ML20072H797
| ML20072H797 | |
| Person / Time | |
|---|---|
| Site: | Three Mile Island  |
| Issue date: | 05/11/1981 |
| From: | Favret L BABCOCK & WILCOX CO. |
| To: | |
| References | |
| TASK-*, TASK-GB NUDOCS 8306290747 | |
| Download: ML20072H797 (164) | |
Text
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Ul{ITED STATES DISTRICT COURT
- SOUTHERN DISTRICT OF NEW YORK
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-- - - - --- - - - - - - - - --- - -x GENERAL PUBLIC UTILITIES CORPORATION, :
JERSEY CENTRAL POWER & LIGHT COMPANY, f METROPOLITAN EDISON COMPANY and :
PENNSYLVANIA ELECTRIC COMPANY, a
Plaintiffs, 80 CIV. 1683
- (R.O.)
l
-against-THE BABCOCK & WILCOX COMPANY and J. RAY McQERMOTT & CO., INC., .
Defendants. :
- - _ - - ---------------x Deposition of THE BABCOCK & WILCOX l
i FAVRET, taken by Plaintiffs COMPANY by LOUIS M. j pursuant to notice at the offices of Kaye, Scholer, Fierman, Hays & Handler, Esqs., 425 f
Park Avenue, New York, New York, on Monday, May 11, 1981 at 9:45 o' clock in the forenoon, before Charles Shapiro, a Certified Shorthand Reporter and Notary Public within and for the State of New York.
8306290747 810511 PDR ADOCK 05000 DOYLE REPORTING, INC.
p CERTIFIED STENOTYPE REPORTERS Os WALTER SH APIRO, C.S.R.
369 LexiNGTON AVENUE Ngw Yonx. N.Y. 10o17 CHARLES SH APIRO, C.S.R. Tg6EPHONE 212 - 867 8220
- - - - - - - s. 4
1 2
! 2 Appe aranc e as 3
4 KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, ESQS.
3 Attorneys for Plaintiffs 1
5 425 Park Avenue New York, New York 6
BY: DAVID KLINGSBERG, ESQ.
7
- - JOEL KATCOFF, ESQ.
-and-8 RICHARD C. SELTZER, ESQ., (a.m. only) 9 of Counsel i 10 11 DAVIS POLK & WARDWELL, ESQS.
Attorneys for Defendants 12 One Chase Manhattan Plaza New York, New York
' 13 O' ,
BY: ROBERT F. W I S E ,. J R . ', ESQ.
14 -and-RICHARD PU, ESQ.
15 4 of Counsel 4
16 17
-oOo-18 19 20 21 22 l l
I 23 l
24
, 25 1
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t 1 3 l I
I 2 IT IS HEREBY STIPULATED AND AGREED 3 by and between the attorneys for the 4 respective parties hereto that the sealing, 5 filing and certification of the within i 6 deposition be, and the same hereby are, 7 - waived; and that the transcript may be 8 . signed before any Notary Public with the 9 same force and effect as if signed be' fore 10 the court.
11 IT IS FURTHER STIPULATED AND AGREED 12 that all objections, except as to the form 13 ,
of the question, are reserved to the time 14 of trial.
15 16
-ooo-17 18 MR. KLINGSBERG: Do you want to mark 19 this as Favret Exhibit 1?
20 (Resume was marked Favret Exhibit 1 I >h 21 for identification, as of this date.) .
22 23 -ooo- l 24 n
V ~
2s I
1 4
() 2 L0U I S M. F AV R E T, having 3 been first duly sworn by the Notary Public 4 (Charles shapiro), was examined and 5 testified as follows:
6 EXAMINATION BY MR. KLINGSBERG:
7 -
Q Mr. Favret, I show you a document 8 .
we have marked as GPU (Favret) Exhibit 1 for 9 identification. Is that an accurate statement of 10 i your education and employment history?
11 A That's a fair representation. I would say 12 most of them are correct. I can't say each one 13 of them are exactly or precisely it as to the (v~}
14 dates, but that is a good chronology.
15 Q In your current position as Executive 16 Vice President of the Business Integration Group, 17 where are you located?
18 A In New Orleans, Louisiana, 1010 Common 19 Street.
20 Q Is that a separate office of Babcock 21 & Wilcox or is that combined with J. Ray 22 McDermott?
23 MR. WISE: What do you mean, ,
l 24 combined with?
o 25 Q Is it in the same building as J. Ray f
1 Favret 5
() 2 McDermott?
3 A It's in the same building and our offices 4 -- it's a B&W building and our offices are on 5 the 20th floor.
6 Q Is the entire 20th floor Babcock &
7 Wilcox?
8 A Yes.
9 Q Is J. Ray McDermott located in the 10 same building?
11 A Yes.
12 Q What is the Business Integration 13 Group?
14 A The Business Integration Group is an 15 operation that has reporting to it a subsidary 16 n Canada, Babcock & Wilcox Canada Limited, the 17 Utility Sales and Marketing Division for the 18 United States, the International Operating 19 Division, Research and Development and Operational 20 Planning.
f 3
> 21 Q How long has the Business Integration 22 Group been in existence?
23 A Thirteen months, approximately.
24 Q Were you in it from its inception?
25 A Yes.
1 Favrot 6 i 2 Q What was the purpose of its 3 formation?
' 4 A The purpose of its formation was as to be 5 able to consolidate our sales and marketing 6 e f forts and also to operate across various 7 - division lines to integrate the operations for 8 Mr. Vannoy.
9 Q Did you say Mr. Vannoy?
10 ,
A Vannoy, yes.
11 Q What is his full name?
t 12 A It's Walter M. Vannoy.
13 Q What is his title?
14 A He is the President and Chief Operating 15 Officer of Babcock & Wilcox.
16 Q How long has he held that position?
17 A A little over a year.
18 Q What position was Mr. Vannoy in before 19 he became President?
20 A He was the Chief Administrative Officer for
(
21 J. Ray McDermott.
22 Q Is there any corporate suborganization 23 within the Business Integration Group that has 24 responsibilities for contracts or contract 25 drafting or negotiation?
1 Favret 7 2 A No.
3 Q Is there another group that would 4 supervise that aspect of the company's operations?
5 A Each one of the operating groups has their 6 own Contracts Legal.
7 -
Q What are the operating groups?
8 A The operating groups are the Fossil. Power 9 . Generation Division and Construction Company, 10 the Tubular Products Group, the Industrial 11 Products Group and -- who am I leaving out?
12 Q Nuclear?
13 A Nuclear Group.
14 Q Is there currently a Power Generation 15 Group?
4 16 A No.
17 Q Could you describe for us briefly 18 your duties and responsibi_ities as Executive 19 Vice President of the Business Integration Group?
20 A My duties are as to coordinate the sales 21 and marketing activities to our utility customers 22 both domestically and internationally in behalf 23 of the other operating groups, to coordinate the company's R&D efforts, and to help resolve l 24
')
\/ 25 intergroup activities.
4
, . . . _ _ _, , _ . . , . _ , _ _ _ _ ,- -- + , , - - - - -
l 1 Favret 8 l l
s,_j 2 Q In 1979 you were a Group Vice President 3 of'the Power Generation Group.
- 4 What was the Power Generation Group?
5 A The Power Generation Group was a 6 consolidation of divisions whose activities were 7 '- primarily associated with power equipment boilers 8 -
for utilities and for industrial applications.
9 Q What were the groups or the divisions 10 that came under the Power Generation Group?
11 A Let me think now.
12 There was a Fossil Power Generation
/~h 13 Division, Construction Company, Nuclear Power U
14 Generation Division, Nuclear Equipment Division, 15 Nuclear Materials and Manufacturing Division, 16 industrial and Marine Division.
17 I believe that's it.
18 Q And is it correct that in 1979 and 19 previously under the Power Generation Group that 20 the contracts -- there was a separate Contracts 21 Legal Department for each one of those groups?
22 A Yes.
23 s Q Was there anyone in the Power 24 Generation Group who had particular supervisory O
O ^
25 power over the contracting area or subject?
1 Favret 9 l
() 2 A At that time each one of the divisions 3 still had their own Contracts Legal Department 4 within their division, but there was a central 5 staff of contracts Legal personnel work where a 6 coordination function took place and that was 7 - called a Commercial Department.
8 .
Q Who was in charge of the Commercial 9 Department?
10 A Prior to his retirement, it was Mr. D. R.
11 Wilson.
12 Q Is there a Commercial Department today?
13 A No.
14 Q Was Mr. Wilson the last head of that 15 Commercial Department?
16 A I don'E recall whether he was --
after his 17 retirement whether we filled that position or not.
18 g Was the function of the Commercial 19 Department transferred to some other, department 20 subsequently?
21 A Not within -- not within the B&W Company,.
22 no. Each group had their own Contracts Legal 23 operation.
24 ,
Q Was there anyone within the J. Ray b
\2 McDermott Company who has taken over the previous 25
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1 Favret 10
/~%
2 function of the Commercial Department of B&W?
()
3 A J. Ray McDermott Company does have a legal 4 staff where various individuals are assigned a 5 coordinating function for -- to assist the 6 operating companies within the parent company.
7 Q Who in J. Ray McDermott is in charge 8 of or has responsibility for coordinating 9 functions in regard to contracting relating to 10 ,
nuclear power plants or related services?
11 A The specific per se would be the 12 Nuclear Group.
13 , Q Right.
- 14 A If they had questions, they would approach 15 Mr. Jim Jones.
1
, 16 MR. WISE: Let's make it clear that 17 you are not answering the question as to 18 someone within McDermott.
19 THE WITNESS: No.
20 MR. WISE: I just wanted to make sure 21 you understood that. Mr. Favret was not 22 talking about Mr. Jones as an employee of the 23 McDermott Company.
I 24 Q Mr. Jones is not an employee of 25 McDermott? .
1
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1 Favret 11 4
()
O 2 A I don't know what his reporting is right now. I would have 3
- 4 THE WITNESS: We would have to check 5 that.
6 A Whether he is an employee of B&W or 7 -
McDermott.
8 .
Q What were your duties and
, 9 -responsibilities as Group Vice President of the l
4 10 Power Generation Group?
11 A As the Group Vice President for the Power 12 Generation Group, I had responsibility of i 13 coordinating the efforts of the various divisions 14 reporting to me and to assure that the
'15 performance was in the best interest of the 16 bompany and that we met our overall objectives 17 of the company.
18 Q Is it fair to say, then, that whe reas 19 now your primary responsibility is in the sales 20 and marketing area, your responsibilities as i 21 Group Vice President of Power Generation we re 22 more of a managerial function?
23 As Yes.
24 Q From 1973 to 1976 you were Vice 25 President of the Nuclear Division in Barberton,
, ,w- -+--.,-,1 _,-e- - -- + + - - ,er ,- -------+g-y-- r,ee---w- -,--e= ,
1 Favret 12
() 2 Ohio.
3 What were your duties and 4 responsibilities at that time?
5 A At that time I reported to the Group Vice 6 President for the Power Generation Group and I 7 - had reporting to me the Nuclear Power Generation 8 - Division, the Nuclear Equipment Division, and the
^
9 Nuclear Materials and Manufacturing Division.
10 Q Who was the Group Vice President of 11 Power Generation during that period of time?
12 A Mr. Vannoy, Walter M. Vannoy.
13 Q Was this again a managerial function?
14 A Yes.
15 Q From 1973 to '787 16 h Right.
17 Q Did you engage in sales activities 18 during that period of time?
19- A Directly or indirectly. I mean at times 20 you would always be acting in. contact with the
) 21 customers.
}
22 Q Yes.
23 A But not necessarily directly.
24 Q During the period 1973 to 1978 can you f
(~)
\'
tell us who was in charge of the Contracts Legal 1
i 25 f
~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . . J
1 Favret 13
~
2 Section of your Nuclear Division?
('_h /
3 MR. WISE: Well, he has mentioned
- 4 more than -- well, go ahead.
5 A Per se I did not have a Contracts Legal man 1
6 reporting to me.
7 . Q Yes?
8 ,
A The Contracts Legal people were part of the
~
9 operating divisions and I did not have a staff.
10 Q What operating divisions would the 11 Contracts Legal people have been a part of during 12 the 1973 to '78 period insofar as it related to 13 nuclear equipment or services?
14 A That's the same divisions that I listed 15 previously.
16 Q Can you tell us the names of the 17 Contracts Legal people in each of those nuclear 18 areas?
19 MR. WISE: For the entire period?
20 Q To the extent you recall, yes.
21 A Nuclear Equipment Division, the principal 22 head of the Legal staff was Mr. Michael Murray.
23 The Nuclear Power Generation Division, 24 a Mr. John Moutz in the early years, and Mr. Jim O
%_/ 25 Jones in the latter years, i
1 Favrat 14 (I 2 For the Nuclear Materials and 3 Manufacturing Division, I will have to get you
- 4 his name. I don't recall. I know the...
5 Q can you tell us briefly the different 6 area of responsibility of each of these three 7 nuclear divisions?
8 A The Nuclear Equipment Division is a designer 9 and fabricator of equipment for application for 10 ,
the U. S. Navy and other products that may be 11 sold for -- to other customers, such as reactor 12 vessels for Westinghouse.
13 Q Is it fair to say that the Nuclear
(
14 Equipment Division does not deal directly with 15 investor-owned electric utilities?
16 i Except for one product, and that would be 17 the electromagnetic filter.
18 Q Nuclear Power Generation?
19 A The Nuclear Power Generation Division's 20 activities were primarily with the utilities and 21 some government contracting activities.
22 The Nuclear Materials and 23 Manufacturing Division at one time during this 24 time period was a supplier of classified material
[b ~# dor the United States Navy and also for commercial 25
- l 1 Favret 15
~
-s-).
(_ 2 fuel fabrication for NPGD, for the Nuclear Power 3 Generation Division.
4 Q Is it fair to say then that insofar as 5 dealings with utilities if it came to a nuclear 6 steam supply system and related equipment, that 7
- would be under the responsibility of the Nuclear 8 Power Generation Division, is that correct?
9 A Correct.
10 , Q And in regard to fuel for the nuclear 11 plants that would be under the Nuclear Materials 12 and Manufacturing Division, and they would deal 13 with utilities in-that regard?
14 A Not correct.
15 Q Not correct?
16 k Not correct.
17 Q Which division would deal with 18 utilities in regard to the sale of fuel for use 19 in nuclear plants?
20 A The Nuclear Power Generation Division.
.} 21 Q I see.
22 Do you recall anyone else from the 23 Nuclear Power Generation Division during the 24 period 1973 to 1978 other than Mr. Moutz and Mr.
25 dones who dealt with the Contracts Legal area?
Favret 16 1 l
) 2 A We are talking 1978 and prior.
3 I believe that Mr. Byron Nelson 4 joined that --
the Nuclear Power Generation 5 Division during that time period and I can't 6 recall the names of the other individuals.
7 -
Q After 1978 do you recall the names 8 - of any other Contracts Legal personnel dealing 9 .with the Nuclear Power Generation Division or in 10 ,
the Nuclear Power Generation Division?
11 A I am sorry, I can't get the names connected 12 with the faces.
13 , Q Do you know the relative 14 responsibilities of Mr. Moutz, Mr. Jones and Mr.
15 Nelson in regard to contract matters pertaining 16 'to nuclear power generation?
17 MR. WISE: I don't know what you mean 18 by " relative," but if the witness does, he 19 can go ahead and answer.
20 A Relatives do you mean reporting 21 responsibility or --
22 Q Let's take it that way to begin with.
23 A well, those gentlemen, that is,.Mr. Jones
, 24 was the senior member and head of the department.
O U 25
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Q Yes?
l
1 Favret 17
) 2 A Mr. Moutz was in the earlier years.
3 Q And Mr. Nelson?
4 A And Mr. Nelson was reporting to Mr. Jones.
1 5 Q Can you identify Mr. McDaniel?
6 A Yes.
7 Q What is his position today?
8 - A Is that Mr. -- what's his first name, Mr.
9 -George, is it?
10 , Q Yes.
11 A I believe he -- no, that would be --
I don't 12 have personal contact with him right now, and I 13 would -- shouldn't venture a guess as to what his
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14 position is.
15 Q During what period of time are you 16 familiar with his position or responsibility?
t 17 A My recollection is that he was a member o f 18 the staff on contract matters in the Contracts 19 Legal Department.
20 Q How about Mr. Mullins? Was he also a 21 member of the staff of the Contracts Legal 22 Department?
23 As res. Mr. John Mullins?
l l
24 Q Yes.
O
\- 25 A He joined the -- I don't know the
1 Favret 18 2 precise time that he joined the firm.
3 Q Would matters pertaining to the
~
4 training of utility employees for the operation 5 of nuclear power plants come under the 6 responsibility of the Nuclear Power Generation 7 -
Division?
8 . A The Nuclear Power Generation Division did ,
9 -not have full responsibility for training of 10 ,
customers' operators. It was usually the utility 11 that assumed that role and requested that we 12 furnish a part of those services.
13 Q But to the extent that you furnished 14 those services, it would have been done by the 15 Nuclear Power Generation Division, is that correct?
16 A Yes.
17 Q Are you familiar with the fact also 18 that from time to time you enter into with 19 customers in relation to nuclear plants so-called 20 master services contracts?
21 A Correct. ;
22 Q And would the responsibilities for 23 providing those services again be under the 24 Nuclear Power Generation Division?
O As it pertains to nuclear matters?
25 A )
/
1 Favret 19 2 Yes.
O)s
(_ Q s
3 A They would primarily contract with the 4
- 4 Nuclear Power Generation Division.
5 Q Now, during 1973 to 1978 when you 6 were Vice President of the Nuclear Division in
, 7 Barberton, how did that interrelate, if at all, to 8 the nuclear operations which your company had in 9 Lynchburg, Virginia?
10 A The operations in Lynchburg, Virginia which 11 you referred to are comprised of the Nuclear 12 Power Generation Division and the Nuclear Mate rials 13 and Manufacturing Division, but in addition to 14 that, there were other divisions also in 15 Lynchburg.
16 Q So you had the executive offices in 17 Barberton and some of the actual division were 18 in Lynchburg?
19 A Correct.
20 Q Who was the head of the Nuclear Power 21 Generation Division during the period 1973 to 22 19787 23 A Mr. John H. MacMillan.
24 Q And who succeeded Mr. MacMillan?
b)
\' A At the time that the Power Generation Group 25
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1 Favrot 20 (q_) 2 was dissolved, the nuclear divisions were made 3 a group and at that time he was succeeded by Mr.
- 4 'Doug Guilbert.
5 Q What time was that?
6 A That would have been 1979.
7 Q All right.
8 A No, wait a minute. Correct that. That 9 would have been April 1980.
10 Q Were you involved in the decision to 11 make these organizational changes?
12 A Partially.
Q Who else was involved?
} 13 14 A Mr. Vannoy.
15 Q Were there any task force or committee 16 beports written or consultants' reports written 17 or presented in regard to these organizational 18 changes?
19 A No. None.
20 Q Were there any memoranda written 21 recommending particular changes with reasons?
22 A There were memoranda written making the 23 announcement of the changes and I don't have 24 , direct knowledge of any other memorandums that D>.
25 Mr. Vannoy may have written.,
--.w w+ e ~m - ma. - --
.- - - .= ..
1 Favret 21
() 2 Q Was there any committee or task 3 force which dealt with these changes?
4 A We had one or two review meetings with 5 the various members of the executive group, but
~.
6 those were organizational meetings. -
7 *-
Q Were minutes kept of those meetings?
8 - A I don't recall.
9 Q Did you present any reasons in support i 10 ,
of any recommendations that you made relating 11 to these reorganization matters?
12 A Did I -- what was the question again?
13 - MR. KLINGSBERG: Do you want to repeat 14 the question, please.
15 (Question read.)
16 $ There were no written reports that were 17 submitted.
18 Q Did you make oral recommendations to 19 Mr. Vannoy?
20 A He asked for my advice and counsel as to 21 whether we should consider a restructuring of 22 the company.
23 s Q And did you provide that advice and 24 counsel?
[/)
'~ 25 A Yes.
1 Favret 22
() 2 Q What was the substance of your 3 advice and counsel to Mr. Vannoy in regard to the 4 restructuring?
5 A That we could have a restructuring of the 6 organization and maybe clarify some of the 7
organizational aspects of the company by the 8 reorganization that we went through.
g Q What aspects required clarification 10 ,
in your view?
11 A Well, it was the consolidation of the 12 nuclear divisions as a group, was number one, l
13 which I had previously been in charge of. That
(
14 would clarify that role.
15 The structuring of the Fossil Power 16 deneration Division and the Construction Company 17 so that their activities were better defined 18 between themselves and with the utility customers.
19 The other one is to consolidate some 20 of our sales and marketing activities for the 21 utilities, both domestically and internationally.
22 Q What factors led you to conclude that 23 there should be a clarification, a restructuring 24 in relation to the nuclear operations?
O 25 A Well, one aspect was that the size of our
t' l
/
1 Favret 23 ,
i ,
(r~) 2 group and its projected growth indicated that it 3 would be timely to makeshift a change and ,
4 restructuring at that point--in time beca'use 3i \
5 the projected growth of the Power Gencr'Ett$on Group
. \.
6 would be very large.
s 7 -
Q Are there any other factors taken i'n t o"'
8 account? , 1
- , 's, 9 A None that I recall. -
13 Q Did you believe that the ke6tructuring 11 clarificction would make your nuclear operations I s s
12 more efficient' 4
~
~T 13 A Make it more cohesive. '
(V 14 )i Q From 1971 to 1973 you ware'Vics 15 President of the Nuclear Equipment Division. -
1' .
m "
16 Am I correct from your previous s,
17 testimony that you dealt in that period ' i 1 s ti 18 principally with Navy matters and did got h' ave ,
19 direct contacts with utility, customers? -
p 20 A Primary contacts and products-vere'for the, j i . '? -
21 Navy, but did have contacts with the utilities in' 22 support of the Nuclear Power Generation Division s
23 where we were manufacturing products or, equi,pment _
i i.
, s +; -
i 24 for them. ;
< s 5 I'} '
s
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25 Q And',that was only what products? . ,
_s '
, 'N,
- 9 4 sg g \ es .
- ~ u 1 1
1 Favret 24 2 A That would be some of the principal 3 equipment.
4 Q Such as?
5 A The pressurizers,' piping, steam generators, 6 reactor vessels.
7 -
Q What was the nature of your contacts 8 - with utilities during this period, '71 to '737 9 A The only contact would be if they came in 10 , to pay a visit to the manufacturing facilities to 11 see their equipment.
12 Q Is it fair to say that the nature of 13 the contacts was of a technical variety?
14 A It would have been on a supportive role for 15 the Nuclear Power Generation Division.
16 Q Supportive in what respect?
17 A Schedule, expected delivery times, but not 18 necessarily on technical issues.
19 Q Yes?
20 A Unless it dealt with manufacturing.
21 Q During that period, '71 to '73, who, 22- was in charge of the Nuclear Power Generation 23 Division?
24 A Mr. Paul Reinker.
) .
'~' 25 Q From 1970 to 1972 you were General
,- a v --w ,. -, , - , , -e-, , , , , . - - . - y ~
1 Fevret 25
( 2 Manager of the Nuclear Equipment Division.
3 What were your duties and 4 responsibilities in that period of time?
5 A Essentially the same as for the subsequent 6 time period. It was just change in detail.
7 -
Q From 1969 to 1970 you were Manager, 8 Planning and Commercial, Lynchburg and Barberton.
9 What were your duties and 10 responsibilities in that period?
11 A Responsibilities were preparing commercial 12 offerings or proposals to the utilities.
13 Q For --
(~}
%s 14 A For the nuclear steam systems and nuclear 15 fuel, with offices in Lynchburg and an office in 16 Barberton.
17 Q To whom did you report?
18 A Mr. W. H. Rowand.
19 Q Will you spell that, please?
20 A R-o-w-a-n-d. It's not William, it's Will.
21 Q In that period of time was there a 22 Nuclear Power Generation Division?
23 A Yes.
24 Q And were you a part of that division?
k/ 25 A~ Yes.
- - . . , . -.-n - - . . - . - - - - - - - - - , - , - - . . - - , - - -
1 I
I 1 Favret 26 Did you report to anybody else besides
( 2 Q 3 Mr. Rowand?
4 A , No .
5 Q I am sorry, but did you state what 6 Mr. Rowand's position was at that time?
7 -
A He was Vice President.
8 Q Of?
9 A Nuclear Power Generation Division.
10 ,
Q Who was the head of the Power ,
11 Generation Group at that time, if there was one?
12 A There wasn't one.
13 Q There wasn't one.
14 To whom did Mr. Rowand re po r't?
15~ A After 1970 or the beginning of 1970, I 16 should say, he reported to a Mr. Ellis Cox.
17 Q What was his position?
18 A He was the --
I am not sure of the exact 19 title, but he was the head of the Boiler Division 20 i at that time and Nuclear Power Generation Division.
21 Q And prior to 1970?
22 A Mr. J' . P. Craven was the head of the Boiler 23 Division at that time.
24 Q Was the Nuclear Power Generation part l
~
l N.') 25 o'f the Boiler Division in that period of time? I
- - - - - _____ . _ _ _ _ _ - . _ . - _ . _ . _ - - __ ___ ~._ _ _ _
1 Favret 27
() 2 A My recollection is getting fuzzy as to the 3 exact reporting relationships that existed. It's 4 been a while ago.
5 Q Was there a time when nuclear 6 equipment manufacture and management was a part 7
of the Boiler Division?
8 A Yes.
9 Q Approximately what period of time was 10 that?
11 A The Nuclear Equipment Division, prior to 12 late 1969, was known as Nuclear and Special Products De'partment.
( 13 14 Q Yes?
15 A Which was part of the Boiler Division. They 16 had responsibility for the manufacturing of 17 nuclear hardware.
18 Q Would that include the nuclear steam 19 supply systems?
20 A As well as equipment for the Navy.
21 Q And that was part of the Boiler 22 Division in that period?
3 A fes.
24 Q And then sometime in the 1969-70 0 25 period the nuclear was broken out?
1 Favret 28 A
() 2 A Yes.
3 Q Did you have any subordinates as
- 4 Manager of Planning and Commercial in 1969 to '70?
5 A '69 to '70. The gentlemen reporting to me 6 were Mr. Nelson; N. S. Embry; Mr. D. R. Brown; 7
a Mr. John Mum, who was in the planning function; 8 a Mr. J. B. Olmstead.
9 Q Who was in the Contract Legal 10 Department at this time doing work on nuclear-11 related contracts for utilities?
12 A I think Mr. George McDaniel was in that 13 function in Lynchburg and we obtained legal N_
14 services from Mr. Wilson's department in 15 Barberton.
16 Q What department was that?
17 A I shouldn't say legal services. Contract 18 services.
19 Q What department was that?
20 A The Commercial Department.
21 Q Is Mr. Wilson still with the company?
22 A No, he is retired.
23 Q Let's go back to the period 1965 to 24 1969 when you were a Proposal Manager, Nuclear (O ._) 25 Power Plants, Lynchburg and Barberton.
. .. . . . _ , _ _ _ _ , _ _ _ _ _ . . ~ _ -
1 Favret 29 2 Did your responsibilities differ from 3 when you became Manager of Planning and 4 Commercial?
5 A The difference would be the addition of 6 some commercial activity in Lynchburg and the 7 - addition of the planning operation for Lynchburg 8 . for Nuclear Power Generation.
9 Q In 19697 10 ,
A Yes.
11 Q What do you mean when you say 12 " commercial activity"?
13 .A The contracts. Preparation of the terms
(
14 and conditions that might associate a technical 15 offering.
16 Q From 1965 to 1969 did you do any of 17 what you would call commercial work?
~
'A
~ ~
extent, yes, but most'of that~was
[8 To~~ some 19 services that we obtained from others.
20 Q From whom?
- 21 A Primarily Mr. Wilson.
22 Q Can you tell us what your principal 23 duties were as Proposal Manager during the '65-69 24, period?
25 A A utility would give an indication that
I 1 Favret 30 O)
( 2 they would be interested in purchasing a nuclear 3 steam system or some scope of supply for a 4 nuclear plant. They would request meetings with 5 the suppliers. We would provide technical 6 information to the customer, assist at times in 7
preparation of or inclusion of certain aspects of 8 our technical of ferings. We would await the 9 issuance of an invitation to bid, review the 10 invitation and the associated specifications, 11 and then prepare a proposal in response to that 12 invitation.
Then the proposal would include the f~)
V 13 _
14 scope of supply, description of the offering, 15 price, schedule, terms and conditions.
16 Q To whom did you report during the 17 '65-69 period?
18 A Part of that time I reported to Mr. D. E.
19 Heyburn, who was Manager of all of the 20 proposition activity, and later to Mr. Rowand.
21 Q Did Mr. Heyburn's responsibility
, 22 extend beyond nuclear propositions?
l l
t 23 A fes, it included also the fossil boiler l
24 proposal activity.
l Q During this '65-69 period who, if 25 i
l
1 Favret 31
(~h 2 anyone,in the Contracts Legal area was
()
3 functioning on nuclear contracts or proposals?
- 4 A There was another gentleman who was also 5 in Contracts Legal in Lynchburg at the time and 6 his name was Mr. Minner, who we would also get i
7
- - some cdvice, but primarily we would take our 8 . commercial preparation of commercial terms and 9 - conditions to a large extent from our boiler 10 business and they would in turn be added as part 11 of our offering, and at times we would also seek ,
12 approval through the normal management chain with our New York office to Mr. Martin Victor, who was
[~)
v 13 14 the secretary and --
15 THE WITNESS: I have to look up his 16 title.
17 A You can get that out of the records.
18 Q Sure.
19 was Mr. Wilson in place in the 20 commercial Department during the '65-69 period?
21 A Yes.
22 Q During the period 1965 to 1970 was 23 there anybody else in Mr. Wilson's department who
- 24 functioned on contracts or proposals relating to a
(~h
\~ 25 n'uclear equipment?
4
,. - . , . .- e.-w. _ , - , - - - . - . - - . , , - - . , - - m . , , , - - . . . . - ,
1 Favret 32
( 2 A Mr. Kazar and Mr. Plunkett.
3 Q Are they still with the company?
4 A Mr. Kazar is still with the company. Mr.
5 Plunkett is retired.
6 Q What is Mr. Kazar's position?
7 A I believe he is part of the LTL Babcock 8 subsidiary.
9 g What is that?
10 ,
A That's a fan company.
11 Q You mentioned the New York office.
12 What was the nature of the office in 13 New York? Was that an executive office?
14 A Those were the executive offices for the 15 company.
16 Q For Babcock & Wilcox?
17 A Yes.
18 Q Prior to 1965 did you have anything 19 to do with nuclear power plants or nuclear steam 20 su ply equipment?
. g-21 A. What do you mean by, did I have anything 22 to do with?
23 Q Did you have any duties or 24 responsibilities relating to such types of
()
\~' 25 equipment?
J
1 Favret 33 2 A No.
s_-
3 Q Was Babcock & Wilcox in the business
- -1 4 of providing any such equipment prior to 1965?
5 A Prior to 1965 the company had been involved 1
6 with the two commercial nuclear power projects, 7 -
one of them for the NSS Savannah and the other one 8 for Consolidated Edison Indian Point No. 1.
9 Q But I take it you had no responsibility 10 for either of those?
11 A For either of those, nor did I have any 12 responsibility for Navy hardware.
13 ,
Q Who negotiated the Indian Point one,
.' 14 do you know?
15 A I don't recall. I don't know, I should say.
1 16 Q Prior to 1965 in any of your 17 positions did you have any responsibilities for 18 proposals or contract matters?
19 A No. On -- in what regard?
m 1
20 Q In any regard.
21 A In any regard. ,
22 .During my sales activities that I would l
23 have been involved with negotiating contracts with 24 utilities for fossil power plants, but not (G/
~
25 nuclear.
hl
1 Favrat 34 i
v) 2 Q Yes?
3 A Except for maybe Wright Patterson Air m 4 Force Base. ,
\
)
5 Q What sort of equipment were you 6 involved in contracting for when you were 7 -
involved in sales?
8 A Utility boilers, industrial boilers, 9 . construction work, service work, replacement 10 ,
parts, the normal scope of supply that would be 11 purchaced by a customer buying boiler equipment.
12 Q Apart from your degrees at Ohio State 13 University, have you had any particular studies
'v
~
14 relating to nuclear matters?
15 A No.
16 Q Where did you obtain your knowledge, 17 technical knowledge necessary to function in the 18 nuclear area?
19 A By reading material that was available 20 and working with the engineers in Lynchburg. But s 21 I do not have a great depth of nuclear technology-22 know-how.
23 MR. KLINGSBERG: Can we take a short 24 break?
O' 25 MR. WISE: Sure.
s
1 Favr'ot 35 i .
(- 2 (Recess taken.)
3 BY MR. KLINGSBERG:
4 Q You mentioned Mr. Moutz before.
, 5 Is he still with Babcock & Wilcox?
6 A He is now operating as part of the 7
- McDermott operating unit -- not operating unit, 8 . but part of the McDermott Company.
9 Q In what capacity?
10 A In Contracts Legal. And I am not familiar I i 11 with his activities at the current time.
12 Q Is he a lawyer?
13 A Yes.
(
]4 .
Q Is Mr. Wilson a lawyer?
15 A No. ,
16 Q Was there anyone in Mr. Wilson's r7 department to whom you looked for legal advice 18 concerning contracting matters?
19 A Restate it again?
20 Q Was there anyone in Mr. Wilson's
( 21 Commercial Department to whom you looked for 22 legal advice concerning contracting matters?
i 23 A- I looked to Mr. --
to Mr. Wilson. He was 24 my point of contact.
25 Q Did he in turn contact attorneys in l
I
1 Favrot 36 r^s
() 2 or out of the company, do you know?
3 A He would have been in contact with Mr.
- 4 Martin Victor's office in New York and the staff 5 that was there and also in our outside counsel, 6 Sullivan & Cromwell.
7 Q Were there any attorneys in Barberton 8 working for the company during the 1965 to 1970 9 period with whom you had any contact relating to 10 contracting matters?
11 A In Barberton?
12 Q Yes.
13 A I don't know precisely what individuals may
[}
14 have had a legal, formal legal degree.
15 Q In the Commercial Department?
16 A In the commercial Department.
17 Q Were there any attorneys in the New l
18 York office working for the company with whom 19 you had any dealings concerning contracting 20 matters during the 1965 to 1970 period?
21 A That I had dealings with.
22 Most of those were handled by Mr.
23 victor himself or outside counsel.
24 Q Yes?
l l
\- 25 A There may have been occasions that somebody 6
i l e
1 Favret 37 a
x
( ) 2 else was involved, but I don't recall.
\m/ .
3 Q Did you have any contacts with any e
- 4 Sullivan & Cromwell attorneys during the 5 1965-1970 period relating to contract matters?
6 A Yes. That would be Mr. George Kern and Mr.
7 - Richard Mestres.
8 , Q Was Mr. Kern Mr. Mestres' superior?
9 A I beg your pardon?
4 10 Q Was Mr. Kern Mr. Mestres' superior?
i 11 A Yes.
12 Q Was there an operation or a department
/~ 13 or a section in Barberton during the 1965-1970 N )T 14 period known as contracts Review?
15' A The name is familiar, but the recollection 16 is not that good as to the exact titles of those 17 departments.
18 Q Did contract proposals have to be 19 approved by anybody before they were submitted to 20 nuclear customers during this period of time?
21 A Yes, by Mr. Wilson.
Q Did he indicate his approval in 22
! 23 writing?
A Not by a formal written document. It may 24
\. . 25 be only by a note.
Favret 38 1
2 Q Was there any form for either the 3
submission or approval of proposals to or by Mr.
4 Wilson?
5 A Early in the development of the business ,
l 6 we adopted what we referred to as standard terms 7
- and conditions for proposals and those became 8 what.we use as our -- as part of every offering 9 or proposal.
. 10 ,
Q Can you put a date or the time when 11 you arrived at standard terms and conditions?
12 A Not precisely, but it was early, I would
[~ say early in that time period.
V) 13 l-4 Q Who developed the standard terms and ,
15 conditions?
e .
16 A The development of the terms and conditions 17 were an offshoot of our terms and conditions 18 for our boiler offerings as modified for -- or 19 as necessary for the nuclear proposal.
20 Q Was there a document called " Standard i
) Terms and Conditions" for boiler contracts or 21 22 proposals in existence in the mid-sixties?
23 A- Yes.
24 Q Do you know if that document still
\
' (D R>
s 25 exists today?
_ , , , _ . - _ _ , - , _ , f,-- --_ . . , - . -y, , - - , - , , ,__.__.,---,e--, ,- ,__,--.,,_,_-y--,y,. .,-.,-_-_-,,mw,,~7- - - - , _ _ y ,-,-y, - --w. ,,y,
I I Favret 39 l l
(_/ 2 A No, I don't know.
3 Q Where was that document maintained?
4 A It was maintained as part of the standard 5 manuals for the company.
6 Q What are standard manuals?
4 7 A standard manuals were broken down into 8 various disciplines, one of which was the sales 9 ~ manual which contained those standards.
10 ,
Q Was there one sales manual for the }
11 whole company or was there a separate manual for 12 different product areas?
() 13 A There were different sales manuals or
)
14 different standards for different divisions and 15 l ..
this is referring to the Boiler Division. .
16 Q Was there a separate book called the 17 Sales Manual for the Boiler Division?
18 A Yes.
19 Q Did there come a time when there was 20 a sales manual for the Nuclear Power Generation 21 Division?
22 A No. Not to my recollection.
23 Q Coming back to the question of i
i
! 24 standard terms and conditions relating to nuclear 4
.- _J equipment contracts--when,I say " nuclear equipment" 25
1 Favret 40 2 I don't mean the Navy equipment that you were ,
3 talking about.
4 A 0.K.
5 Q
We can just understand we are talking 6
about the kind of equipment you sell to --
7 A NSS.
8 Q --
i -
electric investor-owned utilities, 9 1 right. .
10 i You stated that standard terms were 11 developed from the terms for boiler offerings ,
12 and my question ic:
i can you name the personnel 13 who were involved in that deva. l opmen t back in 14 the sixties?
15 k A To the best of my recollection, it would 16 llave been Mr.
Wilson, myself, Mr. Minner.
17 Q
Is Mr. Minner a lawyer?
18 A I don't know.
19 Q
t Did he work for Mr. Wilson?
20 A Not in this time period.
21 Later on he did.
Q Did he work for you?
22 A He was -
no , he did not work for me. He 23 l was a part of the l
1 then Atomic Energy Division 24 during the '65 time period,
!O l
25 and I don't recall --
i at one time he I
did transfer over and became part
Favret 41 1
(j 2 of Mr. Wilson's staff.
Q Was he primarily responsible for 3
4 fuel matters, Mr. Minner?
MR. WISE: What time are we talking 5
6 about now?
MR. KLINGSBERG: In the sixties, late 7
8 -
sixties.
A No. Not necessarily just fuel. He would 9
10 ,
have been operating with Mr. Wilson, who handled .
11 both the boiler business and the nuclear business.
12 Q what was Mr. Minner's position?
() 13 A He was on Mr. Wilson's staff, reporting to r
14 hin.
15 Q What was the Atomic Energy Division?
16 1 Atomic Energy Division existed in the early 17 years and then was incorporated part of the 18 Nuclear Power Generation Division, and I don't 19 recall the exact date that that consolidation 20 took place.
21 Q Were you ever in the Atomic Energy 22 Division?
23 A, No.
24 Q Were these standard terms and
'" conditions relating to nuclear equipment in any 25 1
1 Favret 42 kind of a manual or booklet, '65-70 period?
) 2 3 A They were not published as a standard or 4 manual. They existed in their standard form.
5 Q In other words, they weren't labeled 6 " standard Terms and conditions"?
9 7
A Not that I recall.
8 -
Q Were changes made from time to time 9 in those standard terms and conditions?
10 A In order to meybe be responsive 'oa 11 customer's objections or desires, we would 12 considor modifications to the language.
4
() 13 Q Did you also ever decide on your own ,
either you or your colleagues, that changes 14 15 should be made in order to improve the terms and 1
16 conditions from your company's point of view?
17 A I am sure that as a normal course of doing 18 busines, if we found areas th'a t needed improvement, 19 we would have modified them.
20 Q When you got back into this aspect 21 of the business, that is, the nuclear steam supply matters in or about 1973 to 1978, were 23
{ 23 you aware of whether the company also had l 24 certain standard terms and conditions for such
contracts?
- 25 l
l l
_ . _ _ _ _- _ _ . . _ , ~ . . -
-._m . - , . -- - . _ _ -
Favret 43 1
f A Rephrase the question again.
(_) 2 3 Q Let's take it back.
4 After 1970, you were away for a few 5 years from the utility end of the nuclear steam 6 supply business, is that correct?
7 A Correct.
8 Q You then came back into that aspect S
of the business during the '73-78 period when you 10 became Vice President of the Nuclear Division in l
11 ! Barberton, is that corract? ,
12
- A Correct.
l3 Q Were you aware, during that period ,
14 of time, of whether or not there were any standard 15' terms and conditions for nuclear steam supply 16 bontracts or related services?
17 A In detail, I would -- I did not have that 18 knowledge. I would have checked to see that they 19 did have approved terms and conditions consistent 20 with the procedures and policies of the company.
21 Q Was there a sales manual in the 22 '73-78 period relating to nuclear steam supply or 23 related matters?
24 A No. Not a sales manual.
( '
Q Was there any manual in which terms 25
1 Favret 44 i
~2 and conditions were included during that period?
3 A There would have been an approved set of
. 4 terms and conditions for various offerings or 5 proposals.
6 Q Do you know in what format those 7 - approved terms and conditions were during the 8 '73-78 period?
9 A They would have been part of the records of 10 the Contracts Legal Department.
11 I Q In Earberton?
I 12 A During that time period, it would have been
, O 13 in Lynchburg.
V 14 Q In Lynchburg. l 15 I A And probably a copy in Barberton, but I . .. !
16 Q Under whose principal control would i
17 such a document have been during the '73-78 18 period?
19 A~ The principal. control would. have been with 20 the Nuclear Power Generation Division operating 4 21 under an approval procedure through Mr. Wilson to 22 New York.
23 Q Who would have been principally 24 responsible during that period for changes in p -
\- 25 the standard terms and conditions? .
--.=,-e .- -,-,r ,, . . , - . - - - ... %. - y- - - - - - , , . . -e . r----ry----r,m -*w-zy ,e-.-., -ev-a , - -w+-y w
1 Favrat 45
(-s) 2 A The individual?
3 Q Yes.
4 A It would have been the hierarchy of 5 Wilson, Moutz and/or Jones, whoever was 6 responsible at that period of time.
l 7 -
Q Am I correct that during the '73-78 8 . period that you did not function in regard to 9 _ changes in the standard terms and conditions?
10 A correct, except in an overall executive 11 capacity, 12 Q Do you recall having actually 13 f.unctioned on any changes in the standard terns
['~}
14 and conditions in your executive capacity during .
l 15 that pe riod of t ime?
13 1 No.
17 Q Was there anyone else besides Moutz, 18 Wilson and -- who was the third you mentioned?
19 MR. WISE: Mr. Jones.
20 THE WITNESS: Mr. Jones.
21 Q -- Mr. Jones, who would have had 22 ultimate authority or responsibility for approving 23 changes in the standard terms and conditions?
24 A It would have also involved Mr. Victor's 25 o'f fi ce in New York.
f.. , , . _ , . - _ . . _ _ _ , , , _ , , _ . , _ _ _ _ . _ , - , _ _ _ - . _ . _ . . _ _ _ , . . . , _ _ , _ . , , - , _ . . , _ , _ , , _ . ,,%,- __-- ~, _
1 Favret 46 I
l
- n. 2 was Mr. Victor in place in the same (v ) Q 3 position during the '73-78 period?
- 4 A Yes.
5 Q Was he --
l 6 A Until his retirement. l l
7 -
Q When did he retire?
8 A I don't recall.
9 Q Was he an attorney?
10 A Yes.
11 Q Was he the in-house general counsel?
12 A Yes.
( 13 I
, Q Did you testify before any of the 14 commissions that investigated the Three Mile 15 Island accident?
16 d At one of the Senate reviews I testified 17 briefly and introduced the company to the 18 committee as the -- as an executive officer in 19 the company. The primary testimony was given 20 by Mr. MacMillan.
] 21 Q Did you work on the preparation of 22 Mr. MacMillan's testimony?
23 A. tes.
24 Q Did you testify before the President's b'
'- # 25 or Kemeny Commission or the NRC or Rogovin
1 Favret 47 I .
2 Commission?
3 A No.
- 4 Q Were you interviewed by anyone from 5 the NRC 3pecial Inquiry or the Kemeny C,ommission?
6 A No.
7 *- Q Did you turn over any files or 8 documents to either of those commissions?
~
9 A In response to any inquiries that they may 10 I have made to my o#fice, that would have been 11 handled by my secretary, but I have no direct 12 knowledge of any.
[~ 13 Q Have you searched your files in
(.-
.) for producticn in this I4 response to request 15 lawsuit?
16 A Yes. I personally have not.. The counsel 17 has requested a review of my files and that 18 review has been made and any documents have been 19 made available to them.
~
20 Q Do you maintain a chronological or 21 blue or pink correspondence file?
22 A Yes.
23 Q For how long have you maintained 24 such a file?
b' V A' Probably since about 1970.
25
_ _ . _ - _ . - _ _ . . ,, .. _ . _- . . ~ . .
1 Favret 48 1
l m
2 Did you maintain such a file during (v) Q 3 the '65-70 period?
- 4 A No, I did not.
5 Q When your files were made available 6 for a search by counsel, how far back did your 7 . chronological file go?
8 . A I don't know. It would have been consistent 9 _with what the company's procedures would have 10 been or are for retention of documents.
11 Q What were the proceduras at the time 12 of the search?
13 A I think that they called for retention 14 of up to five years.
15 Q And you normally throw away your 16 chronological file when it is more than five 17 years old?
18 A Right. They would be discarded.
19 Q What sort of files did you maintain 20 during the 1965-70 period of a personal nature?
s 21 When I say " personal," I don't mean your private 22 affairs, but other than things which you sent to 23 company files but relating to your work on 24 proposals and contracts and the like.
O
' 25 A The records would have been retained by
-_ _ , . , , , _ _- , , . , _ _ - , _ _ . _ . 7_ m ,
1 Favret 49
( ) 2 proposal activity and not by a chronological file.
3 Q Did you keep records of each proposal 4 that you worked on for your own use?
5 A No.
6 Q Tou sent everything to some central 7 '- file?
8 . A correct.
9 Q Do you know how long those proposal 10 ,,
records were maintained?
11 A It would have been consistent with the 12 company's policy, which there is a separate 13 portion of it that deals with contract matters on
, 14 contract documents.
I 15 Q can you tell us what that policy is 16 ln relation to contract matters?
17 A No, I haven't reviewed it recently.
18 Q Do you remember what your practice 19 was, going back to the '65-70 period?
20 MR. WISE: The practice was as to 21 what?
22 MR. KLINGSBERG: As to maintaining 23 s files relating to contract and proposal 24 matters.
/~T t' ,/ A' There was a similar procedure in effect, 25
- -- ,4.- -- , g
1 Favret 50
("N but beginning in 1970 there was an enforcement
(_) 2 3 of it. We found that there had been some laxity 4 and there was an extensive review made in 1970 5 for that time period to discard document files 6 that were not necessary to retain.
Was the laxity in: regard to too much 7
l*- Q 8 destruction of documents or too much keeping of 9 -documents?
10 A There was too much keeping of documents.
11 Q And what change was made in 1970 4
12 in that regard?
13 A We enforced the procedure.
(
14 Q Do you remember what the procedure 15 was?
16 A Review your files and discard documents 17 that were unnecessary.
18 Q In terms of contracts and proposals 19 under the procedures as you understood them at the 20 time, what sort of contract and proposal documents 21 could be thrown out and what kind were maintain.ed?
- 22 THE WITNESS: That's a faint I
recollection on my part.
23 l l
24 A I don't recall what the specific procedures !
1
(~)#
\' were at the time. But I do recall that we did a 25
.._,l
1 Favrot 51 m
() 2 have a review of retention.
3 Q Do you recall in response to that
. 4 review throwing away any particular batches of 5 documents or files?
6 A I personally do not. My secretary would'have 7 - performed that function.
8 Q Following that review in 1970, do you
~
g know whether any of your contract or proposal 10 files were still maintained and escaped your 11 secretary's destruction efforts?
12 A No, I am sure that she adhered to the 13 instructions.
14 Q When you went to your new job in 1970, 15 did you take with you any contract or proposal ,
16 iles?
17 A None. Those would have left -- stayid with 18 the previous division.
i 19 Q Were you a part of any task forces 20 or' committees relating to the Three Mile Island' t h 21 accident? s . j 22 A No. .
.ss 23 .
Q Were you interviewed by a y tash!\ - .., s s
forces or committees or consultants investigating %,
l 24 '
T l _
l (~l
\- 25 o'n behalf of the company the 'Three Mile Island' I . .l,
/ d l .:
.. - , , , _.. .,, - ,, , - - - - , . , , . - - , . , c - - , , n-,- , c , , , , , . - ,
I Favret 52 l
('~ 2 accident?
3 A No.
4 Q Have you ever given testimony in a 5 trial in any litigation --
6 A No.
7 '- Q -- relating to company business?
8 A No.
9 Q Have you ever testified in a 10 ,
deposition before relating to company matters?
11 A No.
i-12 Q Did you prepare any memoranda or 13 0.ther written documents relating in any way to
(
14 the Three Mile Island accident?
! 15 A No.
16 Q Have you prepared any memoranda or 17 any other written document relating to the 1
18 company's financial exposure relating to the Three 19 Mile Island accident?
20 A Not th at I recall.
21 Q It's possible that you may have 22 prepared such documents and forgetten about them?
23 MR. WISE: I suppose that's always 24, possible.
25 Q Do you know if a negotiation file was 1
~
I 1
l 1 Favret 53 m
2 maintained in regard to each of the nuclear (V) 3 steam supply system contract matters that you
, 4 functioned on in the '65 to '70 period?
i 5 A Yes. There would have been a complete file 6 starting with the customer's specifications for 7 . inquiry through to the completion of negotiations. ,
8 Q What sort of documents would be 9 included in that file?
10 A There would be a -- if there was a prebid 11 meeting, there would be information such as t 12 that, there would be the customer's specifications, 13 any correspondence from the customer, any 14 minutes that we may have made over the course of 15 the negotiations would have been put into the 16 files, a copy of the proposal, et cetera. It 17 just goes on.
18 Q When was the last time you saw such a 19 file relating to the Three Mile Island No. 1 unit?
20 A Three Mile Island N2. 1, it would have been 21 the documents that have been provided to me by 22 counsel.
23 Q And in connection with preparation for 24 this deposition?
>O ,
25 A' Right.
l
1 Favret 54 And would the same be true of the
( 2 Q 3 Three Mile Island No. 2?
- 4 A Correct.
5 g were there things missing from that 6 file that you recall having been there when you 7 were involved in those negotiations?
8 A They provided selected documents which I 9 ~ . reviewed and I can't recall at the time. I am 10 sure there were other documents.
11 Q You didn't see a file --
12 A No.
~
13 Q --
as such in its original form?
14 A No.
15 Q Prior to your preparation for your 16 deposition in this case, when was the last time you 17 had seen such a negotiation file for the Three 18 Mile Island units?
19 A It would have been probably at the 20 completion of negotiations and entering into a 21 contract.
l 22 Q Do you know whether any portions of 23 those files have been destroyed either in the 24 course of your document retention program or 25 otherwise?
b
1 Favret 55 A I have no knowledge of that.
( 2 3 Q Do you know who would be familiar
- 4 with that fact in the company?
5 A That would -- that would be supposition on 6 my part, but they would be the individuals 7 . executing and responsible for the contracts.
8 , Q And who are those people?
9 .A It would be Mr. Ward,Ihr. Grant Ward, 10 and Mr. Beisel.
11 Q What was Mr. Ward's position when he 12 was functioning on the Three Mile Island No. 1
~
13 matter, or 27 14 A What was his position?
15~ Q Yes.
16 He was a Project Manager.
17 Q Was he the Babcock & Wilcox Project 18 Manager on Three Mile Island No. 17 19 A I am not familiar with which contract. I 20 know he was involved with those jobs.
h 21 Q Was he stationed in Lynchburg?
22 A Yes.
23 Q What was Mr. Beisel's position when 24 he was functioning on the Three Mile Island units?
O\~l A' He was I think Senior Project Manager.
25
I I Favret 56 A Is that higher than the Project 2 Q
()
3 Manager?
- 4 A Yes.
5 Q Was it the responsibility o f the 6 Project Manager to maintain the contract 7 negotiation file?
8 A Yes.
9 Q Is Mr. Ward still with the company?
10 A Yes.
11 Q In what position?
12 A Project Manager.
13 Q Is Mr. Beisel still with the company?
14 A No.
15 Q Is he retired?
16 A Yes.
17 Q What was the first nuclear steam 18 supply contract on which you functioned on behalf .
19 of Babcock & Wilcox?
20 A When you say -- which was the contract?
21 Q Or proposal?
22 A Or proposal.
l 23 Probably it was Consumers Power.
24 Q Do you know the name of the unit?
\ .
25 A' It's the last one to Combustion Engineering.
L i
I can't think of the name of the station now.
I l
1 Favret 57 p)
(
2 Q With whom did you deal at Consumers?
3 A Mr. Russ Youngdahl.
- 4 Q What was the next nuclear steam
, 5 supply proposal that you functioned on?
6 A There was a whole sertos of proposals made 7
- and I am not sure which one was -- goes in what 8 . chronology.
~
9 Q Yes?
-10 ,
A But it could have been Florida Power &
11 Light.
12 Q Do you want to tick off the se rie s ?
13 A That was for Turkey Point Station. The
(
14 other would have been Carolina Power & Light, 15 Robinson Station, and then followed by probably 16 Duke Power.
17 Q Did you get the Florida job?
18 A No.
19 Q Did you get the Carolina job?
20 A No.
21 Q You did get the Duke Power job.
22 A Yes. l l I
23 s Q What plant was that? l l
. i 24 A Oconee.
O 25 Q Do you want to spell that?
. _ _ - - _ . _ . . , _ _ - _ _ . . . - - - - . ~ . , - - . - - - - _ _ ,
x 1 Favret 58
( 2 A O-c-o-n-e-e.
3 Q With whom did you negotiate on the
- 4 Duke Power facility?
5 A Mr. Lee, and I would have to get out a list 6 of their officers to refresh my memory.
7 - Q Who participated with you from 8 Babcock & Wilcox in the Duke Power negotiation?
9 .A Mr. Rowand, Mr. Heyburn and possibly Mr.
10 Wilson.
11 Q What was Mr. Heyburn's position at the 12 time?
13 A He was head of the Project Management for the U'~N 14 Nuclear Power Generation Division.
15 Q What was the next proposal or contract 16 an which you functioned?
17 A I believe the sequence probably was Met Ed.
18 Q Yes?
19 A And there was one other in there and I 20 think it may have been Florida Power Corporation,
) 21 but the job did not go ahead at that time. It was 22 Postponed.
23 Q What came next?
24 '
A It would have been -- I didn't review the
/~'s
's-) 25 o c'ntract numbers.
i
1 Favrat 59 l
A The contracts are booked sequentially 2
( /
3 as to number.
- 4 Q Yes?
5 A I think that the published list of the 6 contracts would be more accurate than my 7
recollection.
8 Q Just tell us the ones you recall. If 9 -you don't get them in quite the right order, we 10 ,
will --
11 A It would have been Jersey Central, Arkansas 12 Power & Light.
13 ,
Q Did you get that job?
14 A Yes.
15 Q What plant was that?
16 $ I would have to go to published data.
17 Q Right.
18 A There was one bid to American Electric 19 Power.
20 Q You didn't get that?
21 A We did not get that.
22 Florida Power Corporation.
23 .
Q Did you get that?
24 A Yes.
(~;
\
'~
25 Q What unit was that?
1 Favrot 60 (j 2 A Crystal River No. -- something or other.
3 Q Right.
- 4 Any others?
5 A And Toledo Edison.
6 Q That's Davis-Besse?
7 - A Yes.
8 And that was the last one that I g .was directly involved with until the more recent 10 contracting for the Power Authority of the State 11 of New York.
12 Q When was that?
13 A That was after the '75 time period.
14 Q Approximately when was that?
15 A I don't recall.
16 Q Were the Florida Power & Light, the 17 Cyrstal River, Toledo Edison, Davis-Besse, the 18 Jersey Central and Met Ed, which would have 19 ultimately become Three Mile Island 1 and 2, and 20 the Duke Power, Oconee similar type units or 21 systems?
22 A Yes.
23 Q How would you describe them?
24 A Similar -- similar type units with certain
' 25 modifications to possibly meet the customer's
1 Favret 61 2 desires.
3 The Toledo Edison unit did incorporate 4 a modification with the elevation of the steam 5 generators relative to the reactor vessel.
6 Q Have you ever had any involvement in 7 . proposals or contracts for units outside the 8 United States?
~
9 .A Yes. Briefly on an offering for -- it was 10 an offering for Spain and that was just very, very 11 briefly, was involved with t. hat in a minor role, 12 and proposals for -- in the post '73 time period 13 for Korea.
14 Q Did B&W get the job for Spain?
15 A No.
16 1
Q What was your involvement in the 17 offering?
18 A It was so minimal that I don't even recall.
19 Q Yes?
20 A I just know it was going on about the time 21 that I took over, which was moving into a new 22 job and I think it was just the mere knowledge of
! 23 than an involvement in, i 24 Q What division or part of the company 25 functioned on international sales or overseas
1 FavrGt 62 2 sales of nuclear steam supply systems?
3 A The same organizations as we discussed l 4 previously.
! )
5 Q What was your involvement in the 6 Korea proposal?
7 A As the -- in charge of the Nuclear Divisions,
- 8 is that I had visited the utilities in the Far 9 -East and had established relationships with the 10 Far East utilities and built up associations in 11 Japan and in Korea. We never did make a 12 proposal into Japan.
13 , Q Did you get the job in Korea?
14 A No.
15 Q Approximately how many nuclear steam 16 Supply systems, if any, has B&W sold outside the 17 United States?
18 A B&W in consortium with BBC is involved with 19 one project--that's with BBR, on the, 20 Muelheim-Kaerlich project.
h 21 Q BBR is who?
22 A Babcock -- it is no longer Babcock. It is 23 Brown Boveri Reaktor Gmbh.
24 Q Were you involved at all in the O '
25 formation of that joint venture?
I
^^
1 Fcvret 63
-[ ) 2 A No.
V 3 Q Have you had anything to do with the
- 4 negotiation efforts of BBR?
5 A Negotiation efforts with whom?
6 Q With customers.
7 . A No, other than in a -- being courteous to a 8 customer in accommodating his visits, no direct 9 . involvement with negotiations.
10 .Q Who in the company is responsible 11 for the terms and conditions that go into the BBR 12 proposals or contract?
( 13 A That was under the responsibility of a 14 gentleman by the name of Mr. B. D. Davies, who 15 reported directly to Mr. Vannoy.
' What was his position?
16 Q 17 A He was the President of the then BBR, 18 which at that time was called Babcock Brown 19 Boveri Reaktor Gmbh.
20 Q Is he still with the company?
21 A Yes.
22 Q In what position? j l
23 A de is now Vice President of our 24 International Operating Division and reports to me.
) ~
s m/ 25 Q Who in Babcock & Wilcox worked out the )
, - . . . . ~ . , -
, .,.r - , - - , . - , , , -, ,,,n -
1 Favret 64 l
l I
division of responsibilities as between Babcock (s) 2 3 & Wilcox and Brown Boveri in regard to
- 4 negotiating contracting matters?
5 A I was not involved with that. I had no 6 direct knowledge.
7 . . Q During the period 1965 to 1970 did you 8 ever see any proposals or contracts of your 9 competitors, Combustion, GE or Westinghouse?
10 A During the early years, and you will have to 11 excuse my recollection, but during the early years 12 of the nuclear business, General Electric and
(~}
'V 13 Westinghouse sold turnkey plants and associated 14 with those were a definition of their offerings 15 and also including terms and conditions.
16 Q Did Babcock & Wilcox sell turnkey 17 plants?
18 A No. Not directly.
19 Q Were the terms and conditions of GE 20 and Westinghouse different from yours because 21 they were selling turnkey plants?
22 A That would take supposition on my part on 23 behalf of GE and Westinghouse.
24 Q Did you ever have any discussions with 10
\/ , 25
~
any GE or Westinghouse representatives concerning
1 Favret 65 2 terms and conditions?
(A_)
3 A No.
- 4 Q The same would be true of Combustion?
5 The answer would be no?
6 A The answer is no.
7 Q Did you ever see any GE, 8 Westinghouse or Combustion terms and conditions, 9 -proposals or contracts in the '65-70 period?
10 ,
A Not that I recall.
11 MR. KLINGSBERG: For the purposes 12 of continuing our chronological number 13 ,
system, the document which was originally 14 marked as GPU (Favret) Exhibit No. 1 for 15 identification will now become No. 164 16 following an audit.
17 Can we agree that the reporter can 18 make appropriate changes in the earlier 19 part of the transcript?
20 MR. WISE: Sure, if Mr. Shapiro l
) 21 would like to do that. Otherwise, I would 22 think it would be enough if he just changes 23 che exhibit number on the original and also i 24 makes a note at the back of the transcript l
' that Favret i is the same as GPU 164.
25 1
I
1 Favret 66
()
,m 2 (Document previously marked Favret 3 Exhibit 1 for identification was re-marked
- 4 GPU Exhibit- 164 for identification, as of 5 this date.)
6 MR. KLINGSBERG: I would now like to 7 -
mark as GPU Exhibit 165 for identification 8 - a memorandum from F. C. Heller to Nuclear 9 Contract Engineering, Barberton, dated 10 ,
December 7, 1976.
11 MR. WISE: My copy says December 7, 12 1966.
MR. KLINGSBERG: '66, I am sorry; did f) v 13 ,
14 I say '767 15 (Memorandum from F. C. Heller to 16 Nuclear Contract Engineering, Barberton, 17 dated December 7, 1966, was marked GPU 18 Exhibit 165 for identification, as of this 19 date.)
20 (Document handed to witness) 21 A Oh, I can't even read it.
22' MR. WISE: Off the record.
23 , (Discussion off the record.)
l 24 BY MR. KLINGSBERG:
.f
25 Q Have you ever seen Exhibit 165 before, l
l
l 1 Favret 67 l
) 2 Mr. Favret?
3 A SPecifically, I can't say that I specifically 4 recall this one document, but 15 years ago is a 5 long time.
6 Q You don't have a recollection, sitting 7 -
here today, of having seen this in 19667 3 8 - A No.
9 Q There is a reference on the third 10 ,
page of the document in the bottom paragraph to 11 Jerry White.
12 Can you identify Mr. White?
13 A. Mr. White is over here (indicating)?
14 Q Yes.
15 A Jerry White was the District Sales 16 anager operating out of the Philadelphia office 17 and Mr. Heller reported to him.
18 Q Did Mr. White and Mr. Heller 19 Participate in the negotiations with Metropolitan 20 Edison?
21 A It would be more accurate to state that 22 they attended the negotiations and assisted in 23 the discussions, but did not necessarily 24 Participate in the actual negotiations themselves.
25 Q What was generally the role of the
l I
1 Favret 68 l l
/^s sales office, the local or regional sales office 2
()
3 as compared with the Barberton Division in regard
- 4 to negotiations or proposals?
5 A The local sales offices were familiar and 6 knew the individuals within the customers' 7 - organizations and acted as a front line of 8 -
communication between the customer and the company.
9 MR. KLINGSBERG: Off the record.
10 ,
(Discussion off the record.)
11 Q will you turn to the last page of 12 this exhibit. There is reference to, under the 13 cc, to" Contract Review Barberton."
(~J) 14 I asked you earlier about contract 15 review. Does this reference refresh your 16 recollection in any respect as to whether there e
17 was a Contract Review Section or operation?
18 A At one time there was a Contract Review 19 Section that reported to Mr. Wilson as Commercial 20 Manager.
21 Q What period of time was that?
22 A I don't recall.
23 Q Was it during the '65-70 period?
24 A Evidently it must have been.
A .
(j
~
25 Q Did there come a time in that '65 to N- -
1 Favret 69
( 2 '70 period when the Contract Review Section was 3 abolished?
- 4 A I don't recall.
5 Q Who was in the Contract Review 6 Section in or about December of 19667 7 A That probably would have been Mr. Kazar.
8 -
Q was he an attorney?
9 A No.
10 ,
Q Was the contract Review Section part 11 of the Commercial Department of Mr. Wilson?
12 A Yes.
() 13 . Q Was it the practice to submit 14 proposals or contracts to the Contract Review 15 Section for review?
16 A The normal practice would have been that 17 somebody in Contract Review and in the Proposal 18 Section would review the specifications in our 19 proposal prior to submittal of our proposal.
20 Q Did they make changes?
21 A And/or exceptions to the customer's offer.
22 Q There is reference also on the last 23 page to"the valiant efforts of Don Wilson and t 24 Lou Favret and their able assistants."
3 i
25 Who were the able assistants?
l
1 Favret 70 2 A That would have been Mr. Embry, Mr. Brown, 3 Mr. D. W. Montgomery.
, 4 Q What was Mr. Brown's position at the 5 time?
6 A He was the Proposal Engineer reporting to Mr.
7 olmstead and he would have reported to me.
8 Q And Mr. Montgomery?
9 A Was a -- I can't recall the exact title, 10 but he was a technical engineer in the Proposition 11 Department in Lynchburg.
~
12 Q Is it fair to say that Embry, Brown 13 and Montgomery were all technically oriented 14 people and advised on those aspects of the 15 contracts and proposals?
16 d Yes.
17 Q Can you identify J. G. Martin, who is 18 listed on the last page of this document?
19 A Mr. Martin was the Northeast Regional 20 Manager with his office in New York as part of 21 the Sales Department.
22 Q He in a sense supervised the 23 Philadelphia Sales Office?
24 A Yes.
i 4-/' 25 Q And the reference to Commercial i
1 Favrot 71 Manager, Barberton would have been to Mr. Wilson?
( 2 3 A correct.
, 4 Q There is reference here to "trying 5 negotiations on this job, particularly those in 6 connection with licensing."
7 . Do you know what the reference is to j 8 ,
the negotiations relating to the licensing?
~
9 .. A There was a difference in opinion, a 10 difference in requirements desired by the customer 11 and what we were prepared to accept responsibility 12 for.
13 Q In regard to licensing? l Os l A Yes.
14 l l
15 Q In other words, to securing the 16 decessary approvals --
17 A Right.
18 Q -- which was I guess then the Atomic 19 Energy Commission? .
20 A The licensing procedures were not well 21 defined and we would not take responsibility for 22 acts of government.
23 Q Did you participate in the negotiations 24 on licensing?
C\
U 25 A' Yes.
1 Favret 72 )
p.
2 Q Were you the lead negotiator on that 3 subject?
4 A Yes.
5 Q. And with whom did you have discussions 6 on the subject of licensing on behalf of Met 7 _
Ed?
8 _A The people representing Metropolitan Edison
~
- 9 for Med Ed No. 1 were Mr. Neidig, Mr. Miller, 10 Mr. Trowbridge, Mr. Pickard, Mr. Lowe and Mr.
11 George Bierman.
12 Q Do you recall discussions with any of
/ 13 those gentlemen in regard to the licensing 14 matters?
1 15 A The principal spokesmen for the customer 16 was Mr. Miller, Mr. Pickard and Mr. Trowbridge.
17 Q Are you limiting yourself now to 18 licensing matters when you say "the principal 19 spokesmen" or are you talking about everything?
20 A I thought you were asking_me who represented 21 the customer.
22 Q Limiting yourself to the negotiations 23 or discussions relating to licensing matters, 24 with whom, if you recall, did you have discussions.
O k/ 25 at Met Ed or on behalf of Met Ed?
a ,- ~ - ,- .-n-- - - - --, - - , , , .
1 Favret 73
() 2 A with those gentlemen.
l 3 Q All three?
- 4 A All three.
5 Q Approximately how many meetings did 6 you attend prior to December 1966 relating to the 7 - negotiations with Met Ed?
8 A Refresh my memory. What is the December 9 1966 --
10 Q That's the document you have in front 11 of you.
12 A This one hers.
13 There was a series of meetings that
( _
14 took place probably at two-week intervals where 15 after we submitted our proposal and we entered 16 $nto serious negotiations.
17 Q Where did tho'se meetings take place?
18 A Usually at Met Ed's offices..
19 Q In connection with this matter of who 20 had what responsibility in regard to licensing, 21 do you have any recollection of any specific 22 discussions with Messrs. Miller, Pickard or 23 Trowbridge?
24 A The specific discussions revolved around l
25 the issue of who would obtain the license and who l
f t .
y,-m - e, y ,y
1 Favret 74 had prime responsibility.
f)N
(_ 2 3 Q Do you recall what, if anything, you 4 said in that regard at the meeting?
5 A That the manufacturer was not in a position 6 to secure a license and that the only one that 7 could secure a license from the government would 8 be the customer.
9 Q Do you recall what Mr. Miller or 10 Pickard or Trowbridge said, if anything, on the 11 subject of licensing?
12 A They requested that we accept to some degree
[~T 13 financial responsibility for changes that might
\_/
14 be brought about by the licensing action.
15 Q And how was that matter finally 16 esolved, the licensing?
17 A The differences were finally resolved, if I 18 recall correctly, that-we accepted limited shared 19 responsibility for changes up to a certain limit 20 for things that we had not specified as being 21 the responsibility of the customer.
22 Q Incidentally, was it the practice of 23 Babcock & Wilcox in this period of time, '65 to
_ 24 '70, after a negotiation was concluded or at any
stage of the negotiation,to prepare any written 25
1 Favret 75
(~3
(_j 2 summaries of the negotiation?
3 A No.
4 Q Do you know whether, in fact, any such 5
written summaries were prepared in relation to the 6 Three Mile Island 1 or 2 negotiations?
7 A Not that I --
not that I recall.
8 -
Q Do you know whether any such summaries 9 of negotiations were prepared in regard to Duke 10 ,
Power or Toledo Edison or Florida Power & Light 11 negotiations?
12 A No.
A Q You say no. You don't recall or --
13 ,
()
14 A No, I don't recall.
15 MR. KLINGSBERG: I will now ask to
)
16 have marked as Exhibit 166 a memorandum from 17 Mr. Kazar to Mr. White dated May 31, 1967.
18 (Memorandum from Mr. Kazar to Mr. White 19 dated May 31, 1967 was marked GPU Exhibit 20 166 for identification, as of this date.)
21 Q Have you ever seen this document 22 before?
23 A' I don't recall.
Q Can you identify T. F. Lammers?
24 O
b 25 A Mr. Lammers was an engineer who worked in
I Favrot 76
(~h q) 2 Barberton and reported to Mr. Olmstead.
3 Q Was he involved in the negotiations 4 with Metropolitan Edison?
5 A He could have been. I don't remember.
6 Q Can you identify Mr. Duffy?
7 -
A Mr. Duffy was Pricing Manager and reported 8 to Mr. Wilson.
9 Q Was he involved in the negotiations 10 ,
with Metropolitan Edison?
11 A No.
12 Q Did he function on the pricing of the
~
13 unit?
14 A I beg your pardon?
15 Q Did he function on the pricing of 16 the unit?
17 A To a limited extent.
18 Q I am not sure if I asked you whether 19 Mr. Kazar is still with the company.
20 A You did ask that.
21 MR. KLINGSBERG: I would like to have I
22 marked as Exhibit 167 for identification l
l 23 a memorandum from C. T. Smith to various 24 persons dated February 14, 1966.
b O 25 (Memorandum.from C. T. Smith to
)
i Favrot 77
,1
) 2 various persons dated February 14, 1966 3 was marked GPU Exhibit 167 for
- 4 identification, as of this date.)
5 MR. KLINGSBERG: The record should 6
indicate that it appears from the wording 7 - of the document that there is more to it, 8 .
but it is my understanding that in the 9 original production, there was nothing 10 ,
attached.
11 BY MR. KLINGSBERG:
12 Q Have you ever seen this document
/~ before?
b) 13 14 A I think I have. I recall that I have seen
- 15 this one.
I Was that in your preparation for this 16 Q 17 deposition --
18 A No.
19 Q -- or before that?
20 A No.
21 Q Do you recall seeing this back in ',667 22 A Yes.
23 Q Can you identify Mr. Smith?
24 A Mr. Smith -- oh. C. T. Smith? He was a 5
25 Salas Manager or Sales Engineer I.think at that
1 Favrot 78
)
2 time operating out of the Philadelphia office.
3 Q Can you identify Mr. Behr?
- 4 A Mr. Behr was in -- probably in Boston.
5 Q A salesperson?
6 A Yes.
7 -
Q Mr. Coughlin?
8 A Mr. Coughlin was a sales specialist, part of 9 -the Atomic Energy Division.
10 ,
Q It is not clear to me from the 11 questions and answers so far what the role was 12 of the Atomic Energy Division in either the
() 13 manufacture or marketing of nuclear steam supply 14 systems.
15 can you explain that?
16 A Rephrase that --
17 THE WITNESS: Repeat the question, 18 please.
19 MR. KLINGSBERG: I will rephrase it.
20 Q Can you explain what the responsibility 21 of the Atomic Energy Division of Babcock & Wilcox 22 was in regard to the marketing or manufacture of 23 nuclear steam supply systems?
24 A At one time the Atomic Energy Division had 25 sole responsibility for the design and sale of I
~ ~
l ,
s s
( ,
( '
1 Favrot 1 s 79
\\ 3 ,i s
q_) 2 their products. They were not familiar l with the 3
utilities, customers and requested assistance '
\
- 4 from the Boiler Division to take the le'ad in sales <
5 and marketing activities. s 1
6 At this point in time they had 7 technical expertise and the nuclear fuel expertise 8 and we joined efforts to assist them in the sale 9 lof products to the utilities.
10 Q Can you identify Mr. Landis?
11 A Mr. Landis was the Vice President in charge 12 of the Atomic Energy Division. ,
s l
l I~ 13 Q Mr. Mackenzie? '
(_
14 A was the Sales Vice President.
15 Q The Atomic Energy Division?
16 d No, the Boiler Division.
17 Q Mr. Wascher?
18 A Mr. Wascher was an engineer in Lynchburg.
19 Q Did these people make.up what was 20 called the Nuclear Project Steering Committee?
21 A I believe the --
22 Q I am sorry, strike that. That was 23 Metropolitan Edison.
24 Who presented the sales plan in O "
25 Barberton?
.. '/
, t e
- - - - - - - - - , . - - , _,y, _ _ _
1 Favret 80 f' 2 A I don't recall.
3 Q What was the sales plan?
4 A I don't recall.
5 Q Was it in writing?
6 A I don't recall.
7 Q Was the sales plan presented in
- 8 - Barberton to Metropolitan Edison people or was 9 -that an internal presentation?
f 10 ,
A That was an internal presentation.
11 MR. KLINGSBERG: I would now like to i
1 12 mark as Exhibit 168 a memorandum from Mr.
I\ 13 Smith to various persons dated February 16, s %-)
14 1966.
i Smith to 15 (Memorandum from c. T.
1 1 16 various persons dated February 16, 1966 t
17 was marked GPU Exhibit 168 for identification,
, 18 as of this date.)
19 Q Do you recall having seen Exhibit --
20 A Ho, I don't.
21 Q --
168 before?
22 Do you know what the little box in the l
23 lower left-hand corner represents?
l l
24 A .No, I do not.
V 25 Q can you identify Mr. Harrison, R. H.
l
1 Favret 81 2 Harrison?
3 A Mr. R. H. Harrison was -- I guess he was 4 Vice President of the Atomic Energy Division.
5 And the record should show that I 6 think Mr. Landis must have been then the -- his 7 assistant.
8 Q Can you identify Mr. Montgomery?
a 9 'A Mr. Montgomery was an engineer working in 10 ,
the Atomic Energy Division in Lynchburg.
11 Q As of this point in time, had you 12 received a preliminary bid request document from 13 Metropolitan Edison?
- 14 A I don't recall. The text would indicate 15 that we may have.
1 16 Q But you don't recall now of your own 17 recollection?
18 A No.
19 Q Do you have any recollection today of 20 your having reviewed the Metropolitan Edison 21 preliminary bid request in or about the early part 22 of 1966 or-before that?
23 A' No, I don't' recall, a 24 Q Do you recall today meeting with O 25 Metropolitan Edison representatives on or about
s 1 Favret 82 February 25th, 1966 in Reading, Pennsylvania?
O)
(_ 2 3 A Yes, I recall attending this presentation 4 and this meeting referenced in the exhibit.
5 Q Did you at that meeting discuss 6 Metropolitan Edison's preliminary bid request?
7 A I don't recall.
8 Q And I take it then you don't recall 9- what, if anything, you said in regard to that 10 ,
request at the meeting?
11 A No.
12 Q Do you have any recollection today of any of the matters that were discussed at that
( 13 1
14 meeting on February 25th?
15 A I am sorry, no.
16 MR. KLINGSBERG: I would like to mark 17 as GPU Exhibit 169 a memorandum dated 18 February 18, 1966, again from Mr. C. T.
19 Smith.
l 20 (Memorandum dated February 18, 1966 V} 21 from C. T. Smith to various persons was 22 marked GPU Exhibit 169 for identification, 23 as of this date.)
\
24 Q Have you seen Exhibit 169 before?
[ h '
I 25 A I don't recall it specifically.
I I 1
- -- __ _ . ~ . . . _ . - _ - . - - - _ . _ _ . , _ . . ~ . . . - . _ - _ _a
l 1 Favret 83 O
In paragraph No. 2 there is a
(_) 2 Q 3 reference to a statement that "Mr. Miller felt
- 4 that we would be diluting their impact, if we 5 brought to the 25th meeting Messrs. Harrison, 6 Mackenzie and Rowand."
7
- - Do you have any recollection of the 8 reasons why it was felt that bringing these 9 gentlemen to the meeting would dilute the impact?
10 A That would be -- I have no specific knowledge 11 of why they -- Mr. Miller would have said that.
12 Q On page 2, the second full paragraph, 13 it says that " Messrs. Montgomery and Favret have
(
14 been contacted on February 18 and requested that 15 each paragraph of the bid request document be
. v 16 hssigned to a specific individual who will be 17 responsible for proper preparation to handle the 18 subject matter."
19 Is this talking about Metropolitan 20 Edison's bid request?
21 A I would assume so.
22 Q Were you assigned specific paragraphs .
23 to handle?
24 A I don't recall.
r~)
25 Q Do you recall what, if any, subject
I 1 Favret 84 2 matter paragraphs you were assigned to handle in 3 this period of time?
4 A No, I don't recall.
5 MR. KLINGSBERG: I think this is an 6 appropriate time to break for lunch.
7
- (Lunch recess taken at 12:25 p.m.)
. 8 9
10 ,
11 12 O
14
- 15
) "i 16 i-i 17 18 .
r 19 i
j 20 i
j 21
\
22 l l
24
' O 25
, r. . , _ , . . . ..,_ ., _ . . , _ . _ - ,
,___my_,_...,-___,_.,.-,y..~._ -
. ___.,_,m______-.. ,,y ...,..,..-,_.,,,_._..,-,,,..,_,m, , , , , , , _ - ~ , . . . . , .
1 85 (3 AF T E RNOO N S ES S ION
(_) 2 3
1:36 p.m.
~
4 LOU I S M. F AVR E T resumed 5 and testified further as follows:
6 EXAMINATION (continued) 7
BY MR. KLINGSBERG:
8 -
Q You testified before the luncheon 9 break that you had lost the Consumers Power bid 10 ,
to General Electric. Do you recall that?
11 MR. WISE: Are you asking him what 12 he remembers about his testimony or whether
() 13 _c they lost it.to General Electric --
You remember you testified before i 14 Q 15 that --
) He testified about losing 16 MR. WISE:
17 the Consumers Power bid. -I don't know 18 whether he testified who had got the 19 contract.
I MR. KLINGSBERG: I have in my notes 20 21 that he lost it to General Electric.-
22 Q That is what you said?
23 A That's incorrect. l
- 24 Q Incorrect. I see.
O 25 I had CE, Combustion Engineering.
1 Favret 86 C\ A Combustion Engineering.
(_) 2 Q To whom did you lose the Florida Power 3
4 & Light job?
5 A To Westinghouse.
6 Q And to whom did you lose the Carolina 7
- - Power'& Light job?
8 - A Westinghouse.
9 Q Up to that point in time, had your ;
1 10 ,
company been successful on any bids or proposals l
11 for nuclear steam supply systems?
12 A As I testified earlier, we had been
[' ) 13 successful with Consolidated Edison on Indian
- x_/
14 Point No. 1.
15 Q And that was the only one?
16 i And the Savannah.
17 Q What was Sdvannah?
18 A A ship.
19 Q A ship? _
20 A Yes.
i 21 Q Was the Indian Point 1 a similar unit; 22 to the Three Mile Island and Cyrstal River and 23 the Duke Oconee?
24 A No, it was not.
O *
~
25 Q How did it differ in its major respect?
1 Favret 87
()
/%
2 A That there was considerable time lapse 3 between the two contracts and I don't recall the
- 4 time interval.
5 The Indian Point unit was much smaller, 6 had a different fuel in the core, and I believe 7
- also had different steam generators.
8 Q As of 1965 and 1966, what kind of an 9 investment in plant d:d Babcock & Wilcox have in 10 order to manufacture nuclear steam supply 11 systems, second and apart from what it already
, 12 had for its boiler operation? In other words, 13 did you have to build a new factory, for example?
(v')
14 A This was what, what was the time period 15 again?
16 Q 1965 and 1966.
17 A Prior to 1965 we made the decision to build 18 a heavy pressure vessel shop at Mount Vernon, 19 Indiana and it was operating and producing 20 reactor vessels for ourselves, Westinghouse and 21 General Electric, and it was just about that time 22 period that I think that the plant was commissioned 23 and we had also made the investment in Lynchburg l 24 in our facilities down there for research and l /~hi t
\"' development.
25
1 Favret 88 2 Q Where were the nuclear steam supply 3
systems, for example, for the Duke Power plant to 4 be manufactured?
5 A The reactor vessel was built at Mount 6 vernon, Indiana; the steam generators were built 7
in the Barberton works, as well as the pressurizer 8 and the piping.
9 Q Did you have to make extensive 10 , changes in the Barberton works in order to get 11 into the nuclear steam supply system business?
12 A Not extensive. We had to add machine tools 13 for machining and upgrading some of the cranes.
[J) 14 Q Did you have to bring into your 15 company engineers who were knowledgeable in the 16 uclear aspects of the manufacture and design in 17 order to go into the nuclear steam supply business 18 in the mid-sixties?
19 A In the mid-sixties we were probably the 20 leading manufacturer of nuclear hardware, 21 producing reactor vessels, as I said, for 22 Westinghouse, GE,and also the majority of the 23 equipment for the United States Navy.
24, Q Were there any reports or memoranda
'- or written materials of which you were aware 25 l
_ _ , , _ - . , ___ _~ -,, , , - - , , - - . . . _ , _ -
I l
I Favret 89 f%
(,) 2 generated by the company in the mid-sixties 3 indicating what, if anything, you had to do in 4 order to make your nuclear steam supply business 5 a profitable one?
6 A A profitable one?
7 Q Yes.
8 - A I don't recall any reports specifically 9 -outlining a program to become profitable.
10 ,
Q Yes.
11 A I think that was the text of your question.
12 Q Were there any reports or written j
13 materials dealing with your establishing your 14 company in the nuclear steam supply business in 15 this period of time?
16 MR. WISE: Mr. Klingsberg, that's 17 terribly broad.
18 I will let the witness answer it, 19 but I do have an objection to the form.
20 If the witness can answer it, he may 21 do so.
22 TIIE WITNESS: Read it back again, 23 s please.
l 24 (Question read.)
i h'
'~
25 A Are there any reports, does it say?
_ , _ . _ _ , . ---__ -..,.,,,-._~m. - m _ ..
f 1 Favret 90 l l}
( ,, 2 Q Reports or other written material.
3 A Or other written material.
4 I recall that there was one report 5 that I prepared that was the basis for the 6 evaluations of the nuclear business and whether 7 - we should build the Mount Vernon facility. That 8 predates the 1965 time period.
9 Q Approximately when was that report 10 ,
written?
11 A Probably 1963 maybe.
12 Q Do you still have a copy of that
^
t 13 report?
N ])
14 A No.
15 Q Do you know if there are any copies 16 Still in existence?
17 A No.
18 Q What factors were considered in this l 19 evaluation by you?
l 20 A The factors that were considered in the 21 evaluation was that GE and Westinghouse had or 22 were in the process of trying to establish 23 themselves in the nuclear business and were making 24 large claims as to the economics of nuclear power.
-t 25 They were also requesting that we provide
. - . ,--3 .-. - . .w--w - - - . - - - 4_,., , . - - r, -- ,,, , ,-
1 Favrat 91 Iqj 2 fabricating facilities to build their vessels.
3 Q What else can you tell us about that 4 report?
5 A That was --
that's the essence of it.
6 Q Did you make any recommendations?
7 A Yes, to go ahead and build the plant.
8 Q Did you recommend that you go beyond 9 building vessels for GE and Westinghouse and go 10 into the nuclear steam supply business yourself?
11 A I don't recall that report to that detail.
12 Q Did you assess at all the GE and 13 Westinghouse claims regarding the economics of 14 nuclear power?
15 A We reviewed the information that they 1
16 published which was in the public documents at 17 that time.
18 Q Did you or anyone else at B&W make 19 your own analyses of the economics of nuclear I
20 power?
(
21 A Most of the economic evaluations were rather 22 straightforward and to a large extent were based 23 upon information also published by the government.
24 So everybody was working with basically the same
/~N 1
('#/ 25 information.
o 1 Favrat 92 p-() 2 Q In connection with this report, did 3 you comment at all on the safety aspects of ;
l 4 nuclear power?
5 A I wouldn't recall.
6 Q Do you recall any reports that you 7 - reviewed in the period 1963 through '66 concerning 8 . the safety aspects of nuclear power?
9 A I recall that the AEC I think had issued 10 ,
some criteria that must be considered in the 11 design of commercial plants.
12 Q Did you assess the reasons why you
(~)
V 13 lost the Consumers Power bid to Combustion 14 Engineering?
15 A The customer evidently evaluated the CE 16 dffering more competitive than ours.
17 Q Do you know whether there were any 18 particular technical, price or other aspects of 19 the proposal of Combustion which made them more 20 favorable to the customer than yours?
21 A I don't know. That would be in the 22 customer's information.
23 Q But you never tried to assess what 24 those reasons were from your point of view?
O 25 A The only thing that'I can comment on is that
1 Favret 93 (O,/ 2 the customer reported that they would prefer to 3
see B&W's organization modified so that we had a
- 4 single responsibility for nuclear energy, and 5
at that time we had two divisions, the Boiler 6 Division and the Atomic Energy Division.
Q And was that influential, was that 7
8 comment influential in your decision to merge
, 9 -those interests?
10 ,
A It was influential at a later date in 11 consolidating and in forming the Nuclear Power i 12 Generation Division. -
() 13 ,
Q Did you assess or ascertain any reasons why you lost the Florida Power & Light 14 15 job?
16 h Did I assess?
17 Q You or anyone else at B&W, to your 18 knowledge.
19 A I think it was a straight price on 20 Westinghouse's part.
21 Q Did you or, to your knowledge, anyone 22 else at B&W assess the reasons why you loct the 23 Carolina Power & Light job to Westinghouse?
24 A Price.
n/
\~
25 Q Did you make adjustments in your price
1 Favret 94 2 to reflect those losses or to make up for 3 those losses when you came to bid on the Duke 4 Power?
5 MR. WISE: I will object to the form 6 of the question.
7 - The witness may answer it if he can.
8 . A Try it again, restate it?
9 Q I will restate the question in view 10 of the objection.
11 In your bids to Duke Power, did you 12 take account of the fact that you lost the Florida 13 and Carolina jobs to Westinghouse on the basis 14 of price?
15 A In the course of any normal business you 16 woulu be -- there would be a constant review of 17 your relative competitiveness to the other 18 offerings in the marketplace, and I am sure we 19 must have on that.
20 Q Have you ever been involved in any 21 litigation concerning claims for breach of 22 warranty or breach of contract or anything against 23 Babcock.& Wilcox relating to sales of boilers?
24 A No, I have not.
O
\/ Q Are you aware of any such litigation?
25
1 Favret 95 m
1 2 A I am aware of litigation, but it's been 3 such a long time that I don't remember the
- 4 specifics of what the suit was about.
5 Q What suit do you recall?
6 A I think there is one at St. Joe.
7 -
Q What did that involve?
8 A I think the customer operated the boiler 9 without water.
10 Q Are there any other litigations that 11 you recall relating to contract claims or 12 warranty claims?
/~)/
13 A Litigation -- that's the only one that I 14 know of specifically.
15 Q Are you aware of any claims which may 16 bot have resulted in litigation but which were 17 resolved concerning breach of warranty or 18 breach of contract or similar matters relating to 19 boilers?
20 A Yes.
21 Q What are those?
22 A Those are Sacramento Municipal Utility 23 District, Florida Power Corporation and Arkansas 24 Power & light.
O 25 Q What was the nature of the claim in l i
1 l
1 Favret 96
() 2 the Sacramento matter?
3 A There was a suit pending but not filed, I 4 don't believe, against Westinghouse, Bechtel and 5 ourselves.
6 Q For what?
7 *- A For claims on damages to the turbine.
8 _
Q Was that settled?
9 -A It was settled, yes.
10 ,
..Q Did you pay any money?
11 A Yes.
12 Q How much?
'~'s 13 A I don't recall. But it was not a
)
~
14 significant amount.
15 Q Did Westinghouse pay?
4 .
16 h I believe so.
17 Q Do you know the approximate time 18 frame of this claim and the settlement?
19 A I don't recall the specifics on it. I am 20 sorry.
21 Q Was the amount of money assigned to 22 any particular kind of factor or any particular asspect of the claim? l 23 l
24 A We considered that it was in lieu of legal O 25 expense.
, _ , _ , . . , . . _ . , , , . _ . . ,r.-. _ - . , .,_,. _. . _ . _ , , , ,
1 Favret 97 l
2 Q How about the Florida Power 3
Corporation claim, what was that about?
4 A That is concerning a failure of a part of 5 a control rod assembly.
6 Q Was that in reference to a nuclear 7 -
plant?
8 A Yes.
9 Q When was that claim?
10 A I don't think it's a claim yet.
11 Q Does that relate to Crystal River?
12 A Yes.
(~'s 13 Q Does that grow out of the recent 14 incident at Crystal River?
15 A Recent incident. What incident?
16 Q That was subsequent to the Three Mile 17 Island accident, an incident at Crystal River 18 which received some publicity.
19 Are you aware of that?
20 A Yes. That's the same one, I think.
/ 21 Q That's the same one?
22 A Yes.
23 Q What was the Arkansas --
MR. WISE: Excuse me, what is the l 24, 25 sametone?
l s ,e - - - -
w-w e - ,,,----c.+, r -4,.--~-- <w-
1 Favrat 98 I
[D 2 MR. KLINGSBERG: The one that they
, V 3 are making a claim on the control rod
- 4 assembly.
5 MR. WISE: It's the same plant or 6 do you mean --
7 - THE WITNESS: It's the same plant.
8 A But I don't know what publicity you are
~
9 thinking about or what I am thinking about, is 10 what I think Mr. Wise is trying to point out.
11 MR. WISE: I think the record is very 12 unclear now as to exactly what it is we have
(~N 13 established.
(_)
14 MR. KLINGSBERG: We will try to 15 clarify it.
16 BY MR. KLINGSBERG:
17 Q What was the control rod assembly 18 claim or discussion which Florida Power 19 Corporation has made, to what did that relate?
20 A That relates to a control rod assembly that 21 failed or found its way up through the reactor 22 and has caused some damage to the equipment which 23 has been repaired.
24 Q And is that finally resolved now?
j x/ 25 A. I don't believe so. Those discussions are
1 FavrSt 99 A still going on.
(y 2 3 Q When you said previously that this
, 4 was the same plant, referring to Florida Power, 5 as was involved in a recent incident, to what 6 were you referring?
7 -
A I don't know how to interpret your statement 8 of a recent incident and I don't know what you 9 .are referring to. I mean, you must be referring 10 to a piece of publicity that I don't have.
11 MR. KLINGSBERG: Off the record.
12 (Discussion off the record.)
(~N 13 Q What was the Arkansas Power & Light NN 14 claim to which you referred?
e 15 A That has to do with an issue of plutonium 16 hnd a commercial aspect of the contract.
17 Q Has that been resolved yet?
18 A No. It's still being discussed.
I 19 Q Are you aware of any other claims 20 which involve litigation or otherwise relating 21 to breach of warranty, breach of contract or 22 similar matters and pertaining to nuclear plants, 23 boilers or anything else or any other equipment 24 with which you were involved at Babcock & Wilcox?
/O
'- 25 A' The question is so broad that -- in the
/
l 4
1 Favret 100 2 course of any conducting of business, there are f-)n 3 -- will be times where items will either have
- 4 to be remedied or dealt with during the course 5 of the initial operation of the unit.
6 Q Yes.
7 -
A And those can be extensively discussed.
8 Q Have there ever been any occasions 9 in regard to such a claim where, in addition to 10 repairing the unit, B&W has paid money or dollars, 11 aside from the sacramento claim that you mentioned 12 before?
That we have paid money before.
(~)
U 13 A 14 Not that I can recall.
15 Q Were you ever a member of the B&W 16 Board of Directors?
17 A No.
18 Q Or the J. Ray McDermott Board of 19 Directors?
20 A No.
( ->T Q Are you or were you ever a member of 21 22 the Executive Committee or similar committee of 23 B&W or J. Ray McDermott?
I 24 A Of the brief year that I was the Power
/'N k~') 25 Generation Group Executive, you would consider l
t l l f
1 Favret 101 O that as part of the Office of the President. But
'(_) 2 3 not a member of the Board of Directors.
1 4 Q Following the accident at Three Mile 5 Island No. 2, were you involved in any way in 6 any of the inquiries into the causes of the 7
accident?
8 - A Was I -- part of the inquiries to any cause 9 of the accident?
10 , Q Yes, within your company.
11 A No. Those were handled by the technical 12 staff in Lynchburg. ,
() 13 . Q Were you involved in any way in any 14 changes that were to be made in the structure of 15 the company or the operations of the company 1
16 which related in any way to the accident at Three 17 Mile Island No. 2?
18 A Changes -- changes in structure?
19 Q Yes, organization.
20 A I don't recall that we made specific changes 21 in structure or organization as a result of the.
22 incident at Three Mile Island.
23 Q Was it ever recommended or suggested l
l 24 within the company that any changes in structure (s
')
\ '
or organization be made which had anything at all 25 l
l 8
_r .
1 Favret 102 to do with the Three Mile Island No. 2 accident?
(O 2 MR. WISE: You are directing your 3
4 question to something that came to Mr.
5 Favret's attention?
6 MR. KLINGSBERG: Obviously.
7 - THE WITNESS: Do you want to read it
. 8 - back, please?
9 (Question read.)
10 ,
A Not that I recall.
11 Q Were any changes recommended or 12 suggested pertaining to the company's operations l 13 in any respect stemming in any way from the 14 Three Mile Island No. 2 accident?
15 MR. WISE: Again you are asking for 16 something that came to Mr. Favret's 17 attention?
18 A I did not personally, all right, make-those 19 recommendations.
20 Q All right.
! }'
21 A If there were recommendations, they would 22 have come from the Nuclear Power Generation 23 Division.
24 Q Did any such recommendations come to f\
\' 25 Eour attention?
l.
1 Favrat 103 2 A Not that I recall.
\
3 Q Who in the Nuclear Power Generation 4 Division was responsible for looking into such 5 matters?
6 A That was Mr. John M. MacMillan, Division 7 - Vice President.
8 . Q Did you have any conversations or 9 written communications with Mr. MacMillan on the 10 subject of changes within B&W resulting in any 11 way from the accident?
12 A No.
(~h 13 ,
MR. KLINGSBERG I would like to mark
'%)
14 as GPU Exhibit 170 a memorandum dated 15 May 23rd, 1966 from L. M. Favret to various 16 persons.
17 (Memorandum dated May 23, 1966 from 18 L. M. Favret to various persons was marked 19 GPU Exhibit 170 for identification, as of 20 this date.)
21 Q Have you seen Exhibit 170 before?
22 A I would say seeing -- since it has my name 23 on it and it was prepared by Mr. Olmstead, I 24, must have seen it before.
\' 25 Q ,
Do you have a recollection of it?
l 1 Favret 104 f3 A In some regards. I do know that we did l _,) 2 3
hire United Engineers & Constructors and I did 4 participate in meetings with them on the subject 5 as outlined in the memorandum. Jackson &
6 Moreland.
7 Q Apart from independently recollecting 8 - some of the events which are discussed in the 9 memorandum, do you recall the memorandum itself?
10 ,
A In this period of time, no. .
11 Q Can you identify Mr. Olmstead?
12 A Mr. olmstead is an engineer who worked 13 for me in Barberton in the Proposal Department --
14 Proposition Department, I should say.
15 Q Do you recall having attended a 16 meeting with United Engineers & Constructors in 17 Philadelphia on or about May 20th, 1966 to 18 review purchaser final specifications and 19 their influence on engineering-estimating-bidding 20 being done by UE&C and J&M7 21 A Yes.
22 Q What is J&M?
23 A J&M was an affiliated company or a 24 subsidiary of United Engineers & Constructors 1%
b 25 located in Boston, known as Jackson & Moreland.
1 Favret 105 y ) 2 Q Can you explain what the UE&C and 3
the J&M role was in regard to this negotiation-4 bidding procedure that was going on at the time 5 with Metropolitan Edison?
6 A Metropolitan Edison had made inquiries in 7
their invitation for two distinct different l 8 . scopes of supply, one of them being a nuclear 9 steam system, the other a nuclear island. The 10 ., nuclear island consisted of the nuclear steam 11 system and other , associated equipment, including 12 the reactor building and the auxiliary building 13 and the spent fuel building.
14 We had hired UE&C to assist us in the 15 preparation of our nuclear island bid and also in 1
16 the review of the specifications as issued by 17 Met Ed.
18 Q Did Babcock & Wilcox submit a bid 4
19 under each of these two alternatives?
20 A Yes.
21 Q Incidentally, against wnom were you 22 bidding on each of these laternatives?
23 A I recall that General Electric bid, 24 Westinghouse,and I am not sure about Combustion O)
\~- 25 Engineering.
I
1 Favrat 106 r Calling your attention to page 3, did 2 Q 3
UE&C draft a set of exceptions and clarifications 4 to the bidding document as indicated?
5 A I would assume that they did. As part of 6 our preparation of our proposal, we would have 7 requested them to do this.
8 _ Q Do you have a recollection of that?
9 JL No, I do not.
10 Q Do you know what bidding document is 11 referred to here?
12 A That would be our proposal.
13 ,.
Q Do you know what areas or subject 14 matters the UE&C exceptions and clarifications --
15 A Pardon me.
7 16 Q All right.
17 A on the' previous question, I would like to 18 add to that. I think the bidding document they 19 are referring to here on that paragraph on page 20 3, the second paragraph, refers to the customer 21 specifications.
22 Q I see.
l 23 MR. KLINGSBERG: I would like to have 24, marked as GPU Exhibit 171 a document n/
\- 25 entitled " Design Criteria, Nuclear Power
1 Favret 107 m
2 Plant for Metropolitan Edison Company,"
3 which has a Babcock & Wilcox stamp of 4 December 3rd, 1965. ,
5 (Document entitled " Design Criteria, 6 Nuclear Power Plant for Metropolitan i;
7 - Edison Company," which has a Babcock &
1 '
8 Wilcox stamp of December 3, 1965, was marked '
9 GPU Exhibit 171 for identification, as of s 10 this date.)
11 MR. KLINGSBERG: I should note for the s i 12 record that this again seems to be what
(~N 13 came out of the production, even though '
%_Y 14 on its face the contents seem to be broader 15 than what follows.
16 MR. WISE: Perhaps, since this is a i
17 document generated by your client, Mr.
I 18 Klingsberg, you have a more complete copy'.
s' .
19 MR. KLINGSBERG: Yes,.we,can attempt 4 20 to ascertain that. No criticism is implied t -
21 by this document probicm. , ,
m 22 MR. WISE: I will note for the record i,
23 that the contents page, which is the.second 24 page of the document, has a blank next to O .
k- 25 the page numbers and that the first three ,1f 4
s
l 4
1 Favret 108
() 2 pages which are attached as the pages 3 3
through 5 of the exhibit are marked in the 4 upper right-hand corner, a draft of 5
November 26, 1965, so it's unclear from the 6 document itself as to whether or not it 7 ever did contain additional sections or 8 whether this was a portion of a draft that s may at some point have fallen into B&W's 10 hands.
11 MR..PU: We made an effort to produce 12 the complete document.
13 MR. KLINGSBERG - I am sure you did,
)
14 Richard.
15 We are going back a lot of years.
16 THE WITNESS: All right.
17 BY MR. KLINGSBERG:
18 Q Have you ever seen Exhibit 171 before?
19 A There is some recollection that this was --
20 could have been one of the early drafts o f the 21 invitation issued by the customer, Metropolitan 22 Edison, for review prior to issuance of the final 23 .5pecifications.
Q Was this the sort of document that, 24 25 so to speak, kick'ed off the dealings between B&W t w v
1 Favret 109 2
and Metropolitan Edison which resulted in the 3
Three Mile Island No. 1 contract?
4 A Yes, this would have been one of the first 5 documents.
6 MR. KLINGSBERG: I would now like to 7
mark as GPU Exhibit 172 a memorandum from 8 .
Mr. Heller to Mr. Favret dated December 3rd, 9
1965.
10 (Memorandum from Mr. Heller to Mr.
11 Favret dated December 3, 1965 was marked 12 GPU Exhibit 172 for identification, as of
/~ 13 .
this date.)
N))
14 Q Have you ever seen Exhibit 172 before?
15 A I would say that I probably have. I can't 2
I 16 specifically recall this exact document.
17 Q Do you recall having reviewed the 18 design criteria?
19 A Yes, I do recall having reviewed the 20 customer's design criteria.
21 Q Do you recall having given your 22 comments and suggestions?
(
I
! 23 A Our comments and suggestions probably would 24.
have been given orally to the customer in one of 7_ i I
, \/ 25 our meetings.
+n. -
1 Favret 110 1
Can you identify Mr. Gray, who
( 2 Q 3
received a copy of this memo according to the --
4 A Mr. Gray is a Sales Engineer --
5 Q --
cc.
6 A -- located in our New York office.
Q What sort of a department did you have 7
8 in Washington at which Mr. Landis was, according g to this document?
10 A We had a government -- we had an office in 11 Washington whose primary responsibility was 12 interfacing with the different government agencies where we might have business being transacted, say
[~T
%) 13 14 for the Atomic Energy Division or in other 15 contract matters.
16 MR. KLINGSBERG: I would like to mark 2
17 as Exhibit 173 a memorandum from Mr. Favret 18 which appears to be written by Mr. Olmstead f
19 to Mr. Heller, dated December 30, 1965.
(Memorandum from Mr. Favret, written 20 21 by Mr. Olmstead, to Mr. Heller, dated December 30, 1965, was marked GPU Exhibit 22 .
f l
173 for identification, as of.this date.)
23 24 A O.x.
! ('3
'"' Q Do you have a recollection of having l 25 i
i r
, . .- .~ . - - . . - - , . .-.
Favret 111 1
2 seen Exhibit 173 before?
A I recall seeing some portions of this 3
4 letter.
5 Q At or about the time it was written?
6 A Yes.
Q When you say "some portions," you mean 7
8 other than the handwritten parts?
9 A Yes.
10 ,
Q Do you know whose handwriting that is?
11 A No, I don't.
Q Does this documenty Exhibit 173, 12
() 13 contain the comments on the portion
" General Instructions and Approach" portion of of the 14 15 Met Ed's design criteria which you and Stauffer 5
1 16 reviewed?
A I think it would be better to say that this 17 18 contains a portion of our comments based upon 19 the information we did receive. I think the 20 memorandum points that there were some sections that were not included and they must have been 21 22 submitted later.
Q Just as an aside, perhaps that 23 24 explains the reason why the previous exhibit, pg No. 171, does not appear to be a complete document,
.-~ _ . . _ _ _ , _ , _ . _ _ . _ .
- m. _ , . , . . - , _ . r_ , m_ . _ ,.r_.
1 Favret 112 since this indicates that only a portion was
(
r g 3
submitted to begin with.
4 Was the modus operandi for you to 5 submit your and your staff's comments to the 6 Philadelphia office and then the Philadelphia 7 sales office to discuss them with the customer?
8 A Yes.
9 Q So, so far you had not had any 10 direct contacts with Metropolitan Edison, is that 11 correct?
12 A I don't -- at this point in the end of 1965, I had not had direct contact.
(~T 13
\_/
14 MR. KLINGSBERG: Will you please mark' 15 as GPU Exhibit 174 a memo from Mr. Heller 16 to Mr. Favret dated February 4, 1966.
17 (Memo from Mr. Heller to Mr. Favret l
18 dated February 4, 1966 was marked GPU 19 Exhibit 174 for identification, as of this 20 date.)
i 1 21 (Document handed to witness) 22 A O.K.
23 Q Have you seen Exhibit 174 previously?
24.
A I can't specifically recall this document.
O
\/I 25 Q Do you recall meeting with Mr. Smith
1 Favret 113
[") 2 and Mr. Heller in order to review design criteria (j
3 submitted by Metropolitan Edison?
' 4 A I don't recall specifically meeting with 5 Mr. Smith and Mr. Heiler. They may have met with 6 others in the office.
7 MR. KLINGSBERG: Will you please mark 8 as Exhibit 175 a memorandum from Mr. Heller
. 9 to Mr. Favret dated Febr2ary 8th, 1966.
10 ,
(Memorandum from Mr. Heller to Mr.
11 Favret dated February 8, 1966 was marked 12 GPU Exhibit 175 for identification, as of l
13 this date.)
14 (Document handed to witness) 15 A O.K.
16 Q Have you seen Exhibit 175 before?
l l
17 A Yes. I 1
18 Q In what connection?
19 A In connection with my duties as -- back in 20 this time period. Some areas more specifically 21 than others.
22 Q Do you recall having been advised as 23 indicated on the third page, the second paragraph
,_ 24 from the bottom, $ hat Westinghouse and General
~
25 Electric, as well as Babcock & Wilcox, were being
_ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ . _ _ . _ _ ._ 1
Favret 114 1
considered as bidders on this project?
) 2 A What was the question? Is that a statement?
3 MR. KLINGSBERG: Do you want to read
- 4 5
back the question, please.
6 (Question read.)
7 A Yes, I think that's consistent with my 8 previous testimony.
9 Q All right.
10 Just so that this chronology of 11 documents makes sense some day to somebody who 12 is reading these transcripts, would you look at
(); 13 Exhibit 167 (handing document to witness).
14 Chronologically, Exhibit 175, where 15 you received copies of the preliminary bid request, 16
't hen ties in, does it not, to Exhibit 167 dated 17 about a week later on February 14th when you 18 began to get ready for your first meeting with 19 the Metropolitan Edison negotiating group?
20 A Yes, I think the two documents are consistent. <
21 Q Right.
MR. KLINGSBERC: We have been going 22 23 about an hour or so. I guess we can take 24 a short recess.
(O_) 25 (Recess taken.)
l
1 Favret 115 2 MR. KLINGSBERG: Will you please mark 3
as GPU Exhibit 176 a memorandum from Mr.
Heller to Mr. Favret dated May 9, 1966.
, 4 5 (Memorandum from Mr. Heller to Mr.
6 Favret dated May 9, 1966 was marked GPU 7
Exhibit 176 for identification, as of this 8 date.)
9 (Document handed to witness) 10 A O.K.
11 BY MR. KLINGSBERG:
12 Q Have you seen Exhibit 176 before?
13 A I don't recall seeing this one specifically.
14 Q Do you remember having received copies 15 of firm specifications for the proposed Met Ed 16 duelear installation in or about the spring of 17 19667 18 A Yes, I do recall the essence of the content 19 of the letter where the specifications were
+
20 transmitted to us and also to the consultants 21 that we retained, Jackson & Moreland.
22 9 DO YO's know when was the last time 23 you had seen a copy of the firm specifications?
24 A Recently or at this time here, you mean?
25 Q At any time, including recently.
l 1
l l
1 Favret 116 I' A More recently in discussions with counsel.
\s) 2 Q Do you know from what file the firm 3
- 4 specifications that you reviewed came?
5 A No, I don't.
6 Q Did Mr. Smith in this period shift 7 .
over from Philadelphia Sales to Barberton?
8 A Yes.
9 Q What did the job of Manager of 10 Electric Utilities entail?
11 A The job of Manager, Electric Utility Sales 12 involved the coordination of the sales efforts 13 from the regional offices and the district offices 14 so that we had a coordinated effort where it 15 involved more than one office, such as,in this 16 base, Philadelphia and New York and maybe Boston.
17 MR. KLINGSBERG: Will you please mark 18 as GPU Exhibit 177 a letter from 19 Metropolitan Edison to Mr. Heller of 20 Babcock & Wilcox dated May 11th, 1966.
21 (Letter from Metropolitan Edison to.
22 Mr. Heller of Babcock & Wilcox dated May 11, 23 1966, was marked GPU Exhibit 177 for a
24 identification, as of this date.) ;
(~% >
l
~
' ( 25 (Document handed to witness) l t
l l
1
Favret 117 1
p
() 2 A O.K.
Have you seen Exhibit 177 before?
3 Q
- 4 A I don't specifically recall it, no.
5 Q Do you recall that there came a time 6
on or about May 11th, 1966 or during the spring 7
of 1966 when you did receive a formal invitation
- 8 to bid from Metropolitan Edison on what came to 9
Hbe the Three Mile Island No. 1 plant?
10 A Yes.
11 MR. KLINGSBERG: I would now like 12 to have marked GPU Exhibit 178, which is a 13 copy of a proposal to Metropolitan Edison 14 Company, Reading, Pennsylvania.
15 (Copy of a proposal to Metropolitan 16 Edison Company, Reading, Pennsylvania, was 17 marked GPU Exhibit 178 for identification, 18 as of this date.)
MR. WISE: For the record, the copy 19 that has been marked appears to be 20 21 something that we as counsel to B&W produced to the plaintiffs. I believe the particular 22 23 s copy came from the files of Sullivan &
Cromwell and the narking on the front of 24 25 GPU Exhibit 178 may have been placed on o
n- -
n . - ,_-- ,-
Favret 118 1
() 2 there by someone at Sullivan & Cromwell.
3 BY MR. KLINGSBERG:
- Q Obviously, Mr. Favret, this is a 4
5 very thick document and it would take you a very 6 long time to review it page by page.
What I would suggest is that you 7
8 flip through it enough to satisfy yourself as to what it is and then if we have questions on 9
10 ,
particular portions, you are free to take as much 11 time as you like to review those portions.
12 A I think the record should show that this 13 is the proposal for the nuclear steam system and
(
14 is designated A4-7B.
Q Is that as distinguished from the 15 16 Island proposal?
17 A Yes, I was involved with the preparation 18 of this document.
19 Q Can you identify Exhibit,1787 20 A Yes.
Q What is it?
21 A It is a proposal from the B&W Company to
.22 23 Metropolitan Edison for the nuclear steam system 24 with a power rating of 2351 megawatts, and D
\- d'esignated as A4-7B.
25 l
i l
Favret 119 1
2 Q Would you look at the page which is j 3
marked in the stampings we are using on documents 4 in this case U00605.
5 A Right. That is Volume 2 of 3.
6 Q Yes.
7
- As indicate'd on the face of this
. document, there is a date, August 15th, 1966. Was 8
9 this proposal submitted to Metropolitan Edison on 10 or about Auguat 15, 19667 11 A Yes.
12 Q You testified that you were involved 13 in the preparation of this proposal?
(
14 A Correct.
15 Q Would you turn to the page marked 16 600607.
17 A What was the number?
18 Q U00607. It's just a couple of pages 19 past the page we were at.
20 A Oh.
Q That's an index to the proposal 21 22 sections in Volume 2.
I 23 Could you just run down that index and tell us first whether there are any of those
.- 24 4
~
25 s'ubject matters in which you had the principal
Favret 120 1
() 2 responsibility for preparation?
Not specifically for the text of these.
3 A
- 4 Q Yes.
5 A But in more general, aware of what was 6 going in and in the review of the final documents.
7 Q Are you able to tell us, running 8 down that list, who had the principal 9 responsibility for the preparation of the text 10 in each of the subject matters?
11 A The summary text would have been prepared 12 by Messrs. Embry and Olmstead.
13 ,
The description of the nuclear steam 14 supply equipment, Section 2, by Mr. Embry.
Section 3, Reactor Auxiliary 15 16 Systems, by Mr. Embry and Mr. Montgomery.
17 Sections 4, 5 and 6 would have been 18 a joint effort of Mr. Olmstead and Mr. Embry and 19 the use of outside consultants.
20 Instrumentation and Protection 21 Systems, I am not familiar with who may have had 22 the lead position on that.
23 Operations would have been the 24.
engineers from Lynchburg, Mr. Embry and Mr.
O 25 Olmstead.
1 i
l l
1 Favret 121
(~% 2 Structures would have primarily been
(_)
3 Mr. olmstead.
, 4 Safety Analysis would have been 5 produced by the engineers in Lynchburg.
6 Project Services, by Messrs. Embry 7 -
and Olmstead.
8 Component capability -- well, let me 9 -refer to that one. Section 12. Probably Mr.
10 Embry, Section 12.
11 Performance would have been a product 12 of Mr. Olmstead and Mr. Embry with supporting
(~h 13 information from the Engineering Department in 14 Lynchburg.
15 Price Adjustment Clauses would have 16 been produced in Barberton by Mr. Wilson and 17 myself.
18 General Conditions, D. R. Wilson, as 19 we discussed, with some consultation.by me.
20 Terms of Payment, Mr. olmstead and 21 myself and Mr. Wilson.
22 Q Now, incidentally, and just so the 23 record is clear, the rest of this appears to be 24 the rest of Volume 2 and it's indicated on the O 25 Previous page volume 3 pertains to nuclear fuel
l l
Favrat 122 1
2 supply, which is not a part of the document which F( )
3 was supplied to us from the Sullivan & Cromwell 4 files.
5 Will you turn to page UOO893, which 6
is near the back, please, that is Section 15, 7
- General conditions.
8 Do you know what sources Mr. Wilson g went to in order to prepare these General 10 Conditions? Do you actually have a knowledge or 11 recollection of that?
12 A Yes. The " Exceptions, Clarifications and 13 General Conditions," Section 15.1, would be an
('}
V 14 incorporation of information provided by the 15 technical people or commercial review of the 16 customer's specifications to which we wanted to f
17 clarify where there may be ambiguities, 18 inconsistencies or areas that we would not adhere 19 to and they would be included as part of this-first section of our general conditions.
20 The balanec of the information, 21 22
" Proposal," would come out of a -- say, Shipping 23 Point and Destination," we would provide that information to Mr. Wilson, he would review it 24 O
N' 25 and it would be incorporated as part of the bid.
e
- ' - , ,r ,,- _.,.y . _ , _,
Favret 123 1
The balance of the terms and (m) 2 conditions were evolved during a review process 3
4 of our previous Boiler Division terms and 5
conditions which had been used for years and as 6 modified and approved by our New York office for 7
- offerings of this type.
8 Q Who conducted that review?
9 A It would be Mr. Wilson, myself, Martin 10 ,
Victor and the use of outside counsel.
11 Q What outside counsel?
12 A Sullivan & Cromwell.
13 Q Well, a particular person?
(
14 A Mr. Kern and/or Mr. Mestres.
15 Q Do you actually have a recollection, 16 ditting here today, of conducting that review?
17 A Yes.
18 Q In regard to the conditions from the 19 boiler provisions, did you have any actual 20 boiler contracts which you utilized, in other 21 words, particular contracts with particular 22 customers?
23 A As I testified previously,for those terms and conditions,we had evolved through the years
-N' 25 a' set of terms and conditions which were then
1 Favret 124 l 2 our norms for conducting business, and as the nuclear business came along, it introduced new 3
~
4 requirements and those were modified then for the 5
nuclear applications.
6 Q I am sorry, but I don't think you have 7
answered the question.
8 My question ist did you have before 9 - you when you made this review that you talked 10 about any particular contracts relating to 11 boilers with particular customers?
12 MR. WISE: Other than the standard
() 13 conditions which he has testified about?
14 MR. KLINGSBERG: That's correct.
15 A No. Only other than the standard ones 16 that we used.
17 Q Did you make any changes in these 18 so-called standard conditions?
19 A The marketplace, the customers, were ,
20 requesting modifications to those and after a 21 due process of review internally and with the advice of outside counsel, some modifications were 22 i
23 made so that we arrived at what we considered to 24 be a consistent set of terms and conditions O 25 which would be suitable for commercial offerings.
1
, w y- % .r, - . , - - . . - . . , , y ,--.e4., , . - - , , - -, y ,w...wep.%,-.--w<~ -ev, s. . -,.-
I Favrat 125 1
I 2 Q Did you receive any advice from 3
utside counsel in connection with this review 4
that was in writing?
5 A Not to my recollection.
6 Q was any analysis made in writing by 7
- anyone in ifr. Wilson's department of the various 8 terms and conditions which were under review in 9 this process?
10 ,
A I don't recall.
11 Q Did you make any writings in the 12 course of this review?
13 A Yes, and those writings would have been
(
14 incorporated into these terms and conditions.
15 Q You mean you did some drafting of 16 Provisions?
17 A Yes, right.
18 Q Apart from actually drafting i 19 provisions, did you write any written analyses, l
20 interpretations, suggestions, recommendations or 21 anything of that sort in the course of this 22 Process?
23 A No.
24 Q Did anyone on your staff make any such
'"' 25 writings?
m
, . - - - - - - ,, y , n p- , -.---g -- ~ v~e,, -we g - -- p
Favrat 126 1
2 A The only writings that I can recall is 3
that we attempted to draft our terms and conditions
- 4 such that they were consistent and built one upon 5 the other.
6 0 You mean that there was a written 7
- analysis indicating whether or not the terms and 8
conditions were consistent and written one upon .
9 another?
10 A I don't know what you mean by "a written 11 analysis."
12 Q I asked you whether you know of any writings which contained analyses, interpretations,
() 13 suggestions, recommendations in connection with 14 15 this review in drafting procedure other than the 16 Ictual drafting of the provisions themselves, 17 and you said the only thing you could think of 18 was something which had to do with making them 19 consistent and building one upon another, and 20 I am trying to find out what kind of writing you had in mind when you made that statement.
21 MR. WISE: Do you understand where 22 23 we are?
THE WITNESS: No. I am lost.
24
' MR. WISE: All right. Maybe we ought 25
1 Favret 127
) to begin again and go through it piece by
[G 2 3
piece.
4 Q Apart from the actual drafts of the 5 provisions themselves, are you aware of any 6 written material by way of analysis, 7
interpretation, recommendations or just generated 8 by you or anyone else at B&W or any counsel in 9 -connection with this process which ended up in 10 Section 15 of this proposal?
11 A No.
i 12 Q I take it from your previous i
("N 13 testimony that there were certain provisions which 14 were drafted explicitly for the nuclear aspects 15 of the proposal and which had no analogue in 16 our prior boiler standard terms, is that correct?
17 A Correct.
18 Q Who drafted those?
19 A some of them I may have drafted, others 20 by Mr. Wilson.
21 Q Do you remember which ones you drafted?
22 A The areas that dealt with shipping point 23 and designations, the fact that most of the l
l 24 boiler products could be shipped by rail, the l
\~') 25 fact that nuclear equipment could not always be
1 Favret 128
(~T
.y_,) 2 delivered to a site and that we modified the 3 language so that it took cognizance of those 4 variances in the types of products involved.
5 The risk of loss or damage on title 6 transfer was made consistent with the shipping 7
and destination clauses so that they tracked.
8 Those are the two particular ones 9 -that I recall.
10 ,
Q Were any of the clauses drafted by 11 sullivan & Cromwell? If you know or recall.
12 A They were involved more with the review 13 and finalization of those drafts.
14 Q You had previously had proposals 15 which were submitted to other utility companies 16 in connection with the nuclear power project and 17 the other projects which -- and the Indian Point 18 project and the two or three Consumers and Florida 19 and the North Carolina, is that correct?
20 A Yes.
21 Q To what extent did you draw on the
- 22. conditions which were used in those proposals in 23 order to arrive at the ones in these proposals, if '
24 any, if you recall?
bi
\#
25 A Portions of those I am sure must have been ,
1 Favret 129
() 2 used as a part of these. The terms and conditions for the industry were in a state of 3
4 evolution, as I mentioned previously.
5 Westinghouse and GE had issued in part of their 6 price list, terms and conditions which more or 7
- less I guess were the norm of the trade.
8 Q For turnkey jobs or for just nuclear g steam supplies systems?
10 A My recollection is not that strong as to 11 how definitive they were between different scopes.
12 Q Do you actually recollect sitting 13 down with Wilson and with Sullivan & Cromwell 14 and drafting conditions fresh, so to speak, for 15 this proposal to Met Ed, bearing in mind that you 16 had previously had five or six other proposals 17 on nuclear plants? _
18 A It is my recollection that these were'an 19 evolution of the previous bids.
i 20 Q Were they different from the 21 previous bids? ,
22 A I would say not that much different. But 23 that's supposition.
24 Q But to some degree they were different?
f N/ 25 A I don't recall.
1 Favret 130 2 Q Were you involved at all in the 3
drafting or the approval of the general conditions 4 on the Indian Point plant?
5 A None. No involvement.
6 Q Do you know who was involved in that 7
- process?
8 . A No, I do not.
9 Q Did there come a time when you saw 10 the Indian Point conditions in the proposal?
11 A No.
12 Q You never saw them?
p 13 A No.
d 14 Q To this day you have never seen them?
15 A I have never seen them.
16 Q Did you look at those conditions or 17 did you contemplate looking at those conditions 18 in connection with the preparation of the Met Ed 19 conditions in GPU Exhibit 178?
20 A No.
21 Q No.
22 Have you ever seen Consumers Power 23 proposal conditions?
24 A Yes, I was assisted in the preparation of
(,
25 that offering, but I don't specifically recall
1 Favrot 131 I 2 the exact terms.
N,_))
3 Q With whom did you participate in the 4 drafting of those conditions?
5 A Mr. Wilson.
6 Q Was Sullivan & Cromwell involved in 7 - that?
8 A Yes.
I g Q In connection with the preparation of 10 the general conditions for Met Ed, did you look 11 at the Consumers Powcr conditions?
12 A I can't recall specifically.
13 Q Were you involved in the drafting
, 14 of the Carolina Power & Light proposed conditions?
15 A Yes.
' Did those differ from the Consumers 16 Q 17 Power conditions?
18 A I don't recall.
19 Q Was Mr. Wilson involved?
20 A Yes.
l 21 Q. Was Sullivan & Cromwell involved?
22 A Probably.
l 23 Q You don't recall?
f 24 A I don't recall. I don't recall specifically
[
(/ 25 on that one.
.~ , . - - -
, , , --.. ,-- , -, e - - - - ,-n,
1 Favret 132 Do you recall whether the Carolina
( 2 Q 3
Power & Light conditions differed from the 4 Consumers Power conditions?
5 A Not, I don't think, markedly. ,
6 Q Did you look at the Carolina Power &
7 Light conditions vhen you drafted the Met Ed 8 Proposal of conditions?
9 .A As I testified earlier, the development of 10 the terms and conditions was an evolutionary 11 Process.
12 Q Yes.
/~N 13 A And as to whether it was any specific one, 14 I don't recall.
15 g were you involved in the preparation 16 df the Duke Power terms and conditions?
17 A Yes.
18 Q What was the name of that, Oconee?
19 A Oconee.
I 20 Q Who else was involved in th't? a 21 A Mr. Wilson.
22 Q And --
1 l 23 A And also with the review of Sullivan &
24, Cromwell.
O' 25 Q Do you recall the review of sullivan y . . . . . - - - , , _ . - - . , , . - . 7_ . m m -, -. -m-- m . ,,-y .- - - - ,-
Favret 133 1
(3
() 2 & Cromwell?
A More specifically, the review with Wilson.
3 4 Q Did the. Duke Power conditions differ 5
in any respect from the Carolina or Consumers 6 conditions?
7 A I have not reviewed the Oconee terms and 8 conditions recently and I hesitate to make a 9 -supposition.
10 ,
Q Did you look at the Oconee proposal 11 conditions or contract conditions in drafting the 12 general conditions or approving the general
() 13 conditions for the Metropolitan Edison proposal?
A Probably.
14 15 Q You don't actually recall?
16 k I don't actually recall.
17 Q Were you involved in the drafting of 18 the Florida Power & Light conditions?
19 A Yes.
Q Did those differ from the previous 20 21 nea that we have mentioned?
A The Florida Power & Light offering started 22 i 23 out to be a nuclear island bid and we dropped out of contention very shortly after the bid 24
'M submittals.
25
1 Fevret 134 2 Q Bearing in mind that you had had 3
Indian Point, Consumers, Duke Power, Carolina, 4 do you actually have a recollection of how much 5 in the way of new drafting you had to do for the 6 Metropolitan Edison proposal?
4 7 A I don't believe it required a lot of new 8 draftsmanship. I think that most of our terms 9
and conditions had been fairly well standardized 10 by the. time I think we probably got to -- I 11 don't recall -- one of the earlier proposals, 12 though.
13 Q But there was some new drafting?
(
14 A Not thdt, I can specifically say there was.
15 There would be, in the " Exceptions, 16 Clarifications and General Conditions," in that 17 area.
18 Q Right.
19 A Specifically for this offering.
20 Q Do you know for a fact whether the 21 provisions on company liability, insurance, risk 22 of loss, warranty, indemnity were identical to 23 those in the previous contracts or proposals?
24 A I don't know for a fact that they are
\d 25 identical.
~. --- - . - . . , , - - , . , . . .- . , - - - . ,, . - - ,- . - , . , - .- - -- -
s t
f 1 Favret 135
. 1 2 Q Will you turn to the page, marked
[)
3 U00904, which contains Section 15.24, " Warranty."
si '
4 were you involved in the drafting of ,
y that section? w 5
6 A Not specifically; I don't recall. g l
7 .
Q Do you know who was [hvolve'd in the \
I 8 drafting of that section? ,
9 A I don't know, but it l's similar to other --
10 other general clauses we would have of this 11 nature, workmanship and material.
m, 12 Q Directing'your attention to the 13 clause "No warranty, express r implied, not '
14 contained in either this Article or in the s
!, 15 section of this Proposal titled ' Performance' 16 shall be applicable," do you see that?
17 A Yes.
18 Q Did you have any conversations s 1 qi 19 with Mr. +4 . Jon on the purpose"of that provision? -
1 i s,
'r$ i great detail, except that\ it was
~
20 A . ,
21 part of most of our offerings and I guesse all'ofl .
\ . -
22 them. 't s 23 Q Do you recall any discussions with '
'~I y\
' ( t 24 Mr. Wilson on the purpose of that provision? .
(~N .. . ..-l .;' I
(. .) 25 A' ' It was to protect the company's dnsir'a'nce -
. '2 "
T d
Favrot 136 1
against implied warranties.
( 2 Q In what respect?
3 4 A In all respects.
5 Q Do you actually recall a conversation 6
with Mr. Wilson on that subject?
7
- A I can't say that I specifically recall that 8 conversation.
9 Q Yes?
10 A It is just as a background.
11 Q Do you recall any conversations with 12 the gentlemen from Sullivan & Cromwell with 13 regard to that provision?
MR. WISE: You should answer that just 14 15 yes or no.
16 A No.
17 Q Did you ever discuss with Mr. Wilson 18 how, if the provision were not in the contract, 19 the rights of the parties would be different?
20 A I don't recall.
Q Did you have any discussions with M.r.
21 22 Wilson in regard to possible omission of this 23 Provision or inclusion of this provision?
24 A I am not that familiar.
O
\## 25 Q I will direct your attention to i i
1 Favret 137 pages U00898 and '899, Section 15.13.
( 2 3
was there anybody in particular in 4 the company, apart from Mr. Wilson, who was 5
consulted in regard to insurance provisions?
6 Will you tell us the name of the person if there 7
was one.
8 A My contact would have been with Mr. Wilson.
9 Q Looking at page UOO899, who, if anyone, 10 was principally responsible for matters 11 portaining to the Atomic Energy Act of 1954 or 12 the Price-Anderson Act?
(^h 13 A I believe this was drafted by Mr. Wilson
'\_/
14 and in conjunction with Sullivan & Cromwell.
15 Q Did you have any knowledge regarding 16 the provisions of the Price-Anderson Act?
17 A I was aware of them and knew that the 18 law existed and that it provided some measure of 19 protection to the parties.
20 Q Did you have any discussions with Mr.
21 Wilson concerning indemnity agreements under the 22 Price-Anderson Act?
23 A fes, to gain the understanding that I did 24 achieve. He would explain it.
N 25 Q Did you have any conversations with
- , - - ,- ., m.-
Favret 138 1 1
2 counsel on that subject?
A In some of the broad review meetings where 3
4 we were developing the terms and conditions, I 5 am sure we must have discussed it.
6 Q Were there any written analyses or 7
- submissions or reports that you read concerning 8
the indemnification provisions of the Price-9 And:raon Act?
10 THE WITNESS: Do you want to read that 11 back, please?
12 (Question read.)
A I don't recall reading any analyses of the 13 14 Price-Anderson Act.
15 Q Do you have a recollection of what 16 Mr. Wilson told you about the Price-Anderson Act 17 indemnity provision?
18 A Other than that as outlined in the text 19 here,to that extent I did have an understanding 20 of it, but that's the limit of it.
21 Q Yes?
A I was not an expert in the Price-Anderson 22 23 Act.
Q Following the submission of the 24 ,
25 proposal to Metropolitan Edison, did there come
l 1 Favret 139 l
l l
() 2 a. time when you attended a series of meetings l 3 with Metropolitan Edison personnel and 4 negotiators?
5 A What was the first part of-the question?
6 Did there come a?
7 - MR. KLINGSBERG: Mr. Reporter?
8 (Question read.)
9 .A Yes. Yes, there came a time.
10 Q Do you have a recollection of the i
11 first meeting?
12 A Yes.
13 Q Where did it take place?
14 A The first meeting, to my recollection, was 15 the one at Reading where we -- the -- I think it 16 Was the meeting in February as described in one 17 of the texts.
18 MR. WISE: I think Mr. Klingsberg's 19 question is directed at the. period after 20 the proposal was submitted.
a 21 THE WITNESS: Oh, after.
22 MR. KLINGSBERG: After the proposal, 23 that's correct.
24 MR. WISE: I believe the record shows, s .
25 Mr. Favret, that that was submitted l
l i
1 l
._ _ _ ~ _-. _ _ , . . , , ,,__ _ _ _ _ _ . . ,-, , _ , ~ . .,.
1 Favret 140 l 2 August 15, 1966.
3 MR. KLINGSBERG: Dated August 15th.
4 A Let me say that my recollection is that 5 there was an interim period following the 6 submittal of the proposal in which the customer 7
reviewed the submittals and that we probably had
. 8 our first meetings with them probably sometime 9 -in September, maybe a little later.
10 MR. KLINGSBERG: I would like to show 11 you a document which we will mark as 12 Exhibit 179, being a memo from Mr. Heller 13 to files dated October 6th, 1966.
( ,
14 (Memo to Files from F. C; Heller, 15 dated October 6, 1966, was marked GPU i
16 Exhibit 179 for identification, as of this 17 date.)
18 Q Do you recall having seen Exhibit 179 19 previously?
20 A Yes.
21 Q Other than in your preparation for 22 testimony?
23 A Yes.
24 Q Do you recall having seen it at the
time it was prepared?
25 l 1
1 Favret 141-142 2 A Yes.
3 Q Did you receive a copy in the regular 4 course of business?
5 A Yes.
6 Q Was it Mr. Heller's duty to take 7 notes at these meetings and submit memos to the 8 files and to those attending of the important 9 points that were discussed?
10 A Yes.
11 Q Did anyone else take notes? l l
12 A Mr. Olmstead, if he would have been there, 13 yes, would have.
s 14 Q Did you take notes?
15 A No.
16 Q Did Mr. Olmstead write memos based a
17 on his notes?
18 A sometimes.
19 Q Do you know if Mr. Olmstead wrote a 20 memorandum of this meeting?
, 21 A I don't recall.
22 Q Was there anybody else who wrote ,
23 memoranda concerning what was discussed at the 24 meeting from Babcock & Wilcox's point of view?
25 A I can only suppose that we had exchanges of
1 Favrat 143 2 information between Barberton and Lynchburg 3 pertaining to the customers' desires.
4 Q Apart from your supposition, you don't
) 5 have an actual recollection of any memoranda?
6 A No.
7 Q Do you recall any discussion at this 8 September 30th meeting, as you sit here today, of 9 , any subjects other than what Mr. Heller has 10 described in his memorandum which we have marked?
11 A The area with regard to the NSS and the 4
12 plant operating under changing load conditions 13 was of concern to the customer and that they were 14 d'esirous of some of the features as described l 15 in the memorandum on the first page of the text, 16 page 2.
i 17 Q This memorandum also refers, does it 18 n o t', to discussion on the subject of liability or 19 responsibility for costs resulting from 20 licensing changes about which you testified this 4
21 morning?
22 A Yes.
! 23 Q Prior to your giving that testimony 24 this morning, had your memory as to that subject l
/~ 25 been refreshed by having read this memorandum in
(_T ;
l i
\
- . - _ . - . . . - . . . - . . . . - - - . - - , - . . . , . , - . ~ - - - -
1 Favret 144 2 preparation for your testimony?
O 3 A I would say -- I can't recall whether I have f
4 seen this document.
) 5 Can I ask a question?
6 MR. KLINBSBERG: Sure.
7 THE WITNESS: Did I have this document?
8 MR. WISE: Why don't you say it. If s
9 you know, you can so testify. If you 10 don't --
11 ; I remember seeing this document, and in
- 12 reviewing this and other documents, it did 13 refresh my memory, but most of the features of N 14 the original agreement as finally negotiated, I 15 participated in.
16 Q Yes?
i 17 A So that they were still reca11able.
18 Q Babcock & Wilcox had an interest, did 19 it not, in seeing that the plant which its agreed 20 to supply, or the nuclear steam system it 21 agreed to supply, was the recipient of appropriate 22 licenses from the Atomic Energy Commission, is 23 that not so?
24 A Yes.
25 Q And it was in Babcock's interest in
[~)/
\,_
-e., ,e y g,-w a -.g-- p nH<. s --g- v -d
1 Favret 145 2 terms of future negotiations and future bids to 3 try to assure that its equipment was the
, 4 recipient of appropriate licenses, is that correct?
5 A correct.
6 Q And indeed, Babcock had meetings 7 . with the Atomic Energy Commission by itself without 8 the customer and not in regard to specific 9 customers, dealing with the question of 10 licensing, did it not?
11 A The then AEC did have provisions where 12 manufacturers could submit a description of a 13 nuclear plant which they would review and comment 14 on and undergo a, so to speak, mock review for 15 licensing.
4 ,
And did your company take advantage 16 Q 17 of those provisions?
18 A Yes, we did.
19 Q Is it fair to say, then, that the 4 20 manufacturer played a substantial role in 21 securing a license for the plant in which its 22 equipment was going to be installed?
23 MR. WISE: What is your definition
- 24 of " substantial"?
25 MR. KLINGSBERG: Significant role.
i t
. _ _ __ _ , . _ _ _ - _ _ . ._ _ _,._.._. . . _.... ~ m._ . _ .. , . . _ . .
1 Favret 146 I will object to the form.
( 2 MR. WISE:
3 If the witness can answer it, he may.
4 A Let me say that the obtaining of a license 5 was the primary responsibility of the customer.
6 It was the role of the equipment supplier to submit 7
information to the customer in a form in which 8 he requested it for final submittal to the AEC.
9 We would participate with the 10 ,
customer and with his selected architect-engineer 11 or engineering organization in the preparation 12 of those documents and would participate with 13 the customer to the extent that he called upon us 14 to do so.
15 Q And you attempted in the course of 16 those participations to do your best to see that 17 the plants were licensed?
18 A We did our best to support the customer in 19 his efforts.
20 Q You said, in words or substance, 21 this morning that in the course of the negotiation 22 with Mr. Pickard and Mr. Trowbridge and others 23 from Metropolitan Edison that -- you said that
, 24 the manufacturer could not secure a license, only i
l O)
\
25 the operator.
i
l 1 Favret 147
() 2 Do you recall testimony to that 3 effect this morning?
4 A Yes.
5 Q Did you actually say something to 6 that effect according to your recollection?
7 A To?
8 Q To Messrs. Trowbridge, Pickard and 9 others?
10 ,
A Yes.
11 Q You recall having said that?
12 A Yes.
13 Q Wasn't that something that was quite
)
J 14 obvious to Pickard and Trowbridge from their 15 long experience in this subject?
16 MR. WISE: I object to the form of 17 the question.
18 The witness can answer it if he 19 understands it.
20 THE WITNESS: Read it back again.
21 (Question read.)
22 A You could ask Mr. Trowbridge and Mr.
23 Pickard.
4
_ 24 Q Is there anything in particular that l .
, 25 makes that particular sentence or phrasing stand t
i
1 Favret 148
(}j
/*
2 out in your mind, 15 years after the fact?
3 A The items that make it relevant in my mind
/
4 is that they were -- they attempted to get the 5 company to take more extensive responsibility 6 than what we were prepared to offer in the way of 7 licensing.
8 Q Your company?
9 A Yes.
10 ,
g My question is, what makes those 11 particular words stand out at this time so many 12 years later in your mind, or do they stand out?
A They stand out because they wanted us to f~}
%s 13 14 take responsibility, as this text indicates, for 15 items beyond our scope of supply for which we 16 dad no control, including site-related matters 17 which were -- we had no information on nor had 18 the site been selected.
19 Q Do you recall the next meeting with 20 the Metropolitan Edison negotiators?
21 A Not specifically.
22 MR. KLINGSBERG I would like to mark 23 as GPU Exhibit 180 a copy of a letter from
( 24 Mr. Neidig to Mr. Heller dated October 12,
'- 1966, with an enclosed memorandum of 25
.s
,. . -. _ . , . . . . , _ , . - - - ~ .- , . . _ . .-...4 - -
1 Favret 149 l 2 meetings of September 30th and October 12th 3 between Metropolitan Edison and Babcock &
- 4 Wilcox, and state for the record that this 5 comes out of the files of the Shaw, Pittman
. 6 firm.
7 (Copy of a letter from Mr. Neidig to L
8 Mr. Heller dated October 12, 1966, with 9 an enclosed memorandum of meetings of l 10 September 30 and October 12, 1966 between 11 Metropolitan Edison and Babcock & Wilcox, 12 was marked GPU Exhibit 180 for
(~} 13 identification, as of this date.)
N.J -
14 (Document handed to witness) 15 A O.K.
16 BY MR. KLINGSBERG:
i 17 Q Do you recall having received or f
18 seen a copy of the memorandum attached to 19 Exhibit 1807 20 A No t in its entirety, but some portions of 21 it read familiar.
22 Q Obviously I am not including the 23 handwritten --
24 A Right.
25 Q -- notations, which may not have been
I ravret 150
() 2 on the copy sent to Mr. Heller, but apart from 3 that, you do have a recollection of having seen
- 4 the memo?
5 A Some portions of it I recall, yes.
6 Q Let me ask you this: do you have, 7 sitting here today, an independent recollection 8 of what was discussed at the October 12th meeting 9 between Metropolitan Edison and Babcock & Wilcox?
10 ,
A Not in --
not totally.
11 Q Do you have any recollection of any 12 discussions other than those which are set forth 13 in the memorandum, either this memorandum or 14 the previous one that you reviewed, prepared 15 by Mr. Heller?
16 THE WITNESS: Will you restate the 17 question again?
18 (guestion read.)
19 A The question is so broad, I really can't 20 offer an answer even.
21 Q All right.
22 Having read the memorandum, does it 23 accord with your recollection of what was 24 discussed at the September 30 and October 12, O
N/
25 1966 meeting?
1 Favret 151 f-m\ A I think there are some areas where we had (j 2 3
differences of interpretation of the results of
- 4 our discussions and that we took exception to some 5 of the items as presented here.
6 Q Do you recall what those were?
7 A No, I do not.
8 Q Do you recall any additional subjects 9 -that were discussed at the meetings,.besides 10 ,
those th'at are set forth in the memorandum, at 11 these particular meetings, September 30th and 12 October 12th?
13 A I don't recall specifically.
14 MR. KLINGSBERG: I would like to 15 now, to round out the record, to mark as
$ 16 Exhibit 181 a memorandum dated October 13, 17 1966 from Mr. White to Mr. Rowand, which 18 states that it attaches a memorandum of the 19 September 30th and October 12th meeting by 20 Mr. Charnoff, with a copy of the memorandum
?)/ to Mr. Favret.
21 22 ( Memorandum dated October 13, 1966 23 from Mr. White to Mr. Rowand, copy to Mr.
24 Favret, with attached memorandum of the O"' 25 S8Ptember 30 and October 12 meeting, was
- , - - - - . , , . --n,---,--r-- ~ - - - - , , -,a-- n- ~vv
1 Favret 152 2 marked GPU Exhibit 181 for identification, 3 as of this date.)
4 (Document handed to witness) 5 A O.K.
6 Q Do you recall having received 7 Exhibit 1817 8 A Not specifically, but the subject of the 9 1200 kilowatt auxiliary power system I think 10 ,
rings a bell.
11 Q In what respect?
12 A That it was one of the items that was 13 under review as part of the proposal as to how 14 much auxiliary power would be required for 15 emergency generator capacity.
16 Q Looking now at Exhibits 180 and 181, 17 can you identify the attachment to Exhibit 180 as 18 the memorandum which was sent to you as part of 19 Exhibit 1817 20 MR. WISE: Are you asking him 21 basically today to look at it and see if it 22 makes sense, if these two are connected, or 23 if he has any independent. recollection 24 specifically that this Exhibit 180 was in fact
.O k- 25 what was attached to 181?
I Favret 153 O
(_j 2 I think we can all read the memos 3 and see what they appear to describe.
- 4 As to whether this witness has a 5 specific recollection of that, I will be 6 happy to let him answer that if he can.
7 MR. KLINGSBERG: Well, let's see if 8 he can.
9 A I would say it is my observation that I do 10 , recall Exhibit 180.
11 Q Yes?
12 A The text of 181 by all indications of its 13 text indicates that it transmitted Exhibit 180.
(
14 Q But you don't have an independent 15 recollection?
e i
16 A I don't recall specifically this document, 17 but I do this one. (Indicating) 18 Q You mentioned earlier in your testimony 19 some disagreement with the conclusions or some 20 conclusions in Exhibit 180.
21 Does Exhibit 181 refresh your i 22 recollection as to any of those exceptions?
23 A I would have to study it in detail before 24 I could answer that question.
O 25 Q Yes? .
e
. - . -- - - -p-.- * -- -g w -
g
- i 1 Favret 154 O)
(_ 2 A And even then I am not sure I can recall 3 the nuances.
~ 4 Q Does Exhibit 181 accurately reflect, 5 to the best of your recollection, discussion at 6 the September 30 or October 12 meeting?
7 A That's a little bit more detailed than my 8 memory is serving me.
9 Q Having looked at Exhibit 179, 180 and 10 181, are you able to tell us anything that was 11 discussed at the October 12 or September 30 12 meetings other than what we have seen set forth 13 in the memoranda?
j b(~h 14 A I would say that my recollection indicates 15 that there was more discussion on the licensing 16 Issues than what these documents would portray 17 and there was more discussion on the items not in 18 our scope of supply for which we would not take 19 responsibility, and especially those as related 20 to site conditions, and the customer had not 21 selected a site.
22 MR. KLINGSBERG: Can we now go to the 23 next exhibit --
24 Q Well, before that, let me ask you O.
s this.
25
. a
+
,. , . . ~ . - - ~. %.
1 Favret 155 e
[a 2 Do you recall the next meeting with 3 Metropolitan Edison?
- 4 A Not specifically.
5 Q Do you recall any discussion on the 6 subject of fuel rod design?
7 A Fuel rod design.
8 In the course of the several of the 9 . meetings, there was discussions on fuel rod 10 design and the design of the total fuel to serve 11 the customer's load cycle for annual refueling 12 energy content.
13 Do you remember anything said on that
(~}
\J Q
14 subject?
15 A There was considerable discussion as to 16 who would bear the responsibility in the event 17 of mechanical fuel failure, premature fuel 18 failure, design or desire of the customer to 19 overburn the fuel or underburn it, and how we 20 would handle the warranty adjustment for 21 those --
for the fuel.
22 MR. KLINGSBERG: I would now like to 23 mark as GPU Exhibit 182 a memorandum from 24 the Shaw, Pittman firm files dated O
\_) 25 Novenber 4, 1966 of a meeting between
L l
1 Favret 156 2 Metropolitan Edison and Babcock & Wilcox
(
3 on October 27, 1966.
- 4 (Memorandum from the Shaw, Pittman 5 firm files dated November 4, 1966 of a 6 meeting between Metropolitan Edison and 7 Babcock & Wilcox on October 27, 1966 8 was marked GPU Exhibit 182 for 9 identification, as of this date.)
10 (Document handed to witness) 11 A May I ask where did this document come from?
12 Q This comes from the Shaw-Pittman Q 13 firm.
O 14 A O.K.
15 Q Have you ever seen Exhibit 182 before?
16 A Not that I recall. s 17 Q Did you attend the meeting on 18 October 27, 19667 19 A The memorandum says, part time.
20 Q what is your recollection?
21 A Some of the contents of the memorandum is, 22 as drafted, I do recall those discussions having 23 taken place.
24 Q Do you recall in regard to those O)
\_ 25 portions whether the memorandum accurately
1 Favret 157 reflects the discussions?
( 2 3 A In all details I couldn't answer to that 4 extent. Certain phases of it, yes, I do recall.
5 Q Do you have any recollection of 6 anything that occurred at the meeting that is 7 inconsistent with what it states in the memorandum?
8 A No.
9 Q Do you have any recollection of any 10 discussion at the meeting which is not summarized 11 in the memorandum?
12 A My recollection is not that good.
g 13 Q Did you participate in any of the x) 14 discussion of any of the subjects listed in 15 Exhibit 1827 16 A I was probably involved in the discussions 17 on items 5, 6.
18 Q What contribution, if any, did you 19 make to those discussions?
20 A some of the features on the pressure vessel 21 design and head removal, the steam generator.
i
[ 22 That's primarily it.
23 MR. KLINGSBERG: I will now ask to 24 have marked as GPU Exhibit 183 for l
' [
\
%- 25 identification a letter from Mr. Neidig l
1 Favret 158 2 to Mr. Favret dated November 22nd, 1966, 3 attaching a memorandum of a meeting dated
- 4 November 16, 1966.
5 (Letter from Mr. Neidig to Mr. Favret 6 dated November 22, 1966, attaching a 7 memorandum of a meeting dated November 16, 8 1966, was marked GPU Exhibit 183 for 9 identification, as of this date.)
10 ,
A These are produced from whose files?
11 Q Babcock & Wilcox.
12 A O.K.
I~T 13 Q Have you seen Exhibit 183 before?
U 14 A Yes.
15 Q Do you have a recollection of 16 receiving it from Mr. Neidig?
17 A Yes.
18 Q Can you identify the handwriting on 19 this document?
20 A I think part of it might be mine and part 21 of it Mr. Wilson's.
1 Will you turn the pages and tell us 22 Q 23 which is yours and which is Wilson's?
l 24 A The first page I think are Wilson's; the l /'N l
t
' -') 25 second page I think are mine; page 3 looks like
1 Favret 159 2 mine. I am not sure on 4 -- no, well, let's see, 3
3 wait a minute. There is a page unnumbered. It's 4 item 3, " Missile Protection," page 3. I can't 5 tell.
6 I can't tell.
7 MR. WISE: Page 4 you can't tell?
8 THE WITNESS: Page 4, I can't tell.
9 A And 5, I can't tell.
10 Q Do you have a recollection of each 11 of the subjects of this memorandum having been 12 discussed at the November 16th meeting?
13 A By and large, yes.
1 O. Apart from the interlineations which 14 Q 15 were made, does the memorandum basically set 16 forth the substance of what was discussed at the 17 meeting?
18 THE WITNESS: Read the question back, 19 please.
- 20 (Question read.)
21 A The substance of the meetings, as far as 22 we were concerned, was more akin to what was 23 included with the marked-up copy.
I 24 Q Were there any subjects discussed at
(_/ 25 the meeting that you recollect today other than
^
1 Favret 160 2 those which are set forth in the memorandum?
3 A Not specifically.
4 MR. KLINGSBERG: I guess this is a 5 good time for a break.
6 (Time noted: 4:31 p.m.)
- 7 .
8 9 LOUIS M. FAVRET 10 11 Subscribed and sworn to 12 before me this day of 13 1981.
14 I
15 i
16 17 ,
18 19 ,
I f I 20 4 f 21 l 22 23 24 l 25 i
I
1 161 0 ' "II'I II" 1
i 3 STATE OF NEW YORK )
l
- ss.:
('T 4 COUNTY OF NEW YORK )
l 5
, 6 CHARLES SHAPIRo, I, C.S.R. ,a 7
' Notary Public within and for the State of New York, 8
do hereby certify that the foregoing deposition 9 of' LOUIS M. FAVRET Was taken before i 10 me on MONDAY, MAY 11, 1981 ;
11 That the said witness was duly sworn 12 before the commencement of his testimony and 13 j
, that the within transcript is a true record of said 14 testimony; 15 That I am not connected by blood or ,
16 ma riage with any of the parties herein nor 17 interested directly or indirectly in the matter in 18 controversy, nor am I in the employ of any of the 19 counsel.
20 IN WITNESS WHEREOF, I have hereunto set 21 my hand this ! day of MAf 198]. .
22 i
e 24 CHARLES SHAPIRo, S.R. l 25 }
=v * ' ' w --
-, .,c.. ,
l
- yu f - ,,-
's ,
' 162 I NDE X l
i WITNESS PAGE Louis M. Favret 4 -
- - E XH IB I TS GPU ,
-FOR IDENTIFICATION 164 Resume 66 (Previously marked as Favret Exhibit 1" ) 3 165 Memorandum from F. C. Heller to Nuclear Contract Engineering, f'}
.. Barberton, dated December 7, 1966 66 166 Memorandum from Mr. Kazar to Mr. White dated May 31, 1967 75 ,
a' 167 Memorandum from C. T. Smith to various percons dated February 14, 1966 . 76 i
168 Memorandum from C. T. Smith to various persons dated February '
.*- 16, 1966 80 .
169 Memorandum dated February 18, . i 1966 from C. T. Smith to
}h
(
various persons 82 i ,
170 Memorandum dated May 23, 1966 from L. M. Favret to various s persons 103 i
- r.yyrn - , - ,
\
jj ' b~
l 1
1
. 163 O
INDEX OF EXHIBITS (Jontinued) i GPU FOR IDENTIFICATION PAGE 171 Document entitled " Design
- -- Criteria, Nuclear Power Plant for Metropolitan Edison
. Company," which has a Babcock
.. & Wilcox stamp of December 3, 1965 107 172 Memorandum from Mr. Heller to Mr. Favret dated December 3, 1965 109 ~
173 Memorandum from Mr. Favret, written by Mr. Olmstead, to Mr.
Heller, dated December 30, 1965 110 J.
174 Memo from Mr. Heller to Mr.
Favret dated February 4, 1966 112 175 Memorandum from Mr. Heller to Mr. Favret dated February 8, 1966 113 176 Memorandum from Mr. Heller to Mr. Favret dated May 9, 1966 115 177 Letter from Metropolitan Edison
) . to Mr. Heller of Babcock &
Wilcox dated May 11, 1966 116 ll
,) 178 Copy of a proposal to
- k. Metropolitan Edison Company, Reading, Pennsylvania 117 I
4
. 1 0 ~
l
- i. .
4, 164 g i
l INDEX OF EXHIBITS (continued)
)
GPU FOR IDENTIFICATION PAGE 179 Memo to Files from F. C.
- Heller, dated October 6, 1966 140
_ 180 Copy of a lettar from Mr.
Neidig to Mr. Heller dated October 12, 1966, with an enclosed memorandum of meetings of September 30 and October 12, 1966 between Metropolitan Edison and Babcock & Wilcox 149 O ,
181 Memorandum dated October 13, 1966 from Mr. Whi te to Mr.
Rowand, copy to Mr. Favret, with attached memorandum of I the September 30 and October 12 meeting 151 a
s l 182 Memorandum from the Shaw, Pittman firm files dated November 4m 1966 of a meeting between Metropolitan Edison and Babcock & Wilcox on October 27, 1966 . 156 '-
183 Letter from Mr. Neidig to Mr.
/ Favret dated, November 22, s s
)
h 1966, attaching a memorandum l of a meeting dated November 16,' , ,
-l 1966 150
-ooo-l
_._____ _ _ _ _ _ _ . _ _ _ _ _ . _ _ . _ - - - - . _ _ - _