Case Document 118-3 Filed 12/15/06 Page 2 of 5

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF 

ALSTOM POWER INC., Civil Action No. 03-627
Plaintiff/Counterclaim Defendant,
The Honorable Terrence F. McVerry
v.
Consolidated
RMF INDUSTRIAL CONTRACTING, INC.,
Defendant/Counterclairn Plaintiff.

 

ALSTOM POWER INC.,
Plaintiff,

V.

AMERICAN INDUSTRIAL ASSURANCE
COMPANY,

 

Defendant.
DECLARATION OF WILLIAM HARRINGTON

I, William Harrington, make the following declaration pursuant to 28 USC 1746, and
declare as following. I am over 18 years of age and competent to testify in open court
concerning the following facts and events. Except as otherwise indicated, I have ?rsthand
knowledge of these facts and events:

1. At the request of McGuireWoods LLP and Philip Helmes, I prepared a bid
estimate for scope of work, using the same information available to RMF at the time of
its bid estimate, and only that informationFoster Wheeler Zack and predecessor companies from 199] to
1995. Foster Wheeler Zack?s business was a mechanical contractor with over ninety 
percent of its business dedicated to the power industry. In my last year, Foster Wheeler Zack
ranked as the 1 1th largest mechanical contractor measured by boilermaker hours in the United

States. Foster Wheeler Zack performed both maintenance and new construction, and did so in

Case Document 118-3 Filed 12/15/06 Page 3 of 5

connection with all types of boiler projects, including combined cycle, pulverized fossil fuel,
Heat Recovery Steam Generator (typically referred to as pronounced as Herzig),
alternative fuel, and circulating ?uidized beds), as was the case in this Project).
Several of these Foster Wheeler Zach projects were comparable in scope and complexity to the
Seward Project.

3. The majority of the work performed by Foster Wheeler Zack was boilennaker
work, that is mechanical erection, with a minority of the work consisting of pipe?tting. The
Seward Project was also predominantly boilermaker work, with a minority consisting of
pipe?tting.

4. ?Estimators,? as that term is typically used in the industry and at Foster Wheeler
Zack, referred to the individuals that did ?take-offs? from drawings. A take?off is the process
whereby an individual, typically non-management level engineers or employees, review
drawings to determine the quantities and dimensions of materials as well as number and types of
connections, such as welds, that are included in the scope of work. In the Seward bid, there were
no drawings of suf?cient detail to permit any take-offs to be performed, nor were any required.
Rather, the bids were prepared using an Equipment Summary Sheet supplied by Alstom that
listed the quantities and weights of materials, as well as the number of welds and other important
bid information. Therefore, there was no need for an ?estimator? to perform the Seward bid
estimate in the traditional sense of the term.

5. At Foster Wheeler Zack, once the estimators completed their take-offs, the task of
assigning manhours to erect the materials and quantities as determined by the estimators was

performed by management level personnel, typically consisting of project managers, division

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managers, superintendents and the CEO. Hence management, not by estimators, performed the
?key? function described as estimating in the papers supporting Alstom?s Motion in Limine.

6. As CEO, I personally reviewed every bid in excess of one million dollars at
Foster Wheeler Zack, and I was involved in the bid review process.

7. Contrary to Alstom?s assertions that ?means? productivity books are typically
used in estimating, there are no such industry standards or means for boilermaker work, the
predominant activity in new boiler construction. The reason for this fact is simply that boiler
components, unlike pipe, are non-standard. They vary signi?cantly by shape, weight, size and
orientation, and often involve signi?cant rigging and fitting up activities that are unique to each
project and each component. Although ?means? do exist and can be used for pipe?tting
activities, management will typically deviate from them depending upon a particularly
company?s own experience.

8. Prior to becoming CEO in 1991, I served in the following positions with the
company or its predecessors: Executive Vice?President of Operations 1984 to 1991, Vice
President of two divisions, 1982-1983. In these management roles, I likewise was personally
involved in bid review meetings for the bid estimates prepared by the company, and actively
performed and applied labor productivity rates and manhour calculations for the bid estimates.
Accordingly, it is entirely incorrect to state, as Alstom does in it papers, that I have not prepared
an estimate for 30 years. I have performed the task of applying manhours and productivity rates
to material quantities routinely throughout my entire career. I performed the same tasks in
connection with this litigation.

9. During my deposition, I was asked to replicate certain bid line items, and Alstom
relies upon my deviations between the estimates provided in my deposition testimony from the

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estimates provided in the bid estimate to conclude that the bid methodology is unreliable.
During the deposition, I lacked certain information and access to methodologies customarily
employed in performing a bid estimate for mechanical erection of boilers, and speci?cally
mentioned that these needed items were lacking. They included such essential information as:
drawings, locations and accessibility of the work, type and alloy of weld, a review of line items
by entire system for proper allocation of work, and collegial bid review. The entire bid review
process for this project involved multiple individuals working for several weeks and I
speci?cally stated that I could not perform a bid estimate of these items in a conference room in

thirty minutes.

I have read the above statement in its entirety and declare it is true

  

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