Selecting Bids for the Mine Expansion Haldeman: We had to choose an engineering construction company, and we had three companies bidding. (I won't mention the names of the companies.) Each of them was associated with local Chilean companies . Swent: That was for this new half-Codegua plan? Haldeman: Yes. Now came the big political pressure through the Chilean associates of these companies to try and get the job. We got the bids in, and all my people evaluated it. I called Mr. Simian and said, "Before we have a board meeting, Ed, 1 want you to go over all these numbers with me." He's an engineer and understands all this. I had two of my staff there, and we went over and over it. The lowest bid was not the best. The highest bid was the best. Swent: Best in what sense? Haldeman: It had better people. Their way of determining their costs was absolutely crystal clear. The other one had all these hidden costs and threw charges on this and that; it was vague. You went through it, and you couldn't find out exactly who was going to be responsible for something and if there were overhead. They included things in general overhead, which shouldn't have been in overhead, at 60 percent. Right off the bat you know you're going to have to sit there and go to arbitration and chisel all the time. The highest bidder had a super team of professionals in the business of mining, smelting, concentrater, and electrical, which were the principal components. We were getting an awful lot of flak from the lower bidder. He had a lot of political clout with the president and the Congress, and he was in the Christian Democrat Party. He put a lot of pressure on the government members of the board. He said, "We know we have the lowest bid." I knew we were going to have fireworks. We went over the bids for a couple of days, and Ed finally became convinced that the [higher] bid we were going to take was the proper bid to have. I said, "After all, too, I have to be responsible for it, because I have the management contract. And Kennecott is responsible; it's not just me alone." Ed said, "All right, let's have the board meeting." At six o'clock that afternoon we had all the board in, and my project manager, Mr. B. B.. Smith, made the presentation. He was an excellent chap. We put all the numbers up on the board, and his number-two man, Mr. Samuelson, went through the details on it. I said, "So the management recommendation to this board is to pick Group A." Silence. Then, "What was that cost again?"
The Chilean board for El Teniente Mine, 1967. Bob Haldeman is third from the left, front row seated in front of the table. (click for larger image)