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Steel Company vs. Engineering Company

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NPD is a Metallurgist, Electric Arc Furnace Process Technology Expert with world-class expertise in electric arc furnace design and operation, design of water cooled elements, material optimization for water cooled elements for furnace and off gas ducts, scrap preheating processes

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This consultant was hired by a Pittsburgh based law firm to represent a Japanese Engineering firm in a law suit between this engineering firm and a US steel company.
The task was to investigate whether the equipment the Japanese firm had delivered to the US steel company was capable of meeting the guaranteed performance of the furnace.

In order to be able to come to a judgment, this consultant received a copy of the bidding documents, purchase order and the drawings of the electric arc furnace as well as important correspondence between the parties during the design and construction period.
The guarantee values were stated in the purchase order as well as the basis (consumption figures, available power, charge mix etc.) for the guarantees.

After studying the material, the following conclusions were drawn and backed up with drawings and documents:

  1. The design of the EAF had several flaws and short cuts compared to an excellent design standard in the industry. In my opinion the low contract price forced the engineering firm to lower the cost of the equipment in order to avoid excessive losses.
  2. The customer did not charge the material mix the guarantees were based on. Therefore the furnace volume was inadequate for the current operation and caused frequent equipment damage and interruption of the operation. The steel company did not want to run the operation with a charge mix that was basis of the guarantees.
  3. 3. mix as per guarantees as well as for the charge mix the steel company was using.
  4. This consultant concluded that for both cases all guarantees could have been met if an experienced operator would have been on site despite the short cuts in the design of the furnace.

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Kevin Kennedy & Associates, Inc.
Rapid Response Engineering® Solutions
3905 Vincennes Road, Suite 320
Indianapolis, Indiana 46268
(317) 536-7000 voice
(317) 536-7220 fax

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