Avoid this $2.5 million error
Now that we’re into the new year, it is perhaps a good time to pause and reflect about one of the worst legal meltdowns affecting a control system that made it through the courts in 2007—a dozen-year affair that came to a grinding halt (in all ways that you can imagine that phrase) this past year before the Mississippi Supreme Court. It was a perfect storm of things going wrong for a control system integrator, and it could happen to anyone.
Note to owners of control engineering companies: Any resemblance between these events and your worst 3 a.m. nightmare is not coincidental.
Additional note to readers: Because I am interested in the educational—not the sensational—aspects of this, I either am not identifying the companies involved or using pseudonyms.
In 1995 a utility generating unit in Mississippi was being upgraded. The utility contracted with a plumber. (No, I am not making that part up!) for the upgrade of its control system. The plumber subcontracted that work to Best Integration Services (BIS).
The day came for site acceptance testing. Dave, the BIS control systems specialist, tried to start the turbine at its rated speed of 4,860 rpm, but the mechanical overspeed bolt tripped and shut it down—even though the readout showed only 4,000 rpm and not the trip speed of 5,346 rpm. Dave then went to work trying to figure out what happened. Because he was by himself, he enlisted Bill, an employee of the utility, to test the speed of the turbine using a Strobotac. Bill measured the turbine speed with the Strobotac and called out the readings to Dave in the control room. The readings confirmed that the BIS control system was accurately measuring the speed of the turbine. So what did they do? You guessed it—they figured out the problem was the mechanical overspeed bolt and adjusted it upward. When the turbine was started up again, it ran, but vibrated excessively.
Two months later the real problem was discovered. Using a digital tachometer, it was determined that the turbine was actually operating at a speed of 6,560 RPM, although the BIS control system was only showing 4,860 rpm. Apparently BIS had mistakenly placed its sensors on an auxiliary turbine shaft that moved at a different speed than the main shaft—and when the manual Strobotac readings were taken, apparently the wrong shaft was again checked! The result of the adjustments made in reliance on these measurements was the destruction of the turbine rotor, followed by 12 years of litigation.
The final chapter of this story was written in 2007 with an opinion handed down by the Mississippi Supreme Court. As you might suspect, there was no happy ending for the control system engineer. BIS and the plumber were ordered to pay $2.5 million in damages, including repair costs, interest, and attorneys fees.
Each of the various defenses of the engineer was shot down. For instance (and I am paraphrasing):
Engineer: “It was the owner employee who took the erroneous Strobotac readings, not us. So the owner should bear at least part of the blame.”
Court: “The contracts allowed for the owner to assist the engineer, but that did not change the fact that all of the legal responsibility for the control system remained with the engineer.”
Engineer: “There is no evidence that the owner’s employee did not measure the speed of the main shaft.”
Court: “Even without direct evidence, it is only logical to assume that the employee would have been instructed to measure the shaft with the sensors—in other words, the wrong one. But so what? The engineer was still in charge and legally responsible.”
Perhaps the only ruling to go in favor of the engineer was that the utility was not entitled to its “consequential damages” (in this case, the utility’s costs of purchasing additional capacity to make up for the loss of the turbine). This was not because such damages were out of bounds; it was because the court decided that the utility had not done enough to prevent these losses from happening. Which means the $2.5 million could have been even worse.
Yes, this was a perfect storm of things going wrong for the control systems engineer. But could this happen to anyone? In my view: yes. So that is my not-so-subtle message regarding all things legal in the automation field as we begin the new year: Hope for the best, but plan for the worst.
|Mark Voigtmann is a lawyer with Baker & Daniels, LLP (Washington, DC, Indiana and China). His group assists the automation and process industry in structuring projects and resolving disputes. (317-237-1265).|