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Enron Mail |
Remarkably clear explanation.
From: Ben F Jacoby @ ECT 09/20/2000 06:48 PM Sent by: Ben Jacoby@ECT To: Kay Mann/Corp/Enron@Enron, Sheila Tweed/HOU/ECT@ECT cc: Subject: LM6000 Title Transfer Question FYI, see below. ---------------------- Forwarded by Ben Jacoby/HOU/ECT on 09/20/2000 06:43 PM --------------------------- Matthew Tezyk@ENRON_DEVELOPMENT 09/20/2000 06:13 PM To: Ben F Jacoby@ECT cc: Dan Shultz/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mike Coleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Dick Westfahl/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: LM6000 Title Transfer Question Ben, Does ENA wish to accept Title of 14 LM6000's on September 26, 2000, or accept Title of these Units after each has been issued an Inspection Acceptance Certificate from EECC QA/QC department? The following is a summary of the LM6000 Title Transfer Question: Mike Storm, GE/SSEP Project Manager, requested from me, on 9/19/00, to accept title of 14 LM6000's no later 9/26/00. I informed him I was not authorized to make this decision and that I would contact the Owner to make the decision. I further informed Mike Storm that our Owner would not accept those terms and a compromise must be worked out. Contract Reference 15.2.1 of contract 24-LM6K-2-99 states: title transfers when equipment is ready to ship to the delivery point and seller notifies purchaser of such event. Delivery Point is defined as the SSEP storage yard. SSEP has notified us that Units #1-14 are "Ready to Ship". Contract Reference 10.2.3 of contract 24-LM6K-2-99 states: purchaser has the right to inspect the equipment for "completeness prior to loading on transport to delivery point". We have inspected the first eleven Units and have informed SSEP that Units #1-14 ARE NOT COMPLETE and therefore are NOT at the Delivery Point. FACT: Units # 1-11 are at the delivery point. #12-14 are at SSEP. FACT: If we sent a truck to SSEP tomorrow, NONE of the UNITS would be "Ready to Ship" to a project site. FACT: SSEP QA/QC has 15 Non Conformance Reports on these 14 turbines which need to be corrected before they are "Ready to Ship". It is in the best interests for both companies to correct the Non Conformance's prior to shipment to the delivery point or project site. RECOMMENDATION: I recommend that we DO NOT accept Title until the Units are actually ready to be shipped to a project site. The problem is that NONE OF THE UNITS ARE READY TO SHIP! SSEP has to work off punchlist items which their QA/QC department has listed on Non Conformance Reports. At this juncture, no money can be withheld from SSEP. To ensure they will be fixed, Title should transfer after our QA/QC inspectors give written notice that each Unit is complete and ready to ship. This will protect ENA on the quality of the machines, as well as, ensure that little or no "re-work" is performed in the field. If you require further information or any assistance in this matter, please feel free to contact me at 713-646-8258. Matthew Tezyk Project Manager
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