Free Response - District Court of Federal Claims - federal

Case 1:98-cv-00488-SGB

Document 364-3

Filed 07/21/2006

Page 1 of 3

IN THE UNITED STATES COURT OF FEDERAL CLAIMS ) SACRAMENTO MUNICIPAL UTILITY DISTRICT ) ) Plaintiff, ) ) v. ) ) THE UNITED STATES OF AMERICA, ) ) Defendant. ) )

No. 98-488 C (Judge Braden)

Written Direct Testimony of Brian P. Brinig Related to Proposed Modification to Labor Costs in Table A
I. INTRODUCTION 1) My name is Brian P. Brinig. I have been a Certified Public Accountant in the State of California since 1977. My resume and list of expert testimony has been previously provided to this Court. 2) In the Court's March 31, 2006 Memorandum Opinion and Order, the Court allows internal labor costs related to 16 SMUD employees who charged the majority of their time to the dry storage project (the "16 Employees"). The analysis to determine the employees who charged the majority of their time to the dry storage project was based upon the Government's expert's (Navigant Consulting, Inc.) analysis of labor charges from January 1, 1992 through December 31, 2003. 3) The Court's March 31, 2006 Memorandum Opinion and Order Requesting Supplemental Expert Testimony specifies the time periods prior to and after May 15, 1997 for various calculations. Specifically, the Court has determined that SMUD is entitled to damages, but only for certain costs incurred from May 15, 1997 to December 31, 2003.1 4) Because the Court has excluded damages for costs incurred before May 15, 1997, I am updating the labor cost analysis using the time period for damages allowed by the Court, May 15, 1997 to December 31, 2003. 5) Use of June 1, 1997 Cut Off Date. In the SMUD accounting system, all data before November 1, 1999 was accounted for under the FMIS software program. The present, retrievable data from that program includes the month and year of
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March 31, 2006 Memorandum Opinion and Order.

Case 1:98-cv-00488-SGB

Document 364-3

Filed 07/21/2006

Page 2 of 3

each charge, but it does not include the specific day of the charge. Consequently, I cannot specifically determine the amount of labor charges that were incurred during the first half of May or the second half of May. Under these circumstances, I used a cut off date of June 1, 1997 (instead of May 15, 1997), a shorter period for the damages claim, to recalculate the allowable labor attributable to the employees who charged the majority of their time to the dry storage project. II. OPINION 6) In my opinion, from June 1, 1997 to December 31, 2003, 37 SMUD employees charged the majority of their time to the dry storage project. The total direct and indirect labor costs related to the 37 SMUD employees from June 1, 1997 to December 31, 2003 is $6,007,701 and $713,681, respectively.2 Therefore, the total labor costs related to the 37 SMUD employees who charged more than fifty percent of their time to the dry storage project from June 1, 1997 to December 31, 2003 is $6,721,382. III. METHODOLOGY 7) I analyzed the total labor charged to the dry storage project ("claimed work orders") from June 1, 1997 through December 31, 2003 from SMUD's FMIS and SAP accounting systems. For the employees who charged time to the claimed work orders, I quantified the total time charged to the claimed work orders by each employee and each employee's total time charged to all work orders. I then calculated the percentage of each employee's time charged to the claimed work orders in relation to each employee's total time. 8) I identified 37 SMUD employees who charged fifty percent or more of their time to claimed work orders (the "37 Employees").3 9) For the 37 Employees, I determined the total direct labor charged to the relevant work orders, and the amount of direct labor is $6,007,701. I also determined the total indirect labor charged to the relevant work orders by the 37 Employees during the FMIS period, June 1, 1997 through October 31, 1999, and the amount of indirect labor is $713,681. There is no dispute among the parties that SMUD is entitled to the indirect labor category during the FMIS period. 10) The totals for the 37 Employees replace the total direct and indirect labor for the 16 Employees addressed in the version of Table A that was previously filed on
Includes direct labor for the 37 Employees for the entire time period (June 1, 1997 ­ December 31, 2003). Includes indirect labor for the 37 Employees from June 1, 1997 through October 31, 1999 (FMIS period only), a period in which there is no dispute between the financial experts as to their inclusion. 3 Footnote 1 to the Court's March 31, 2006 Order Requesting Supplemental Expert Testimony states: "The `Labor' category may include costs attributable to the 16 employees who charged the majority of their time to the `dual-purpose' dry storage project...."
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Case 1:98-cv-00488-SGB

Document 364-3

Filed 07/21/2006

Page 3 of 3

July 7, 2006. The July 7, 2006 Table A includes direct labor for the 16 Employees of $3,562,7014 from June 1, 1997 through December 31, 2003 and indirect labor for the 16 Employees of $503,399 from June 1, 1997 through October 31, 1999. In summary, the calculations for the 37 Employees replace the calculations for the 16 Employees as follows: a) Direct labor for 37 Employees of $6,007,701 replaces direct labor for the 16 Employees of $3,562,701, and b) Indirect labor for 37 Employees of $713,681 replaces indirect labor for the 16 Employees of $503,399. 11) Exhibit 1 identifies the 37 Employees and presents a summary, by employee, of the total hours, and labor dollars, charged to both the claimed and unclaimed work orders. IV. CONCLUSION (AND OPINION) 12) In my opinion, from June 1, 1997 to December 31, 2003, 37 SMUD employees charged the majority of their time to the dry storage project. The total direct and indirect labor costs related to the 37 SMUD employees from June 1, 1997 to December 31, 2003 is $6,007,701 and $713,681, respectively.5 Therefore, the total labor costs related to the 37 SMUD employees who charged more than fifty percent of their time to the dry storage project from June 1, 1997 to December 31, 2003 is $6,721,382.

The July 7, 2006 Table A includes direct labor for the 16 Employees of $1,039,812 from June 1, 1997 through October 31, 1999 and $2,522,889 from November 1, 1999 through December 31, 2003 ($3,562,701 for the entire time period). 5 Includes direct labor for the 37 Employees for the entire time period (June 1, 1997 ­ December 31, 2003). Includes indirect labor for the 37 Employees from June 1, 1997 through October 31, 1999, a period in which there is no dispute between the financial experts as to their inclusion.

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