Politics Case

Fauquier Gas Company

I. Major Facts:

1. Fauquier Gas Company, as one of the nation's 440 gas companies, served an area where land use was changing from agricultural to residential and commercial.

2. To meet the increased demand for gas resulting from this conversion, 3 1/2 miles of new gas lines had to be ready for customer hookup by September.

3. An additional 10 miles of new gas lines were planned for the next year.

4. Mr. Murphy, as the manager of supply management, was responsible for the purchases of materials used in gas distribution such as pipe, meters, fittings, etc.

5. Other major areas included the procurement of furniture, systems and forms, stores management, and materials forecasting and control.

6. The supply organization was under the management control of the vice-president for operations.

7. In January, Mr. Murphy was having lunch in the company cafeteria when he heard Mr. Clive Byers, the construction project manager, talking about a new project.

8. Fauquier Gas Company was going to add 3 1/2 miles of new gas lines and would start construction in June in order to "gas the line" that September.

9. Murphy asked Byers for the purchase request so he could immediately contact suppliers (mills) and get quotations on prices and deliveries. He knew from experience that the mills' schedules for pipe production required a substantial lead time.

10. He was concerned that the mills would not be able to accommodate Fauquier's schedule.

11. Byers told him that the purchase request would be sent over as soon as Pat Wilson, the design engineer, completed the pipe specification and Sam Law, the construction project engineer, approved it.

12. Mr. Charlie Buck, the design superintendent, headed the design organization. Both the design and construction organizations were under the management control of the vice president of operations.

13. Mr. Murphy called Pat Wilson and asked about the pipe specification. Wilson told him that the diameter of the pipe would be 24 inches with a wall thickness of 3/4 inches and that the length would be 57 feet. In prior purchases, the wall thickness was 3/8 inches and the length was "random double normal" (40 feet plus or minus 5 feet).

14. When Mr. Murphy inquired about the change in wall thickness and length, Wilson replied that the operation of the line would be governed by less stringent specifications if the wall thickness was 3/4 inches. Wilson said using 57-foot-length pipe would reduce welding costs.

15. When asked which wrapper would be applied to the pipe, Wilson said that he had not yet gotten to that part of the specification.

16. In