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 Turners 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
Turners 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 Companys 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.