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<br />v <br /> <br />~ <br /> <br />. <br /> <br />. <br /> <br />to the indemnification clause in all requests for statements of <br />qualifications from engineering firms. Firms which are <br />unwilling to accept the clause will henceforth be eliminated <br />from consideration, However, my request with respect to the <br />two subject firms arises because they were selected several <br />months ago, before Mr, Stroup's memo was issued. <br /> <br />Bishop, Broqden, & Rumph, Inc. <br /> <br />This firm was selected last year to perform a water rights <br />evaluation for the Stagecoach Project, which project has been <br />authorized for construction by the General Assembly. In <br />negotiations with the firm, it was concluded that the most cost <br />effective means of proceeding was to divide the study into two <br />phases because the results of the first phase would enable me <br />to decide how best to complete the water rights evaluation. <br /> <br />The firm has satisfactorily completed the first phase, I <br />now need to enter into a second contract to provide for the <br />completion of the evaluation. <br /> <br />If the indemnification clause is not modified as requested, <br />I would have to terminate negotiations with Bishop and go to <br />the second firm which I had short-listed. However, the second <br />firm, Leonard Rice Engineering, has already indicated to us <br />orally that it too would refuse to sign a contract containing <br />the boilerplate indemnification clause. I do not know what the <br />third ranked firm, Tipton & Kalmbach, would do. <br /> <br />Even if these other firms would sign a contract with the <br />state, there would, I believe, be several significant <br />disadvantages to going to the other firms at this time. <br /> <br />(1) If I have to go to another firm to do the second phase <br />of the water rights evaluation, I estimate that it will cost <br />about $4-5,000 more (about 50\ more) than it would to have <br />Bishop complete the work, This is because the new firm will <br />spin some wheels becoming familiar with the water rights and <br />hydrology of the study area, matters with which we have already <br />paid Bishop to become acquainted. <br /> <br />(2) Using another firm would result in an unacceptable <br />'delay in completing the water rights evaluation. Pursuant to <br />the authorizing legislation, the water rights evaluation for <br />the project must be completed before the Board can loan its <br />money to the project sponsor. The sponsor hopes to have a <br />September construction start. This schedule cannot be met if I <br />have to bring in a new firm to do the water rights evaluation. <br /> <br />(3) More importantly, the project sponsor intends to sell <br />bond anticipation notes to finance that portion of the <br />project's costs not covered by the Board's loan. These notes <br /> <br />-2- <br />