Opinion ID: 1638588
Heading Depth: 3
Heading Rank: 2

Heading: Disagreements over Load Shedding

Text: During this same time framethe summer and fall of 1997BCM and Harbert had an ongoing dispute concerning certain electrical and instrumentation components for Project 15. In part, the dispute concerned what the parties referred to as load shedding; the load-shedding work was to be performed by Duke Instrument Service, one of Harbert's subcontractors on Project 15 and Project 16. During the dispute, Harbert took the position that a change order was needed for load-shedding modifications. In an August 5, 1997, letter to Asarisi, Harbert requested an additional $134,271.40 for proposed change-order work (which included an adjustment to a previous change order) and stated that it was reserving its right to claim for a fifty-six (56) day compensable time extension impact ... to the projects milestone completion dates that resulted from this extra work. Eventually, BCM agreed to recommend that the Board approve a change order for $14,073.40 for wire and conduit. However, BCM did not recommend that the Board approve the remainder of the proposed load-shedding change order because Harbert had allegedly failed to provide adequate information to justify the order. On August 14, 1997, Asarisi sent Harbert a letter, a copy of which it also sent to Federal. That letter stated: As you are aware, ... Harbert ... informed the [Board] and BCM in November 1996 that the new Reactor and Clarifiers would be on line by December 26, 1996 and the project would be complete by March 1997. To date, none of this has happened. Our daily records indicate that your present work force consists of 1 superintendent and 3 laborers. We are aware of your efforts to seal Reactor 2. However, there are still a number of items that would keep the project from starting up if Reactor 2 was ready today. We have enclosed a partial list of items that have to be completed before Reactor 2 is put on line. This is not a complete list and there may be other incomplete items that delay start up. We are quite concerned about the slow rate of progress on the project and the impact that delays have on the [Board] and the operation of the plant. Therefore, in accordance with [subsection] 8.11 of the [Standard] Specifications you are hereby notified that you have 10 days to start work on each of the items on the enclosed list, with the exception of items that are dependent on the completion of Reactor 2. If work has not begun on all noted items within 10 days the [Board] will notify [Federal] that the project is in default. We trust that you will provide an adequate work force to complete the work within the specified time and to avoid further actions against you. The list of items enclosed with the letter includes 19 items, one of which is referred to as load shedding. On September 10, 1997, Harbert responded by letter to Asarisi's letter dated August 14, 1997. Harbert stated that it disagreed with the assessment of the project's rate of progress to date and that it [took] exception to your threat to declare this contract in default. Harbert asserted that, in part, the completion of Project 15 had been delayed by two contract modifications, which allegedly had delayed the completion date from March 1997 to May 12, 1997. According to Harbert, in the interim, the problems with the sealing of reactor basin #2 occurred. Harbert asserted, BCM's actions and allocation of responsibility thereof for its role in these project delays are well documented and supported. Harbert also contended that its manpower level on Project 15 was in-line with the amount of work that remains to be completed and that the indecisiveness of ... BCM in promptly resolving field issues, specifically the problems associated with Reactor No. 2, has contributed to this project's slow rate of progress. Further, Harbert asserted that  all of the specified items [on the list that accompanied Asarisi's August 14 letter] have already been completed. ... We feel your actions of threat to declare this contract in default are premature and without adequate supporting evidence. (Emphasis added.) On September 25, 1997, Harbert sent Asarisi a letter arguing that it had provided sufficient information for the approval of the load-shedding change order and stating that a representative of BCM was scheduled to meet with a representative of Duke Instrument Service to discuss the matter further. The letter continued: Currently, we are awaiting BCM's next course of action. In the meantime, the work remaining for the load shedding system is on hold and will continue to delay the project until we receive the required approval and authorization to proceed with the change order work. This letter will serve as our final request that BCM issue the appropriate change order, as previously submitted, in the amount of $134,271.40. Short of receiving a positive response from you by October 3, 1997, ... Harbert ... will exercise its legal right to ensure that we receive full compensation, from the [Board] for the above requested amount, including all relevant legal fees. Based on the foregoing, Harbert evidently considered the load shedding change-order work to be different from the load-shedding item on the list that accompanied Asarisi's August 14, 1997, letter, which it stated had already been completed. On October 3, 1997, Asarisi sent Harbert a letter responding to its September 25, 1997, letter. Asarisi stated, in part, that the scheduled meeting had occurred between a representative of BCM and a representative of Duke Instrument Service but that the portion of the change order that was in dispute required the submission of information Harbert still had not provided. The letter continued: You state that the work on Load Shedding is on hold until you receive approval and authorization to proceed. However, the Load Shedding design is quite clear and the only outstanding issue is how much extra, if any, [Harbert] is entitled to. This issue has in no way kept you from completing the work and no additional time will be recommended for delays associated with Load Shedding.  (Emphasis added.) Also on October 3, 1997, Harbert sent Asarisi a letter that stated, in part, that Harbert would proceed as stated in accordance to our September 25 letter. At the same time, as an act of good faith, ... Harbert ... is currently proceeding with implementing the load shedding modifications so that flow through Reactor No. 2 will not be further delayed. ... Harbert ... maintains its position to claim for all compensatory time impact costs to the project's milestone completion dates that resulted from this extra work. On October 14, 1997, Asarisi sent Harbert a letter accompanied by a memorandum summarizing what occurred at a meeting about the load-shedding issue held on September 16, 1997. The letter closed: We welcome your comments to this Memorandum. A copy of the letter was sent to Federal. In response to the memorandum, on October 15, 1997, Harbert sent Asarisi a letter that stated, in part: ... Harbert ... does not concur with any of BCM's allegations or comments [as to the load-shedding-change-order issue]. Our position on this matter remains unchanged. Due to BCM's unwillingness to negotiate in good faith, we will include all outstanding costs for the load shedding modification in our impending litigation claim against the Board ... and BCM.... Any further correspondence on this matter will be issued through [Harbert's] attorney. Harbert also sent a facsimile transmission to Duke Instrument Service authorizing it to proceed with load-shedding work and stating that it had informed the [Board] that as an act of good faith we will proceed with this work under protest. [We are] assuming that you will begin this work immediately as to not impede system start-up.