and July 17, 2003 has been

determined.
4. Overall

delay is measured by comparing the actual completion of critical path

activities with the corresponding planned dates for such activities. There is a 16month delay to the planned completion of fuel transfer as identified in MY'

Stipulation of Facts dated March 28, 2003. This delay is the result of SWEC'
performance and ultimate termination as well as NAC's performance and

ultimate termination, and is not related to the actions or inactions of the DOE.

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C. Yankee Atomic
1. Unlike

CY and MY, there was no overall decommissioning contractor that was

responsible for coordinating all of the decommissioning activities including
activities related to the transfer of fuel to the ISFSI. Instead, two separate

contracts were issued to NAC related to the equipment needed for fuel transfer
and the actual transfer of fuel to the ISFSI. The first is known as the Hardware

Contract and the second is the Fuel Transfer Operations Contract, or FTOC. The
contract milestones outlined in these contracts were utilized as the baseline in the
review of activities leading to and actually transferring fuel to the ISFSI.
2. As there

was no comprehensive project schedule, a detailed as-built schedule

was generated utilizing contemporaneous documents including, but not limited
to, correspondence, weekly fabrication logs, monthly project reports,

transmittals, submittals, invoices, amendments to the Contracts, and Certificates
of Compliance.
3. The

critical path of the as-built schedule has been determined as well as the

amount of critical delay incurred between May 29, 1996, the award date of
NAC's Hardware Contract, and June 25, 2003, the completion of fuel transfer.
4. Eleven

months of critical path delay to the completion of fuel transfer is the

result of contractor delays to the fuel transfer preparation activities, and is not
related to the actions or inactions of the DOE.

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Appendix 1- Curriculum Vitae

Kenneth W. Blair, P.

My qualifications as an expert in scheduling are based upon my work experience in the

engineering, construction, and govermrient contract industries for over thirty years. I
am currently a Principal at Navigant Consulting, Inc. (" NCI" ) where I consult on a wide
variety of matters.
I have Bachelor of Science and Master of Science degrees in civil engineering from

Rutgers University. The degrees were awarded in 1969

and 1971, respectively.

I am a

licensed Professional Engineer in the states of New Jersey, Pennsylvania, and Maryland.
I served as a commissioned officer in the United States Army Reserve Corps of
Engineers from 1969 through 1977.

My career began in 1969 as a Structural Engineer Associate with a structural engineering

consulting firm in New Jersey. In this capacity, I was responsible for the structural

design, specification preparation and field inspection of many types of concrete, steel
and timber structures. I also evaluated existing structures for safety, alternate uses, and

code compliance. My work involved coordination with clients and govemmentaV
regulatory agencies, as well as architects, engineers, contractors and owners.

After leaving the structural engineering consulting firm, I joined the Technical Services

Division of the New Jersey Housing Finance Agency. The Housing Finance Agency was

responsible for design, construction, financing, and management of low-rise, mid-rise,

and high-rise housing throughout the State of New Jersey. I served as Senior Structural
Engineer and, subsequently, as Manager of Engineering and Construction. In the latter

position, I had responsibility for the engineering deparbnent, coordination with
architectural teams and other consultants, geotechnical investigations of sites,

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