Q TurnerConstructionCompany

Turner Construction Company Questions 1. What are are the various types of contingency funds? How do they work? Do you think this approach to contingency funds is adequate? Overkill? 2. What is Turner’s business strategy towards their clients? How is it different from their competitors? What is your opinion of this strategy? What are its strengths and weaknesses? What could invalidate Turner’s business strategy? 3. Evaluate the IOR system and related reports and meetings. Does the IOR system force managers and the project team to address contingencies and problems you identified previously? It appears to take a lot of time in meetings; is this necessary, wise? The system seems to be based purely on financials. What are the benefits/ disadvantages of this type of control system? 4. If you were Gary Thompson, what would you say about the $500,000 to: (a) Les Shute and Don Kerstetter? (b) Owner of Kent Square? (c) Our project team (Jim Verzella and bill Rantenen)

Facts Bill Rantanen – project manager (one project) Jim Verzella – project executive (several projects) Gary Thompson – Territory General Manager (several project executives) Jane Murphy – senior cost engineer Les Shute – Group Vice President Don Kerstetter – Executive Vice President Bob Meyer VP of Project Cost Systems

THE TURNER CORPORATION AND ITS SUBSIDIARIES POLICY GUIDELINES FOR BUSINESS CONDUCT Policy on Compliance with Law The Company’s policy is to comply fully with all laws and regulations of the U.S. and its and other political subdivisions, as well as each foreign country. Policy on Political Contributions Support of political candidates and parties in the U.S. is desirable for individuals and is a responsibility of citizenship. However, no money, goods, or services shall be contributed on behalf of the Company directly or indirectly for these purposes. Political contributions may be made in foreign countries if legal in such countries and do not violate the laws of the United States. Policy on Business Ethics Our business relationships with clients, architects, engineers, suppliers, subcontractors and other business associates are often of long duration, and are frequently of a social nature. At times in these relationships gifts and entertainment may be offered as expressions of friendship. Offering or accepting such gifts or entertainment may be appropriate so long as the value does not exceed proper bounds of a normal business relationship. A gift of nominal value, an occasional meal preceding or following a business discussion, an invitation to sports event or theater is not necessarily improper. … Employees must not accept gifts or entertainment where to do so might result in an obligation or the appearance of an obligation to conduct business with the donor in such a way as to reflect less than an independent, arm-length relationship.

Policy on Accounting Controls It has always been the policy of the Company to maintain the integrity of its financial records and operating controls. All policies and procedures are subject to audit. No artificial, false, or misleading entries shall be made in the books and records of the Company, employee expense accounts, or in any requisition submitted to an owner for any reason. Nor shall any payment or receipt be made with the understanding or intent that such transaction is to be used for a purpose other than that described by the documents supporting the transaction. Policy on Conflicts of Interest Company policy with respect to conflicts of interest requires that directors, officers and all other employees avoid any conflict or the appearance of conflict between their personal interests and the interest of the Company win dealing with suppliers, subcontractors, customers, and all other organizations or individuals doing or seeking to do business with Turner. Policy on Reporting Responsibility for conformance to these guidelines falls on every Turner employee. An employee who may be asked to engage in or becomes aware of an act that is or may be in violation of these guidelines must report it promptly.