Message-ID: <23593224.1075861352340.JavaMail.evans@thyme> Date: Fri, 16 Nov 2001 15:49:36 -0800 (PST) From: gerald.nemec@enron.com To: david.owen@enron.com, scott.josey@enron.com Subject: RE: Summary of discussion with Gerald Cc: jesus.melendrez@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable Bcc: jesus.melendrez@enron.com X-From: Nemec, Gerald X-To: Owen, David , Josey, Scott X-cc: Melendrez, Jesus , 'kckrisa@apex2000.net' X-bcc: X-Folder: \GNEMEC (Non-Privileged)\Nemec, Gerald\Sent Items X-Origin: Nemec-G X-FileName: GNEMEC (Non-Privileged).pst I agree with your summary. -----Original Message----- From: =09Owen, David =20 Sent:=09Friday, November 16, 2001 5:33 PM To:=09Josey, Scott Cc:=09Melendrez, Jesus; Nemec, Gerald; 'kckrisa@apex2000.net' Subject:=09Summary of discussion with Gerald=20 Scott, I talked to Gerald after our telecon as you requested ----- here's the summ= ary: I repeated to Gerald my reply when you asked my opinion regarding the best = way to approach Clark. To reiterate for clarity, I suggest that Scott tell= Clark we are not satisfied with BCCK's management of activities related to= field construction and construction management activities. If you (Scott)= feel it is appropriate or necessary to offer details, the general reasons = are: (1) Poor communication leading to schedule delays and/or cost increase= s; (2) A very casual (and consequently unacceptable) approach to improving= the overall project schedule as necessary to achieve a 15 December 2001 in= -service date; and, (3) Unilateral decision-making by BCCK without the cons= ent of all Crescendo partners having the same effect as (1) above. As a re= sult, Scott and Ken mutually agree and have directed Dave to take a lead ro= le in completing all construction, testing, commissioning, start-up and rel= ated activities. It is important to stress to Clark, that, while Dave and = his delegates have primary authority and responsibility for completing thes= e activities, it will not be done at the exclusion of BCCK. To the contrar= y, Crescendo requests and expects BCCK's full and open participation. =20 Though the contract does not explicitly address this action, Gerald agreed = that since Enron wears the vast majority of all types of risk in this proje= ct, it is reasonable for us (Enron) to take action in order to protect our = interests. In addition, Ken Krisa agrees with the need and reasons for mak= ing this move, establishing strong support (though not, perhaps, unanimous)= at the Crescendo LLC level. Because the contract does not provide specifi= cally for this action, our options -- in increasing order of severity with = regard to impact upon BCCK and the potential for unpleasant reactions by sa= me -- are: Most Productive, Least Destructive to Project and Relationships: 1. Take the direct approach to Clark as I described above. Plan B: 2. Submit a change order under the appropriate section of the Contract cha= nging BCCK's scope of work and informing them of the change in management p= hilosophy and leadership. Desperation Tactic: 3. Declare the agreement in default due to non-performance and take over a= ll activities contemplated by the agreement. (Gerald --- How did I do???) Dave