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. . ~ @ SOllie EnQlneerinQ Corporation 1501 Duail Street PO. Box 7350 Newport Beach. California 92658-7350 consultlnq enOlneers I arCf"lltects 714/476-3400 Telex 685561 June 10, 1986 Subject: san Miguel Project -- Feasibility Study /f%~f;/-~ I!If ~J~.,~" ,1(' /" '1,//,{I""... "J, ." i it. } '-7." .. oj ; , ',JSVf CO(.()(O ,-" IS-')~ ~-:; ') 'lk. 'l'fi "U 0t:',., ~D. -'r!/~.,. '() IA: ,", I 'Y/. ',CiV'll'tt I s,~ tr ~'4/;> .'/) Mr, William McDonald Director Colorado Water Conservation Board 1313 Sherman Street, Room 721 Denver, CO 80203 Dear Mr. McDonald: We have completed negotiations with your staff on the plan of study and the cost proposal for the San Miguel Project Feasibility Study, However, we have been advised that the State is now insistinq on a broad indemnification provision which is not limited to the Consultant's negligent acts. Ms. Susan Menkes, our in-house attorney, has discussed this requirement with Mr, Barry Stein at the Attorney General's office, who indicated he did not have the authority to modify the State's position. This same matter arose in connection with Boyle Engineering's negotiations with the State Engineer's Office for professional services in connection with the Arkansas River Compact litigation. I'm attaching a copy of our letter to Dr. Danielson, State Engineer, setting forth our rationale for objecting to the State's new indemnification requirements. All of the facts and information in that letter are directly applicable to our pending contract with the Colorado Water Conservation Board for the San Miguel Project Feasibility Study. In summary, our letter points out that indemnity provisions beyond negligence are uninsurable, and that signing such provisions jeopardizes our liability insurance coverage, which is neither in the State's or Boyle's best interests, Since our liability policies are on a "claims made basis", it is imperative that we not jeopardize continuation of coverage in future years when claims might be made for the consultant's negligent acts in prior years. We are ready and willing to perform the professional services for this assignment and assume full responsibility for our negligent acts. However, it is inequitable to require a consultant, with limited resources, to assume responsibility for uninsurable risks over which he has no control,