Yes, please.

-----Original Message-----
From: Brownfeld, Gail 
Sent: Monday, September 10, 2001 8:13 PM
To: Sanders, Richard B.
Subject: FW: Foster Wheeler suggested language for delay damages


Let me know if you'd like me to handle the Pain Creek matter.  Thanks.

-----Original Message----- 
From: Lund, David 
Sent: Mon 9/10/2001 4:31 PM 
To: Brownfeld, Gail; Millie.Hewes@nepco.com 
Cc: Sanders, Richard B. 
Subject: RE: Foster Wheeler suggested language for delay damages



Of course Gail.  I'm sorry you didn't get a copy sooner. 

Millie,  Please make a copy of the arbitration demand and our response that
Seth Price submitted on our behalf.  This is entitled "Foster Wheeler
Limited vs. NEPCO"  Please fax or overnight mail the copy to Gail Brownfeld
at Enron, EWS.  Go to the Enron web site (People Finder) to locate her
mailing address.  Thanks.

By copy to Richard Sanders, I left a voice message last week with you
describing a new matter we are developing as a claim against Overland
Construction, Inc. (a subsidiary of Black and Veatch) on a project called
"Payne Creek", located in central Florida.  Considering the losses suffered
to date ($7 Million) the project is now spelled "Pain Creek".  I spoke to
Schwartzenburg about it and he suggested we enlist your group for
assistance.  I have also retained Seth Price's firm (with Derrick's
approval) to help evaluate and develop the claim.  I would like to schedule
a conference call with Seth, myself and a member of your group to review the
claim.  Schwartzenburg and myself are available on Thursday, September 13th
and so is Seth but only in the morning.  Given the time zone differences
between Seth and myself, I would like to target 11:00 AM central time.  Let
me know if Gail or someone else will be the assigned attorney.  The claim
involves construction cost overruns due to errors in the owners
specification. 

Thanks.

David H. Lund, Jr.
Assistant General Counsel
National Energy Production Corporation
11831 North Creek Parkway N.
Bothell, WA 98011
425-415-3138
Fax: 425-415-3032
David.Lund@nepco.com or davidlu@nepco.com

                -----Original Message-----
                From:   Brownfeld, Gail [ <mailto:Gail.Brownfeld@ENRON.com>]
                Sent:   Monday, September 10, 2001 10:34 AM
                To:     Lund, David
                Cc:     Sanders, Richard B.
                Subject:        RE: Foster Wheeler suggested language for
delay damages

                David,
                        Sorry for the phone tag of last week. The reason I
was calling
                actually related to the attached.Can I get a copy of the
file on this
                and also can we schedule a call with outside counsel to
discuss this
                matter?  Apparently, life at EWS in not that different from
EI and as
                the trusty litigation manager, I need to be involved in
this.  To the
                extent that I have suggested a call on Wednesday to discuss
the Pakistan
                case, maybe you and I can arrange something with Seth to
occur before or
                after that call.  It would be helpful to have what was filed
beforehand,
                if it could be arranged. Thanks in advance.

                -----Original Message-----
                From: Lund, David
                Sent: Thursday, August 30, 2001 2:18 PM
                To: Brownfeld, Gail
                Subject: RE: Foster Wheeler suggested language for delay
damages


                Yes, against NEPCO.  We have retained Seth Price of Shapiro
Fussell in
                Atlanta.  I have Derrick's approval.  The action was
delivered two weeks
                ago
                and then put on hold.  After the unsuccessful settlement
meeting, it was
                ignited again.  Seth will issue our response on Tuesday
(9/4).  Seth has
                worked on NEPCO matters before and is familiar with our
business
                practices
                and contract terms with suppliers. 

                This is rather new matter and I didn't have the opportunity
to involve
                you
                earlier.

                David H. Lund, Jr.
                Assistant General Counsel
                National Energy Production Corporation
                11831 North Creek Parkway N.
                Bothell, WA 98011
                425-415-3138
                Fax: 425-415-3032
                David.Lund@nepco.com or davidlu@nepco.com

                                -----Original Message-----
                                From:   Brownfeld, Gail
                [ <mailto:Gail.Brownfeld@ENRON.com>]
                                Sent:   Thursday, August 30, 2001 11:46 AM
                                To:     Lund, David; Schwartzenburg, John
                                Subject:        RE: Foster Wheeler suggested
language
                for
                delay damages

                                Dave,
                                        Was the arbitration initiated
against NEPCO?  If
                so,
                who has
                                been retained to handle it?

                                -----Original Message-----
                                From: Lund, David
                                Sent: Thursday, August 30, 2001 12:30 PM
                                To: Schwartzenburg, John
                                Cc: Brownfeld, Gail
                                Subject: FW: Foster Wheeler suggested
language for delay
                damages


                                This is a heads up to a mounting dispute
with a major
                equipment
                                supplier,
                                Foster Wheeler Limited (HRSG supplier).
Currently they
                have
                initiated
                                an
                                arbitration action before the AAA here in
Seattle for a
                payment claim
                                ($1.2
                                M) on the Linden, NJ project of which we
have held back
                payment to
                                satisfy
                                our claim for delay LDs and re-work ($3.8
M).  While
                this
                action is
                                pending,
                                FWL has initiated some unlawful bargaining
tactics on
                our
                Lakeworth, FL
                                project.  More of the drama is outlined
below. 

                                No need for action here.

                                David H. Lund, Jr.
                                Assistant General Counsel
                                National Energy Production Corporation
                                11831 North Creek Parkway N.
                                Bothell, WA 98011
                                425-415-3138
                                Fax: 425-415-3032
                                David.Lund@nepco.com or davidlu@nepco.com

                                -----Original Message-----
                                From:   B-David Lund
                                Sent:   Wednesday, August 29, 2001 7:03 PM
                                To:     B-Galen Torneby
                                Cc:     B-Bob Black; B-Don Campbell; B-Greg
Tardanico;
                B-Mike Ranz;
                                B-Daniel
                                Haas; B-David Hattery; 'Seth Price'
                                Subject:        RE: Foster Wheeler suggested
language
                for
                delay damages

                                ATTORNEY-CLIENT COMMUNICATION; PRIVELEGED
AND
                CONFIDENTIAL

                                Galen,

                                I don't have the full history of dealing on
this
                purchase
                order with
                                FWL,
                                but my instincts say we don't have to accept
"material"
                changes to the
                                terms
                                on the eve of signing a PO.  FWL's attempt
to adjust
                significant delay
                                risk
                                at the eleventh hour constitutes a breach of
good faith
                and
                fair
                                dealing.
                                It is as if we were to sign the PO based on
weeks of
                review
                of a firm
                                and
                                final price but mark down the price a few
million on the
                final draft
                                because
                                we felt we were taken to the cleaners on a
previous job
                they
                sold to us.
                                FWL needs to be instructed to accept the PO
without the
                proposed
                                changes.
                                If they refuse, we have (and we must tell
them) the
                choice
                to contract
                                with
                                another party and hold them liable for the
extra cost of
                another
                                supplier to
                                make the schedule required.  This liability
is based on
                breach of an
                                implied
                                contract and FWL faces damages for
detrimental reliance
                (that would be
                                the
                                incremental cost above FWL's firm price
charged by the
                replacement
                                vendor).
                                The reliance argument is that we excused
other bidders
                weeks
                ago and
                                chose
                                to exclusively deal with FWL based on
agreement
                (reliance)
                of terms and
                                conditions presented in earlier drafts of
the PO or
                referred
                to in
                                previous
                                PO documents.  The detriment argument is FWL
knew they
                had
                us captive to
                                them on this deal.  By going forward without
other
                bidders,
                we lost
                                price
                                protection and commitment for schedule by
other bidders,
                therefore we
                                are at
                                a detriment without market forces.  In the
best world,
                our
                purchasing
                                activities need to keep proposals
competitive by not
                dropping back to
                                one
                                supplier for critical path equipment.

                                I mentioned a choice here, the other choice
is to
                continue
                to deal with
                                FWL
                                and accept their additional terms because
the risk of
                changing horses
                                and
                                being successful on a lawsuit based on
implied contract
                and
                detrimental
                                reliance outweighs the risk and cost of
having to
                "mitigate"
                the effect
                                of
                                LDs on FWL if critical path work is not
impacted or hard
                to
                document and
                                prove it was impacted, and whether our
obligations were
                fulfilled in
                                this
                                respect.  Since FWL has now opened the door
to change
                "material" terms
                                on
                                the eve of signing, we have the opportunity
to do the
                same
                with them,
                                but
                                that doesn't help if the parties continue to
go in
                opposite
                directions
                                while
                                your end date stays the same.  I would say
they know
                this is
                a dilemma
                                to us
                                and are betting we will deal with them on
these new
                first-time
                                "material"
                                changes to the PO terms.  If we go with the
second
                choice, I
                would
                                encourage
                                NEPCO and Enron to take FWL off any
preferred bidders
                list.

                                In addition, I thought I heard from the
folks who
                attended
                the Linden 6
                                settlement meeting a week ago that the
parties said they
                would not let
                                the
                                litigation on Linden 6 effect our other
on-going deals.
                Apparently FWL
                                is
                                taking their issues on Linden 6 over to
other deals.  We
                may
                want to do
                                the
                                same.

                                Stepping back a bit, unless our documents
and witnesses
                are
                crystal
                                clear on
                                the implied contract theory and we have a
clear fact
                pattern
                for
                                detrimental
                                reliance, I wouldn't lick our chops and be
confident
                that we
                got them on
                                this liability.  I am willing to advance an
argument for
                posture
                                purposes in
                                order to force some conclusion on the PO
terms that they
                have attempted
                                to
                                open up.  And with what little I know thus
far, I would
                encourage we try
                                to
                                strike a deal in lieu of another lawsuit.

                                David H. Lund, Jr.
                                Assistant General Counsel
                                National Energy Production Corporation
                                11831 North Creek Parkway N.
                                Bothell, WA 98011
                                425-415-3138
                                Fax: 425-415-3032
                                David.Lund@nepco.com or davidlu@nepco.com

                                                -----Original Message-----
                                                From:   B-Galen Torneby
                                                Sent:   Wednesday, August
29, 2001 1:22
                PM
                                                To:     B-David Lund
                                                Cc:     B-Bob Black; B-Don
Campbell;
                B-Greg
                Tardanico;
                                B-Mike Ranz
                                                Subject:        Foster
Wheeler suggested
                language for
                                delay
                                damages

                                                 << File: mom-0822.doc >> <<
File:
                8&13.doc
                >> David,

                                                I am forwarding an email
from Mr. Garry
                Greatrix,
                                Project
                                Manager, Foster Wheeler Ltd.  Please read
the document
                attached entitled
                                8&13.doc.  This has been presented as
revised language
                to
                "all NEPCO
                                contracts" from Foster Wheeler.  This
suggested language
                has
                been
                                presented
                                as endorsed by Foster Wheeler legal and
executive
                management.  The FW
                                team
                                explained that this language resulted from
what they
                have
                experienced
                                with
                                NEPCO on recent projects, specifically
Linden 6 and
                Kendall
                and that
                                they
                                cannot sign the purchase contract without
it.

                                                Since this affects more than
the Lake
                Worth
                Project I
                                felt
                                any acceptance or dialog regarding FW's
suggested
                language
                would need to
                                be
                                reviewed and approved by NEPCO legal and
executive team.


                                                Galen J. Torneby
                                                Project Manager
                                                National Energy Production
Corporation
                (NEPCO)
                                                11831 North Creek Parkway
North
                                                Bothell,  WA  98011  USA

                                                Tel:   425-415-3052
                                                Cell:  425-922-0475
                                                Fax:  425-415-3098
                                                email:
<mailto:galen.torneby@nepco.com>
                                < <mailto:galen.torneby@nepco.com>>

                                                -----Original Message-----
                                                From: Greatrix, Garry
                [ <mailto:Garry_Greatrix@fwc.com>]
                                < <mailto:[mailto:Garry_Greatrix@fwc.com]>>
                                                Sent: Wednesday, August 29,
2001 6:47 AM
                                                To: Galen.Torneby@nepco.com
                                < <mailto:Galen.Torneby@nepco.com>>
                                ; Richard.Skibinski@nepco.com
                < <mailto:Richard.Skibinski@nepco.com>> ;
                                Martin.Tollefson@nepco.com
                < <mailto:Martin.Tollefson@nepco.com>> ;
                                dlabine@nepcan.com
< <mailto:dlabine@nepcan.com>> ;
                sketler@nepcan.com
                                < <mailto:sketler@nepcan.com>> ; ltoth@nepcan
                < <mailto:ltoth@nepcan>>  .com;
                                Don.Campbell@nepco.com
< <mailto:Don.Campbell@nepco.com>> ;
                Braid, Alan;
                                Kirk,
                                Bob; Baiton, Darren; Hildebrandt, Bob;
McKenna, Richard;
                Jonker, Chris;
                                Ratelle, Leo; Rajhans, Shekhar; Dueck, Rob;
Shaffer,
                Edward;
                McNinch,
                                Bob;
                                Jansen, Bruna; McDonald, Robin; Copsey, Dick
                                                Subject: NEPCO Lake Worth -
Minutes of
                Meeting - August
                                22,
                                2001

                                                     Please find attached
Minutes of our
                Project Design
                                Review Meeting
                                                at
                                                     NEPCAN offices
Wednesday August 22,
                2001.
                                                   
                                                     Discussion and Action
items are as
                noted for
                                followup
                                by
                                                     NEPCO/NEPCAN/FW
accordingly.
                                                   
                                                   
                                                     Best regards,
                                                   
                                                   
                                                   
                                                     Garry Greatrix
                                                     FW Project Manager


                       
       
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